WESTERN UNION CO. v. PENNSYLVANIA
Legal provision: Due Process
Argument of John G. Buchanan, Jr.
Chief Justice Earl Warren: Number 15, Western Union Telegraph Company, Appellant, versus Pennsylvania, by Sidney Gottlieb, Escheator.
Mr. Buchanan, you may proceed now.
Mr. John G. Buchanan, Jr.: Mr. Chief Justice, may it please the Court.
This appeal is from the affirmance by the Pennsylvania Supreme Court of a decree declaring the escheat to the Commonwealth of Pennsylvania of the amounts of Western Union telegraphic money orders which originated at office in Pennsylvania.
The Western Union Telegraph Company, the appellant, asserts that the Pennsylvania escheat law as here applied is repugnant to the Fourteenth Amend -- the Due Process Clause of the Fourteenth Amendment because it escheats these amounts with which the Pennsylvania has no sufficient contacts without sufficient notice and without giving Western Union the protection to which it is entitled or should be entitled under the Constitution against liability to others for the same amounts.
Western Union is a New York corporation with its principal office in New York City.
It has thousands of offices in the 48 states and District of Columbia where it is registered to do business.
It's not registered in Alaska or Hawaii.
Its interstate business is regulated by the interstate -- by the Federal Communications Commission, formerly by the Intestate Commerce Commission.
It has been continuously regulated.
A telegraphic money order transaction is designed to cause a credit for payment of money to be telegraphed from the office of origin to a payee at another office.
The sender -- sender of the money order goes into Western Union office and fills out an application form and pays the principal amount plus the tolls and gets a receipt.
A message is then sent from the office of origin to the Western Union office closest to the designated payee who is often called the sendee.
This message directs the second office, the office of destination to make payments to the designated sendee by negotiable draft the file tariffs of the -- this telegraph company call for this form of payment.
The office of destination gets to in touch with the sendee.He is called in and given a negotiable draft.
If he wants cash immediately, he can endorse that draft and in fact in return for currency.
But very often, because this draft is in some ways preferable to cash, he walks out of the office with the draft.
Justice Potter Stewart: And who's the drawee of the draft, who is he?
Mr. John G. Buchanan, Jr.: The drafts are drawn on banks called fiscal agents and sub-fiscal agents of Western Union but they're just banks in various cities throughout the United States but none of those cities are in Pennsylvania.
Justice Potter Stewart: Western Union is drawer?
Mr. John G. Buchanan, Jr.: Western Union draws against its account at those banks --
Justice Potter Stewart: But yet, what are -- one of those fiscal agencies?
Mr. John G. Buchanan, Jr.: One of those fiscal agencies?
Justice Potter Stewart: And the sendee is the -- is the payee of the draft?
Mr. John G. Buchanan, Jr.: The sendee is named as the payee --
Justice Potter Stewart: Normally --
Mr. John G. Buchanan, Jr.: But of course these are negotiable.
He can endorse them and they can travel as couriers without luggage.
Justice Potter Stewart: Doesn't really fit differ much with check, does it?
Mr. John G. Buchanan, Jr.: It's a check.
Justice Charles E. Whittaker: If it's a draft in any event, it's accepted before it's delivered.
So it's an absolute obligation of Western Union, isn't it?
Mr. John G. Buchanan, Jr.: It is an absolute obligation of Western Union.
Justice Charles E. Whittaker: It's not drawn on the bank but it's drawn on Western Union --
Mr. John G. Buchanan, Jr.: No --
Justice Charles E. Whittaker: -- available at the bank?
Mr. John G. Buchanan, Jr.: No I'm sorry, Your Honor.
It is drawn against the Western Union's account at the bank.
It is a draft on the bank but those bank -- in those banks, balances are maintained.
Justice Charles E. Whittaker: It's an effective check, right?
Mr. John G. Buchanan, Jr.: It's a check.
It's referred in the book of rules of Tariffs as a draft, that's why I find myself calling of that.
But it is payable at a particular bank.
And it is also payable to order is negotiable.
Justice William O. Douglas: Are you in effect, send a Western Union here is -- is your client is a stakeholder and you don't care to whom you're paid as long as you're protected?
Mr. John G. Buchanan, Jr.: We do want to be protected, Your Honor, and in our position in this case is this Pennsylvania decree cannot protect us.
First of all, it can't protect us under the Full Faith of the Credit Clause and it can't protect us even if this Court said, “Oh yes, Full Faith of the Credit Clause would protect you here.”
It can't protect us against the continual harassments that we would have and people that might not take that as the last word.
The trouble is that this is such a multistate transaction; anyone of these money order transactions can involve possible claims of three or four states.
Therefore, a wise rule is badly needed to save the courts and litigants and my clients against multiple litigation if not multiple liability.
Chief Justice Earl Warren: Does any other state ever brought any actions to escheat this money?
Mr. John G. Buchanan, Jr.: Other states have brought actions or made claims, some of them under the Uniform Unclaimed Property Act don't bring actions, they just say give us a return, give a report and pay the money in, and as I will show later, some of those are quite duplicative as of the same moment of escheat.
Just very confusing to the owner of the escheated.
Chief Justice Earl Warren: Of course, well do you -- do you concede that -- in these circumstances, some state couldn't cheat the money?
Mr. John G. Buchanan, Jr.: Yes Your Honor as I will indicate --
Chief Justice Earl Warren: What state is that?
Mr. John G. Buchanan, Jr.: As I will indicate, New York here has the strongest claim --
Chief Justice Earl Warren: Did you ever done it?
Mr. John G. Buchanan, Jr.: Oh we send regular reports to New York --
Chief Justice Earl Warren: Have they ever escheated the money?
Mr. John G. Buchanan, Jr.: Oh yes, they regularly, yes.
Chief Justice Earl Warren: All of it?
Mr. John G. Buchanan, Jr.: Money --
Chief Justice Earl Warren: Or --
Mr. John G. Buchanan, Jr.: -- money permits.
Chief Justice Earl Warren: -- probably your whole system?
Mr. John G. Buchanan, Jr.: They only escheat after 15 years.
Chief Justice Earl Warren: Yes, but I mean --
Mr. John G. Buchanan, Jr.: Therefore, they're sometimes too late.
Others take this in a shorter period of three years.
Chief Justice Earl Warren: But has New York attempted to escheat the money on all of your -- all your transactions throughout the country because you are incorporated in New York?
Mr. John G. Buchanan, Jr.: No it does not appear in the record, but that is the fact, Your Honor.
Chief Justice Earl Warren: That is the fact.
Mr. John G. Buchanan, Jr.: That is the fact.
New York exerts that he is entitled to all of these unclaimed property.
Before I -- made statement of facts, I'd like to make it perfectly clear, I'm not sure that I made it absolutely clear in answer to Mr. Justice Douglas' question that though we cannot under the Pennsylvania procedure be in the position of the stakeholder in this case, we think we should in all equity and fairness be a stakeholder and would want to be a stakeholder.
Some state is entitled to all of the funds that we're talking about here.
Justice Charles E. Whittaker: Why can you not distinguish?
Mr. John G. Buchanan, Jr.: Because Pennsylvania has no provision for New York for instance which has already brought suit for at least part of the particular funds back of the particular drafts involved in this Pennsylvania case.
There's no provision for New York to come into the Pennsylvania proceeding even if New York wanted to and maybe they would choose that's well we'd like two bites out of cherry and if you lose to Pennsylvania, you'll have lost under a decree that doesn't bind us and we'll come in again.
The Assistant Attorney General of New York is here and I'm very happy to have given a quarter of my time to her because I think that when you hear her argue, you will see that New York is out to take these funds under its custodial statute.
It's not -- that the true escheat statue -- statute but it's the equivalent so far as we're concerned.
Justice Charles E. Whittaker: Well, I think this raise was to the Pennsylvania Court and would substitute service was then had upon the creditor, would that not bind New York?
Mr. John G. Buchanan, Jr.: With good seizure of the raise and good fair notice, an opportunity to come into courts, it would bind New York.
But this decree that we're dealing from is not going to convince New York that it is bound.
Hence, I am afraid that unless this Court makes it very clear one way or the other, other states will not feel themselves bound.
Justice Hugo L. Black: You made one statement that I'm not sure I quite understood, maybe I understood it wrong.
Did you say that one state is bound under all circumstances to be entitled to all these funds?
Mr. John G. Buchanan, Jr.: The very nature of escheat is that it takes 100% of funds.
It's one or another.
Now, whether the state entitled to escheat, is entitled by mere priority regardless of contacts which is Pennsylvania's position here or whether the state that is entitled is the domiciliary state or some other state, only one state can take the funds.
If more than one can take it, we have been denied due process by a multiple taking.
Justice Hugo L. Black: Well I'm not take -- talking about making you pay it, two or three or four or five, did I understand you to say that's under the law, one state is entitled in every dollar of this fund, one or another state is entitled to every dollar of this fund.
Mr. John G. Buchanan, Jr.: Every dollar of this fund, Your Honor.
Justice Hugo L. Black: With no distinction possibly would be drawn in your judgment?
Mr. John G. Buchanan, Jr.: No, some of these funds might be proven to be new to the State of Nevada or I don't think they have a current escheat statute or say, California.
Justice Hugo L. Black: You mean there's a state that doesn't have escheat statute?
Mr. John G. Buchanan, Jr.: It's up 22 and it's going strong.
Justice William O. Douglas: Well Mr. Buchanan, analytically, what's the relationship between Western Union and these deposits?
Mr. John G. Buchanan, Jr.: The relationship, it is just a creditor-debtor.
Justice William O. Douglas: So that -- it was a property, it's a debt owing by Western Union to somebody?
Mr. John G. Buchanan, Jr.: A debt owing by Western Union to somebody in most --
Justice William O. Douglas: Somebody -- to somebody is the depositor as creditor.
Mr. John G. Buchanan, Jr.: No, not a depositor Your Honor.
That is --
Justice William O. Douglas: Not as depositor, the fellow --
Mr. John G. Buchanan, Jr.: No.
Justice William O. Douglas: -- who buys -- gives you the money and gets his draft.
Mr. John G. Buchanan, Jr.: In very few other cases is the fellow that gave us the money, the one who is the obligee because --
Justice William O. Douglas: How much -- or is this a combination?
As I understand it, if I go to into a Western Union office in Pennsylvania and I ask you to send my son at college $25, but that's too low, but if I do, there's a relationship established in that.
If you don't deliver to my son the $25, I'm entitled a refund of it, am I not?
Mr. John G. Buchanan, Jr.: If we don't deliver within 72 hours and that is -- is the next step in the procedure.
If we don't deliver a negotiable draft to your son within 72 hours, then you are entitled to a rebate.
