NORTH CAROLINA GENERAL ASSEMBLY
1971 SESSION
CHAPTER 1135
SENATE BILL 681
AN ACT TO REVISE THE ESCHEAT LAWS.
The General Assembly of North Carolina enacts:
Section 1. A new Chapter 116A of the General Statutes is hereby enacted entitled as follows:
"CHAPTER 116A
"ESCHEATS AND ABANDONED PROPERTY
Sec. 2. G.S. 116-20, G.S. 116-21, G.S. 116-22, G.S. 116-22.1, G.S. 116-23, G.S. 116-23.1, G.S. 116-24, and G.S. 116-25 are revised and transferred to Chapter 116A to read as follows:
"§ 116A-1. Escheats to University. — All real estate which has heretofore accrued to the State, or shall hereafter accrue from escheats, shall be vested in the Escheat Fund. Title to any such real property which has escheated to the Escheat Fund shall be conveyed by deed in the manner now provided by G.S. 146-74 through G.S. 146-78, except as is otherwise provided herein: Provided, that in any action in the superior court of North Carolina wherein the State Treasurer is a party, and wherein said court enters a judgment of escheat for any real property, then, upon petition of the State Treasurer in said action, said court shall have the authority to appoint the State Treasurer or his designated agent as a commissioner for the purpose of selling said real property at a public sale, for cash, at the courthouse door in the county in which the property is located, after properly advertising the sale according to law. The said commissioner, when appointed by the court, shall have the right to convey a valid title to the purchaser of the property at public sale. The funds derived from the sale of any such escheated real property by the commissioner so appointed shall thereafter be paid by him into the Escheat Fund.
"§ 116A-2. Unclaimed real and personal property escheats to the University of North Carolina. — Whenever the owner of any real or personal property situated or located within this State dies intestate, or dies testate but did not dispose of all real or personal property by will, without leaving surviving any heirs, kindred or spouse to inherit said property under the laws of this State, such real and personal property shall escheat. The State Treasurer shall have the right to institute a civil action in the superior court of any county in which such real or personal property is situated, against any administrator, executor, and unknown heirs or unknown claimants as party defendants, which unknown heirs or unknown claimants may be served with summons and notice of such action by publication as is now provided by the laws of this State. The superior court in which such civil action is instituted shall have the authority to enter a judgment therein declaring the real and personal property unclaimed as having escheated, and the real property may be sold according to the provisions of G.S. 116A-1. A default final judgment may be entered by the clerk of the superior court in such cases when no answer is filed by the administrator, executor, unknown heirs or unknown claimants to the complaint, or if any answer is filed the allegations of the complaint are either admitted or not denied by such party defendants, and no claim is made in the answer to the property left by said deceased person. The funds derived from such sale shall be paid into the Escheat Fund where said funds, together with all other escheated funds, shall be held without liability for profit, or interest subject to any just claims therefor.
"§ 116A-3. Unclaimed personalty on settlements of decedents' estates to the Escheat Fund. — All sums of money or other personal estate of whatever kind which shall remain in the hands of any administrator, executor, administrator c.t.a., or personal representative when the administration of an estate of a person dying intestate, or partially intestate, without leaving any known heirs or spouse to inherit same, is ready to be closed, unrecovered or unclaimed by suit, by creditors, next of kin, or others entitled thereto, shall, prior to the closing of the administration of the estate, be paid, or delivered, by such administrator or executor to the State Treasurer as an escheat and shall be included in the disbursements in the final account of such estate. In such cases as above described, the State Treasurer is authorized to demand, sue for, recover, and collect such unclaimed moneys or other personal estate of whatever kind from any administrator, or executor after the estate is ready to be closed, or from the clerk of the superior court if the unclaimed assets have been paid over to him, and the State Treasurer shall hold the same without liability for profit or interest, subject to any just claims therefor. The provisions of this section and G.S. 116A-2 shall apply to the estate of a person missing for seven years and the State Treasurer may bring an action to have an administrator appointed in such case.
"§ 116A-4. Other unclaimed personalty. — Personal property of every kind, except as is otherwise provided by this Chapter, including dividends of corporations, or of joint-stock companies or associations, including savings and loan associations, choses in action, and sums of money in the hands of any person, firm or corporation which shall not be recovered or claimed by the parties entitled thereto for three years after the same shall become due and payable, shall be deemed derelict property, and shall be paid or delivered to the Escheat Fund and held without liability for profit or interest until a just claim therefor shall be preferred by the parties entitled thereto.
