*1 JERSEY, STATE OF NEW PLAINTIFF-CROSS-APPELLANT CORPORATION, RESPONDENT, AND v. UNITED STATES STEEL ANT- APPELLANT AND CROSS- DEFEND RESPONDENT. Argued January 19, 1953 Decided March 1953.
Mr. Josiah the Stryker argued cause for the defendant- cross-respondent Tams & Stryker, {Messrs. Horner, attorneys). Mr. Emerson Richards the cause the argued plaintiff- Parsons, cross-appellant and respondent Theodore D. {Mr. Attorney-General, attorney).
The the opinion of court was delivered by J. This is the appeal of Oliphant, judgment resulting instituted under the proceeding Act, Escheat N. J. S. A. 2:53-15 1951, et as amended by 304, L. c. seq., 1093, p. and was certified here pursuant to Rule 1:5-2 on petition of defendant-appellant, 10 N. J. 21 (1952). cause was heard in the Court, Superior Division, before Chancery Goldmann, the Judge judgment which court escheated certain preferred common stock of the defendant-appel- lant, the whereabouts of the owners of which had been un-
41 the pro- institution of it for to the prior known to 14 years than more payable and the dividends on the stock ceeding, but the proceeding; 14 the commencement years the dividends declared determined that below suit was instituted less before the payable than were under the not escheatable act. main presented appeal.
Two questions pro- relates of the notice sufficiency given first this 21, amended N. as under J. S. A. ceeding required 2:53— 1951, relates whether L. c. 304. The second by question appellant pursuant checks mailing by the dividend claimants, certain filed by dividend .orders of the dividends sufficient transmute payment that the a claim on the checks with the result claims into said therefore would be barred the statute limitations and by be escheatable. 1948, 3, These were instituted on November proceedings 1946, 713, effect. under the L. then in provisions of c. p. an filed answer as permitted defendant-appellant final and the was then stayed pending
statute proceeding Co., 5 determination in State v. Standard Oil N.
(1950). obtained plaintiff-respondent
On June final the time and publication place order of fixing notice in the and conditions for hearing, publication form statute, A. 2:53-21 7 of (section J. S. required act The order fixed the date of hearing of 1946). 7, 1951, and further September notice required three times place the timé thereof should be published *4 in a in Mercer general a week circulation newspaper that interest any claiming directed County, person any the in the stock file his claim ownership should with later five the date fixed for days than prior court The was consistent with the of requirements order hearing. act as necessary
the 1946 to the notice. Legislature 1951, 304, L. which the interim had c. act did not passed the effective until it was approved by become Governor 13, 1951. The difference between the amend- important July here the pre- question
ment and the act insofar existing to be sub- the claims required sented is that the new act the three days prior later than mitted to the court not was to of the amendment date fixed for effect hearing. in which to file the claims. two additional give days under the order of June was had publication Notice the 28, 1951, defendant-appellant from any without objection Í951 of the application here respect possible with two amendment, and it further consented to orders expressly 1951, the court, 13, made extending of one September time until the further order of court claims filing if the defendant any, expressly obligation, removing with claims respect any paid during period 13, 2:53-15 et On November operation of N'. J. 8. A. seq. 1951 a further was made the time for extending order 1, of claims until December 1951. As presentation result and the extension the of the notice orders of given $159,319.71 Steel to claimants out of Corporation paid $342,790.82 unclaimed, total of in dividends listed 52 of stock, 90 shares and 4 original of unclaimed common original preferred shares of unclaimed stock. notice, As to the that if argues question appellant amendment, 1951, 304, valid, L. c. is then the notice in the case at bar is invalid for failure to with given comply such amendment. The gravamen appellant’s complaint the 1951 was in at the time the act effect notice was case, and is to this if given applicable therefore ap- plicable the claimants were entitled to two additional days in which to file their claims to the date of hearing, since the amendment fixed the last date for claims days three before the rather than five hearing days as fixed in the original act. concedes the original Act, 1946, Escheat L. c. was valid.
