Escheat

Just as nature abhors a vacuum so the law abhors a vacant ownership of anything. In the U. S. the States are the original and ultimate proprietors of all lands within their jurisdictions. And the ancient feudal doctrine of Escheat or accidental reverting of lands to the original lord has been applied in modern law not only to lands but to personal property, unclaimed savings deposits, dividends, and securities. Most laymen and many lawyers think of escheat only when persons die without wills and heirs. Last week smart lawyers all over the U. S. eyed with admiration a lawsuit filed in the Dauphin County Court at Harrisburg to compel the Commonwealth of Pennsylvania to collect by escheat some 15 millions tucked away in the treasuries of Pennsylvania's 150 biggest corporations. If the suit succeeds, its two principal sponsors, a pair of young Philadelphia lawyers named Michael Edelman and Abram Jere Creskoff stand to collect $3,000,000 as the State's informers.

The Pennsylvania Legislature has already complimented the pair by passing a law to prevent anybody else from being so profitably smart in the future. But dark, curly-haired, bespectacled Lawyer Edelman and round-faced, blue-eyed, dressy Lawyer Creskoff who filed their informations back in 1935, are not worried.

One winter afternoon three years ago the two lawyers discovered that unused balances of money deposited in Federal Courts disappear into the U. S. Treasury after five years if unclaimed and if the right to the money is not disputed. Realizing that within State boundaries the State is sovereign and that the Federal Government has no escheat powers save in its territories, they probed further, learned that in the custody of the Treasury awaiting disposition was $160,000 in such funds from the District Courts at Philadelphia, Scranton and Pittsburgh.

Under Pennsylvania law the informer of such funds could collect 25% of what is left after the State pays its lawyers to prosecute the suit. Technicalities over the $160,000 have at long last reached the U. S. Supreme Court whose rulings in comparable cases have upheld the escheat rights of the States. Spurred by the distant glint of a $34,000 commission on the $160,000, Prospectors Edelman & Creskoff went sluicing up the creeks of other Pennsylvania escheat tributaries. Taking corporations capitalized at above $2,000,000, they analyzed corporation statements and manuals, traced unclaimed dividends, stocks, bonds, interest, unclaimed deposits by gas, telephone and water customers, filed a series of informations between April and September 1935 that finally impressed Pennsylvania's Secretary of Revenue and moved him to start action. Then Governor Earle, responding to shouts by the Pittsburgh Press about a political "Sixteen Million Dollar Grab," urged passage of a law to require corporations to report all such escheatable sums directly to the State and barred fees to informers.* Last week's suit if successful will force Pennsylvania to go through with the Edelman & Creskoff informations on the 25% basis.

*Informers may still collect in intestate cases. Pending is the possible 25% which shrewd John R. K. Scott of Philadelphia hopes to collect from the $20,000,000 estate of the late snuff Heiress Mrs. Henrietta Garrett. Some 2,000 persons are currently claiming heirship, must be eliminated, however, before the estate escheats.

This file is automatically generated by a robot program, so reader's discretion is required.