Pennsylvania v. New York, 40
Decision Date | 19 June 1972 |
Docket Number | No. 40,O,40 |
Citation | 92 S.Ct. 2075,32 L.Ed.2d 693,407 U.S. 206 |
Parties | Commonwealth of PENNSYLVANIA, Plaintiff, v. State of NEW YORK et al. rig |
Court | U.S. Supreme Court |
See 92 S.Ct. 2880.
Pennsylvania brought this original action against New York to determine the authority of States to escheat, or take custody of, unclaimed funds paid to Western Union Telegraph Co. for purchase of money orders. The Special Master, following Texas v. New Jersey, 379 U.S. 674, 85 S.Ct. 626, 13 L.Ed.2d 596, recommended that any sum held by Western Union unclaimed for the time period prescribed by state statute may be escheated or taken into custody by the State in which the company's records placed the creditor's address, whether the creditor be the payee of an unpaid draft, the sender of a money order entitled to a refund, or an individual whose claim has been erroneously underpaid; and where the records show no address, or where the State in which the creditor's address falls has no applicable escheat law, the right to escheat or take custody shall be in the debtor's domiciliary State, here New York. The recommended decree is adopted and entered, and the cause is remanded to the Special Master for a proposed supplemental decree with respect to the distribution of the costs to the States of the inquiry as to available addresses. Pp. 208 216.
Hermann Rosenberger II, Philadelphia, Pa., for plaintiff.
F. Michael Ahern, Asst. Atty. Gen., Hartford, Conn., for intervenor plaintiff State of Conn. Winifred L. Wentworth, Tallahassee, Fla., for defendant State of Fla.
Julius Greenfield, New York City, for defendant State of New York.
Pennsylvania and other States except to, and New York supports,1 the Report of the Special Master filed in this original action brought by Pennsylvania against New York for a determination respecting the authority of the several States to escheat, or take custody of, unclaimed funds paid to the Western Union Telegraph Company for the purchase of money orders.2 We over- rule the exceptions and enter the decree recommended by the Special Master, see 407 U.S. 223, 92 S.Ct. 2880.3
The nature of Western Union's money order business, and the source of the funds here in dispute, were described by the Court in Western Union Telegraph Co. v. Pennsylvania, 368 U.S. 71, 82 S.Ct. 199, 7 L.Ed.2d 139 (1961):
Id., at 72—73, 82 S.Ct., at 200.
In 1953 Pennsylvania began state proceedings under its escheat statute4 to take custody of those unclaimed funds, held by Western Union, that arose from money order purchases in the company's Pennsylvania offices. The Supreme Court of Pennsylvania affirmed a judgment for the State of about $40,000, Commonwealth by Gottlieb v. Western Union, 400 Pa. 337, 162 A.2d 617 (1960), but this Court reversed, Western Union v. Pennsylvania, supra, holding that the state court judgment denied Western Union due process of law because it could not protect the company against rival claims of other States. We noted that controversies among different States over their right to escheat intangibles could be settled only in a forum Id., 368 U.S., at 79, 82 S.Ct., at 203.
Thereafter, in Texas v. New Jersey, 379 U.S. 674, 85 S.Ct. 626, 13 L.Ed.2d 596 (1965), the Court was asked to decide which of several States was entitled to escheat intangible property consisting of debts owed by the Sun Oil Co. and left unclaimed by creditors. Four different rules were proposed. Texas argued that the funds should go to the State having the most significant 'contacts' with the debt, as measured by a number of factors; New Jersey, that they should go to the State of the debtor company's incorporation; Pennsylvania, to the State where the company had its principal place of business; and Florida, to the State of the creditor's last known address as shown by the debtor's books and records. We rejected Texas' and Pennsylvania's proposals as being too uncertain and difficult to administer, and rejected New Jersey's because 'it would too greatly exalt a minor factor to permit escheat of obligations incurred all over the country by the state in which the debtor happened to incorporate itself.' Id., at 680, 85 S.Ct. at 630. Florida's proposal, on the other hand, was regarded not only as a 'simple and easy' standard to follow, but also as one that tended 'to distribute escheats among the States in the proportion of the commercial activities of their residents.' Id., at 681, 85 S.Ct., at 630. We therefore held that the State of the creditor's last known address is entitled to escheat the property owed him, adding that if his address does not appear on the debtor's books or is in a State that does not provide for escheat of intangibles, then the State of the debtor's incorporation may take custody of the funds 'until some other State comes forward with proof that it has a superior right to escheat.' Id., at 682, 85 S.Ct., at 631. The opinion concluded:
Id., at 683, 85 S.Ct., at 631.
On March 13, 1970, Pennsylvania filed this original action to renew its efforts to escheat part of Western Union's unclaimed money order proceeds. The complaint alleged that Western Union had accumulated more than $1,500,000 in unclaimed funds 'on account of money orders purchased from the company on or before December 31, 1962,' and that about $100,000 of that amount, 'held by Western Union on account of money orders purchased from it in Pennsylvania,' was subject to escheat by that State. Pennsylvania asked for a judgment resolving the conflicting claims of it and the defendant States, and for a temporary injunction against payment of the funds by Western Union or a taking of them by the defendant States, pending disposition of the case.5
In their arguments before the Special Master, the parties suggested three different formulas to resolve their conflicting claims. Pennsylvania contended that Western Union's money order records do not identify anyone as a 'creditor' of the company and in many instances do not list an address for either the sender or payee; therefore, strict application of the Texas v. New Jersey rule to this type of intangible would result in the escheat of almost all the funds to the State of incorporation, here New York. To avoid this result, Pennsylvania proposed that the State where the money order was purchased be permitted to take the funds. It claimed that the State where the money orders are bought should be presumed to be the State of the sender's residence. Connecticut, California, and Indiana supported this proposal, as did New Jersey as amicus curiae.
Florida and Arizona also supported Pennsylvania, but argued that where the payee had received but not cashed the money order, his address, if known, should determine escheat, regardless of the sender's address.
New York argued that Texas v. New Jersey should be strictly applied, but that it was not retroactive. Thus, as to money orders purchased between 1930 and 1958 (seven years before the Texas decision)6 New York asserted its right as the State of incorporation to all unclaimed funds, regardless of the creditor's address.7 As for money orders drawn after 1958, New York would apply the Texas rule, and take the funds in all cases where the creditor's address did not appear or was located in a State not providing for escheat.
The Special Master has submitted a report recommending...
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