In Re: Escheatment of Matured, Unredeemed, and Unclaimed United States Savings Bonds with Purchasers' Addresses in the Commonwealth of Pennsylvania Petition of: Pennsylvania State Treasurer, Joseph M. Torsella
Argued: April 10, 2018
BEFORE: HONORABLE ANNE E. COVEY, Judge, HONORABLE MICHAEL H.
WOJCIK, Judge, HONORABLE JAMES GARDNER COLINS, Senior Judge.
E. COVEY, Judge.
this Court is the Pennsylvania State Treasurer, Joseph M.
Torsella's (Treasurer) Application for Leave to Effect
Service by Publication (Application) of the Treasurer's
Amended Complaint (Complaint). The Treasurer filed the Complaint
in this Court's original jurisdiction seeking to obtain
legal title to certain matured, unredeemed and unclaimed
United States (U.S.) savings bonds (Bonds) by way of a valid
escheatment proceeding pursuant to Section 1301.10b of The
Fiscal Code (Code).
Complaint, the Treasurer avers that he is seeking to obtain
legal title to the following matured, unredeemed and
unclaimed Bonds pursuant to Section 1301.10b of the Code:
12.A vast majority of the matured, unredeemed [Bonds] are
Series 'E' bonds, which were first sold in 1941.
Nearly 4.6 billion Series E bonds were sold in this country
between 1941 and 1980. Between 1941 and November 30, 1965,
Series E bonds were sold with 40-year terms. Between December
1965 and June 30, 1980, they carried 30-year terms. The last
Series E bond was issued in 1980, and all such bonds had
reached maturity by June 30, 2010.
13. Series A-D bonds were sold from March 1, 1935, through
April 30, 1941. Series A-D bonds were sold with 10-year
terms. The last of these bonds was issued in 1941, and all
such bonds had reached maturity by April 30, 1951.
14. Series F and G bonds were sold from May 1, 1941, through
April 30, 1952. Series F and G bonds were sold with 12-year
terms. The last of these bonds was issued in 1952, and all
such bonds had reached maturity by April 30, 1964.
15. Series H bonds were sold from June 1, 1952, through
December 31, 1979. Between June 1, 1952 and January 31, 1957,
Series H bonds were sold with terms of 29 years and 8 months.
Between February 1, 1957 and December 31, 1979, they carried
30-year terms. The last Series H bond was issued in 1979, and
all such bonds had reached maturity by December 31, 2009.
16. Series J and K bonds were sold from May 1, 1952, through
April 30, 1957. Series J and K bonds were sold with a term of
12 years. The last of these bonds was issued in 1957, and all
such bonds had reached maturity by April 30, 1969.
17. Series EE bonds were first sold in January 1980 and
continue to be sold through the present. Series EE bonds were
originally sold with different terms but all Series EE bonds
earn interest for up to 30 years. The first Series EE bond
reached final maturity in January 2010.
18. Series HH bonds were sold from January 1, 1980, through
August 31, 2004. Series HH bonds were sold with 20-year
terms. The first Series HH bond reached final maturity and
ceased earning interest in January 2000.
Complaint ¶¶ 12-18; see also Application
the Treasurer stated in his Application that the Bond
purchasers/owners had last known addresses in the
Commonwealth 26 to 79 years ago. See Application
The only information currently available to the Treasurer
regarding the identities and addresses of the current owners
of the [Bonds] delivered to the Treasurer's office
consists of the names and last known addresses of safe
deposit box owners and the information on the face of the
[B]onds included among the safe deposit box contents
delivered to the Treasurer's office pursuant to [Sections
1301.3(4) and 1301.13 of the Code,  72 P.S. §§
1301.3(4) and 1301.13 [(relating to delivery of abandoned or
unclaimed property subject to the Commonwealth's custody
and control)]. Each of the [Bonds], however, has remained
unclaimed for at least six years after final maturity, and
even the most recent of the [B]onds delivered to the
Treasurer were issued in 1991. Accordingly, the information
is outdated or generally no longer accurate. In many, if not
most, cases, these [B]onds will likely have passed by
inheritance or to persons other than the original owner.
Application ¶ 6.
the Treasurer's efforts to locate the Bonds' owners
or their heirs, the age of the Bonds as well as the deaths
and relocations of their owners have resulted in many of the
Bonds and, consequently, approximately $840 million,
remaining unclaimed. Some of the Bonds have been repossessed
by the U.S. Treasury, which has not attempted to locate the
Bonds' owners or their heirs and refuses to supply
information it possesses that may assist the Treasurer in
locating them. Accordingly, unless an owner or heir has
reason to know that the Treasurer or the U.S. Treasury
possesses the Bonds, they will remain unclaimed in
perpetuity. The Treasurer's purpose in taking ownership
of the Bonds is so the Treasurer has more than a mere
custodial interest in them, with the ultimate goal of
reuniting the Bonds' proceeds with their owners or their
Section 1301.2(a) of the Code provides that "[a]ll
abandoned and unclaimed property . . . is subject to the
custody and control of the Commonwealth[.]" 72 P.S.