Justice William O. Douglas: That's by reason of agreement between us at the time I purchase the draft.
Mr. John G. Buchanan, Jr.: Agreement as set up by the filed tariffs.
Justice William O. Douglas: Right, now is -- as to the funds that are involved here, what do they represent?
Monies which fathers like me are entitled by way of refund because of non-delivery or monies which are represented perhaps still by outstanding drafts which should not delivered, which?
Mr. John G. Buchanan, Jr.: Though I wondered whether Your Honor's son would give you the opportunity with refund, the majority -- the great majority of the monies involved here are cases of outstanding negotiable drafts payable to the sendees.
Justice William O. Douglas: So that in --
Mr. John G. Buchanan, Jr.: The son at college.
Justice William O. Douglas: So that in that sense the father no longer has any right to fund, does he?
Mr. John G. Buchanan, Jr.: No.
It's unlike the bank deposit --
Justice William O. Douglas: Yes.
Mr. John G. Buchanan, Jr.: -- cases where the whole idea is to put money and to come out at the same place.
Justice William O. Douglas: Whether the relationship is between you -- the Western Union and the father by reason the father's right to refund or between Western Union and the son by reason of the outstanding draft, where it be the son will be to holder of that I guess it's negotiable draft.
Relationship was one as far as Western Union is concerned of debtor to creditor.
Mr. John G. Buchanan, Jr.: Debtor to creditor, evidenced by draft in almost all the cases -- in some of the cases.
Justice William O. Douglas: So what's escheated here is what?
The property of the creditors and not of the Western Union's?
Mr. John G. Buchanan, Jr.: It's the interest of the creditor.
Justice William O. Douglas: And not of Western Union?
Mr. John G. Buchanan, Jr.: No it's -- it's an obligation of Western Union but it's the interest in that obligation which is escheated.
Justice William O. Douglas: I guess that's negotiable (Inaudible)
Mr. John G. Buchanan, Jr.: The typical case you might say of those that are involved here is an out of state sendee or is endorsee where there is a negotiable draft outstanding.
Justice William O. Douglas: So that in that sense the property interest in the sense of the creditor is owned not by anybody in Pennsylvania but outside of Pennsylvania.
Mr. John G. Buchanan, Jr.: And it's payable outside Pennsylvania under the negotiable instrument --
Justice William O. Douglas: Now is there any -- is there any Pennsylvania's statute of limitations which makes the claim, whether it's claim for refund or the claim presented by the draft barred by that.
Mr. John G. Buchanan, Jr.: The Pennsylvania in its escheat does not recognize the statute of limitations.
We did plead it here as a protection to those better entitled to these funds but we have not pressed that.
As a matter of fact, Western Union has not -- has never taken that as its personal defense in a suit on one of these obligations.
Justice William O. Douglas: Well, what about the New Jersey case?
On some times since I wrote it, but I had a recollection that --
Mr. John G. Buchanan, Jr.: In New Jersey --
Justice William O. Douglas: We've turned it on the fact that the statute of limitation --
Mr. John G. Buchanan, Jr.: In New Jersey.
Justice William O. Douglas: -- is not escheatable under the New Jersey statute.
Mr. John G. Buchanan, Jr.: In New Jersey Your Honor, avoided coming to the constitutional question --
Justice William O. Douglas: Well did I --
Mr. John G. Buchanan, Jr.: -- because under New Jersey law, the statute of limitations has barred it.
I mean the constitutional question that's involved here.
But New Jersey since Your Honor --
Justice William O. Douglas: Well, that opinion dealt with a constitutional question.
Mr. John G. Buchanan, Jr.: New Jersey has tried to get around that by passing a five-year escheat or custodial.
All the states are after this sort of funds and it's a problem which is going to --
Justice William O. Douglas: Well, but to the extent of which the Western Union is protected by a statute of limitations.
If the proper analysis is the debtor and creditor, then to that extent, at least, then Western Union takes these funds, doesn't it?
Mr. John G. Buchanan, Jr.: No.
The Western Union --
Justice William O. Douglas: Do you believe that the obligation is that?
Mr. John G. Buchanan, Jr.: Western Union as a matter of fact pays stale drafts, old obligations.
There's one in the record here that we paid off while this was pending and while Pennsylvania was claiming it dating back to 1935.
That was paid in New York.
And -- Pennsylvania cannot, though they have tried in their brief, say to us, “You have to plead the statute of limitations and therefore you're protected."
We -- the only thing that Pennsylvania can furnish us to satisfy the Constitution when they take this is the right to plead that there has been a valid escheat decree which bars all others.
Otherwise, there is a double taking or the possibility of a double taking which is a violation of due process.
Justice Felix Frankfurter: I take it, you're starting you -- your contention from where the decision of this Court have left you, is that right?
Mr. John G. Buchanan, Jr.: That is exactly right, Your Honor.
Justice Felix Frankfurter: Now where did -- where do the decisions of this Court leave you to -- and leave you open to make whatever contention you are planning to make?
Mr. John G. Buchanan, Jr.: The decisions of this Court leave us a fairly narrow scope.
The decisions of this Court have been based.
I say this is the rationale though they haven't been based in so many works on a domiciliary hold on the property taken.
The bank deposit case is obviously inclined against United States which was deposits in the U.S. Marshals office in Philadelphia taken by Pennsylvania because the -- those funds were held in Pennsylvania by what is -- for those purposes of Pennsylvania Court.
In Connecticut Mutual against Moore, the Connecticut Mutual was a foreign life insurance corporation though its -- its regulated status and its method of doing business under the supervision of the New York Insurance Commissioner in effect as to those policies made it the same as the New York Corporation.
But there, the only thing that this Court held was that where you have a New York insured and New York beneficiary and a policy issued in New York, New York can take the proceeds.
Justice Felix Frankfurter: If there's -- if there has been no change of residence prior to maturity of policy by debt.
Mr. John G. Buchanan, Jr.: Exactly, that has to be the situation at the date of the escheat or the date maturity of the policy.
Justice Felix Frankfurter: But in the New York in the insurance case we couldn't tell that is -- that's what bothers some of us, we couldn't tell what -- what the domicile of the beneficiaries.
Mr. John G. Buchanan, Jr.: It bothers me as to whether that case decided at anything Your Honor, but at least we know what it didn't decide in part.
Justice Felix Frankfurter: But I thought you said the cases lead you, rather narrow maneuvering ground, what is open to you to argue the different case, this case from the Standard Oil and the Insurance case?
Mr. John G. Buchanan, Jr.: The domiciliary hold, Standard Oil of course, that's the most recent; it was a case of domiciliary corporation.
They said, “If it's the money you owe, give us your stock which is located at the registered office of the -- in the domiciliary state."
The stock is much closer than anything else to the corporate heart.
Give us its stock in these -- under dividend checks because you are a domiciliary state and that is the holding.
Justice Felix Frankfurter: And you just indicated there you already had a (Inaudible).
Here, you haven't gone by a thing, you may have a legal read in the sense of an obligation and pursue of all the cover, I thought that you haven't gone anything here at all, have you?
Mr. John G. Buchanan, Jr.: A mere legal obligation.
Justice William O. Douglas: Well Mr. Buchanan will this be it, if Pennsylvania may despise the interest of the creditor and in that way require you to pay your obligation owing the creditor to the State of Pennsylvania.
You want to be protected against some other state with the creditor actually resides that.
Mr. John G. Buchanan, Jr.: Exactly.
Justice William O. Douglas: Tell me you're saying well now that property -- Pennsylvania can't displace a New Jersey creditor by just picking up Western Union's obligation to New Jersey, if anyone may do that, New Jersey's got to be it or --
Mr. John G. Buchanan, Jr.: New York --
Justice William O. Douglas: New York?
Mr. John G. Buchanan, Jr.: -- or New York, yes.
The -- if Pennsylvania by simply saying, “Well, we can serve your registered agent and therefore, we have power to seize the raise that is a hard thing to seize simply by service.
Well then, anyone of 48 states or the District of Columbia that has an escheat or custodial statute can do the same thing.
And as I indicated before lunch, there are some of the custodial statutes under the Uniform Act where the period of dormancy, the period for escheat is exactly seven years, the date of escheats and presumably the moment of escheat is exactly the same day in each year.
So that four or five states by their legislative action, escheat the same amounts could escheat, the same amounts due from all over the country, simply because they can get jurisdiction of Western Union in that state.
Then which one of four or five that have the identical statute is the escheator?
You'd have an automatic quadruple or quintuple escheat or taking into custody at the same moment.
The very theory of escheat is that a court decree only declares escheat that has already taken place, but if Pennsylvania by speedy action, runs through its own courts and gets a final decree and if therefore able to cut off the claims of four or five other states, that's we're doing the same thing but didn't get there as fast, then has Pennsylvania's action nullify the escheats which had already occurred in this other cases just through the action of its courts?
The metaphysical questions are impossible as I --
Justice Felix Frankfurter: You don't have to do anymore, I take it Mr. Buchanan, and to find vulnerability in your statute in relation to your case.
You have a merely negative task but have you and do you care to state what do you think is the solution of this conundrum that you just put?
Mr. John G. Buchanan, Jr.: I believe --
Justice Felix Frankfurter: -- just put a conundrum.
You said there are four, five states unlike the answer you gave to Justice Black I think earlier, Justice Black and the Chief Justice earlier before lunch, namely that is one or all or nothing.
You now indicated because there might be five, four or five candidates for --
Mr. John G. Buchanan, Jr.: Theoretically you have --
Justice Felix Frankfurter: With his (Voice Overlap) --
Mr. John G. Buchanan, Jr.: Yes.
Justice Felix Frankfurter: Have you address to yourself to what you think is the --
Mr. John G. Buchanan, Jr.: I think Your Honor.
Justice Felix Frankfurter: -- (Voice Overlap) -- with problem?
Mr. John G. Buchanan, Jr.: I think Your Honor in this case, the state of domicile is the only one which should take under any wise decision.
Justice William O. Douglas: State of domicile of what?
Mr. John G. Buchanan, Jr.: The state of domicile and that is New York -- the state of domicile of Western Union because that is the only domiciliary fact that is known this whole complex business.
Justice Hugo L. Black: But Western Union's supplies so far as I've heard from you so far is that one question that might be understood in this through is -- has no interest dollar can't get it.
Mr. John G. Buchanan, Jr.: But at least the domiciliary state has the tie, the control -- real control over this corporation.
Justice Hugo L. Black: It probably belongs to somebody else and you say that the -- maybe it's right that the one state should have a right to take this property as its own.
It's a state where the corporation was organized that which corporation has no possible interest by itself and --
Mr. John G. Buchanan, Jr.: The interest of corporation Your Honor is not the important thing.
