State by Hilgendorff v. American Can Co.

• Decision Date: 16 March 1964
• Docket Number: No. A--64,A--64
• Citation: 198 A.2d 753,42 N.J. 32
• Parties: STATE of New Jersey, by Hugo A. HILGENDORFF, Jr., Attorney-at-Law specially designated by the Attorney General of the State of New Jersey, Plaintiff- Respondent, v. AMERICAN CAN COMPANY, a New Jersey corporation, Defendant-Appellant.
• Court: New Jersey Supreme Court

Page 32

42 N.J. 32

198 A.2d 753

STATE of New Jersey, by Hugo A. HILGENDORFF, Jr. Attorney-at-Law specially designated by the Attorney General of the State of New Jersey, Plaintiff- Respondent, v. AMERICAN CAN COMPANY, a New Jersey corporation, Defendant-Appellant.

No. A--64.

Supreme Court of New Jersey.

Argued Jan. 20, 1964.

Decided March 16, 1964.

John C. Heavey, Jr., Newark, for appellant (Carpenter, Bennett & Morrissey, Newark, attorneys; Samuel M. Coombs, Jr., Newark, of counsel).

Charles J. Kehoe, Deputy Atty. Gen., for respondent (Arthur J. Sills, Atty. Gen., attorney; Hugo A. Hilgendorff, Jr., East Orange, of counsel and on the brief).

The opinion of the court was delivered by

JACOBS, J.

In 1960 a partial judgment in the sum of $37,950.99 was entered in the plaintiff's favor with the defendant's consent. In June 1961 a judgment for the plaintiff in the additional sum of $1,896.19 was entered. No appeal was taken from either judgment within the time allowed, or indeed at any time, and both judgments were fully paid. Thereafter in July 1962 the defendant moved for relief under R.R. 4:62--2. Its motion was denied by Judge Kingfield and its appeal from the order of denial was certified by us before argument in the Appellate Division.

The plaintiff State of New Jersey's complaint was filed in 1959; it sought custodial escheat under N.J.S. 2A:37--29 et seq., N.J.S.A. of unclaimed dividends, interest, wages and other cash obligations in the possession of the defendant American Can Company, a corporation of New Jersey. In due course the defendant filed an answer which set forth that it possessed unclaimed property in the sum of $39,972.98 which might be taken into custody by the plaintiff; it asserted no defense to New Jersey's custodial claim except with respect to a small portion thereof ($2,171.32) which it alleged was also being claimed by the State of California. Its answer asserted by way of separate defense that California was an indispensable party and that the amount of its claim should be eliminated from the proceeding. In a pretrial order the defendant stipulated that the State of New Jersey was entitled to custodial escheat of the property in its custody (less the amount being claimed by California) and that a partial judgment to that effect could be entered immediately. On September 16, 1960 findings of fact and conclusions of law were entered by Judge Kingfield; after referring to the defendant's consent to the entry of partial judgment, the conclusions expressly set forth that the State was entitled to custody, that its custodial escheat act was intended to furnish absolute protection against double liability and that to that end the State waived any claim of sovereign immunity. A judgment dated September 16, 1960 incorporated the findings of fact and conclusions of law, directed that the defendant pay the sum of $37,711.30 to the State of New Jersey, and retained jurisdiction for the purpose of granting reimbursement in the event the defendant is subjected to double liability. To correct an inadvertency the September 16 judgment was amended on December 16, 1960 to indicate that California's claim was in the amount of $1,896.19 (instead of $2,171.32 as theretofore asserted) and that partial judgment was in the sum of $37,950.99 (instead of $37,711.30 as theretofore entered). The defendant delivered its check for $37,950.99 to the Treasurer of New Jersey and a warrant for satisfaction was duly filed.

On March 29, 1961 Judge Kingfield passed on the issues which related to the sum claimed by California as well as New Jersey. He determined that the New Jersey court had jurisdiction to adjudicate the matter, that California was not an indispensable party, that New Jersey could take custody under its custodial escheat act without depriving the defendant of due process, and that the defendant could be given absolute protection against double liability by a reservation of jurisdiction in the judgment. In his determination, the Judge expressly incorporated an opinion he had filed in another case where he had referred to Commonwealth by Gottlieb v. Western Union Tel. Co., 400 Pa. 337, 162 A.2d 617 (Sup.Ct.1960), then pending on appeal before the United States Supreme Court. 368 U.S. 71, 82 S.Ct. 199, 7 L.Ed.2d 139. There Pennsylvania had escheated property which was in the possession of Western Union, a New York corporation; the property was also being actively claimed by New York. Judge Kingfield first considered withholding his decision until the Supreme Court's opinion was hended down but then concluded to decide the matter, noting (1) that since Pennsylvania had an absolute escheat act in contrast to New Jersey's custodial escheat act, the Pennsylvania case was not on all fours with the one before him, and (2) that if either party was dissatisfied with his determination, appeal could be taken and a dispositive ruling obtained. On June 16, 1961 he entered judgment for the State of New Jersey in the sum of $1,896.19. His judgment concluded with a retention of jurisdiction for the purpose of granting reimbursement in the event the defendant is subjected to double liability. The defendant did not appeal from the judgment and paid it in full.

