State v. Phillips Petroleum Company

• Decision Date: 15 December 1947
• Docket Number: 4-8344
• Citation: 206 S.W.2d 771,212 Ark. 530
• Parties: State v. Phillips Petroleum Company
• Court: Arkansas Supreme Court

206 S.W.2d 771

212 Ark. 530

State v. Phillips Petroleum Company

No. 4-8344

Supreme Court of Arkansas

December 15, 1947

Appeal from Pulaski Circuit Court, Second Division; Lawrence C Auten, Judge.

Affirmed.

Guy E. Williams, Attorney General, and John E. Coates Jr., for appellant.

Armistead Rector & Armistead, for appellee.

OPINION

Ed. F. McFaddin, Justice.

This appeal necessitates a research into the common law doctrine of bona vacantia -- that is, "vacant goods" or "unclaimed property" or "personal property without an owner." ^[1]

The State of Arkansas, on the relation of the Attorney General, filed a complaint in the Pulaski Circuit Court against the Phillips Petroleum Company, which complaint -- omitting caption and signature -- reads as follows:

"The plaintiff, State of Arkansas, alleges that the defendant, Phillips Petroleum Company, is a Delaware corporation lawfully authorized to do business in Arkansas, where it is engaged generally in the oil business.

"That this cause is brought both at common law and pursuant to § 11981, Pope's Digest, authorizing a 'suit in the name of the State to recover any forgotten or lost or other outstanding public interests or property . . . to which the State, either in law or equity, may have or claim title . . .'

"That defendant now holds in its possession and custody and has held therein continuously for more than seven years prior to April 15, 1947, various moneys, rents, royalties, credits, and other personal property, which have been unclaimed, forgotten, abandoned, or otherwise lost by various persons (including individuals, firms, associations, partnerships, and corporations), both known and unknown; that defendant received, obtained, procured, and came into possession and custody of said personalty by virtue of various leases, contracts, conveyances, and other agreements, express or implied, relating to real and personal property located in Arkansas.

"That said personalty, being bona vacantia, is subject to appropriation by plaintiff in its sovereign capacity, after due notice to former owners and claimants and an opportunity for asserting their rights.

"That following plaintiff's request therefor, defendant refused to disclose the names, addresses, and other information relating to said former owners and to the personalty so held by defendant for said period; that plaintiff is entitled to said information which is material to this cause, within defendant's own knowledge, and wholly unknown to plaintiff; and that plaintiff attaches hereto interrogatories, supported by affidavit, addressed to defendant, and calling for such information.

"Wherefore, plaintiff prays for an order directing defendant to answer said interrogatories attached hereto; that defendant be ordered to pay and deliver into the registry of this court all such personalty aforesaid held for said period and for such persons; that on receipt thereof by the clerk of this court, an order be entered absolving defendant of and from all liability to any and all former owners and claimants to said personalty; that all former owners and claimants thereto, be given a reasonable time, on proper notice, for the assertion of their rights, if any, in and to said property; and that a final order and judgment be entered appropriating to and vesting in plaintiff any residue, for costs and all other proper and general relief."

Attached to the complaint were interrogatories which -- omitting affidavit -- read as follows:

"Interrogatories to Be Propounded to Defendant

"1. Do you now have in your possession or custody any moneys, rents, royalties, credits, or other personal property, which you have held continuously for more than seven years prior to April 15, 1947, which personalty has laid unclaimed or forgotten or abandoned or otherwise lost by any person (including an individual, firm, association, partnership, and corporation), both known and unknown, which property you received or obtained or procured or came into your possession or custody by virtue of any lease, contract, conveyance, or other agreement, express or implied, relating to real or personal property located in Arkansas?

"2. If your answer is in the affirmative, then file a schedule disclosing the following information:

"A. The last known name and address of such person. If unknown please so state.

"B. The kind, type, nature and value of each item of said personalty so held by you.

"C. The legal description of the real or personal property situated in Arkansas, from whence each item of said personalty was derived."

