For reversal -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Francis, J.
[35 NJ Page 391] In this custodial escheat action brought under N.J.S. 2 A:37-29 (L. 1951, c. 304), the Chancery
Division of the Superior Court entered judgment for the defendant on the ground that the property involved had no situs in New Jersey. We certified the ensuing appeal of the State before it was argued in the Appellate Division.
Union Bag and Paper Corporation was organized as a corporation of the State of New Jersey in 1916. Its principal office existed in this State until the merger to be discussed hereafter. It had, and the corporation resulting from the merger still has, a paper box manufacturing plant in this State. For a period of five successive years prior to July 12, 1956, certain wages due former employees of Union, deductions withheld from wages of former employees for installment purchase of United States Savings bonds, and dividends on its capital stock remained unpaid and unclaimed. At the time of trial it was undisputed that the sums owed by Union from those sources were: $3,424.28 in unpaid wages, $206.25 deductions from wages for purchase of Savings Bonds, and $954.25 dividends on stock. No New Jersey resident was owed any part of the moneys, nor were any of the wages earned in this State. In view of the fact, however, that Union was a domestic corporation and citizen of New Jersey during the period of accrual of the debts, there is no doubt that they constituted intangible property escheatable to the State when they had remained unclaimed for the time prescribed by the statute. N.J.S. 2 A:37-29, 34. For escheat purposes their situs was clearly in this State. Standard Oil Co. v. State of New Jersey, 341 U.S. 428, 71 S. Ct. 822, 95 L. Ed. 1078 (1951); State by Richman v. Sperry & Hutchinson Co., 23 N.J. 38, 48 (1956); State by Van Riper v. American Sugar Refining Co., 20 N.J. 286 (1956).
The Custodial Escheat Act, 2 A:37-29, provides that:
"* * * [T]he state may take into its protective custody property consisting of cash, dividends, interest or wages owed by any corporation organized or doing business under the laws of this State, belonging to any person remaining unknown, or whose whereabouts is unknown, or whose property remains unclaimed as defined herein
for a period of 5 successive years; and after a period of protective custody has expired as herein prescribed, the state may proceed to escheat such property to itself."
The act empowers the Superior Court, in a summary action brought in the name of the State of New Jersey by the Attorney General, to direct the corporation to deliver such moneys to the State Treasurer for safekeeping. N.J.S. 2 A:37-30. In order to facilitate the accomplishment of the purpose the Legislature ordained further that:
"It shall be the duty of any * * * person having knowledge or information concerning any escheatable property as defined herein, to notify the attorney general of this state within a reasonable time, of the existence of such escheatable property." N.J.S. 2 A:37-42.
Union, being a "person" under this section, is bound by the mandate to report property in its possession which is subject to custodial escheat. N.J.S. 2 A:37-11. The primary purpose of the Custodial Escheat Act was to confer upon the State the right to possession of unclaimed funds in ample time to avoid the possible application of the six-year statute of limitations. State by Parsons v. United States Steel Corp., 22 N.J. 341, 353 (1956). Obviously, therefore, a reasonably prompt notification is contemplated so that the Attorney General may institute the summary action to transmute the right of possession into the fact of possession without fear of the six-year bar. A reasonable time in this, as in so many situations, depends on the particular circumstances. Here, as will presently appear, compliance with the requirement called for a report within a well defined period of time.
The report is of inestimable value to the State. If the duty to make it had not been imposed by the Legislature, the Attorney General would have the tremendous burden of inquiry of the thousands of corporations of the State at regular intervals to ascertain whether they ...