On December 4, 1961 the Supreme Court filed its opinion in Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71, 82 S.Ct. 199, 7 L.Ed.2d 139 (1961), reversing Pennsylvania's judgment of escheat in Commonwealth v. Western Union Tel. Co., supra. On July 17, 1962 the defendant American Can Company filed a notice of motion under R.R. 4:62--2 seeking to be relieved of the escheat judgment against it. The grounds set forth in the notice were (1) the judgment was void, (2) it was entered in violation of due process and the defendant's rights under the Fourteenth Amendment, and (3) for 'other reasons justifying relief.' After hearing argument Judge Kingfield denied the motion. In attacking his ensuing order, the defendant's brief embodies points which allege that the judgment was void and was entered without due process, and that the lower court had abused its discretion and had ignored the terms of the judgment in refusing to grant the equitable relief sought by the motion. Although the defendant's motion and the points in its brief refer in terms to but one judgment, there were in fact two judgments entered at different times and involving different elements. They are properly to be viewed and dealt with as separate judgments for purposes of the present proceeding. Cf. Applestein v. United Board & Carton Corp., 35 N.J. 343, 173 A.2d 225 (1961).

The early common law doctrine of escheat was associated with real property; it was an incident of tenure and related to the right of the lord to take for want of a tenant. Later the doctrine was extended to personal property which had no owner or whose owner or owner's whereabouts was unknown. In 1946 the New Jersey Legislature asserted its sovereign power to appropriate such personal property within its borders by the passage of an absolute escheat act. L.1946, c. 155; N.J.S. 2A:37--11 et seq., N.J.S.A. That act was held to be a constitutional exercise of legislative power and many proceedings were brought under it. State by Parsons v. Standard Oil Co., 5 N.J. 281, 74 A.2d 565 (1950), aff'd Sub nom., Standard Oil Co. v. New Jersey, 341 U.S. 428, 71 S.Ct. 822, 95 L.Ed. 1078 (1951). In 1951 the New Jersey Legislature passed a custodial escheat act which provided an alternative method for taking custody of (and thereafter escheating) personal property. L.1951, c. 304; N.J.S. 2A:37--29 et seq., N.J.S.A. This act was upheld and hundreds of Superior Court proceedings were prosecuted in accordance with its terms. See State v. Thermoid Co., 16 N.J. 274, 108 A.2d 421 (1954); State v. American-Hawaiian Steamship Co., 29 N.J.Super. 116, 101 A.2d 598 (Ch.Div.1953); cf. State by Parsons v. United States Steel Corp., 22 N.J. 341, 347, 126 A.2d 168 (1956). Thus when in 1959 the State of New Jersey instituted its custodial escheat action against the defendant American Can Company there was no question as to the jurisdiction of the Superior Court to entertain it. Personal jurisdiction was present because there was due service of process on the defendant and jurisdiction of the subject matter was present because the court had power to determine cases of the class to which the action belonged. See Abbott v. Beth Israel Cemetery Ass'n, 13 N.J. 528, 537, 100 A.2d 532 (1953); State v. Osborn, 32 N.J. 117, 122, 160 A.2d 42 (1960); 7 Moore, Federal Practice, par. 60.25(2), at p. 264 (2d ed. 1955). When the Superior Court entered the partial judgment of $37,950.99 in 1960 (with the defendant's consent) it clearly had jurisdiction to do so and the same was true when it entered the 1961 judgment in the additional sum of $1,896.19. Neither judgment was in any view subject to attack as being void. See West Jersey Trust Co. v. Bigham, 118 N.J.L. 160, 161, 191 A. 743 (E. & A.1937); 7 Moore, op. cit. supra, par. 60.25, at p. 257 et seq. As Professor Moore has pointed out, policy considerations strongly dictate that the concept of void judgments be restricted and that unappealed civil judgments ¹ not be dealt with as void except where there has been a plain usurpation of power. In the light of the then prevailing circumstances (including the decision in Standard Oil Co. v. New Jersey, supra) the judgments entered by Judge Kingfield, and the hundreds of earlier escheat judgments, may not now fairly be treated as plain usurpations of power and therefore void.

Western Union limited the sweep of Standard Oil (cf. Note, 62 Colum.L.Rev. 708 (1962)) by holding that where two or more states are actually seeking to escheat the same property, state courts may not entertain jurisdiction, thus leaving the disputing states to seek original relief in the Supreme Court. It would appear to have no bearing whatever on the 1960 consent judgment which dealt...