New York --
Justice Hugo L. Black: But that's what I suppose --
Mr. John G. Buchanan, Jr.: New York has the ties and to control the contacts, sufficient contacts in the language of the cases.
Justice Felix Frankfurter: What the -- International Shoe?
Mr. John G. Buchanan, Jr.: No.
Justice Felix Frankfurter: (Voice Overlap)
Mr. John G. Buchanan, Jr.: -- sufficient contact, the language of International Shoe don't apply here at all, Your Honor.
A different sort of interest is involved and must be considered, the same with the multiple taxation cases.
Justice Charles E. Whittaker: That's my reason for asking in this question.
Why contacts doesn't do it.
I don't understand that.
Is it not a question of where is the raise?
Mr. John G. Buchanan, Jr.: The situs.
Justice Felix Frankfurter: Alright that depends on situs.
Mr. John G. Buchanan, Jr.: (Inaudible) -- it's too right.
Justice Felix Frankfurter: Alright now what's the matter with the new rule that deviates maybe a little old about the old rule, that situs of the intangible credit is the domicile of the debtor and make it perhaps if that what it requires, the domicile of the principal office or chief place of business of the debtor, would that be alright?
Mr. John G. Buchanan, Jr.: That certainly would be alright Your Honor.Situs is perhaps an old fashioned word but I think it's a wise word in case like this.
Justice Felix Frankfurter: Did it got to have some rule by which to determine situs, haven't you, in order to determine presence of the raise?
Mr. John G. Buchanan, Jr.: Right Your Honor, and domicile in this case, I submit that it's very easy to find the situs.
The debtor's state of incorporation, the debtor's principal office, the debtor's treasury to which all of these unclaimed money orders filtered back, they go into the cash until --
Justice William O. Douglas: Suppose you were at Delaware corporation.
Mr. John G. Buchanan, Jr.: New York.
Justice William O. Douglas: I say suppose you were.
Mr. John G. Buchanan, Jr.: And we had our principal office in New York.
Justice William O. Douglas: That's everything as it is now?
Mr. John G. Buchanan, Jr.: That would be a little harder question.
I'm glad we are altogether here.
We would have no fear of multiple escheats.
We would have a good defense under the decisions of this Court if New York had been fast enough to take these funds first.
They brought their suit but they have a 15-year escheat statute.
They're not quite so greedy and my friend from New York State would say, well they're not greedy at all.
As a matter of fact, they have a very well setup escheat system which does not take fast but takes wisely.
Unknown Speaker: (Inaudible)
Justice Felix Frankfurter: Mr. Buchanan, when you said that's a harder case, there is the procedural way of -- of avoiding all these rate of seizure, illegal seizure, isn't that?
Mr. John G. Buchanan, Jr.: If this Court would entertain the suit, we would be glad to the -- the -- pay the money into the -- into this Court and let the states fight it out, but we are in that position, we're in that position of having had it taken from us by Pennsylvania.
Chief Justice Earl Warren: What would you say if your company was incorporated in Delaware and had its principal place in a business in New York, where would the escheat lie?
Mr. John G. Buchanan, Jr.: In that case, Delaware, Your Honor, under that standard of New Jersey case would have a clear right to escheat.
But this Court would have the problem of bringing together, considering together the interest of New York and Delaware and Mr. Justice Frankfurter's suggestion of a interpolator on the order of Texas against Florida would be the only real solution in that case.
Unless this Court said domicile is the good, easy rule, it's fair on the average to everyone concerned, stick to domicile.
Justice Felix Frankfurter: But I -- in your case -- excuse me --
Justice Hugo L. Black: How could it say it's fair to everyone?
You're going to look at 10 to everyone concerned.
Say that the state which happen to be active and having collaboration to organizing, get all the multistate money which may belong or have belong to the people in all of the state for the union.
How could just say that you're putting it all simply in way of fairness, that that's a fair way to provide --
Mr. John G. Buchanan, Jr.: Well I --
Justice Hugo L. Black: -- (Voice Overlap) --
Mr. John G. Buchanan, Jr.: I said it might be fair on the average but Your Honor indicates well some states might average out better than others.
Justice Hugo L. Black: We know they're working out well.
Mr. John G. Buchanan, Jr.: New York I suppose would --
Justice Hugo L. Black: Maine -- Maine and Delaware, maybe New Jersey.
Mr. John G. Buchanan, Jr.: And Arizona.
Justice Hugo L. Black: Arizona permitted?
I didn't know if they did it.
Mr. John G. Buchanan, Jr.: Or Panama.
Justice Hugo L. Black: They become a recent competitor.
Mr. John G. Buchanan, Jr.: It -- I'm glad I'm on this side of the batch, these questions in fairness are not mine for ultimate decision.
I say in this case, the questions of fairness, the protection of the interest of the true owners.
The protection of the interest of other states, the protection of the interest of the orderly administration of justice to avoid reasons to escheat, unseemly the competition between states all call for a reversal of this Pennsylvania decree.
Justice Hugo L. Black: But I presume there's one basis of fairness is more than that.
The word “situs” or are any other word or label, that is whether the states had nothing to do with the money and left at a place or to get it all for process of escheat on grounds somehow Constitution requires.
I'm not saying we don't have to sit and do that but I do not see how anyone could appeal on the basis of justice in that regard.
They're just simple elemental as -- as we think about of justice.
Mr. John G. Buchanan, Jr.: When it comes to horse trading, I represent the horse here.
Justice Hugo L. Black: You do not ought to be held twice in that --
Mr. John G. Buchanan, Jr.: We do not want to be held twice.
Justice Hugo L. Black: In that I think is also an element of fairness that you should not be.
Mr. John G. Buchanan, Jr.: And I think that we and other similarly situated and the states who are otherwise going to be contending over every little escheatable bit of property are entitled to a clear, firm rule.
Whether that be domicile, you say that might not be fair principal place a business, but here, there is an additional factor.
The monies that are paid on these unclaimed amounts and were represented mainly be negotiable drafts, eventually find their way back into the treasury in New York of the Western Union Company and that after two years under Federal Communications Commission regulations, these unpaid amounts have to be taken in as income.
They thus enter into the profit-loss statement and into the regulated rate structuring.
They are already given back but we will lose a little something here but the -- when we have to pay the amounts under this new escheat statutes but they either go back to the general public when they weren't claimed by us or in reduction of rates or they should go to one certain place.
Justice Felix Frankfurter: Mr. Buchanan, is Delaware still the mother of corporation?
Mr. John G. Buchanan, Jr.: I don't know.
I'm not an incorporator myself Your Honor.
Justice Felix Frankfurter: If he, if --
Mr. John G. Buchanan, Jr.: I like the Pennsylvania corporation myself.
Justice Felix Frankfurter: I didn't -- I the domicile of the corporation or to be in test, Delaware would be in excessively affluent society, wouldn't she?
Mr. John G. Buchanan, Jr.: As Mr. Justice Black points out, maybe that's too good.
But the principal office -- where the principal office coincides with the state of incorporation, where the actual work is done there.
Justice Felix Frankfurter: Well he made -- we made that to test with reference to jurisdictional matters, is it not?
Mr. John G. Buchanan, Jr.: Exactly Your Honor -- yes and --
Justice Hugo L. Black: Well, the arguments could be made against that -- to take the New York Life Insurance Company, maybe its principal office is in New York but its policy holders are in every state in the union.
Mr. John G. Buchanan, Jr.: And New York is very fair about it, the New York Life and the Metropolitan.
Justice Hugo L. Black: Yes.
Well, I'm not saying they're not.
Mr. John G. Buchanan, Jr.: In the Mutual of New York.
They only take --
Justice Hugo L. Black: It seems to me that your company's interest is a single one, while you have had added it there.
What you want to be protected as I understand it, is having to pay this price of being harassed by continuous lawsuits because there's no way for nobody to know who gets it.
Mr. John G. Buchanan, Jr.: That's exactly our --
Justice Hugo L. Black: You have no other interest, doesn't it?
Mr. John G. Buchanan, Jr.: We're not interested so far as -- so long as we are thoroughly protected.
Justice Felix Frankfurter: So far as harassment, apart from collectability is concerned, there is no mode of correct protection except in having all potentially interested state before the Court.
Mr. John G. Buchanan, Jr.: That is -- that is correct, Your Honor.
Though I indicated if New York were entitled -- were held by this Court to be the -- the state entitled to escheat, I don't think anybody else would be picking on us because that would be clean cut.
You either need a clean --
Justice Felix Frankfurter: Clean --
Mr. John G. Buchanan, Jr.: (Voice Overlap) --
Justice Felix Frankfurter: -- has clean cuttedness barred or inhibited litigation by lawyers?
That's something new.
Justice Hugo L. Black: Suppose --
Mr. John G. Buchanan, Jr.: Well --
Justice Hugo L. Black: -- we didn't want to hold at New York got a windfall.
Then what's your suggestion?
Mr. John G. Buchanan, Jr.: I would suggest first Your Honor that it's not windfall for New York because it holds it in custody and if claimant shows up, (Voice Overlap) back.
Justice Hugo L. Black: It doesn't own it yet.
It hold it in custody for people owned it.
You own it in various parts of the union --
Mr. John G. Buchanan, Jr.: You're asking --
Justice Hugo L. Black: Suppose we didn't want to hold it.
Mr. John G. Buchanan, Jr.: You're asking in --
Justice Hugo L. Black: In corporation, did you get it or are they supposed to be centralizing it at certain states, or the status of doing business, then what's --
Mr. John G. Buchanan, Jr.: You're asking me Your Honor for my second choice?
Justice Hugo L. Black: Your second suggestion.
I don't understand why Western Union --
Mr. John G. Buchanan, Jr.: No.
Justice Hugo L. Black: -- has a choice?
Mr. John G. Buchanan, Jr.: No.
Justice Hugo L. Black: Except to be relieved?
Mr. John G. Buchanan, Jr.: Yes.
We think that we would be better protected under the line of cases in this Court, if in line with those cases, New York were held to be the state here.
But if -- if we're not to be New York, the only other states are those that can have -- can show the presence of these negotiable drafts or the states in which the banks are situated on which those drafts are drawn.
Justice Hugo L. Black: You haven't --
Mr. John G. Buchanan, Jr.: No.
Justice Hugo L. Black: -- yet to mention the people who own the money, either those who paid it in or those to whom it could have done.
Mr. John G. Buchanan, Jr.: We don't -- we don't know where those people are, what state they are resident in because the very nature of this business is the money goes particularly when it's in a form of draft, as a courier without luggage.
From state to state and is has rapidly as can be imagined.
The money certainly went out of Pennsylvania with the speed of the electricity when the wire was sent, say from Pennsylvania to San Francisco, transmitting a money order to somebody who got within 72 hours, a draft there.
