State v. Standard Oil Co., Docket 169/14.

• Decision Date: 03 March 1949
• Docket Number: Docket 169/14.
• Citation: 64 A.2d 386
• Parties: STATE v. STANDARD OIL CO.
• Court: New Jersey Superior Court

64 A.2d 386

STATE

v.STANDARD OIL CO.

Docket 169/14.

Superior Court of New JerseyChancery Division.

March 3, 1949.

Syllabus by the Court.

1. Our Escheat Act, R.S. 2:53-15, et seq., N.J.S.A., is not manifestly unconstitutional on its face, notwithstanding the right to effectuate such power with respect to certain property and in certain special circumstances may be lawfully blockaded.

2. Under the common law the doctrine of bona vacantia was confined to personalty to which no one was lawfully entitled or which no one was legally capable of receiving by succession.

3. The power of the sovereign state to take charge of personal property inferentially abandoned or unclaimed during the period specified by the statute cannot now be successfully controverted.

4. The decisions in this state have uniformly held that when a right of action has become barred under our statutes of limitations, the statutory defense is a vested right that cannot be rescinded or disturbed by subsequent legislation.

5. The applicability of the statute of limitations, and its defensive efficacy, depend upon the factual circumstances of the particular case.

6. The essential elements of due process of law as guaranteed by the Fourteenth Amendment of the federal Constitution are appropriate notice of the judicial action and adequate opportunity to be heard.

Petition by the State of New Jersey, by Walter D. Van Riper, Attorney General of New Jersey, against Standard Oil Company, for judgment declaring that personal property possessed and retained by defendant has escheated to the State and directing delivery of the property to the State Treasurer.

Judgment in accordance with opinion.

Emerson L. Richards, Sp. Deputy Atty. Gen., for the State,

Stryker, Tams & Horner, of Newark (Josiah Stryker and Valdemar Beeken, both of Newark, of counsel), for defendant.

George K. Large, of Flemington, for United States Tobacco Co. and United Fruit Co.

John A. Hartpence, of Jersey City, for United States Pipe & Foundry Co.

JAYNE, Judge.

In pursuance of the terms of a legislative enactment entitled ‘An Act providing for the escheat of certain unclaimed personal property’ and its amendments, R.S. 2:53-15 to 2:53-32, N.J.S.A., a petition was filed in the Court of Chancery, in the name of the State of New Jersey, charging that the defendant has custody or possession of certain personal property which, by reason of the occurrence of one or more of the contingencies mentioned in the statute, has escheated to the State. A judgment is sought in this court declaring that the personal property so possessed and retained by the defendant has escheated to the State and directing its delivery to the State Treasurer.

The defendant in a schedule attached to its answer to the petition has revealed its possession of certain property comprehended by the statutory designation of escheatable personal property, such as unclaimed dividends, debenture interest coupons, Liberty Loan Bond subscriptions, etc., which have for more than fourteen successive years prior to the filing of the present petition remained unclaimed and unpaid because the beneficial owner or person entitled thereto and his address have been unknown.

The defendant denies, however, that such property is now subject to escheat by the State and the averments of the answer introduce for decision, inter alia, certain issues of law which have been summarized in the plaintiff's brief in the following fashion:

‘A. Constitutionality:

‘1. That if the escheat statute is construed so as to provide for the escheat to the State of the property here involved, it violates both the New Jersey Constitution and the Constitution of the United States, in that it violates the right of the defendant to acquire, possess and protect property, in that it takes the property for the public use of the State of New Jersey without compensation and in that it deprives the defendant of its property without due process of law.

‘2. That with respect to the shares of stock listed in Schedule A, the last known domiciles of the record owners of the said shares were outside New Jersey, and to escheat the said shares of stock would deprive the owners thereof of their property without due process of law, in violation of the New Jersey Constitution and the Constitution of the United States.

‘B. Situs:

‘That many of the persons listed in Schedule A as the former owners, or former beneficial owners, or persons entitled, were never citizens nor residents of the State of New Jersey and that the claims of such persons never had a situs in New Jersey; that if such claims were subject to escheat in any jurisdiction, they would be subject to escheat in the State of the last known domicile of such persons.

‘C. Jurisdiction:

‘1. That this court is without jurisdiction to escheat such property to the State of New Jersey, and a decree of escheat of this court would not protect the defendant from the claims of such other States in which the former owners or former beneficial owners might have been domiciled.

