Malone v. Provident Inst. for Sav. in Boston

• Decision Date: 11 January 1909
• Parties: MALONE, Atty. Gen., v. PROVIDENT INST. FOR SAVINGS IN BOSTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

201 Mass. 23

86 N.E. 912

MALONE, Atty. Gen.,

v.PROVIDENT INST. FOR SAVINGS IN BOSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 11, 1909.

Case Reserved from Supreme Judicial Court, Suffolk County.

Application to probate court by Dana Malone, Attorney General, for the payment to the State Treasurer of certain unclaimed deposits in the hands of the Provident Institution for Savings in Boston. Decree for petitioner, and defendant appeals to the Supreme Judicial Court, where a single justice reserved the matter for consideration of the full court. Decree affirmed.

John Chipman Gray, Wm. R. Trask, and Roland Gray, for appellant.

Dana Malone, Atty. Gen., and Fred T. Field, Asst. Atty. Gen., for appellee.

KNOWLTON, C. J.

This application to the probate court was brought by the Attorney General, under St. 1907, p. 292, c. 340, which is now found in St. 1908, p. 606, c. 590, §§ 56, 57. This statute is as follows:

‘Section 1. The probate court shall, upon the application of the Attorney General and after public notice, order and decree that all amounts of money heretofore or hereafter deposited with any savings bank or trust company to the credit of depositors who have not made a deposit on said account, or withdrawn any part thereof, or the interest, or on whose passbooks the interest has not been added, which shall have remained unclaimed for more than thirty years after the date of such last deposit, withdrawal of any part of principal or interest, or adding of interest on the passbook, and for which no claimant is known, or the depositor of it cannot be found, shall, with the increase and proceeds thereof, be paid to the Treasurer and Receiver General, to be held and used by him according to law, subject to be repaid to the person having and establishing a lawful right thereto, with interest at the rate of three per cent. per annum from the time when it was so paid to said treasurer to the time when it is paid over by him to such person.

‘Sec. 2. Any person claiming a right to money deposited with the Treasurer and Receiver General under the provisions of the preceding section of this act * * * may establish the same by a petition to the superior court, as provided in section 1 of chapter 201 of the Revised Laws, as amended by section 1 of chapter 370 of the acts of the year 1905.’

The question presented by the report is whether the law is constitutional. The objections to it, on the part of the respondent, are that it is in contravention of the Constitution of Massachusetts, and particularly of sections 10 and 12 of the Declaration of Rights, that it is in contravention of the fourteenth amendment of the Constitution of the United States, in that it deprives persons of their property without due process of law, and that it is in contravention of the same Constitution in that it impairs the obligation of contracts.

Inasmuch as the depositors referred to in the application have not appeared, and no one represents them or any of them before the court, objections to the constitutionality of the statute, founded only on their interests, are not open to this respondent. Hingham v. Quincy Bridge Corp., 6 Allen, 353-357; 357;Lampasas v. Bell, 180 U. S. 276-284, 21 Sup. Ct. 368, 45 L. Ed. 527;Hatch v. Reardon, 204 U. S. 152-160, 27 Sup. Ct. 188, 51 L. Ed. 415. But inasmuch as most of the objections that they might make are founded upon considerations which are applicable to the claims of this respondent, although perhaps from a different point of view, we shall deal with the questions presented without close scrutiny of the respondent's right to raise them.

The principal argument of the respondent has been in support of six propositions, as follows:

‘1. The Legislature cannot substitute another person for the person with whom the depositor made his original contract.

‘2. The Legislature cannot substitute a right to the whole of a small fund for a proportional share of a deposit in a very large one.

‘3. The Legislature cannot turn a cestui que trust of the savings bank into a mere creditor of the state.

‘4. The Legislature cannot impair the depositor's right to interest.

‘5. The Legislature cannot deprive the respondent of the right to retain the deposits until called for by the owners.

‘6. The Legislature cannot deprive a bank of its rights to do business in accordance with the terms of its charter.’

The argument in support of these propositions seems to assume that the contract between the respondent and each depositor was made to continue for all time, even if the depositor should die, leaving no heirs, so that his property would escheat to the commonwealth under Rev. Laws, c. 140, § 3, or should absent himself for many years from the commonwealth, leaving no one to represent him or care for his estate, and should abandon his property altogether. On the contrary the charter granted to the Institution for Savings and the contract between the institution and its depositions must be assumed to have been subject to the sovereign power of the commonwealth, through proper proceedings, to take possession of property that escheats to the commonwealth and hold it as its own, and also to take into its care and custody property abandoned by its owner, when he is an absentee from the commonwealth, leaving no one to represent him for many years, and cannot be found. The right of the commonwealth, in its sovereign power, so to take property into its control under such circumstances, is well established. Nelson v. Blinn, 197 Mass. 279, 83 N. E. 889,15 L. R. A. (N. S.) 651;Cunnius v. Reading School District, 198 U. S. 458, 25 Sup. Ct. 721, 49 L. Ed. 1125;Id., 206 Pa. 469, 56 Atl. 16,98 Am. St. Rep. 790;Deaderick v. County Court, 1 Cold. (Tenn.) 202. The contract between the corporation and each depositor, by an implied condition, was...