The circuit court sustained the defendant's demurrer, and when the plaintiff elected to stand on the complaint, a final judgment was entered dismissing the complaint. From that judgment there is this appeal; and the State seeks to reverse the judgment by reliance on (1) § 11981, Pope's Digest, and (2) the common law doctrine of bona vacantia. We consider these contentions.

I. Section 11981, Pope's Digest. This is a part of Act 194 of 1915, and the portion germane to this cause reads: "It shall be the duty of the Attorney General, . . . to institute suit in the name of the State to recover any forgotten or lost or other outstanding public interests or property . . ." This language merely empowers the Attorney General to institute a suit, and has no bearing on the question of whether the complaint in this case states a cause of action.

II. Bona Vacantia. The gist of the complaint is, that the defendant holds -- and has held for more than seven years -- unclaimed, abandoned and forgotten money belonging to unnamed persons; that this money belongs to the State as bona vacantia ; and that the defendant refuses to disclose the names of the persons "wholly unknown to plaintiff," ^[2] to whom such money formerly belonged. The prayer is, that the defendant be required to deposit the money in the registry of the court and answer the interrogatories, so that the State may proceed to obtain the money. Does this complaint state a cause of action under the common law doctrine of bona vacantia

A. The Arkansas Statutes. Chapter 58, Pope's Digest, is entitled "Escheats." (See §§ 5087, et seq., Pope's Digest.) This chapter, in prescribing the method by which the State may receive personal property, is based entirely on the assumption that there must have been a previous administration of the estate of a known decedent. That condition does not exist under the allegations in the complaint in the case at bar, so this statutory proceeding has no application to this case. After analyzing our escheat statutes, appellant concedes that they do not cover such a situation as is here presented, saying:

"The above is the conventional type of escheat legislation applying only to death cases where there are no known takers. In the present situation we are dealing with the escheat of unclaimed and abandoned personalty, irrespective of the death of the owner. We are not contending that the owners are dead, they may or may not be. Therefore, the above statutes have nothing to do with this case. As a result we must turn to the common law to determine the State's right to such property."

B. The Common Law. At common law, "escheat" referred to real estate which reverted to the crown in the absence of heirs; and bona vacantia referred to personal property. "In the case of personal property the crown takes because it is property without an owner -- that is, bona vacantia. As to such property, following the common law, it is not strictly correct to term the right an 'escheat.'" (19 Am. Juris. 380.) In modern American decisions the distinction between the State taking personal property by bona vacantia, and real property by escheat, has been largely disregarded, and many cases ^[3] refer to the State's taking of personal property as being "by escheat." But in the case at bar it is important that we keep in mind the distinction between escheat and bona vacantia; because the State -- to prevail in this case -- must establish that at common law, the doctrine of bona vacantia applies to a situation similar to the one alleged in the present complaint.

Section 1679, Pope's Digest, is Chapter 28, § 1 of the Revised Statutes of 1838, and reads: "The common law of England, so far as the same is applicable and of a general nature, and all statutes of the British Parliament in aid of or to supply the defect of the common law made prior to the fourth year of James the First (that are applicable to our own form of government), of a general nature and not local to that kingdom, and not inconsistent with the Constitution and laws of the United States or the Constitution and laws of this State, shall be the rule of decision in this State unless altered or repealed by the General Assembly of this State."

Did the common law doctrine of bona vacantia apply to a situation such as is here presented? In ascertaining the common law, we not only look to our own cases, but we revert to the early English cases, and the early writers on the common law, such as Blackstone, Kent and Bracton. Cases from other American states are also persuasive as to what was the common law. See 12 C. J. 198, et seq.

The most exhaustive modern case which we have found on bona vacantia is that of Illinois Bell Telephone Co v. Slattery (7 Cir.), 102 F.2d 58. In that case the telephone company had been ordered by the regulatory body of Illinois to make overcharge refunds to subscribers. After several years of attempted refunds, there still remained many unclaimed refunds in the possession of the telephone company, and the State of Illinois sought to capture all these unclaimed refunds under the common law doctrine of bona vacantia. The Circuit Court of Appeals denied such relief to ...