Justice Hugo L. Black: But none of the couriers at that time had been or have known, did they, any right of owning in a single slight right of ownership to that money.
Mr. John G. Buchanan, Jr.: Any single --
Justice Hugo L. Black: None of the couriers.
Mr. John G. Buchanan, Jr.: The negotiable drafts themselves?
Justice Hugo L. Black: That's right.
Mr. John G. Buchanan, Jr.: But the holders -- the holders of them did --
Justice Hugo L. Black: That's right.
Mr. John G. Buchanan, Jr.: From time to time.
Justice Hugo L. Black: But that's temporary but that the -- it was the people who would get the money and not the people who would carry into holding.
Mr. John G. Buchanan, Jr.: That's correct, Your Honor.
The holders are the people entitled to the money.
The holders of the drafts whether endorsees or original holders and -- but we don't know where they are.
We know where these banks are, where the drafts were drawn but in this present state to this record this case can only be sent by saying how sort out which of these money order transactions is tied up with a bank in Chicago or one in Memphis or one in San Francisco or Los Angeles.
Justice Charles E. Whittaker: About how many dollars have been totally involved here are represented by outstanding negotiable drafts?
Mr. John G. Buchanan, Jr.: Almost all, Your Honor.
The -- with great majority of the money involved here is represented by outstanding drafts that were issued to sendees or payees.
The next amount in size is refund drafts outstanding, but then there are also cases where the sender never went back to get his refund draft and therefore there are only one negotiable receipt outstanding, that's a very small part of it.
Justice Felix Frankfurter: From the point of view of contact, that dubious legal term, send me as much contact with reference to the outstanding draft in -- in sendee's state as there is in Pennsylvania and the sender -- and the sender's state.
Mr. John G. Buchanan, Jr.: Even more Your Honor because it was the sender's idea that kept that draft out there into that other state.
Justice Charles E. Whittaker: Well, that's my position.
The draft is not issued to Pennsylvania.
Mr. John G. Buchanan, Jr.: No.
Justice Charles E. Whittaker: In the telegram, New Orleans authorizes and New Orleans office should have it delivered there, wouldn't it?
Mr. John G. Buchanan, Jr.: That's right, Your Honor, some of these were intrastate and from one point is Pennsylvania to another one-six dozen approximately.
Justice Felix Frankfurter: So it's fair to -- it's fair reading of the decision of this Court that if the sendee states were able to segregate or know the amounts uncollected in the sendee state, the sendee state certainly could escheat.
Mr. John G. Buchanan, Jr.: If they can prove that the drafts are still in the sendee states and so on, yes.
Justice Felix Frankfurter: Well, whether they're still in there or not, certainly they reach there first, but that was the starting.
From the point of view of contract, if it means anything, namely a decent relation to the subject matter, that's --I can't get beyond that can you?
Mr. John G. Buchanan, Jr.: However, they would have no power over those sendees perhaps in most of the cases because the fellow that needs a money order remits --
Justice Felix Frankfurter: Yes, but that power of the Western Union which is doing business in other states.
Mr. John G. Buchanan, Jr.: That's right, but the fellow who typically gets a remittance is either so journeying at college shall we say or passing through hung-up.
Justice William O. Douglas: Well, isn't this also your point Mr. Buchanan that if the draft arrives and sendee's said state and is delivered, you don't know what happens to it.
If it's not delivered within 72 hours the obligation comes back to an obligation of the sender's state.
Mr. John G. Buchanan, Jr.: Refund draft.
Justice William O. Douglas: Yes.
Mr. John G. Buchanan, Jr.: Yes and that refund draft maybe uncashed and wander out anywhere in the country.
Justice William O. Douglas: Do you make reports to Western Union?
Do you make reports to more than New York, to state they made it in New York?
Mr. John G. Buchanan, Jr.: Yes, indeed, we make reports; I presumed the all 22 states that presently have this at least --
Justice William O. Douglas: Do you have difficulty in determining what you report?
How do you do it?
Mr. John G. Buchanan, Jr.: Particularly when the acts are vague and don't indicate exactly what they want us to report and then we ask and they say, “We want you report everything”.
Chief Justice Earl Warren: Very well.
Mrs. Kessler Toch.
Argument of Ruth Kessler Toch
Ms Ruth Kessler Toch: Mr. Chief Justice, may it please the Court.
New York has filed here as amicus curiae in the Court being given permission to argue.
As amicus curiae asking that the Court not decide this appeal on consideration only of Pennsylvania's contention that it has jurisdiction of these obligations by virtue of the amenability to process of Western Union, 48 states, at least, United States can make that statement.
Nor on consideration only of the single contact that Pennsylvania has with these transactions.
Now, whether we say situs in the traditional way or contact as that term has been used in the fairly recent escheat case in decisions, opinions by this Court.
Now, I should say that in all escheat cases, the holder has no interest.
It is the key, is or it is the holder, banks, life insurance and so on.
The interest is by the owner who is unknown or cannot be found.
Now, we ask the Court that if you -- the whole of this transactions, the kind of transactions these are, with virtually every one of them passing through several states and to evaluate Pennsylvania's claim in that plight.
Now, we ask the Court to evaluate the claim of the State of New York which in this case is the state of incorporation and the state where the principal office of the obligor is located and where the obligation is -- ultimately has its place as Mr. Buchanan has described it.
Now, obviously, in these multistate transactions, Western Union having its offices and thousands of offices in the 48 states, in other words, not just one office but thousands of them, it would be difficult of course, to bring all of the states that could possibly have a claim before the Court.
We submit that Pennsylvania in this case is representative of all the other states which have some contact with these transactions as contrasted with New York State in this case because the step that may take place in anyone of these several states is no more essential in the transactions than the step which may take place in another state.
And accordingly, the contact again of anyone said state would not be greater than a contact of another.
This would include Pennsylvania and perhaps Pennsylvania's claim is a great and its contact is a great deal less than that of, for example, the state where the sendee has been or where he is resident.
And so we asked the Court to weigh as alternative to the number of states with minor and equal in value and degree, at the most, the ultimate and essential contacts of the principal office of Western Union with the transactions and therefore, of the state of the principal office of Western Union, New York State.
Now, Pennsylvania, in its brief, has sent that New York's position in this case is and in its statutes is different from the position we took in the Connecticut Mutual case.
And perhaps in my comment on that, I will also answer Mr. Justice Frankfurter's question of where Connecticut Mutual and Standard Oil leaves us or states which are before the Court on the question of escheat.
I think our position is in harmony with the position we took in Western -- in Connecticut Mutual and also that where those cases leave us is that the factors in one kind of transaction point to one state as having the jurisdiction, the dominant contacts and in another transaction, another kind of transaction that another state has it.
Now, in the Standard Oil --
Chief Justice Earl Warren: Ms. Kessler Toch, I wonder if --
Ms Ruth Kessler Toch: Yes.
Chief Justice Earl Warren: If we don't use contacts in different senses here now, when we're determining what the dominant contacts should be, what contacts are we talking about?
The contacts with the company or are we talking about the contacts with the person to whom who owes -- to whom the money is owed?
Ms Ruth Kessler Toch: I think we're talking about the contacts with the obligation.
Chief Justice Earl Warren: Well, now that's -- that's just what I want to ask and why -- why should it be that way in this escheat matter, I can see if there was contest between the person to whom the money was to be paid and the person who is to pay, that perhaps the contacts of the person who is to pay would be the appropriate one, but here we're not doing that.
Here the company has no interest in this money at all and the -- and the only person who's interested in it would be the person who's entitled payment.
Ms Ruth Kessler Toch: Yes, Mr. Chief Justice.
But in escheat, as I said, the money is taken by the state from the holder of it.
That is where it is, it's the holder of it.
Chief Justice Earl Warren: Well, I'm not so sure -- I could agree to that because the -- if the Western Union and takes money in Pennsylvania to send to a person in another part of Pennsylvania, I don't know that we necessarily need to say that -- that they hold it in New York.
Ms Ruth Kessler Toch: Except that eventually it -- they don't hold it in Pennsylvania, they don't hold it in Pennsylvania.
Chief Justice Earl Warren: Well, it don't, as a matter of fact it's because they wanted to do business --
Ms Ruth Kessler Toch: That is quite right.
Chief Justice Earl Warren: -- do all their business, say can in New York, but the fact is that the money was paid in Pennsylvania and it was supposed to be paid out in Pennsylvania.
Why must we then say that the money is being held in New York?
Ms Ruth Kessler Toch: No, Mr. Justice -- Chief Justice, it was not paid out in Pennsylvania and it wasn't supposed to be paid out in Pennsylvania except in the -- in a small proportion of the cases.
Chief Justice Earl Warren: Well, in some -- some of the cases --
Ms Ruth Kessler Toch: But very few.
I mean -- may say this, certainly, so few that we can't say that, that was the type of transaction it was and that's where the money was.
Chief Justice Earl Warren: Well, but you aren't in overall rule that will -- will govern in all cases.Now, certainly you have to be bound by some of the cases that you bring before us here.
Ms Ruth Kessler Toch: Yes, I am.
I think I am on a matter of law and I think that each one of these cases, the rule of law is developed because of the kind of transaction it is.
Chief Justice Earl Warren: May I -- may I tell you one other thing troubling then I won't -- won't bother you anymore.
I notice one of the things that subjected to about the escheat in Pennsylvania is, that the notice is not adequate.
Now, I'm just wondering this, if the escheat is always to be in New York, do you think notice could ever be really adequate in cases where the telegram was sent in Arizona let us say to a payee in Arizona.
How would in any notice in New York be good notice to that payee?
Ms Ruth Kessler Toch: Well, may I --
Chief Justice Earl Warren: And he's the really -- the person who's --
Ms Ruth Kessler Toch: That's right.
Chief Justice Earl Warren: -- who's involved here.
Ms Ruth Kessler Toch: That's right.
I should state that that was that -- perhaps Mr. Buchanan can answer a little more definitely on that one, he has his five minute because I didn't study it but I should also say two things, that -- notices would have to go from Pennsylvania also to the payees -- the sendees all over the United States and moreover, New York a custodial statute so that at any time when the sendee discovers at any time that this money has gone to the State of New York, always comes to the State of New York to control and gives them the money and that is the daily practice.
Chief Justice Earl Warren: But that's merely because New York has a (Voice Overlap) --
Ms Ruth Kessler Toch: Custodial statute.
Chief Justice Earl Warren: -- law.
Now it might be -- there might another state that doesn't have it in that one -- a law in a case, in a case where corporation would be bound whatever rule -- faction in this case.
Ms Ruth Kessler Toch: That may there well but I think that the notices still could, whatever notice is affective whether it's personal or publication, would be effective whether it was in Pennsylvania or was outside because the sendees, that's exactly why we're saying in this case and of the most of sendees are spread all over the United States.
