Untitled Texas Attorney General Opinion ( 1980 )

The Attorney General of Texas
June 4. 1980
MARK WHITE
Attorney General
Honorable Warren G. Harding Opinion No. ~~-18 6
State Treasurer
P. 0. Box 12608, Capitol Station Re: Whether article l581h,
Austin, Texas 78711 V.T.C.S., relating to unclaimed
funds held by a county, is constitu-
tional.
Dear Mr. Hard@
You ask whether article 1581h, V.T.C.S., is constitutional. This statute
applies to unclaimed funds in the custody cr control of a county or precinct
officer, including a court. The officer holding the funds is required to give
written notice to the owner that the funds will become county property if he
does not claim them within the time prescribed by law. Sec. 3. If the funds
are not claimed within four years after notice is given, they become the
property of the county. Sec. 4.
Article 1581h, V.T.C.S., vests ownership of the funds in the county
without any judicial proceedings It is in the nature of an escheat statute,
because it provides for the transfer of unclaimed property to the county.
See State of Texas v. State of New Jersey, 379 U.S. 674 (1965). It, however,
mers in a constitutionally significant way from the other Texas es&eat
statutes. Article 3272, V.T.C.S., provides for the escheat of real estate
through a judicial proceeding. Branham v. Minear, 199 S.W.2d 841 (Tex. Civ.
App. - Eastland 1947, writ ref’d n.r.e.); Robinson v. State, 87 S.W.2d 297
(Tex. Civ. ADD. - El Paso 1935. writ dism’dl. Article 3272a. V.T.C.S.. which
applies to personal property, is custodial in nature. State v. Liquidating
Trustees of Republic Petroleum Co., 510 S.W.2d 311 (Tex. 1974). See
Comment, 29 SW. L.J. 575 (1976). The state never actually takes title tothe
property, since the owner may claim the property or its-value at any time.
Sec. 6. Article 3272b, V.T.C.S., provides for the escheat of bank accounts,
also subject to future claims of owners. Article 4.08 of the Insurance Code
applies to unclaimed funds of life insurance companies. Again, there is
provision for reimbursement when a claimant appears. Sec. 8.
Article 1581h, V.T.C.S., vests title to unclaimed property in the county
four years following notice to the owner. There is no judicial proceeding to
determine whether the facts exist which would support an escheat under
article 1581h, V.T.C.S., nor may the owner claim the property after four
P. 594
Honorable Warren G. Harding - Page Two (NW-186 1
years have elapsed. In our opinion, article 1581h, V.T.C.S., deprives the owner of property
without &e process of law because it vests title in the county without a judicial
proceed@.
The Supreme Court of California has stated that a judicial procedure is necessary to
perfect the escheat of an estate. State v. Savings Union Bank & Trust Co., 199 P. 26 (Cal.
19211. If a statute orovided for an immediate escheat without iudicial oroceedims it would
deprive the owner- of property without due process of law. Id. Sek also M&nheim v.
Superior Court of Los Angeles County, 478 P.2d 17 (Cal. 1970) (i&uiiUnited States
Supreme Court has held that the state mav take custodv of unclaimed bank denosits end
later institute judicial proceedixs to estabiish conclusively that the property was actually
abandoned. Anderson National Bank v. Luckett, 321 U.S. 233 (1943). The court stated as
follows:
The fundamental requirement of due process is an opportunity to be
beard won such notice ‘and proceedings as are adequate to
safeguard the right for which the constitutional protection is
invoked. If that is preserved, the demands of due process are
fulfilled.. . .
For this reason also it is not an indispensable requirement of due
process that every procedure affecting the ownership or disposition
of property be exclusively by judicial proceeding. Statutory
proceedings affecting property rights, which, by later resort to the
courts, secure to adverse parties an opportunity to be heard,
suitable to the occasion, do not deny due process.
Id. at 246-247, article 1581h, V.T.C.S., does not provide any judicial proceeding at’ any
pint to determine whether funds are actually unclaimed funds within its terms. Nor is
there any provision for determining whether a claimant who comes forward within four
years is the actual owner of the funds. In our opinion, article 1581h, V.T.C.S., would
unconstitutionally deprive owners of property without due process of law, in violation of
the 14th amendment of the United States Constitution and article I, section 19 of the
Texas Constitution.
SUMMARY
Article 1581h, V.T.C.S., authorizes the county to take title to
unclaimed property without a judicial proceeding. It is therefore
unconstitutional as permitting the deprivation of property without
due process of law.
MARK WHITE
Attorney General of Texas
P. 595
,
Honorable Warren G. Harding - Page Three (Mw-186)
JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
Prepared by Susan Garrison
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Jim Allison
Jon Bible
Susan Garrison
Rick Gilpin
Bruce Youngblood
P. 596