Douglas Aircraft Co. v. Cranston

• Court: United States State Supreme Court (California)
• Writing for the Court: TRAYNOR; GIBSON
• Citation: 24 Cal.Rptr. 851,374 P.2d 819,58 Cal.2d 462
• Parties: , 374 P.2d 819, 98 A.L.R.2d 298, 46 Lab.Cas. P 50,639 DOUGLAS AIRCRAFT COMPANY, Inc., Plaintiff and Respondent, v. Alan CRANSTON, as State Controller, Defendant and Appellant. L. A. 26426
• Decision Date: 02 October 1962

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24 Cal.Rptr. 851 58 Cal.2d 462, 374 P.2d 819, 98 A.L.R.2d 298, 46 Lab.Cas. P 50,639 DOUGLAS AIRCRAFT COMPANY, Inc., Plaintiff and Respondent,
v.
Alan CRANSTON, as State Controller, Defendant and Appellant. L. A. 26426. Oct. 2, 1962.

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[374 P.2d 820] [58 Cal.2d 463] Stanley Mosk, Atty. Gen., John F. Hassler and Bonnie Lee Martin, Deputy Atty. Gen., for defendant and appellant.

Louis Lieber, Jr., Elmer J. Stone and William D. Craig, Santa Monica, for plaintiff and respondent,

TRAYNOR, Justice.

In 1959 the Legislature enacted the Uniform Disposition of Unclaimed Property Act. (Code Civ.Proc. §§ 1500-1527.) The act defines abandoned property (§§ 1502-1508) and requires that its holder shall report (§ 1510), and pay or deliver it to the State Controller (§ 1512). The statute of limitations is not a defense to such reporting and payment or delivery (§ 1515), and the act applies to property that was abandoned before it took effect (§ 1510, subd. (g)). It provides for notice to the owner by publication and otherwise (§§ 1510, subd.

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[374 P.2d 821] (e), 1511). The owner may appear at any time and claim the property from the Controller after it has been delivered to him (§§ 1517- 1520). Delivery to the Controller is a defense to any action by the owner against the holder. (§ 1513.) The objectives of the act are to protect unknown owners by locating then and restoring their property to them and to give the state rather than the holders of unclaimed property the benefit of the use of it, most of which experience shows will never be claimed.

After the act became effective, Douglas Aircraft Company brought this action against the Controller for declaratory relief with respect to over $17,000 in unpaid wage claims for work done in California on which the statute of limitations had [58 Cal.2d 464] run before the effective date of the act. Douglas performs government and private contracts. In the past it has credited unclaimed wages arising out of its contracts with the United States to the United States, and the Controller makes no claim that such wages should be reported or paid to him. He contends, however, that Douglas is required to report and pay unclaimed wages arising out of work done on nongovernment contracts to the extent that such wages are ascertainable from the available records of Douglas (§ 1510, subd. (g)) whether or not the statute of limitations had run on the claims for such wages before the effective date of the act. The trial court held that Douglas could not constitutionally be required to pay wage claims to the Controller on which the statute of limitations had run before the effective date of the act. The Controller appeals.

Douglas contends that the California Constitution precludes the Legislature from abrogating the defense of the statute of limitations after the statute has run. (See Chambers v. Gallagher, 177 Cal. 704, 708-709, 171 P. 931; Chambers v. Gibson, 178 Cal. 416, 417, 173 P. 752.) It further contends that even if the generally applicable California rule were otherwise, the due process clauses of the United States and California Constitutions would preclude requiring it to report and pay wage claims on which the statute of limitations had run under the circumstances of this case. In this respect it asserts that owing to its reliance on the statute of limitations, it has not kept records that would enable it, except at unreasonable expense, to invoke the act's protection against double liability (§ 1513) and contends that to expose it to such liability would deny due process of law. (See Standard Oil Co. v. New Jersey, 341 U.S. 428, 442-443, 71 S.Ct. 822, 95 L.Ed. 1078; Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71, 82 S.Ct. 199, 201, 7 L.Ed.2d 139.)

The Controller contends that the rule of Chambers v. Gallagher, 177 Cal. 704, 171 P. 931, that the defense of the statute of limitations cannot be abrogated after the statute has run should be limited to cases in which a prescriptive title has been acquired or the liability was created by statute. (See William Danzer Co. v. Gulf R. R., 268 U.S. 633, 637, 45 S.Ct. 612, 69 L.Ed. 1126.) With respect to contract claims he urges that we adopt the rule of the United States Supreme Court that the due process clause does not prohibit abrogating the defense of the statute of limitations after the statute has run. (See Campbell v. Holt, 115 U.S. 620, 628, [58 Cal.2d 465] 6 S.Ct. 209, 29 L.Ed. 483; Chase Securities Corp. v. Donaldson, 325 U.S. 304, 315-316, 65 S.Ct. 1137, 89 L.Ed. 1628.) He also contends that the act...