Justice Felix Frankfurter: Ms. Toch, would you --
Ms Ruth Kessler Toch: Yes.
Justice Felix Frankfurter: -- satisfy a curiosity of mine.
How much -- what's the size of the fund that we will get with an escheat statute.
Ms Ruth Kessler Toch: Mr. Justice Frankfurter, I couldn't tell you.
Justice Felix Frankfurter: Do you have a -- do you have that magnitude?
Ms Ruth Kessler Toch: It's substantial but as I say they are always ready and they --
Justice Felix Frankfurter: Yes I understand that.
It's probably there but I --
Ms Ruth Kessler Toch: Yes.
Justice Felix Frankfurter: -- just want to know what the gross amount is.
Ms Ruth Kessler Toch: I couldn't tell you and as I said, if the Court wants to know, I can find out and send you our comptroller reports.
In the few minutes that I have left, I think that the -- we took the position in Connecticut Mutual and the brief is on file in this Court.
We said that New York there seeks only policies written by the branches of the foreign companies on New York ensures and delivered in New York.
And that is the core of the court's holding; it is the domiciliary tie, the tie of residence.
Now, those where the essential factors in this insurance policies, so that the prinicipal office aspect of it was subordinate.
But in this case, Pennsylvania does not rely on residence of any one.
They don't know the residence of the sendees, they don't know the residence of the senders and certainly Western Union is not a resident.
And New York State, the only domicile that we know, both by registration and by the principal office is in New York State.
Now, as to life insurance since then, we have these giant insurance companies in New York State, Metropolitan New York by this showing.But we only escheat the unclaimed funds on policy written in New York, delivered New York and the lives of New York residents by our own domestic insurance companies.
Their branches outside New York in Pennsylvania, anywhere, we do not touch them.
And finally as far as our legislation is concerned, in 1953 we added in the -- as subject to escheat to our statute Section 501 involving securities.
And there, we said, that we take only the unclaimed securities of domestic corporations owed to residents of New York State.
So I think that our position is consistent, I think that our position is rather temperate, it is a custodial statute and so we ask that for these transactions is to court reverse Pennsylvania, reject Pennsylvania's claim and approve New York's claim.
Chief Justice Earl Warren: Ms. Kessler, what would you say if this company was incorporated in Delaware and had its principal place business in New York, would it pass?
Ms Ruth Kessler Toch: I -- I think without giving it a thought that I would say the principal place of business and none of which is domesticated.
Chief Justice Earl Warren: I beg your pardon?
Ms Ruth Kessler Toch: But I still say is the site of obligation, yes.
Where the company merely registers outside that state but has its place of business -- now as a matter of fact we took the position in our brief in Connecticut Mutual that the mere fact that a foreign insurance company has been authorized to do business in New York State, it wasn't doing business in New York State, we were not claiming policies written by that company.
Justice Charles E. Whittaker: What would that -- that's the theory, due to the court's holding in Standard Oil against New Jersey.
Ms Ruth Kessler Toch: I think we're dealing there with securities which have their situs, I think, going way back and the home of the company
Justice Charles E. Whittaker: Are you involve with shares in stocks, and --
Ms Ruth Kessler Toch: Yes.
Justice Charles E. Whittaker: -- with cash dividends accumulate those shares.
Ms Ruth Kessler Toch: Yes.
Justice Charles E. Whittaker: And it was held there.
Now, New Jersey has no place of business at all, but Standard Oil has no place of business in New Jersey, that was its domicile and yet New Jersey was entitled to this property and this piece of land.
Ms Ruth Kessler Toch: I know and I have tried to utilize that case and bring it's harmony with our position.
But the only thing that I can ascribe to as the basis of that holding is the old traditional theory that the stocks of a corporation have their base in the state where the core -- companies incorporated.
Justice Charles E. Whittaker: One more, if I may.
Ms Ruth Kessler Toch: Yes.
Justice Charles E. Whittaker: If it would have to do with your (Inaudible)
Ms Ruth Kessler Toch: Yes.
Justice Charles E. Whittaker: This Court got to make it, it hasn't gone up to now.
Ms Ruth Kessler Toch: I know.
Well, in this case, of course, we don't have the problem.
Chief Justice Earl Warren: You may have three extra minutes to finish argument, and that time (Voice Overlap) by the other side the same of course.
Now, Mr. -- Mr. Creskoff.
Argument of A. Jere Creskoff
Mr. A. Jere Creskoff: Mr. Chief Justice and may it please the Court.
Perhaps I will first endeavored to answer Mrs. Toch because she spoke last and that is always most clearly in mind.
I have no objection to the fact but the fact is that in filing its petition before this Court, the State of New York seemed to rest its application on the question of the domicile of the corporation, the respondent in this case.
However, the brief filed by the State of New York seems to depart from that position and argues rather on contacts.
Now, it seems to me that in the contents of the brief, New York leans over toward the position taken by Pennsylvania and depends on contacts rather than the mere fact of domicile of the corporation.
Now, this of course must necessarily be so because in the sense, it was New York in the decision of its appellate court by its legislature on the decision in Connecticut Life versus Moore in 297 New York, that got away from the question of the domicile of better corporation and rest it in a contacts, the so-called superior contacts that New York had with the insurance policy stoned by foreign insurance companies, domesticated in New York and so to residents of New York.
It's true that when that case reached this Court, this Court modified the cases of escheat or to taking under its custodial law various classes of policies that might have troubled this Court such as the residence of the beneficiary and other factors that were then involved but it was New York itself that in that series of cases departed from the principle that is a insignificant fact that a corporation has its domicile in one place or another.
Now, this business we've heard about the unseemly raise of the states for the escheat of funds, just isn't held up by the facts.
It so happens when my hair was a lot darker even then day, I argued the original client case in this Court way back in the 303 U.S. 20 some years have passed from that day and I leave it to this Court to answer for itself how many us chief cases have reached this Court in those 20 some years.
Obviously, very few and obviously always when someone thought that there was a special point involved that hadn't been decided.
Justice Felix Frankfurter: Let me ask you before this last statement the special point involved.Using this Court, can you suggest that this Court could affirm the judgment of your Supreme Court by just citing the insurance cases in the case?
Mr. A. Jere Creskoff: No I wouldn't come go completely that far for the simple reason that there has been raised in this case by the appellant, the question of this threats that were issued.
I don't know exactly what controlled this Court's decision to know its probable jurisdiction in this case but we have in our discussions in Pennsylvania assumed it was that new element of the graft.
Justice Felix Frankfurter: Yes, but the fact in the -- do you think the fact -- the fact that are now before us common within the -- in the decision, I don't mean the rationale, I don't mean the philosophy but I mean the circumstances which were relied on in the opinions of the Court for sustaining the claim of escheat by state.
Mr. A. Jere Creskoff: I do indeed.
I think in the case of Standard Oil and New Jersey and in the Connecticut and Moore cases, there is sufficient law without further for this Court to recognize the degree of the Pennsylvania Court in this particular case.
Justice Felix Frankfurter: Well, wasn't that a great emphasis on the domiciliary place of the business?
Mr. A. Jere Creskoff: Not in the Connecticut case, there was emphasis of it but the Court departed from the significance domicile.
Justice Felix Frankfurter: I know that talk about the contacts.
Mr. A. Jere Creskoff: It talked about substantial contacts and in my opinion, may I say that there was a lot to the theory of substantial contacts and when we examined what contacts we are talking about as the Chief Justice started to inquire, we can perhaps clarify just what the substantial contacts is and what the affirmable contacts are that other states might touch upon a fund and then this point let me say that I can't conceive of any single escheat situation where any of that more than two states can possibly be involved and probably when a situation is analyzed in each particular case just one state is surely involved.
Now, I wonder if it was made clear to the Court in the answer to the Chief Justice's question, I know there was no one intention not to make it clear but I want to leave it crystalline clear that not one cent of the funds covered by the Pennsylvania escheat decree have been the subject of the claim of any of state including New York.
Justice Felix Frankfurter: Is that proof that it's that -- that (Inaudible) -- no, I'm sure that that involved -- the implication is, if they had it, they wouldn't have gone after it.
Does that mean that it's a matter of law that issues to Minnesota and South Dakota and Florida wouldn't give rise to legitimate claim of contacts?
Mr. A. Jere Creskoff: I think not for the following reasons because I think that what we're talking about here, the most substantial contact of all can only be in the state where the raise, when the obligation was created, now I can conceive of the shifting locale of that obligation once created and that obligation that's being escheated --
Justice Felix Frankfurter: -- (Voice Overlap) -- I don't follow the necessity of such monistic doctrine.
If I issue a check in one's states, which gets to the another state and the whole of it, as a negotiable instrument funds which he can claim in the courts of that state and every state, why do you cut it all off we say that the issuing place is the only contact place.
Mr. A. Jere Creskoff: No I said when you judge this substantiality of contacts that give a state and perhaps the only other state a right to proceed.
That is a very substantial contact, now let me answer something on the question of these drafts and these payees.
That very question was before the New Jersey Court of the Standard Oil case.
It's true that the same question was not pressed when that case reached this Court but if the Court will keep in mind that Mr. Buchanan agree that another name for these drafts we talked about is checks and that checks in payment of dividends that's been issued in the thousands and that that question was disposed by the New Jersey Supreme Court in the Standard Oil case, those checks too might have been negotiated; those checks to may have found their place in the hands of citizens or residents in other states or other foreign countries.
Justice William J. Brennan: Well, may I suggest though Mr. Creskoff isn't there at least has difference that the sender comes into a Pennsylvania office of Western Union as an agreement from the Western Union, that if show order its office in Connecticut make a payment of X dollars to somebody in Connecticut.
Since a draft issued from the Connecticut office, the obligation with Western Union undertook in Pennsylvania present and order to it's Connecticut office which discharged and the transaction which involved in what's now an outstanding draft originated not in Pennsylvania, in that sense, but in Connecticut whereas the dividend shops which we're speaking of in the New Jersey case and perhaps my memory fails me but I thought that those went out on the statute of limitations, I may be wrong about that but in any event, the initial obligation to pay dividend was discharged in New Jersey by the draft which issued in New Jersey, wasn't it?
Mr. A. Jere Creskoff: No as i recall --
Justice William J. Brennan: By the check rather.
Mr. A. Jere Creskoff: That situation, those checks were drawn on banks in New York.
Justice William J. Brennan: They were drawn on but were they drawn by?
Mr. A. Jere Creskoff: Drawn by and on the banks in New York that were the special depository (Voice Overlap) --
Justice William J. Brennan: Well now, you made it right about that.