We are in accord with the conclusion of the trial court the order of June Í951 met the requirements the statiite at the time the order was made and that tbe question application particular státúte on pro- determined at the cedure is point at proceeding which
43 decision that the time for the law is existing applied, the statute the required by as to is when order applicability macle) which for the notices publication posting the the effective date of amend- was some three weeks on'July the Governor ment when it was finally approved by 13, 1951. is that pro rule of construction ordinary unless tbe
cedural- statute prospectively is to be construed that á retroactive opera intent indicates legislative clearly the al intended, steps is it has been held tion so under the taken, the and all done ready things pleadings, is unless an intent to the contrary plainly old law will stand manifest. affected words only by general cases Pending when future reached the proceedings point Con new law 2 Statutory becomes Sutherland operative. J., 701, 136; 59
struction
sec.
C.
sec.
ed.),
p.
(3rd
Iñc.,
&
230 N. Y.
1174;
Houlberg,
Berkovitz v. Arbib
p.
White
v. 6 N. J. L. Ct. (Sup.
mitt, 15 J. L. 165 1835). Ct. (Sup.
It what defendant-appellant not clear can raise the properties dispute custodian of of lack of notice insofar as the individual claim question ants are concerned or how it been in view of prejudiced, has the fact that it on its own motion or order of September 13, 1951, it any relieved expressly obligations But claimants under the Escheat Act. accruing assuming exists, then facts as right possibly they ap such be deemed to have waived should such pear. amend the to move to order of June
right: by failing (1) 28, 1951, to the new statute time at so as to conform some order, date fixed in the hearing or before (2) orders the time extending two agreeing Co., v. Trust 127 N. McSweeney claims. J. L. Equitable & A. 1941). (E. situation here as it presented exists on Viewing notice specific facts without regard any provisions amendment, statute or it is original quite ap- *6 ample received notice have these claimants parent clause due of- process of sufficient meet the requirements to Federal Constitution. 14th Amendment of the the less concept rigid a “due of law” formulates process phrase in and specific other envisaged and more fluid than those and its asserted Rights, Bill of of the particular provisions rather rule, tested, by not a matter of but denial is to be in the par the facts involved of the of appraisal totality U. S. 62 S. Ct. ticular Betts v. Brady, case.
Finally, the order was directing publication this cause act effective and amendatory before became made, was valid when and was not invalidated subse- Thus seem that the legislation. it would quent publication valid; of the was even if the 1951 act is proper notice con- is no sequently validity there need to discuss the of the act, inasmuch admits the defendant-appellant validity of the if the 1951 act is not publication applicable or invalid. that all point defendant-appellant second is divi-
dends for which checks were mailed defendant by the pur- suant to dividend orders were- paid by mailing such checks and thereafter the stockholders had claims on the checks and dividends. 1941 no
Prior dividend checks were mailed to a except pursuant stockholders -to dividend order executed after corporation, with the filed'by stockholder a form stockholders mailed to the 1941 there apparently in and fill it sign the stockholder which requested as in- be would filed receipt upon attached order which Al- future dividends. mailing structions covering and notices of order forms types several different though following question, during used were all: fair illustration of sign Kindly the attached fill in and .“TO STOCKHOLDERS: you order, upon receipt file
permanent we will of the same covering mailing your future dividends instructions it as your holding Corporation. of the CAPITAL STOCK of Shares in the This, ORDER, being all future dividends covers PERMANENT *7 further instructions are received. remain in force until and will TRIMBLE, RICHARD Treasurer. Bro., & Lehman 15,350 $73.48 DIVIDEND ORDER. PERMANENT CORPORA- To the Treasurer of the UNITED STATES STEEL City. TION, Broadway, York 71 New by York, pay, cheque Please New the order of........... following post ...................... mail to address office due, ................................ and which all dividends may Stock, Capital due, hereafter be of Preferred on all shares standing, Common, Corporation, of now the United States Steel may my and which hereafter stand of in name on the books of record writing Corporation, the said this order be revoked in until shall legal by me, or, my by my representatives.” death, in case of The trial a in as fact there nothing court found the 'dividend of under consideration or forms notice orders which could be a positive construed as ‘or agreement, that matter be any the check would received agreement as law payment.” The common rule is that check or note, either of a third re promissory person, debtor or for a debt, ceived is not if not itself payment paid, except where it is eases be received positively agreed to payment. Thomas,
Freeholders Middlesex v. 20 N. J. Eq. 39 (Ch. of J. 1869); Weisberger v. G. J. Corporation, 107 61 Eq. Service, etc., & A. v.
