Opinion of the Court
Sometimes, however, the prepaid draft was never collected or cashed. Id., at 72–73. At that point, Western Union would endeavor to issue a refund to the purchaser. Ibid. But if neither the purchaser nor the payee ever collected the prepayment, Western Union would hold on to the funds until they were deemed abandoned under state law, at which point the property could become eligible for escheatment. Ibid.; see also Pennsylvania v. New York, 407 U. S. 206, 209 (1972).
Texas outlined the rules that this Court established for determining which State has the right to take custody of such abandoned property. 379 U. S., at 680–682. That case involved various small debts held by Sun Oil Company, and multiple States asserted the right to escheat the funds. Id., at 675–676. To resolve the competing claims, we established that, as the primary (default) rule, the proceeds of abandoned financial products should escheat “to the State of the creditor’s last known address as shown by the debtor’s books and records.” Id., at 680–681.[1]
We further acknowledged that there would be times in which that primary rule would not resolve the escheatment question, either because the creditors’ addresses were unknown or because the State that is entitled to escheatment under the primary rule did not have a law empowering it to take custody of the proceeds. Id., at 682. So we also adopted a secondary rule to apply in those circumstances; namely, that the proceeds should escheat to the debtor’s State of incorporation. Ibid.
These rules were designed, at least in part, to distribute
- ↑ We have previously described the “debtor” as the entity holding the prepaid funds equivalent to the value of the money order, for example, Western Union or MoneyGram, which would be contractually obligated to pay those funds to certain recipients. Delaware v. New York, 507 U. S. 490, 503 (1993). The “creditors” can be both the intended payee and, where the debtor has an obligation to provide a refund if the draft is never paid out, the original purchaser. Ibid.