"§ 116A-4.1. Uncashed money orders and travelers checks. — (a) Any funds held or owing by any organization for the payment of any money order or travelers check on which such organization is directly liable shall be deemed abandoned property and shall be paid to the Escheat Fund: (1) when the instrument in the case of a money order has been outstanding 7 years from the date of its issuance or in the case of a travelers check when it has been outstanding 15 years from the date of its issuance, and (2) when the last known address of the apparent owner of the instrument is in this State. Where the records of the holder of the funds do not show a last known address of the apparent owner of a money order or travelers check, it is presumed that the last known address of the person entitled to the funds is in the state in which the money order or travelers check was issued. Any money order or travelers check held by any person, firm or corporation which remains unclaimed shall be deemed abandoned and paid to the Escheat Fund after three years.
(b) On or before the 1st day of June of each year, every organization shall pay to the State Treasurer all funds deemed abandoned pursuant to this Section as of December 31 of the previous year. Such payment shall be accompanied by a statement setting forth such information as the State Treasurer may require.
(c) Any holder who has paid to the Escheat Fund moneys deemed abandoned property pursuant to the provisions of this Section may make payment to any person appearing to such holder to be entitled thereto, and upon proof of such payment, the State Treasurer shall forthwith reimburse such holder to the extent of the full amount, without interest, paid into the Escheat Fund with respect to the instruments involved. If a holder declines or is unable to make payment to any person claiming ownership of funds paid to the Escheat Fund, the person claiming ownership may submit his claim to the State Treasurer who shall pay such claimant forthwith upon submission of adequate proof of ownership.
"§ 116A-5. Unclaimed funds held or owing by life insurance companies. — (a) Definitions. The term 'unclaimed funds' as used in this section shall mean and include all moneys held and owing by any life insurance company doing business in this State which shall have remained unclaimed and unpaid for five years or more after such moneys became due and payable under any life or endowment insurance policy, or moneys payable under annuity contracts or all dividends payable to holders of policies. A life insurance policy not matured by the prior death of the insured shall be deemed to be matured and the proceeds thereof shall be deemed to be 'due and payable' within the meaning of this section when the insured shall have attained the limiting age under the mortality table on which the reserve is based. Moneys shall be deemed to be 'due and payable' within the meaning of this section although the policy shall not have been surrendered nor proofs of death submitted as required and although the claim as to the payee is barred by a statute of limitations.
(b) Scope. This section shall apply to all unclaimed funds, as herein defined, held and owing by any life insurance company doing business in this State where the last known address, according to the records of such company, of the person entitled to such funds is within this State, provided that if a person other than the insured be entitled to such funds and no address of such person be known to such company or if it be not definite and certain from the records of such company what person is entitled to such funds, then in either event it shall be presumed for the purposes of this section that the last known address of the person entitled to such funds is the same as the last known address of the insured according to the records of such company.
(c) Reports. Every such life insurance company shall on or before the first day of May of each year make a report in writing to the Commissioner of Insurance of all unclaimed funds, as hereinbefore defined, held or owing by it on the thirty-first day of December next preceding. Such report shall be signed and sworn to by an officer of such company and shall set forth:
(1) In alphabetical order the full name of the insured, his last known address according to the company's records, and the policy number;
(2) The amount appearing from the company's records to be due on such policy;
(3) The date such unclaimed funds became payable;
(4) The name and last known address of each beneficiary or other person who, according to the company's records, may have an interest in such unclaimed funds; and
(5) Such other identifying information as the Commissioner of Insurance may require.
(d) Notice; publication. On or before the first day of September following the making of such reports under this section, the Commissioner of Insurance shall cause to be published notices entitled: 'Notice of Certain Unclaimed Funds Held or Owing by Life Insurance Companies.' Each such notice shall be published once a week for two successive weeks in a newspaper published in the county of this State in which is located such last known address of each such insured, or other person who, according to the company's records may have an interest in such unclaimed fund, or by posting such notice at the courthouse door of said county.
The notice shall set forth in alphabetical order the names contained in such reports of each insured whose last known address is within the county of publication together with:
(1) The amount reported due and the date it became payable,
(2) The name and last known address of each beneficiary or other person who, according to the company's records, may have an interest in such unclaimed funds, and
(3) The name and address of the company.
The notice shall also state that such unclaimed funds will be paid by the company to persons establishing to its satisfaction before the following December 1st their right to receive the same, and that not later than December 1st such unclaimed funds still remaining will be paid to the Escheat Fund which shall thereafter be liable for the payment thereof.