(E. 1930); Condenser Co. Mycalex 46. America, Div. Super. (Law 7 N. J.
Corporation of S., 233. Payment, p. 1950); § C. do would urged construction Obviously, violence to the parties. intention addresses as to the stockholders’ purpose inquiry t|ie at the to them given the authorization the checks to forward the cheeks and'to'save addresses was to insure delivery and the the inconvenience company stockholders "Certainly the dividend. personal calls for the payment a new right there was substitution of agreement no for the the' place of action either in debt or on check funds set stockholders’ trust as cestuis rights que funds for the aside from mass of' corporation general tffe Co., payment supra, of dividends. State v. Standard Oil. ’ in that at The rule correctly applied 302. of law was p. it had so declared by decision the fact that not been courts at the time were mailed has no these dividend orders McDermott v. effect on its or existence. verity, efficacy Paterson, 122 N. J. L. at & A. p. 1939). (E. in the
No for so substantial agreements change rights the circum- can be equities parties fairly implied here It that such change stances is certain presented. never within the of the not contemplation parties; certainly within of the stockholders who undoubt- contemplation insure the edly designed delivery considered inquiry checks, of the alter the nature of the of action. Indeed, no stockholders gave any thought possibility *8 check dishonored. short of being Nothing express agreement new old would accept obligation alter the There is a trustee- character of the relationship. as to dividends which continued until the dividend is ship unless the waive that actually paid, parties by agreement relation favor of another. in its that the argues State cross-appeal
escheat entered below should include the unclaimed divi- dends, not those declared 14 or only years more institution of this action but also those declared within the 14-year N. J. period. provides: S. A. 2:53-17
4? owner, owner, person any “Whenever beneficial or entitled to personal property State, within this has beeh or 'shall remaiA be and period years, unknown for of fourteen Successive or whenever owner, person, the Whereabouts of such beneficial owner or has been period or shall be and remain unknown for the óf fourteen successive years, any personal property or whenever wherever situate has been period or shall be and remain unclaimed for the of fourteen succes years, then, any event, personal property sive such1 Such shall escheat to the State.” term “personal act, as defined in the property” N. J. A. 2:53-15, 8. includes: “* * * moneys, negotiable instruments, action, interest, choses estate, stocks, bonds, deposits, debts or demands due to the escheated machinery, crops, stock, fixtures, every farm live other kind of tangible intangible property thereon, up or and the accretions until escheat, the time of the of the bill of but shall not mean and property property custody any‘court
include real or in the in this State, any personal by property chapter nor covered one hundred ninety-nine forty-five.” of the laws of one thousand hundred nine (Italics supplied.)
We find no merit in the State’s contention that the escheat of stock includes the unclaimed dividends within the 14-year period. The statute works a forfeiture therefore must be strictly construed. v. McNeely Woodruff, Sutherland, L. Ct. (Sup. 1833); 3 Con struction secs. 5603 (3d ed.), and 5604. It is a well settled principle escheat and forfeiture are not favored law, and any doubt as to whether property subject escheat Jur., is resolved against State. 19 Am. sec. 387.
