State v. United States Steel Corp.

Hehek, J.

(dissenting). L. 1951, c. 304, now N. J. S. 3A :37-38 et seq., referred to as the “Custodial Escheat Act,” is to he enforced as written.

Conceding that “here the State does not have title at the time its right to bring the custodial action accrues,” and the “State’s right” is not “that of the unknown owner,” and “that person may bring suit against the corporate debtor until custody of the fund is given to the State Treasurer, N. J. S. 2A :37-33 (excepting, of course, an earlier expiration of limitations) for not until that time is the corporation released from its obligation,” the holding nevertheless is that “the defense of limitations may be pleaded by the defendant in the custodial action but failure to report property subject to custodial escheat pursuant to N. J. S. 2A :37-42 within *362 a reasonable time so as to reasonably permit the Attorney-General to institute action therefor will undermine the defense.”

But N. J. S. 2A:37-42 was not so designed. It came into being as section 22 of L. 1951, c. 304, amending and supplementing the original Escheat Act of 1946, c. 155, entitled “An Act providing for the escheat of certain unclaimed personal property.” Section 1 of the act of 1946, as amended in 1947, now N. J. S. 2A :37—11, defines “personal property” within the intendment of the act. Section 2 provides for the escheat of “personal property” left by an intestate without heirs or known kin capable of inheriting the same. And section 3 provides for the escheat of the “personal property” of a person “unknown” or whose whereabouts is “unknown,” or remaining “unclaimed” for 14 successive years. These sections, 1, 2 and 3, now N. J. S. 2A:37-11, 12, 13, embody the only definition in the statute of “escheatable personal property,” and here is to be found the significance of the term “escheatable property” in section 22, now N. J. S. 2A :37-42. Section 5, now N. J. S. 2A :37-30, makes provision for a proceeding by the State to obtain custody of moneys payable as wages, dividends or interest unpaid for five successive years, intangibles not then escheatable but which may become escheatable if unclaimed for two years after possession taken “for safekeeping” and notice given to the “owners” by the State Treasurer.

N. J. S. 2A:37-42 is not in terms applicable to the intangibles not yet escheatable in law and in fact, but subject to sovereign custody if the State so elects, and later escheat if unclaimed for two years after custody taken by the State Treasurer and notice to the creditor. The words used are inapt to that end. It is fairly to be presumed that if the Legislature had intended to lay upon the corporate debtor the positive duty of notice to the State of such potentially escheatable intangibles within the sixth year, with default tolling the statute of limitations, it would have said so in clear and indubitable terms. If it had so provided, and the State thereby acquired the right now asserted, then the *363 debtor could not make payment of the debt or obligation to the creditor without the State’s consent, or judicial process on notice.

A settled rule of interpretation comes into play here. Plainly, the words "attorney, surrogate, administrator, executor” in N. J. S. 2A:37-42 are not inclusive of corporate debtors of the particular class. To hold that the concluding general words "or any other person” cover such corporate debtors in these circumstances would be to disregard the interpretive maxim nosciiur a, sociis and the corollary rule of ejusdem generis embodying the principle that associated words and phrases may be looked to for the significance of doubtful words, and where general words follow particular words, in an enumeration describing the subject, the general words are deemed to comprehend only objects similar in nature to those enumerated. The word “other” will generally be read as "other such like,” and thus be restrictive of the meaning of the general terms to those ejusdem generis, thereby giving effect both to the particular and the general words. The particular words are treated as indicating the class, and the general words as embracing all within the class although not specifically mentioned. Is it not so that in sound reason and logic the antecedent special words are essentially restrictive; otherwise, they would have no meaning. In re Armour’s Estate, 11 N. J. 257 (1953).

It is not within the judicial province to supply a casus omissus,- such is the exclusive function of the legislative authority. An omission in a statute cannot be supplied by construction. “[I]f a particular case is omitted from the terms of a statute, even though such a ease is within the obvious purpose of the statute and the omission appears to have been due to accident or inadvertence, the court cannot include the omitted case by supplying the omission. This is equally true where the omission was due to the failure of the legislature to foresee the missing case.” Crawford’s Statutory Construction (1940), sec. 169.