It shall not be obligatory upon the Commissioner of Insurance to publish any item of less than fifty dollars ($50.00) in such notice, unless the Commissioner of Insurance deems such publication to be in the public interest. The expenses of publication shall be charged against the Escheat Fund.
(e) Payment to the Escheat Fund. All unclaimed funds contained in the report required to be filed under this section, excepting those which have ceased to be unclaimed funds since the date of such report, shall be paid over to the Escheat Fund on or before the following December 1st.
The Commissioner of Insurance shall have the power, for cause shown, to extend for a period of not more than one year the time within which a life insurance company shall file any report and in such event the time for publication and payment required by this section shall be extended for a like period.
(f) Custody of unclaimed funds; insurers exonerated. Upon the payment of such unclaimed funds to the Escheat Fund, the State shall assume, for the benefit of those entitled to receive the same and for the safety of the money so paid, the custody of such unclaimed funds, and the life insurance company making such payment shall immediately and thereafter be relieved of and held harmless by the State from any and all liability for any claim or claims which exist at such time with reference to such unclaimed funds or which thereafter may be made or may come into existence on account of or in respect to any such unclaimed funds.
(g) Reimbursement for claims paid by insurers. Any life insurance company which has paid to the Escheat Fund moneys deemed unclaimed funds pursuant to the provisions of this section may make payment to any person appearing to such company to be entitled thereto, and upon proof of such payment the State of North Carolina shall forthwith reimburse such company to the extent of the full amount, without interest, paid the Escheat Fund for the account of such claimant.
(h) Determination and review of claims. Any person entitled to unclaimed funds paid to the Escheat Fund may file a claim at any time with the Commissioner of Insurance. The Commissioner of Insurance shall possess full and complete authority to accept or reject any such claim. If he rejects such claim or fails to act thereon within 90 days after the receipt of such claim, the claimant may make application to the Superior Court of Wake County, upon not less than 30 days' notice to the Commissioner of Insurance and the State Treasurer for an order to show cause why he should not accept and order paid such claim.
(i) Payment of allowed claims. Any claim which is accepted by the Commissioner of Insurance or ordered to be paid by a court of competent jurisdiction shall be paid by the Escheat Fund.
(j) Records required. The State Treasurer shall keep a public record of each payment of unclaimed funds received from any life insurance company. Such record shall show in alphabetical order the name and last known address of each insured, and of each beneficiary or other person who, according to the company's records, may have an interest in such unclaimed funds, and with respect to each policy, its number, the name of the company, and the amount due.
"§ 116A-6. Certain unclaimed bank deposits to Escheat Fund. — All bank deposits in connection with which no debits or credits have been entered within a period of five years, and where the bank is unable to locate the depositor or owner of such deposit, shall be deemed derelict property and shall be paid to the Escheat Fund and held, without liability for profit or interest, until a just claim therefor shall be preferred by the parties entitled thereto. The receipt of the Escheat Fund of any deposit hereunder shall be and constitute a release of the bank delivering over any deposit coming within the provisions of this section from any liability therefor to the depositor or any other person. Upon receipt of such funds, the State Treasurer shall cause to be posted and kept posted for 30 days at the courthouse door of the county in which such bank is located, a notice giving the names of the persons in whose name or names such deposits were made in said bank, the amount thereof, and the last known address of such person, and the bank paying over said funds to the Escheat Fund shall furnish such information to be used in giving said notice. If any person at any time thereafter shall appear and show that he is the identical person to whom such funds are due, the State Treasurer shall pay the same in full to such person, but without any liability for interest or profits thereon. Debits of service charges and debits of intangible taxes made by banks shall not be considered debits within the meaning of this section. A bank shall be deemed to be unable to locate a depositor or owner when the present address of the depositor or owner is unknown to the bank, and the United States mail addressed to the depositor or owner at the last known address, with a return address of the sending bank on the envelope, is returned undelivered to the bank mailing the same.
"§ 116A-7. Other escheats. — (a) Unpaid and unclaimed salary, wages or other compensation due to any person or persons from any person, firm, or corporation within the State are hereby declared to be escheats coming within the laws of this State, and the same shall be paid to the Escheat Fund immediately upon the expiration of two years from the end of the calendar year in which the same becomes due, provided, that this paragraph shall not apply to any person, firm or corporation employing less than 25 persons.
(b) Rebates and returns of overcharges and unclaimed meter deposits due by utility companies, which have not been paid to or claimed by the persons to whom they are due within a period of two years from the time they are due or from the time any refund was ordered by any court or by the Utilities Commission, shall be paid to the Escheat Fund.