p. There is in the nothing of definitive theory include, stock, accretions of the dividends declared within the 14-year period and unpaid for want of knowl edge of the stockholders’ whereabouts. Dividends on stock constitute a portion of the accumulated surplus profits of the enterprise allotted to the stockholders according their several interests upon declaration of the dividend which becomes separate and distinct from the stock and ordinarily would not pass by the transfer of the stock the stockholder unless the dividends were included in the contract. This is *9 not but the transfer before
so even- to dividends declared Fiduciary v. Martindell until after the transfer. payable & Counsel, A. Inc., 1943). at 415 (E. J. Eq. page N. the escheat have for The could Legislature provided is and the years, question within 14 of dividends declared such property. escheat whether intended to Legislature prop personal to be that before seems legislative policy must be or his whereabouts can be escheated erty owner 2:53-17, and A. a of 14 N. J. 8. period years, unknown for in N. S. A. found J. in of personal property the definition alia, personal property inter defines statute, 2:53-15 the * * * of tan kind “stocks, every other mean bonds thereon.” and the accretions gible intangible property as per- effect “accretions” distinguish is define upon from the separate property sonal and distinct property terms-of Thus, express it an which is “accretion.” period dividends declared within prescribed act the de the dividends of 14 escheatable because years have be said to 14-year clared within the cannot period that period. remained unclaimed for below was entered decision When judgment fee until for counsel appellant’s application reserved on in a cause pass upon question pending this court should this in us, and was retained for jurisdiction purpose before should be sustained. In State the event that counsel fee Co., J. that a Elevator we determined v. Otis in a proper counsel fee be allowed in action escheat can where, here, the defendant case, actively opposed but escheat, itself, counsel fee should be title no claiming awarded. below affirmed. I in the affirmance of the join (concurring).
Heher, the reasons expressed generally judgment, Mr. Justice Oliphant. opinion matter of the State’s subject cross-appeal,
As to the declared within 14 dividends unclaimed herein, in- complaint statutory principle
49 yoked abandonment of presumption raises rebuttable be or shall “has been property where the subject personal successive fourteen of period and remain unclaimed for proceeding where the 2:53-17), J. 8. A. years” (N. declared dividends in this unclaimed principle,
grounded are not escheatable. within that period in dissenting opinion in
But, my stated for reasons allow I not Co., N. J. would v. Otis Elevator State custodian. a counsel fee to dis- I Jr., part). J.
William (dissenting Brennan, relates to as it of the sent from the affirmance the stock the escheat of I think that State’s cross-appeal. declared thereon therewith the dividends
should include declared stock, whether Dividends on within 14 years. are “accretions” the 14-year period,
before or within this, conceding The contemplation. majority, statutory have pro- could Legislature that “The conceding and also within 14 years,” declared vided the escheat of dividends read as is to be A. 2:35-15 nevertheless holds that N. J. 8. escheat- an item in the of catalog “accretions”
constituting upon the property and distinct from able items “separate 'accretion,’” and that the condition it is an which un- remain “shall be and that the personal property escheat is there- years” fourteen successive period claimed for the of The major- I cannot agree. to an accretion. applicable fore are admit the existence if we only view is tenable ity immediately, pre- in the statute. clause redundancy kind of every is “and other the reference to accretions ceding which, the major- accepting tangible intangible property,” or in existence is embracive of accretions ity interpretation, wholly empty significance make over 14 would We wher- “and thereon.” should'strive the added accretions word meaning every ever substance possible give be here readily by reading a statute. That can done it be me the intended Legislature statute as it is clear to bonds, ma- “stocks, read, is, deposits, as saying livestock, fixtures and kind every farm other chinery, crops, if escheatable shall be intangible property” tangible in which years, period unclaimed for the successive “the case, alone, as well accretions but property the bill time thereon” in existence at “the when such ac- escheat,” to the time and without regard existence, are escheated with cretions came into to be of the part property. the ma- which result under impractical consequences illustrated what is happening jority’s interpretation in this the State under case. stock over to goes *11 Dividends declared as as 1901 were un- judgment. long ago claimed But the dividends declared upon only some of it. 1934 escheat under the Those to declared judgment. unclaimed from 1934 the time the bill of escheat in 1948 remain with the The State and custodian. parties must be of further put expense litigation State must whether to after (the decide one action bring declared, the 14 have the dividend last elapsed or to several as the time runs as to one or some of bring and what In the them), purpose? None itself. suggests a very absence of indicated intent to plainly legislative bring about this undesirable result we should not interpret statute am it. I produce convinced is such only intention not to be found in the language of statute but that on the has its contrary Legislature plainly evinced desire to avoid it.
The Chief and Justice this dis Justice join Jacobs sent. Heher, Oliphant, For Wachenfeld affirmance—-Justices Burling —4.
For Vanderbilt, Justice and Justices modification —Chief and Brennan- —3. Jacobs