‘2. That this court is without jurisdiction to escheat the shares of stock of the record owners thereof, since the last known domicile of such persons was outside New Jersey, and to escheat such property would mean that the record owners or other persons who may now own the same, would be deprived of their property without due process of law; that this would expose this defendant to liability to the true owners of the said shares of stock, which liability might be asserted against the defendant in other states where the defendant is subable, the defendant being suable in a number of other states, or would expose the defendant to escheat proceedings in the states of the last known domiciles of the owners of the said shares of stock.

‘D. Statute of Limitations:

‘That all causes of action with relation to the said dividends, etc., accrued and arose against the defendant more than six years prior to the passage of the escheat act, as well as more than six years prior to the institution of these proceedings, and that any right of action has been barred by the New Jersey Statute of Limitations (N.J.S.A. 2:24-1); that therefore all claims thereon have been legally extinguished and have become wholly unenforceable against the defendant.

‘The defendant asserts that it has a vested right in the defense of the Statute of Limitations as to all such claims, and that the legislature had no power to divest the defendant of such vested right.’

At a pre-trial conference it was proposed that it would be advantageous to debate at a preliminary hearing the controversial points essentially of a legal character in their abstract form. Counsel retained in three other similar cases, to wit, State v. United Fruit Company, docket No. 169/54, State v. United States Pipe & Foundry Company, docket No. 169/53, and State v. United States Tobacco Company, docket No. 169/15, have participated. The expectation that numerous additional proceedings would be instituted in pursuance of the purposes of the statute is now a reality. Presently I shall have before me 107.

The briefs of counsel have invited my attention to more than one hundred reported decisions, augmented by numerous references to other sources of information relating to the subject of escheat and to the doctrine of Bona Vacantia. I have, despite my current duties, consulted them.

In this pursuit, however, I have discovered that some of the points of law projected for consideration cannot be preliminarily settled from an abstract presentation because the rulings necessarily implicate their application to a concrete statement of the facts of the particular case. To announce the variations in the law in their apposition respectively to the imaginable divergencies of the facts of such cases would require a composition of inordinate capacity.

Neither shall I be enticed by the abundance of informative material at hand to discuss historically the power of escheat which in this country has subsumed the governmental appropriation of personal property. A legislative recognition of the power to escheat real property may be found in New Jersey as early as February 27, 1828. Elm.Dig. 162; O'Hanlin v. Den. ex dem. Van Kleeck, 20 N.J.L. 31, affirmed Van Kleek v. O'Hanlon, 21 N.J.L. 582. Perhaps the recent enactments in many states have been inspired by the appetite for new sources of needed public revenue but, as Mr. Justice Jackson recently remarked, ‘Escheat, of course, is not to be denied on constitutional grounds merely because the motive of the states savors more of the publican than of the guardian.’ Connecticut Mutual Life Ins. Co. v. Moore, 333 U.S. 541, 68 S.Ct. 682, 694, 92 L.Ed. 863. True, the sovereign power of escheat has been obliged to accommodate itself to the processes of evolution in governmental and property innovations, yet its legal vitality has not diminished on the way.

Is our Escheat Act manifestly unconstitutional on its face? In my judgment it is not. The power of the sovereign state of take charge of personal property evidently so abandoned or unclaimed cannot be successfully controverted, notwithstanding the apprehension that the right to effectuate such power with respect to certain property and in certain special circumstances may be lawfully blockaded. Anderson Nat'l Bank v. Luckett, 321 U.S. 233, 64 S.Ct. 599, 88 L.Ed. 692, 151 A.L.R. 824; Hamilton v. Brown, 161 U.S. 256, 16 S.Ct. 585, 40 L.Ed. 691; Christianson v. King County, 239 U.S. 356, 36 S.Ct. 114, 60 L.Ed. 327; Security Sav. Bank v. California, 263 U.S. 282, 44 S.Ct. 108, 68 L.Ed. 301, 31 A.L.R. 391; United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840; Provident Inst. for Savings v. Malone, 221 U.S. 660, 31 S.Ct. 661, 55 L.Ed. 899, 34 L.R.A.,N.S., 1129; Cockrill v. California, 268 U.S. 258, 45 S.Ct. 490, 69 L.Ed. 944; Connecticut Mutual Life Ins. Co. v. Moore, supra; In re Melrose Ave., 234 N.Y. 48, 136 N.E. 235, 23 A.L.R....