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SPERRY & HUTCHINSON COMPANY v. CHARLES E. O'CONNOR (03/20/80)

decided: March 20, 1980.

THE SPERRY & HUTCHINSON COMPANY, APPELLANT,
v.
CHARLES E. O'CONNOR, ESCHEATOR OF THE COMMONWEALTH OF PENNSYLVANIA



No. 161 January Term, 1978, Appeal from the Order of the Commonwealth Court of Pennsylvania at No. 1330 C.D. 1976, affirming the Order of the court of Common Pleas of Philadelphia County at No. 2578 December Term, 1969

COUNSEL

W. Charles Hogg, Jr., Stephen W. Miller, Philadelphia, for appellant.

Lawrence Barth, Asst. Atty. Gen., for appellee.

Eagen, C. J., and O'Brien, Roberts, Nix, Larsen and Flaherty, JJ. Roberts and Nix, JJ., filed dissenting opinions.

Author: Larsen

[ 488 Pa. Page 342]

OPINION

Appellee, escheator of the Commonwealth of Pennsylvania, filed a petition in escheat in the Court of Common Pleas of Philadelphia County against appellant, the Sperry and Hutchinson Company, a New Jersey corporation authorized to do business in Pennsylvania. Appellant is in the business of supplying Pennsylvania retail merchants with trading stamps commonly known as "S & H Green Stamps." Consumers receive the S & H Green Stamps from participating retail merchants and collect the stamps in booklets which are presented to various redemption centers of appellant in exchange for cash, goods, or merchandise of the stampholder's own choosing. Not all of the stamps issued by appellant have been presented for redemption, however; and the petition in escheat avers that the value of the unredeemed

[ 488 Pa. Page 343]

    trading stamps issued prior to December 1, 1962 exceeds three million dollars. Appellee filed its petition to escheat this amount pursuant to the Act of May 2, 1889, P.L. 66, § 3, as amended, 27 P.S. § 333.*fn1

Appellant filed preliminary objections contending, inter alia, that according to the rule enunciated in Texas v. New Jersey, 379 U.S. 674, 85 S.Ct. 626, 13 L.Ed.2d 596 (1965), the lower court lacked jurisdiction over the subject matter of the petition in escheat. These preliminary objections were dismissed by order of the lower court dated July 15, 1976, and appellant subsequently filed an appeal to the Commonwealth Court pursuant to the Act of March 5, 1925, P.L. 23, as amended, 12 P.S. § 672.*fn2 That court affirmed the order of the lower court dismissing appellant's preliminary objection to jurisdiction. O'Connor, Escheator of the Commonwealth of Pennsylvania v. Sperry and Hutchinson Co., 32 Pa. Commw. 599, 379 A.2d 1378 (1977). We granted appellant's petition for allowance of appeal.

As we have made clear, when an interlocutory appeal is taken pursuant to the Act of March 5, 1925,*fn3 "the sole question appealable is whether or not the court below had jurisdiction either over the person of the defendant or the subject matter of the action." Studio Theaters, Inc. v. City of Washington, 418 Pa. 73, 76, 209 A.2d 802, 805 (1965). Since appellant does not question the amenability of its person to service of process in Pennsylvania, the sole question presented by this appeal is whether the lower court has subject matter jurisdiction over the instant action in escheat. We have, on many occasions, held that subject matter jurisdiction embraces:

[ 488 Pa. Page 344]

The competency of the court to determine controversies of the general class to which the case presented for its consideration belongs, and the controlling question is whether the court had the power to enter upon the inquiry, not whether it might ultimately decide that it was unable to grant the relief sought in the particular case. . . . [T]he Act of 1925 was not concerned with matters going to the right of plaintiff to recover on his cause of action but only with his right to have his cause of action heard and determined. Strank v. Mercy Hospital of Johnstown, 376 Pa. 305, 309, 102 A.2d 170, 172 (1954).

With this test for subject matter jurisdiction in mind, we turn to appellant's jurisdictional objections.

First, appellant contends that insofar as the addresses of stampholders are unknown, the rule set forth in Texas v. New Jersey, supra, constitutes a complete jurisdictional bar to any consideration of the petition in escheat by a Pennsylvania court. The Texas rule establishes priority among multiple states attempting to escheat the same res. It specifies that the state of the last known addresses of the creditors of intangible personalty has the superior right to escheat, and where such addresses are lacking, the superior power of escheat resides in the state of corporate domicile.*fn4 Texas v. New Jersey, supra, 379 U.S. at 681, 85 S.Ct. at 631, 13 L.Ed.2d at 601. Since the creditors' addresses in the instant case are unknown, appellant concludes both that Pennsylvania lacks the power to escheat according to the Texas rule, and lacking such power to escheat, Pennsylvania courts also necessarily lack the power to hear this action in escheat. Such a conclusion is totally without merit.

[ 488 Pa. Page 345]

The question of the power to hear or adjudicate a controversy in escheat and the question of the power to escheat are separate and distinct questions.*fn5 As we have stated:

Therefore, Texas does not constitute a jurisdictional bar upon the lower court's statutorily authorized jurisdiction over the subject matter of a petition in escheat, and the lower court is fully competent with respect to hearing and adjudicating this controversy in escheat.*fn6

Appellant next contends that the lower court lacks jurisdiction over the escheat action in that the lower court has not seized the res. Appellant's contention is premised upon the ancient legal maxim that a movable res follows the person, which in this case, appellant takes to be the person of the stampholders. It is mere sophistry, however, for appellant to suggest that appellee must symbolically seize the creditors (by knowing their addresses) in order to seize

[ 488 Pa. Page 346]

    the res. Appellant's contention, a legal fiction, is overly technical and flies in the face of the realities of the instant action which specifically involves property of unknown owners, unclaimed or abandoned property as defined by statute. Furthermore, the intangible property is not the S & H Green Stamps but the obligation they represent. In lawfully seizing the person of appellant, the obligor, the court has effectively seized the res, the obligation owing by appellant.*fn7

Finally, appellant contends that the possibility of its multiple liability offends the Due Process Clause of the U.S. Constitution and thereby bars the lower court from exercising its jurisdiction. To speak of multiple liability at this stage of the litigation is premature; such a review would require us to address matters touching the substantive right of the appellant to have its petition for escheat ultimately granted through the lower court's exercising the power to escheat. The Act under which this appeal was taken*fn8 "was not intended to furnish a short cut to the determination of the issues of law or fact raised by the pleadings and that it was not concerned with matters going to plaintiff's right to recover . . . but only with his right to have his cause of action heard and determined. ...


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