Mr. A. Jere Creskoff: -- for the payment of dividends that special --
Justice William J. Brennan: You may be right about that.
I rather had the recollection of the dividends
Mr. A. Jere Creskoff: But let me --
Justice William J. Brennan: -- that checks originated in New Jersey --
Mr. A. Jere Creskoff: Let me follow up your question there a bit, in another direction, Mr. Justice Brennan.
These drafts, we must remember, are issued -- we're issued no less than 15 years to go in any instance and in some instances 30 years ago, as assumed by Exhibit A in the record page 59, where there's a representative list, of this type of graft.
Only one item is for a hundred dollars and the rest are for $1 to $15 dollar maximum.
We understand that that is represented those 20 items are represented above the situation.
Now, you've have heard they might not be a majority of cases but many of these drafts were issued intrastate.
The sender was in Pennsylvania, the recipient was in Pennsylvania.
The whereabouts of neither is known, no claims has been made.
Now what about these drafts, isn't it interesting that the respondent himself in his answer in the State Court in Pennsylvania, pleaded that the Pennsylvania stature of limitations has deprived to all of these drafts and there was no further liability.
Now, in this situation we are much of the fears of dual liability, triple liability, quintuple liability but in fact, this respondent while it didn't pass in the appellate court, did plead at the Pennsylvania statute of limitations was a bar to all of the drafts, and I think any liability to run wherever held.
Now, going to the question or fear of liability over and over again, that certainly wouldn't be true.
That the respondent has any fear on that score at all because himself, has categorically pleaded that these obligations are all dated.
Justice William J. Brennan: Well, Mr. Creskoff, I might suggest that I don't think you don't get to the point that troubles me.
I don't see how Pennsylvania has a better claim for purposes of escheat.
By reason of the initiation of the transaction in the Pennsylvania office, when in many of this cases at least the terminal part of the transaction now represented by an outstanding draft, to place at an office in another state.
The state of the office, where the sendee was at least at the time where the order went then, now, why should Pennsylvania's connection whit the transaction rise to any better claim than that of --
Mr. A. Jere Creskoff: May I try to answer that this way.
We assume that in the ultimate sense, it was the duty of the respondent to refund the price deposited or the amount deposited with Western Union to be sent in the event that they could not deliver that month.
Justice William J. Brennan: But only then but I as understand what Mr. Buchanan answered us earlier, I haven't look at this record to know the actual facts, I thought what he told us was, that the bulk of sum escheated is represented by drafts, issued by sendee offices which have never been presented for payment, am I wrong in part of it?
Mr. A. Jere Creskoff: No, that's -- I'm in agreement with that generally but perhaps, this more approaches our are reasoning in answer to your question.
We must remember that there was no agreement here or whatsoever between the sender and Western Union to issue any draft at all.
All the record discloses and all of the instances, all that happened was, Western Union gave a receipt to the sender saying, we will send so much money to the sendee.
Justice William J. Brennan: But isn't this -- this -- isn't this involved us with a tariff of requirements and whatever may have been the words in the understanding between the clerk and the sender is not the whole transaction as defined in the tariff.
Mr. A. Jere Creskoff: I don't -- I don't think that the sender is bound, nor anyone is bound unless under the Pennsylvania law, there's a specific agreement that the issuance of a draft is in fact payment and of course the draft is evidence of the obligation.
But the original obligation is that which the draft is built around, now even in notifying the pay where Western Union said we have received a sum of money for you.
It's true that Western Union for its convenience or that of the payee might not pay the dollars over the counter but issue a draft, but that's something that was never within the agreement between the sender and Western Union.
Justice Felix Frankfurter: It's the course of business isn't it?
Mr. A. Jere Creskoff: In the course business.
Justice Felix Frankfurter: Well is that -- it is the course of business to have a draft.
Justice William J. Brennan: Well, this is required by the tariff?
Mr. A. Jere Creskoff: No sir.
Justice William J. Brennan: No, it's not?
Mr. A. Jere Creskoff: The very -- the record will show that these are exhibits of the respondent that is was a matter of convenience whether in a given case, either making refund to the sender or giving the money to the payee whether a draft was or was not issued was a pure matter of convenience, to one or the other of a party, now in any case, the sender could come in, and walk out with the cash if that's what he prefer.
If he didn't want to carry the cash, he might say I will take a draft in which case, they gave him a draft.
Sometimes Western Union would know the payee and would mail a draft or deliver it by messenger and would do so apparently without asking the sendee which form he wanted the transmittal but would do so as a matter of convenience to itself and the draft.
Justice Felix Frankfurter: But if we're going to talk reality, I think I would have to say that to show us in actual that the applicant for a money order in Pennsylvania established and if that shows that he's actually residing, a legal resident of Pennsylvania then the notification of the payee in Connecticut or New York that he may come up and turn up at the office of Connecticut and New York, he got a showing and that would make it suable into courts of that state against the Western Union in there, doesn't it?
Mr. A. Jere Creskoff: He may on certain cases where not these drafts are dated (Voice Overlap) where not the statute of limitations available as a defense.
Justice Felix Frankfurter: I follow that.
I'm just saying, he gets a notification and go to the Western Union office and show this piece of paper and wants $627 and they could have sold him a baseball game or what not.
And this (Inaudible) he could sue in that state for shows in that piece of paper, come to being there, doesn't it?
I mean all these are legal reality or unrealities, whichever you choose to call them.
Mr. A. Jere Creskoff: Well I remember this too about that draft we're talking about that it wasn't an unconditional draft in every case, it was a draft that have to be accepted at the bank in which drawn.
Justice Felix Frankfurter: Well, that's to identify himself that he'd have to accept it.
Let me ask you this.
Mr. A. Jere Creskoff: It's not the identification of the end of the sendee, I'm talking when it reaches the bank on which it's withdrawn, the draft have to be accepted.
Justice Felix Frankfurter: Let me ask you this Mr. Creskoff, suppose needless saying the decree of Pennsylvania, and suppose in the next litigation to come before this Court, one of this Greyhound Lines where they got these escheats.
It turns up in Minnesota that there are $12,000 and $22,000 unclaimed sendee claim against the Western Union in Minnesota and Minnesota wants to then bring the escheat proceeding in Minnesota against the Western Union and sue them there.
If one votes to sustain your decree, the decree you got, does that in impliedly mean that Pennsylvania that Minnesota would be out in my hypothetical case?
Mr. A. Jere Creskoff: I think, that Minnesota would be bound in that case to give full faith and credit to that that finally adjudicated here.
Justice Felix Frankfurter: Yes, if I assumed that as supposed it gives full paid in credit to that decree but these are due moneys that are accumulated since the decree.
Mr. A. Jere Creskoff: Oh yes.
Justice Felix Frankfurter: And it said that our claim, the basis of our plane, the contact we have for the unsatisfied money orders, claim within Minnesota, is that $22,000 that shows in action not redeemed and not satisfied in Minnesota and that issue was never contested.
Mr. A. Jere Creskoff: I would the --
Justice Felix Frankfurter: The decree in Western Union against Commonwealth merely covered the funds up to that time.
I want to know whether if I sustain your decree I foreclosed all these questions.
Mr. A. Jere Creskoff: I would think not sir.
I would think that the claimant of Minnesota in that case would have to be freshly examined and that it may turn out because of the facts in that case to be superior than any claim that Pennsylvania might assert.
Justice Felix Frankfurter: Well is it one or the other when you say superior and reading as implied in a situation where there are multiple interests, what compulsion is there in law, in the Constitution in good sense that is only one state that is superior to all the others?
Mr. A. Jere Creskoff: Well, I have never argued that one state of necessity because it's a state --
Justice William O. Douglas: I thought your argument was that the one who got it first was the one entitled.
Mr. A. Jere Creskoff: No, I do not at all attach any importance that time and may I say upon.
Justice William O. Douglas: Well if then -- if you and Minnesota were locked into an argument like here over Justice Frankfurter's $12,000 who would win it or who should win it?
Mr. A. Jere Creskoff: Well I -- I would say, I would like to know first what Minnesota was asserting as it rights to the fund as compared to what Pennsylvania on that hypothetical case was saying its rights were into those specific funds.
Now Pennsylvania --
Justice William O. Douglas: The residents of Pennsylvania had been taking money orders to be delivered in Minnesota and Minnesota office of Western Union never could bind the people so they had in Minnesota $12,000.
Mr. A. Jere Creskoff: I would say I would like to examine all of those facts and to show that that's a consistent position, may I say that Pennsylvania has very scrupulously avoided attempting to include as escheatable property any moneys that other residence of the other 48 states may have sent or residents in Pennsylvania under similar circumstances.
Pennsylvania does not regard that as escheatable property within Pennsylvania, even though the sendees may have been in Pennsylvania because to be consistent, the concept of Pennsylvania is that the closeness of the contact to the core of the transaction, the obligation if there's to be some order “must reside in the state” where the fund, where the obligation is originated because the sender's sent the fund from that and was presumably a resident of that state.
Justice Charles E. Whittaker: But Mr. Creskoff, is it really a question of which state has the better or more equitable claims?
Is it not really a question of whether the Pennsylvania judgment here validly as against these creditors took their credits?
Mr. A. Jere Creskoff: I think that's the ultimate question.
Justice Charles E. Whittaker: We're not here -- now, isn't it true that before you could -- first of all, do you agree this is an action in rem?
Mr. A. Jere Creskoff: Yes, sir.
Justice Charles E. Whittaker: And you had no personal service on these persons whose credits you took?
Mr. A. Jere Creskoff: No, I want the personal service was on the debtor.
Justice Charles E. Whittaker: Right, now then in order to substantiate the substituted service on these unknown persons whose credits you took, did you not have to first have a raise in Court?
Now, did you have the raise in Court here?
Mr. A. Jere Creskoff: Yes, sir.
Justice Charles E. Whittaker: And how did you get it, that's the --
Mr. A. Jere Creskoff: Our --
Justice Charles E. Whittaker: -- question for me.
Mr. A. Jere Creskoff: -- position is that the obligation created at the time of the sending was the raise that is here attached the obligation of Western Union.
Our position right or wrong is that the locale of that obligation cannot shift by the mere issuance of these drafts which are now stale-dated, a term used by the Pennsylvania Supreme Court in its opinion and that Pennsylvania had jurisdiction over the rights, notice it was proper, it was affirmed on appealed and as far as Pennsylvania's concerned unless this Court finds that an error was committed.
We are not concerned with the third step where the full faith and credit will be given by New York.
They have given heretofore, as a matter of fact, during the whole tendency of this case, the Pennsylvania case we're here talking about and New York abandoned property laws specifically exempted any situation in which another court and another state have first taken jurisdiction.