The Custodial Escheat Law is not self-executing. It is purely permissive. It does not effect an automatic transfer *364 of possession of the intangibles to the State. The State “may,” by this “alternate method,” N. J. S. 2A :37-29, “take into its protective custody” property of the given class. Custody is obtained, N. J. S. 2A :37-30, 31, by service upon the corporate debtor of a copy of a “summary judgment” in an action brought by the State in the Superior Court, directing the transfer of the moneys to the State Treasurer for safekeeping. The corporation is then required (note the specific provision here) to turn over all information in its possession that may be of use to the State Treasurer in giving notice to each such creditor, N. J. S. 2A :37-32, that the moneys had been transferred to State custody “as his property, for [his] benefit,” and if the moneys remain unclaimed for two years, “an action will be instituted to escheat such moneys to the state. * * *” The payment of the moneys to the State Treasurer, N. J. S. 2A :37-33, operates as a discharge pleadable in bar of any action brought by the creditor against the corporation.

But until then the corporate debtor has the benefit of every defense, including the bar of the statute of limitations, to an action by the creditor. All this is clear beyond peradventure. The State may elect not to take custody of such credits, or it may delay action indefinitely. Until it does act, the legal relation between the corporation and its creditor remains unchanged; and if, meanwhile, the statute of limitation operates to bar action on the claim, there is no escheatable property. The corporate debtor has then acquired a vested right to the defense of the statute, proof against legislative impairment or judicial annulment. State, by Parsons v. Standard Oil Company, 5 N. J. 281 (1950), affirmed sub nom. Standard Oil Company v. State of New Jersey, 341 U. S. 428 , 71 S. Ct. 822 , 95 L. Ed. 1078 (1951).

Such is the statutory scheme. It is to be borne in mind that we are concerned here with the debtor-creditor relationship and the resultant choses in action classified as bona vacantia. There is no moral ground in favor of the sovereign’s revenue which would deny the debtor the defense of the statute of limitations. The operation of this statute of *365 repose is not to be arrested unless the Legislature has so ordained in explicit terms; and such is not the case here. We are not free to supply the means of overriding the limitation to remedy what we conceive to be an inadvertent or unwise omission or to comport with our concept of sound economic policy.

If the contrary view be accepted, the failure of the State to take custody for “safekeeping,” as the Custody Act permits, would defeat the statute of limitations as a defense. The State may choose to enforce the right, or it may refrain from action. See Hamilton v. Brown, 161 U. S. 256 , 16 S. Ct. 585 , 40 L. Ed. 691 (1896).

Under the common law, to complete title by escheat it was necessary that the lord make entry on the lands and tenements escheated, or sue out a writ of escheat. Annotation, 40 L. Ed. 691 . See also 19 Am. Jur. 389 . Action is necessary to reduce the property to the possession of the State; and until then the debtor-creditor relation continues unchanged. Before escheat the State has no title, but a mere possibility of interest.

It is established principle that escheats are not favored in the law; and any doubt as to whether the property is subject to escheat is resolved against the state. State, by Richman v. National Power & Light Co., 16 N. J. 486 (1954); Taylor v. Benham, 5 How. 233 , 12 L. Ed. 130 (1847); People ex rel. Attorney-General v. Stockton Saving & Loan Society, 133 Cal. 611 , 65 P. 1078 (Sup. Ct. 1901). See also 19 Am Jur. 387.

And see the holding in State, by Richman v. National Power & Light Co., supra, that the statute is not self-executing and “imposes no restriction or penalty” for failure to perform the duty of notice.

The doctrine of estoppel to prevent unjust enrichment has no pertinency here.

I would reverse the judgment.

Brennan, J., joins in this opinion.

Jacobs, J., concurring in result.

*366 For affirmance — Chief Justice Vanderbilt, and Justices Olipi-iant, Wacheneeld, Burling and Jacobs — 5.

For reversal — Justices Heeler and Brennan — 2.