Provident Institution for Savings in the Town of Boston v. Malone

In 1907 the general court of the commonwealth of Massachusetts passed an act providing that deposits in savings banks which had remained inactive and unclaimed for thirty years, and where the claimant was unknown or the depositor could not be found, should be paid to the treasurer and receiver general.

Under this statute, which is copied in the margin,1 the attorney general on May 5th, 1908, filed in the probate court of Suffolk county a petition, setting out the mames and last known addresses of 226 persons who had deposit accounts ranging from $1 to $4,284 in the 'Provident Institution for Savings in the Town of Boston.' He alleged that for more than thirty years no part of the principal or interest had been withdrawn, no interest had been added upon any of the pass books, and no additional deposits had been made on any of the accounts; that no claimant for any of said deposits was known, and that the depositors could not be found. He thereupon prayed that the court would order the said sums of money, with the increases thereof, to be paid over to the treasurer and receiver general of the commonwealth. A copy of the petition was served on the bank, and a citation, addressed to the depositors, was published once in each week for three successive weeks in two newspapers in Boston, requiring them each to show cause on July 16, 1908, why the prayer of the petition should not be granted.

The savings bank alone answered. It admitted the allegations of the petition. It averred, however, that when each deposit was made, an agreement was signed by which the by-laws of the bank, made in pursuance of the charter granted December 11, 1816, were assented to by the depositor. These by-laws provided that regular semiannual dividends of 4 per cent should be declared on all deposits of $5 and over, and should be added to the principal; that no dividends should be paid on sums above $1,600; that no money could be withdrawn without the production of the pass book, and that by a vote of the trustees they might dissolve the institution at any time, and divide the whole property among the depositors, in proportion to their respective interests therein.

The bank contended that the act requiring deposits to be paid over to the receiver general deprived persons of their property without due process of law, and also impaired the obligation of contracts. After hearing, the probate court directed the bank to pay over and transfer to the treasurer and receiver general of the commonwealth the amounts deposited by the persons named in the petition. On appeal, that order was affirmed by the supreme judicial court of Massachusetts. 201 Mass. 23, —L.R.A. (N. S.), 86 N. E. 912.

Messrs. John C. Gray, William Ropes Trask, and Roland Gray for plaintiff in error.

Messrs. Dana Malone and Fred T. Field for defendant in error.

Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court: