United States v. Klein, No. 439

CourtUnited States Supreme Court
Writing for the CourtSTONE
Citation58 S.Ct. 536,303 U.S. 276,82 L.Ed. 840
PartiesUNITED STATES v. KLEIN, Escheator of Commonwealth of Pennsylvania
Decision Date28 February 1938
Docket NumberNo. 439

303 U.S. 276
58 S.Ct. 536
82 L.Ed. 840
UNITED STATES

v.

KLEIN, Escheator of Commonwealth of Pennsylvania.

No. 439.
Argued Feb. 11, 1938.
Decided Feb. 28, 1938.

Messrs. Homer S. Cummings, Atty. Gen., and Sam E. Whitaker, Asst. Atty. Gen., for the United States.

Page 277

Mr. A. Jere Creskoff, of Philadelphia, Pa., for appellee.

Mr. Justice STONE delivered the opinion of the Court.

The question for decision is whether statutes of the Commonwealth of Pennsylvania, Purdon's Penn.Statutes, tit. 27, §§ 41, 45, 282, 334, are unconstitutional because they authorize interference with a federal court and an invasion of the sovereignty of the United States, in so far as they purport to confer jurisdiction on a state tribunal to declare the escheat of moneys deposited in the registry of the federal court and later covered into the Treasury of the United States.

In a suit brought by secured bondholders in the District Court for Eastern Pennsylvania to compel payment of the bonds by a defendant on the ground that it had appropriated the security to itself, a decree was entered in favor of the plaintiffs and other bondholders similarly situated, with provision for notice to the latter that they file their claims in the suit. Brown v. Pennsylvania Canal Co., D.C., 229 F. 444; Pennsylvania Canal Co. v. Brown, 3 Cir., 235 F. 669; Brown v. Pennsylvania R. Co., 3 Cir., 250 F. 513. It appearing that certain of the bondholders had not filed their claims and could not be found, the defendant was directed by the court to pay into its registry the money due to such bondholders, which was then placed in a designated depositary of the United States, in the name and to the credit of the court, pursuant to R.S. § 995, 28 U.S.C. § 851, 28 U.S.C.A. § 851. On June 30, 1926, the fund was deposited in the Treasury of the United States as required by R.S. § 996, as amended, 28 U.S.C. § 852, 28 U.S.C.A. § 852, in the case of funds paid into court and unclaimed for more than five years.

In 1934 the present appellee, as Escheator of the Commonwealth of Pennsylvania, proceeding under the Penn-

Page 278

sylvania statutes which authorize the escheat of moneys paid into court where the persons entitled to them have remained unknown for seven years, petitioned the District Court to declare an escheat of the fund. The court dismissed the petition, without prejudice, on the grounds that appellee had not yet procured a declaration of escheat, which was deemed necessary in order to perfect the Commonwealth's title, and that the court was without jurisdiction to make such a declaration. Thereupon the Pennsylvania escheat statutes were amended, Acts of May 16, 1935, P.L. 195, June 28, 1935, P.L. 475, to confer upon the court of common pleas jurisdiction to decree an escheat of moneys deposited in the custody or under the control of any court of the United States within the Commonwealth.1

Page 279

The present suit was brought by appellee in the court of common pleas, No. 5, of Philadelphia county, upon a petition setting out the facts already detailed and praying a declaration that the fund had escheated to the Commonwealth. The United States appeared in the suit and moved to dismiss the petition on the ground that the state court was without jurisdiction to escheat moneys in the custody of the United States or of its courts. The order of the court of common pleas granting the motion was reversed by the Supreme Court of Pennsylvania, which held that the statutes relating to escheat of funds in the custody of federal courts conferred jurisdiction on the court to declare the escheat and was subject to no constitutional infirmity, since exercise of that jurisdiction involved no interference with the federal court and no attempted control over funds in its custody. Escheat of Moneys, in Custody of United States Treasury, 322 Pa. 481, 186 A. 600.

The United States then filed an answer and upon a trial of the issues the court of common pleas gave its decree declaring that the fund had escheated to the Commonwealth and that appellee had authority to claim it, and directing him to apply to the District Court for an order that the moneys be paid to him as Escheator. The state Supreme Court affirmed so much of the decree as declared the escheat and authorized appellee to prosecute the claim of the Commonwealth to the moneys. 326 Pa. 260, 192 A. 256. From its decree of affirmance the case comes here on appeal under section 237 of the Judicial Code, as amended, 28 U.S.C.A. § 344.

Section 996 of the Revised Statutes, as amended, 28 U.S.C.A. § 852, directs that when the right to moneys paid into federal courts has been ad-

Page 280

judicated and they are unclaimed for more than five years, they...

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94 practice notes
  • Second Ave. Holdings, LLC v. Latimer (In re Latimer), Bankruptcy No. 11–00223–BGC7.
    • United States
    • U.S. Bankruptcy Court — Northern District of Alabama
    • March 26, 2013
    ...343, 347, 80 L.Ed. 331, 338 (1936). But cf. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938). This has been true even where the Government was a claimant in existing state proceedings and then sought t......
  • Treasurer of N.J. v. U.S. Dep't of the Treasury, No. 10–1963.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • June 27, 2012
    ...proceeds from the matured but unredeemed bonds. But we disagree. In support of their position, the States cite United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938), in which the Escheator of the Commonwealth of Pennsylvania sought to recover funds that a private company o......
  • Colorado River Water Conservation District v. United States Akin v. United States, Nos. 74-940
    • United States
    • United States Supreme Court
    • March 24, 1976
    ...343, 347, 80 L.Ed. 331, 338 (1936). But cf. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938). This has been true even where the Government was a claimant in existing state proceedings and then sought t......
  • Second Ave. Holdings, LLC v. Latimer (In re Latimer), Case No.: 11-00223-BGC7
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • March 26, 2013
    ...343, 347, 80 L.Ed. 331, 338 (1936). But cf. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938). This has been true even where the Government was a claimant in existing state proceedings and then sought t......
  • Request a trial to view additional results
94 cases
  • Second Ave. Holdings, LLC v. Latimer (In re Latimer), Bankruptcy No. 11–00223–BGC7.
    • United States
    • U.S. Bankruptcy Court — Northern District of Alabama
    • March 26, 2013
    ...343, 347, 80 L.Ed. 331, 338 (1936). But cf. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938). This has been true even where the Government was a claimant in existing state proceedings and then sought t......
  • Treasurer of N.J. v. U.S. Dep't of the Treasury, No. 10–1963.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • June 27, 2012
    ...proceeds from the matured but unredeemed bonds. But we disagree. In support of their position, the States cite United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938), in which the Escheator of the Commonwealth of Pennsylvania sought to recover funds that a private company o......
  • Colorado River Water Conservation District v. United States Akin v. United States, Nos. 74-940
    • United States
    • United States Supreme Court
    • March 24, 1976
    ...343, 347, 80 L.Ed. 331, 338 (1936). But cf. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938). This has been true even where the Government was a claimant in existing state proceedings and then sought t......
  • Second Ave. Holdings, LLC v. Latimer (In re Latimer), Case No.: 11-00223-BGC7
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • March 26, 2013
    ...343, 347, 80 L.Ed. 331, 338 (1936). But cf. Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946); United States v. Klein, 303 U.S. 276, 58 S.Ct. 536, 82 L.Ed. 840 (1938). This has been true even where the Government was a claimant in existing state proceedings and then sought t......
  • Request a trial to view additional results

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