(c) All moneys in the hands of clerks of the superior court, the State Treasurer, or any other officer or agency of the State or county, or any other depository whatsoever, as proceeds of the limitations of State banks by receivers appointed in the superior court prior to the Liquidation Act of 1927, shall be immediately turned over into the custody of the Escheat Fund: Provided, however, that nothing in this section shall be construed to require the said clerk or other officer to turn over funds of minors or other incompetents in his possession, but the custody and control of the same shall be under existing law with reference thereto.
(d) All moneys in the hands of the Treasurer of the State, represented by State warrants in favor of any person, firm, or corporation, whatsoever, which have been unclaimed for a period of five years, shall be turned over to the Escheat Fund.
(e) Unpaid and unclaimed dividends or other distributions due to any person or persons from any association organized under Subchapter IV or Subchapter V of Chapter 54 of the General Statutes are hereby declared to be escheats coming within the laws of this State, and the same shall be paid to the Escheat Fund immediately upon the expiration of three years from the time the same became due. Provided that this section shall not apply to the Agricultural Fund now on hand known as the State Warehouse Fund.
(f) Any funds derived from the liquidation of any national bank organized and operated in this State, which has heretofore or which shall hereafter become insolvent, when such insolvent bank has been fully liquidated by a receiver appointed by the Comptroller of the Currency as provided by Title 12 of United States Code Annotated, sections 191 and 192, or any other federal law, or has been liquidated by any agent appointed as provided by Title 12 of United States Code Annotated, section 197, which shall remain under the control of the Comptroller of the Currency and deposited with the Treasurer of the United States, or deposited elsewhere, as authorized by law, which shall be due any depositer or stockholder of this State, which for a period of ten years after becoming due such depositor or stockholder or available for distribution to any stockholder in the liquidation of such insolvent bank, has not been paid over to such depositor or stockholder, or the legal representative of such depositor or stockholder, due to inability to locate and deliver the same to the person entitled thereto, shall be deemed derelict property and shall be paid over to the Escheat Fund by the Comptroller of the Currency, or by such agent as may have the funds in charge, to be held in protective custody by the Escheat Fund until a just claim shall be made for same by the owner thereof. Upon payment of such funds to the Escheat Fund, the Comptroller of the Currency, or any agent having such funds in charge, shall be relieved of all further liability therefor.
Upon receipt of such funds the State Treasurer shall cause to be posted, and keep posted for 30 days, at the courthouse door of the county in which such insolvent national bank did business, a notice giving the names of the persons to whom such amounts so paid over were due, the amount thereof and the last known address of such person, and the source from which such funds were received: Provided, the Comptroller of the Currency or liquidating agent of such insolvent national bank shall furnish such information to the State Treasurer when such funds are so paid over to it. If any person at any time thereafter shall appear and show that he is the identical person to whom any part of such fund, is due, the State Treasurer shall pay such part in full to such person, but without any liability for interest or profits thereon."
Sec. 3. G.S. 116A-8, 116A-9 and 116A-10 are enacted to read as follows:
"§ 116A-8. Escheat Fund. — (a) The Escheat Fund shall be established by the State Treasurer and maintained by him as a separate fund. All funds which escheat shall be paid to the State Treasurer. Any funds previously escheated to the Escheat Fund which are claimed by their rightful owner shall be returned by the State Treasurer from the Escheat Fund.
(b) The payment of any funds described in this Chapter, or the transfer of any personal property described in this Chapter, to the Escheat Fund shall relieve any person, firm, association or corporation, or any State or federal official or agency of further liability therefor.
(c) The State Treasurer shall deposit or invest the Escheat Fund in his discretion, as provided for State funds generally.
"§ 116A-9. Distribution of income of Fund. — The income derived from the investment or deposit of the Escheat Fund shall be distributed annually on or before July 1 to the State Education Assistance Authority for loans to aid worthy and needy students who are residents of this State and are enrolled in public institutions of higher education in this State.
"§ 116A-10. Terms of loans. - Loans made by the State Education Assistance Authority shall be made under terms of other loans made by the Authority."
Sec. 4. G.S. 55-130, G.S. 53-20(l) and (p) and all other statutes referring to the 'University of North Carolina' in connection with escheats is hereby amended by changing 'University of North Carolina' to 'State Treasurer'."
Sec. 5. This act shall become effective July 1, 1971.
In the General Assembly read three times and ratified, this the 21st day of July, 1971.