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State v. F.W. Woolworth Co.

Decided: June 4, 1957.

STATE OF NEW JERSEY, BY GROVER C. RICHMAN, JR., ATTORNEY-GENERAL OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
F.W. WOOLWORTH CO., A NEW YORK CORPORATION, DEFENDANT



Schettino, J.s.c.

Schettino

This action was commenced under N.J.S. 2 A:37-29 et seq. , known as the Custodial Escheat Act. The case has been submitted on stipulations of facts, memoranda of law and oral argument.

Plaintiff alleges that defendant has in its custody or possession moneys payable to various persons as dividends upon its capital stock having a situs within this State; that these moneys have remained unclaimed by the owners thereof for a period of five successive years; and demands judgment ordering defendant to deliver said moneys to the State Treasurer for safekeeping, together with a list of the individual amounts and the names and last known addresses of the persons entitled to such moneys.

As to these dividends defendant denies that it has in its custody or possession any dividends having a situs within this State which are subject to the provisions of said Custodial Escheat Act. The sole issue to be decided is whether unclaimed dividends on the capital stock of a foreign corporation authorized to do business in New Jersey payable

to stockholders whose last known addresses on the records of the corporation are in New Jersey, have a situs within this State and may, therefore, be taken into the protective custody of the State of New Jersey in accordance with the provisions of the Custodial Escheat Act.

The following facts are stipulated. Defendant F.W. Woolworth Co. is a corporation organized under the laws of the State of New York. Its statutory principal office is at Watertown, New York, and its principal business office is located in the Woolworth Building, New York City. Defendant is authorized to do business in the State of New Jersey, and does business in our State, operating 75 stores. All dividends are declared by its board of directors in New York and are paid by its dividend-paying agent, City Bank Farmers Trust Co., in New York City. This agent pays the dividends by drawing its own checks on the dividend account of defendant corporation with it and mailing the checks to the stockholders at their mailing addresses as shown by the records of defendant corporation. All balances in the dividend account of defendant corporation, representing dividend checks which have not been cashed, are kept by the dividend-paying agent for six years and then turned over to defendant corporation. These moneys are co-mingled by defendant corporation with its general funds.

Since 1912, when the first dividends were declared by defendant after its organization in 1911, and up to September 12, 1951 (five years prior to the service upon defendant of the order to show cause in this action), dividend checks in the aggregate of $889, mailed to stockholders having New Jersey mailing addresses on the records of defendant, have not been cashed and remain unclaimed. Defendant has no knowledge as to whether the addresses appearing on said list were the residences of the persons indicated, their places of business or other addresses, or whether such persons are alive and now living in New Jersey. These addresses were merely the last known mailing addresses of such persons for dividend-mailing purposes, as noted on the records of the defendant. These unclaimed dividends have not been

claimed by the State of New York, and the State of New York is not entitled to them under New York law.

Plaintiff concedes that under the Custodial Escheat Act, in order for the plaintiff to succeed, the court must first find that the unclaimed dividends, payable to persons whose last known addresses on the records of the corporation are in New Jersey, have a situs within the State of New Jersey.

N.J.S. 2 A:37-30 provides in part as follows:

"* * * and whenever any person or any corporation organized under the laws of any other state and authorized to do business in this state shall have custody or possession of any moneys payable by such person or corporation to any person as wages earned within this state, or of any moneys otherwise having a situs within this state , which moneys are payable to any one person in any of the categories above enumerated and the owner of, beneficial owner of, or person entitled to the same has been and remains unknown for the period of 5 successive years, or the whereabouts of such person has been and remains unknown for the period of 5 successive years, or such personal property has been and remains unclaimed for the period of 5 successive years, then the superior court may in a summary action brought in the name of the state ...


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