Now, it's true in 1960, after the decree was injured in this case, New York amended its abandoned property law and left out that provision and I'm saying during the entire period, the inception of the action to the procurement of the decree, New York recognized that many field with another state had proceeded to the escheat of the fund, it would hold hands off until the determination of that case and Your Honor needs determine.
Justice Charles E. Whittaker: I still don't see (Inaudible) basis of state claim the presence of drafts in Pennsylvania.
Mr. A. Jere Creskoff: When one raises the obligation by Western Union.
Justice Charles E. Whittaker: But it's -- that it's the question --
Mr. A. Jere Creskoff: Pennsylvania has seized that raise.
Justice Charles E. Whittaker: How did they seize it?
Mr. A. Jere Creskoff: By the service of the process by the service of the complaint of escheat by this complainant.
Justice Charles E. Whittaker: By the service of a -- of a summon on Western Union --
Mr. A. Jere Creskoff: Actually a certified copy of the petition escheat.
Justice Charles E. Whittaker: Could that not have been served in any one in the 48 states in the same way?
Mr. A. Jere Creskoff: No because as far as Pennsylvania is concerned, it has jurisdiction over Western Union, Western Union is operated in Pennsylvania through hundreds of offices for many years.
It enjoys the protection of the laws of Pennsylvania in the same sense as was set in the Connecticut-Moore case.
It has pleaded in the Courts of Pennsylvania that submitted itself to the jurisdiction in this case.
Justice Charles E. Whittaker: You don't have to be in Missouri.
Mr. A. Jere Creskoff: But not on these funds, Your Honor.
It may submit itself in Missouri as to different raise but it hasn't as to this raise from our viewpoint.
Justice Charles E. Whittaker: Well, could this raise only found in any one of the 48 states of the claim, am I right?
Mr. A. Jere Creskoff: It has been so indicated here but I don't think you can.
Justice Felix Frankfurter: Do you think it could?
Mr. A. Jere Creskoff: I don't think it can.
Justice Felix Frankfurter: That was some place, (Inaudible) that takes the place of the physical raise in that statute.
Mr. A. Jere Creskoff: We take that position right or wrong.When you think it's right, but whether be right or wrong, that's our position, that the raise does not float around, the obligation does not float around.
Justice Hugo L. Black: Has there been in the proposals so far as you know, that Congress by its power, under the Commerce Clause or any clause to enact some legislation to prevent confusion as a result of the claims of the various states to escheat?
Mr. A. Jere Creskoff: I don't think that -- I've never heard of such a proposal.
I don't know whether Congress would interest itself because the confusion and the size of the whole field is sometimes greatly exaggerated.
I don't think any confusion exist, I don't think any chaos exist, I don't know of any other state that ever at the same time has laid a claim to a fund that another competent court in a different state had under its control because of prior start of procedure.
Now we --
Justice Hugo L. Black: Because of prior procedure, that's putting a greater emphasis on who gets there first.
Mr. A. Jere Creskoff: No, because the case was depending, because it's recognize that ones a competent court has taken jurisdiction of the subject matter properly or coordinate courts will recognize that jurisdiction, recognize that possession and to waive the orderly disposition of that case.
There just have been none of these raises we talk about.
Justice Hugo L. Black: Well there has been a bunch of good activity in the last few years in the (Inaudible)?
Mr. A. Jere Creskoff: Not that I am aware of that, Your Honor.
There's been a little --
Justice Hugo L. Black: I think Mr. Justice Frankfurter pointed out some of it in one of his previous opinion.
Mr. A. Jere Creskoff: Well, since that opinion was retained have we heard, of any unseemly raises between the states and the unseemly litigation between states.
Justice Hugo L. Black: This may not be unseemly but despite of dispute between you and New York here.
Mr. A. Jere Creskoff: There is no despute in the sense that New York is a party here.
New York is simply (Voice Overlap) --
Justice Hugo L. Black: New York is here raising questions.
We've permitted New York to argue.
Mr. A. Jere Creskoff: Well, I --
Justice Hugo L. Black: I assume that the state who are headed to an escheat would never get together in the way and that the Congress passed the law, I don't know what it could or not, I'm not saying.
Mr. A. Jere Creskoff: They might, it just so happens I'm not in their company.
That they might consider it, I just don't know one way or the other.
Justice Hugo L. Black: Well, the former case as all of them have pointed in one opinion or another, the difficulties of reaching the decision, the decision have been better now, haven't you?
All the time there's someone pointing out that -- as Mr. Justice Frankfurter has pointed out here and the other members of the Court, that there may be other claimants who have a pretty considerable right to some of these funds.
Mr. A. Jere Creskoff: Well it's always appeared to me that others have been more concerned upon that about the possible existence of other claimants than the immediate parties have ever been.
Justice Hugo L. Black: Well, if we're confronted with this contest that vague between you and New York --
Mr. A. Jere Creskoff: Well --
Justice Hugo L. Black: -- and the other states may find out their responsibilities that I have no doubt the Courts will have far better more contest than your case.
Justice Felix Frankfurter: This is a relatively new field with all the said and done, these laws didn't get on the way until the late 30's.
Mr. A. Jere Creskoff: Yes, I agree with that Your Honor, this is wrong as far as the law goes a new field.
I don't think the field is as unlimited as some people suspect.
Justice Hugo L. Black: You mean the honeypot is getting entry?
Mr. A. Jere Creskoff: Our essential position in the situation is of course this, that Pennsylvania have jurisdiction over the subject matter that the raise as we see it was seized, that the case proceeded to unnoticed to hearing that the lower court adjudicated the case, that exceptions were heard.
Exceptions disposed of then appealed to the Supreme Court of Pennsylvania.
All of the arguments you heard here today and more are heard and carefully considered by the Supreme Court.
And affirmed the decision of the lower court and interpreted the state statutes involving the part of drafts and the dates under those drafts, and the staleness of drafts that we heard about today.
I necessarily think that the decree of the Supreme Court of Pennsylvania, opinion by that Court in this case is where they have a lot of weight because it considered all of these questions.
And insofar as it determined the interpretation of the Pennsylvania statute on notice and the Pennsylvania statues on the drafts concerning a question whether they're payment or not or just an evidence of the obligation deserve a great deal of weight from this Court and I'm certain that they will get a great deal of weight.
Justice Hugo L. Black: As I understand your argument.
It means and probably should that if you do when New York's law and any other states barred you from asking from presenting your claims.
Mr. A. Jere Creskoff: As to any of these --
Justice Hugo L. Black: To adjust funds.
Mr. A. Jere Creskoff: -- these funds.
Justice Hugo L. Black: So that it gives one state which the power to determine as you say in the lawsuit of its own in its own state to make a final determination of who's entitled to funds that maybe the 40 states has potential claim?
Mr. A. Jere Creskoff: Except Your Honor that we don't conceive that any single fund can there be 40 states in having the potential claim or that's the question of domicile is eliminated more than one fact as to a specific fund as to a specific single item we're talking about.
Let's assume that all we're talking about here is the hypothetical $25 transaction that Mr. Justice Brennan referred to.
If we narrow it down that way.
I can't see that any Court will ever find that more than one state is entitled to escheat of that $25.
Once it eliminates the question of the easy solution, let's give it to the state of incorporation of domicile.
Other than that, I can't see any two states.
Justice Potter Stewart: Well now, how about the situation of money sent to Pennsylvania to Missouri and a draft drawn to Missouri and given to the sendee and the sendee never cashes and does in testing whether that draft is interstate.
Certainly, Missouri will have greater rights for that money, would it not, by escheat than would the State of Pennsylvania?
Mr. A. Jere Creskoff: Maybe but not in particular case with those particular fact shown that Missouri would prevail.
Justice Potter Stewart: But you'll see -- I'm -- I'm just --
Mr. A. Jere Creskoff: But then we say --
Justice Potter Stewart: Suggesting an answer to your statement that you couldn't conceive of a situation where that would be to the state.
But that obviously is a (Voice Overlap) --
Mr. A. Jere Creskoff: No.
I think Missouri have succeeded in that case.
And that still be one state that could --
Justice Potter Stewart: Now, how can Missouri succeed if Pennsylvania had already cheated the money under this decree?
Mr. A. Jere Creskoff: Well, it couldn't under this decree but I think that it's only fair to assume that there are many situation of hardship as the cases have shown.
These funds can't be held in a vacuum forever because somebody may be affected by the notice of a procedure itself; that happens every day.
You try to do substantial justice.
You try to do -- to give notice that's fair under all circumstances considering the nature of the case, your International or your malignant cases said that very specifically on the question of certainly somebody may be hurt.
Your International Shoe case much more substantial interest wherein dispose off.
Justice Potter Stewart: But that was a matter of service of process here I'm just suggesting that I understand that you know the fact that in this hypothetical case I gave you, Missouri would have a greater right to escheat than Pennsylvania.
Mr. A. Jere Creskoff: If it proceed --
Justice Potter Stewart: And get under this decree, the money's already been escheated to Pennsylvania.
Mr. A. Jere Creskoff: Well, let me point out as far as Pennsylvania's concerned of escheat statute still provide a term of years and which then a proper person, that could include that term could include another state, could include anybody that might come in and recover the fund that had showed superior title.
There's nothing that bars any state I'm coming in for period of three years after the final decree escheat in Pennsylvania.
Now, in New York under this custodial statute, I must differ although it may seem a matter of temerity with Mrs. Toch here from what that statute provides that statute is a mixed mini escheat statute to New York statute.
Justice William J. Brennan: A what?
Mr. A. Jere Creskoff: Mixed.
Some cases are mini escheat and some cases custodial.
I say, if we assume that these drafts are separate obligations under the New York statute, you must come in within five years.
Or you forever lost your chance for a refund.
Now the five years differs from the Pennsylvania three years that who is there to say which is the wiser period by which they -- more generous or one must can go (Voice Overlap) --
Justice Felix Frankfurter: Let me ask you, does it appear in the record if it's an allowable statement that you can make outside the record?
How many -- how many states it was the nonappearance of the sendee that led to the nondischarge of the original deposit in Pennsylvania Court.
Mr. A. Jere Creskoff: I don't know, that's not in the position.
I don't think it was --
Justice Felix Frankfurter: But --
Mr. A. Jere Creskoff: -- ever attacked.
Justice Charles E. Whittaker: Do you know the answer to that question?
Justice Hugo L. Black: You didn't put in the briefs?
Mr. A. Jere Creskoff: There is nothing in the record on that --
Justice Felix Frankfurter: So, if there are -- but my point of view or the point of view of contact as I understand it carrying out a procedure that this been an outline if in fact the local office in the various states and were to this payee or that they're waiting for the check or whatnot.
If the X numbers of state and X number of state also have the kind of contact that I understand the prior decisions of this Court be satisfied.