§ 1301.2(a). In 2016, the General Assembly enacted
Section 1301.10b of the Code to specifically address U.S.
savings bonds, therein declaring:
It is the intent of the General Assembly to allow the
[Treasurer] to obtain possession of unredeemed and unclaimed
[U.S.] savings bonds on behalf of residents of this
Commonwealth but held by the [f]ederal [g]overnment to permit
and facilitate the right of Pennsylvania bond holders to be
reunited with the bond holders' [U.S.] savings bonds
72 P.S. § 1301.10b(a). Section 1301.10b(c) of the Code
states, in relevant part:
Notwithstanding any law to the contrary, [U.S.] savings bonds
that are unclaimed property pursuant to [S]ection 1301.10[.1]
[of the Code] shall escheat to the Commonwealth three (3)
years after becoming unclaimed property by virtue of the
provisions of [S]ection 1301.2 [of the Code]. All property
rights and legal title to and ownership of [U.S.] savings
bonds or proceeds from the bonds, including all rights,
powers and privileges of survivorship of any owner, co-owner
or beneficiary, shall vest solely in the Commonwealth
according to procedures set forth in subsections (d)
[(relating to civil action commencement)], (e) [(relating to
service by publication)], (f) [(relating to escheatment
judgment)], (g) [(relating to the Commonwealth's
redemption process)] and (h) [(relating to the
Commonwealth's duty to pay future claims)].
72 P.S. § 1301.10b(c). Despite that title to the U.S.
savings bonds will be vested solely in the Commonwealth upon
escheatment, Section 1301.10b(h) of the Code expressly
preserves the owners/heirs' rights to claim their
proceeds at any future time without limitation. See
Treasurer 2/22/18 Supp. Br. at 12.
undertake a U.S. savings bond escheatment action, Section
1301.10b(d) of the Code specifies:
Within one hundred eighty (180) days after becoming
reportable as unclaimed property pursuant to [S]ection
1301.10[.1] [of the Code], if no claim has been filed in
accordance with the provisions of [S]ection 1301.19 [of the
Code] for a [U.S.] savings bond, the [Treasurer] may commence
a civil action in Commonwealth Court for a determination that
the [U.S.] savings bond shall escheat to the Commonwealth. .
72 P.S. § 1301.10b(d). Section 1301.10b(e) of the Code
shall make service by publication of the proceeding
in accordance with [Pennsylvania Rule of
Civil Procedure] No.
[(Rule)] 430 (relating to
Service Pursuant to Special Order of Court. Publication). In
addition, the notice shall name any known owner, co-owner or
beneficiary to be served and notify the person that:
1. the person has been sued in Commonwealth Court;
2. the person shall answer the petition or other pleading or
otherwise defend, on or before a specified date, not less
than forty-one (41) days after the date the notice is first
3. if the person does not answer or otherwise respond, the
petition or other pleading shall be taken as true, and
judgment, the nature of which shall be stated, shall be
72 P.S. § 1301.10b(e) (emphasis added).
If service cannot be made under the applicable rule[, ] the
plaintiff may move the court for a special order directing
the method of service. The motion shall be
accompanied by an affidavit stating the nature and extent of
the investigation which has been made to determine the
whereabouts of the defendant and the reasons why service
cannot be made.
Pa.R.C.P. No. 430(a) (emphasis added). The Pennsylvania
Superior Court has explained:
Due process of law requires an adequate investigation
for interested parties. Courts have repeatedly
expressed the importance of proper service of process.
'Service of process by publication is an extraordinary
measure and great pains should be taken to ensure
that the defendant will receive actual notice of the action
against him.' Fusco v. Hill Fin. Sav.
Ass'n, . . . 683 A.2d 677, 680 ([Pa. Super.] 1996).
'Due process, reduced to its most elemental component,
requires notice.' PNC Bank, N.A. v. Unknown
Heirs, 929 A.2d 219, 230 (Pa. Super. 2007). . . .
As our federal courts have observed: 'Service of process
is not a mere technicality. Rather, constitutional due
process requires that service of process be 'reasonably
calculated, under all circumstances, to apprise interested
parties of the pendency of the action and afford them an
opportunity to present their objections.''
Calabro v. Leiner, 464 F.Supp.2d 470, 471 (E.D. Pa.
2006) (quoting Mullane v. Cent. Hanover Bank & Tr.
Co., 339 U.S. 306 . . . (1950)). To this end, Rule
430(a) applies only where 'service cannot be made' in
the normal fashion. Pa.R.C.P. No. 430(a) . . . .
Sisson v. Stanley, 109 A.3d 265, 270-71 (Pa. Super.
2015) (emphasis added and omitted).
(1) If service of process by publication has been authorized
by rule of civil procedure or order of court, the
publication shall be by advertising a notice of the
action once in the legal publication, if
any, designated by the court for the publication of legal
notices and in one newspaper of general
circulation within the county. The
publication shall contain the caption of the action
and the names of the parties, state the nature of the
action, and conclude with a notice
substantially in the following form:
If you wish to defend, you must enter a written appearance
personally or by attorney and file your defenses or
objections in writing with the court. You are warned that if
you fail to do so the case may proceed without you and a
judgment may be entered against you without further notice
for the relief requested by the plaintiff. You may lose money
or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO
NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH
BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT
HIRING A LAWYER.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE
ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY
OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR
(NAME) (ADDRESS) (TELEPHONE NUMBER)
Note: The office shall be that designated by the
court under Rule 1018.1(c) [(relating to the form notice to
(2) When service is made by publication upon the heirs and
assigns of a named former owner or party in interest, the
court may permit publication against the heirs or assigns
generally if it is set forth in the complaint or an affidavit
that they are unknown.
Pa.R.C.P. No. 430(b) (bold text emphasis added). Finally,
Pennsylvania Rule of Appellate Procedure (Appellate Rule)
Whenever a matter . . . is brought before the Commonwealth
Court within its original jurisdiction, the following names
and related information shall be included in the notice to
defend set forth in the complaint pursuant to [Rule] 1018.1:
MidPenn Legal Services 213-A North Front Street Harrisburg,
Pennsylvania 17101 (717) 232-0581
Dauphin County Lawyer Referral Service Dauphin County Bar
Association 213 North Front Street Harrisburg, ...