Mr. A. Jere Creskoff: I'm --
Justice Felix Frankfurter: If they -- and if they each, if they each had a shorter statute of limitation of a period of installation than yours and each ran for their own you'll have the X state going after their local fund.
Mr. A. Jere Creskoff: You would have this X states but I still point out that each state if it were entitled under this theory would not be proceeding for the same transaction, for the same dollar that was sent.
In that sense, there would be no conflict between any of the states.
Justice Felix Frankfurter: No, because from my point of view Pennsylvania as sender the state would be out because I think the receiving state would ever get a claim because that's where a new obligation either in a piece of paper or in the creation of a new shows and action, that was the -- as it was the domicile of the grieving states and all of these and I'm afraid play either than most of writing my own acts.
All of which shows that this ad hoc unitary determination of what is essentially is a non-unitary problem is not the way to make adjustment.
If that doesn't help you, I don't mean to help.
That needs my help.
Mr. A. Jere Creskoff: I am offering that, Your Honor.
Justice Hugo L. Black: In the Standard Oil Case though several opinion.
Two of the opinion indicated that wholly found this position was made to his four members agreeing for any final disposition that's made, all the states should be heard about.
It might have an interest nor to State of Pennsylvania.
One suggested -- one opinion indicated that the proper place indicated, the proper place to do that might be in our courts.
The other one didn't indicate at all.
Assuming that it should be found necessary of some kind that in order to name that final adjudication the evident adjudicated that all the claimants could be present.
Would you say that Pennsylvania would've been a good -- its court would have been an appropriate place for this instance to have that adjudicated in the other state?They would then have no power to bring them here, wouldn't they?
Mr. A. Jere Creskoff: I don't think so, Your Honor.
I do believe that if ever there was such a rule or an act of Congress that some special forum would probably be designated for the disposition of such cases.
Justice Felix Frankfurter: The Constitution of the United States does that.
Justice Hugo L. Black: It says that this Court -- of course we have said that in some instances a matter of that between states that you began in the District Courts.
Mr. A. Jere Creskoff: Well I know further.
I contemplate that in these cases, the dispute might sometimes involve others than just states and might be as to particular fund of individuals involved, there are payees.
So when I said a different forum, I meant that there were any applicants for part of the funds involved other than the state.
Justice Hugo L. Black: Can you say the way we can dispose of this particular judgment that either holding absolutely that you're entitled to in New York or not.
A holding that New York is more entitled than you are holding against you and then leaving it to be decided hereafter, what have you?
Mr. A. Jere Creskoff: I would have no difficulty at all with the proposition that this Court can properly affirm the Pennsylvania decree.
I think when the briefs are studied, some of the other problems raised here today by some of the questions of the Justices perhaps offer some more problem than does that question.
Justice Hugo L. Black: But your argument would rule New York out completely, wouldn't it?
Mr. A. Jere Creskoff: I would rule them out because Your Honor I think they have ruled themselves out.
I think they've ruled themselves out by their own statute.
Justice Hugo L. Black: You mean by not claiming there yet?
Mr. A. Jere Creskoff: No sir, because they specifically accepted cases in which other states were already proceeding.
I think they've ruled it out by their own position in Connecticut versus Moore case.
May I go back Mr. Justice Frankfurter to your question which you said I have no intention of helping you and which I did --
Justice Felix Frankfurter: Why do you mean to -- to --
Mr. A. Jere Creskoff: That -- and this Court --
Justice Felix Frankfurter: I didn't mean to --
Mr. A. Jere Creskoff: This Court --
Justice Felix Frankfurter: -- compare it in your way
Mr. A. Jere Creskoff: This thought occurs to me beyond the portend of your question sir that perhaps Pennsylvanians would benefit more than his -- than we're aware of if the rule or the other way because I have no doubt that the number of sendees in Pennsylvania if that were -- those funds were regard as escheatable in Pennsylvania would exceed by far the funds that are escheatable under this decree because the funds were originated and that sent out from Pennsylvania.
Justice Felix Frankfurter: You mean --
Mr. A. Jere Creskoff: -- certain -- that moving the other way, Pennsylvania was the proper forum.
Justice Felix Frankfurter: Either the sendees -- called it the sendee's state where your property was?
Mr. A. Jere Creskoff: Pennsylvania was the sendee's state.
Justice Felix Frankfurter: I asked you that because Pennsylvania is so rich that people don't make claims.
Mr. A. Jere Creskoff: I think because more money is sent in to Pennsylvania (Voice Overlap) --
Justice Felix Frankfurter: (Inaudible) interest rates high in there?
Mr. A. Jere Creskoff: I'm not aware of that part, Your Honor.
Chief Justice Earl Warren: Mr. Buchanan.
Rebuttal of John G. Buchanan, Jr.
Mr. John G. Buchanan, Jr.: In the three minutes which you Mr. Chief Justice have graciously awarded me, I would like to point out --
Chief Justice Earl Warren: What about five minutes.
You have five minutes.
Mr. John G. Buchanan, Jr.: I'd like to point out just a couple of things from the record in answer to the two various questions that have been asked.
On the number of -- on the amount coming into Pennsylvania, if Your Honors will refer to page 57 of the record, it shows that --
Justice William J. Brennan: What page Mr. Buchanan?
Mr. John G. Buchanan, Jr.: 57.
Justice William J. Brennan: Thank you.
Mr. John G. Buchanan, Jr.: It shows the $23,590 were found to be originating elsewhere not taken by Pennsylvania and about $40,000 to some of two other figures without Pennsylvania.
So Pennsylvania has chosen the bigger approach, the bigger end of this stake on the idea that can only have one answer.
Justice William J. Brennan: When you say went out of Pennsylvania, you mean that literally outside of Pennsylvania?
Mr. John G. Buchanan, Jr.: Well, originated in Pennsylvania, excuse me.
Justice William J. Brennan: We -- but we don't know though how many of them.Were the sendees in Pennsylvania?
Mr. John G. Buchanan, Jr.: Yes, we do know approximately five-sixth went out of Pennsylvania, five-sixth of the total.
Justice William J. Brennan: The amount is almost $35,000?
Mr. John G. Buchanan, Jr.: That same page shows that $31,500 was destined out of Pennsylvania, $6,000 within Pennsylvania, $23,000 coming in from out of state.
Justice William J. Brennan: Oh I see.
Justice John M. Harlan: How many of --
Mr. John G. Buchanan, Jr.: The --
Justice John M. Harlan: -- the -- when send out to return in Pennsylvania fund can be?
Mr. John G. Buchanan, Jr.: That the record does not show but the record does show that all drafts issued less than 1% are refund drafts, that was a sample which shown at the page -- I don't remember the name in the page in the records.
It's not page 59.
Justice John M. Harlan: One-seventh of the drafts for intra --
Mr. John G. Buchanan, Jr.: One-sixth for intrastate.
Justice William J. Brennan: I don't want to eat into your time Mr. Buchanan but I know there's something about destruction of your records under SEC regulations after a particular period.
If I understand, your record are still completed and so that you can identify which drafts one from Pennsylvania to what offices outside of Pennsylvania?
Mr. John G. Buchanan, Jr.: Yes.
Justice William J. Brennan: But not of course drafts issued by an office outside of Pennsylvania where that is you have no idea?
Mr. John G. Buchanan, Jr.: No.
We have the records of a drafts involved in this case.
But they have not been statistically analyzed.
Justice William J. Brennan: Well I -- but they would show, wouldn't they, the sender, sendee's office have issued a draft, the sendee office that issued the draft?
Mr. John G. Buchanan, Jr.: Yes, with some reservation I say that the records weren't so good some earlier years.
Mr. Justice Brennan you asked about the Book of Rules the tariffs, the filed tariffs.
At pages 61 to Page 64 of the record are the extracts from the filed tariffs and each one starts by saying, “All payments will be made by drafts.”
There are some provisions for paying cash in certain instances but at the very least, those -- these filed tariffs give Western Union the option at least, the very least, no matter how you read them to pay by drafts.
Mr. Justice Frankfurter and Mr. Justice Douglas had some question about the situation in Minnesota, will Minnesota sit back and let Pennsylvania, the Pennsylvania decree rule us, I say no.
Minnesota is free to say Pennsylvania sent out a notice filed a petition, sent out a notice saying, “We are taking money refundable to senders,” and that's what the notice said here.
But we're -- we are taking drafts payable to sendees says Minnesota because this whole proceedings started out saying in the notice saying, “We're just taking money refundable to senders” but in the end they took something much broader than that payable to sendees, payable to endorsees and drafts and so on.
And the fellow who is sitting out in Minnesota with a negotiable instrument in his hands stale-dated though it be, he knows Western Union is good for it, doesn't get anything from that, so he had published in the newspaper in Pennsylvania saying, “Money is refundable to senders are being taken.”
Justice Felix Frankfurter: Did you try to urge a breakdown for those with escheatable claim of Pennsylvania in order to differentiate, in order to take care of the point you've just made?
Mr. John G. Buchanan, Jr.: The amount that has gone out?
Justice Felix Frankfurter: Yes.
Mr. John G. Buchanan, Jr.: Is held by -- this record was made up from our records by us at the request of the escheator.
Justice Felix Frankfurter: Yes.
Mr. John G. Buchanan, Jr.: The arrangements the proofs were within his control that we did it for him.
Justice Felix Frankfurter: Yes but -- but I understand that, but this must have started in the lower court, didn't it, in a litigation?
This didn't start in Supreme Court of Pennsylvania --
Mr. John G. Buchanan, Jr.: No, it started in the Common Pleas Court in Dauphin County.
Justice Felix Frankfurter: Right.
Well now, did you there say Pennsylvania purports to escheat only the senders' property.
And therefore, they must took it to the senders what is in involved in escheating an obligation owing not to the sender but owing to somebody else?
Mr. John G. Buchanan, Jr.: I understand from my partner who tried the case there that this was urged.
Justice Felix Frankfurter: It wasn't and that was rejected.
Mr. John G. Buchanan, Jr.: Hence not followed.
Justice Felix Frankfurter: Pardon me?
Mr. John G. Buchanan, Jr.: And our suggestion was not followed, we were told we take everything that originates in Pennsylvania.
Justice Felix Frankfurter: So that the total, the decree to be escheated by the Supreme Court of Pennsylvania includes the sender's claim what might be sender's claim or return of the unclaimed deposit.
Mr. John G. Buchanan, Jr.: Of --
Justice Felix Frankfurter: As well as sendees in Minnesota and all over the --
Mr. John G. Buchanan, Jr.: The --
Justice Felix Frankfurter: -- place.
Mr. John G. Buchanan, Jr.: -- sendees are the big part of us.
The sendees' claim are a big part of us.