State v. Otis Elevator Co.

The opinion of the court was delivered by

Vanderbilt, C. J.

The State of New Jersey instituted this action in the Chancery Division of the Superior Court pursuant to the provisions of the Escheat Act (L. 1946, c. 155, as amended and supplemented; N. J. S. A. 2:53-15 to 32; now N. J. S. 2A:37-11 to 28), alleging that the Otis Elevator Company had in its custody or possession certain personal property, described in general terms only, that had escheated to the State. As provided in N. J. 8. A. 2:53-21, the Otis Elevator Company was ordered by the court to answer the complaint, to retain all escheatable personal property then in its custody or possession until the further order *4of the court and to disclose to the plaintiff in its answer such information regarding such escheatable personal property as was pertinent and would cause a speedy determination of the action. After successive stipulations extending the time to answer until the final disposition by this court of the test case of State v. Standard Oil Co., 5 N. J. 281 (1950), affirmed 341 U. S. 428, 71 S. Ct. 822, 95 L. Ed. 1078 (1951), the Otis Elevator Company filed its answer setting forth all the information called for by the order of the court, including detailed schedules showing the names and last known addresses of the record owners of all unclaimed personal property in its custody or possession together with the nature and amounts of such property. In addition in its answer the Otis Elevator Company asserted various defenses relating to the jurisdiction of the court, the constitutionality of the Escheat Act, and the applicability of the statute of limitations.

According to the answer of the Otis Elevator Company, the bulk of the unclaimed personal property in its custody or possession consisted of stock registered in the name of Frank C. Rhodes. Claim to this stock was made by Abraham Grenthal, substituted receiver of the firm of J. B. Skehan & Co., in an independent action instituted in New York against the Otis Elevator Company and Mrs. Frank C. Rhodes, as executrix of the estate of her deceased husband. The institution of the New York action occasioned an amendment of the complaint filed in this escheat proceeding so as to include Grenthal and Mrs. Rhodes as parties defendant; an amendment of the answer filed by the Otis Elevator Company setting forth as an additional defense the possibility that it might be subject to double liability; and the filing by Grenthal of an answer to the amended complaint claiming the Rhodes’ stock. Default was entered against Mrs. Rhodes for failure to answer. At the hearing the Grenthal claim was fully litigated, but the Otis Elevator Company, although it had raised various defenses in its answer, did not contest the escheat of any of the personal property sought by the State.

*5The judgment of the court entered on March 3, 1952, disallowed the Grenthal claim; declared all the personal property reported by the Otis Elevator Company in its answer to have escheated to the State and directed that it be turned over to the State Treasurer; discharged the Otis Elevator Company of all liability with respect to the escheated property; and directed that the State Treasurer pay out of the escheated property a counsel fee of $7,000 plus costs and disbursements to the attorney who had prosecuted the action for the State, a fee of $2,788.30 as a reward to the escheator, and a fee of $100 to the officer appointed by the court to take depositions. The request of the Otis Elevator Company for the allowance of reasonable counsel fees and disbursements was denied. So much of this judgment as disallowed the claim of Grenthal to the Rhodes’ stock has been affirmed by this court on a separate appeal, State v. Otis Elevator Company, 10 N. J. 504 (1952). The present appeal by the Otis Elevator Company seeks a review of only that portion of the judgment denying its request for the allowance of counsel fees and disbursements.

Two main questions are presented on this appeal: may an allowance of counsel fees be made to a defendant in proceedings under N. J. S. A. 2:53-15 ei seq. to escheat personal property and, if so, should an allowance have been made to the defendant Otis Elevator Company?

I.

This is the first case in which it has been contended that counsel fees are a matter of substantive law. Prom the outset in PTew Jersey, following English precedents, the allowance of costs and counsel fees had been uniformly considered by the courts of this State to be a matter of procedure rather than of substantive law. Rader v. Southeasterly Road Destrict, 36 N. J. L. 273 (Sup. Ct. 1873); Murphy v. Brown & Co., 91 N. J. L. 412 (Sup. Ct. 1918); Igoe Brothers v. National Surety Co., 112 N. J. L. 243 (E. & A. 1934); Robinson v. Jackson, 14 N. J. Misc. 866 (C. P. 1936); *6Savitt v. L. & F. Construction Co., 124 N. J. L. 173 (E. & A. 1940), affirming 123 N. J. L. 149 (Sup. Ct. 1939). In accordance with this uniformly accepted view the Supreme Court, in the exercise of the rule-making power over practice and procedure granted it by Article VI, Section II, paragraph 3 of the Constitution of 1947, promulgated Buie 3 :54-7 relating to counsel fees to be effective September 15, 1948, coincidentally with the Judicial Article of the Constitution. Buie 3 :54-7 in its original form provided that no fee for legal services should be allowed in the taxed costs or otherwise, except in (a) matrimonial actions, (b) out of a fund in court, (c) in unc'ontested actions for the foreclosure of mortgages, or (d) “as provided by these rules or by law with respect to any action, whether or not there is a fund in court.” On January 21, 1949, paragraph (d) of the rule was amended by adding the qualification that “the authority, heretofore vested in the Court of Chancery for the granting of counsel fees in causes generally, is hereby superseded.”

In the case of John S. Westervelt’s Sons v. Regency, Inc., 3 N. J. 472 (1950), the Supreme Court first had occasion to consider the constitutionality, meaning and effect of the rule. It there unanimously held (at pp. 477-478) :

“The rule as originally written is not ambiguous when considered as a whole. It was adopted in the exercise of the rule-making power relating to practice and procedure conferred upon the Court by Article VI, Section II, paragraph 3 of the Constitution of 1947. It was plainly designed to be self-contained and exclusive. The cited amendment' [of paragraph (d)] of the rule makes clear the purpose to supersede in this regard the powers of the old Court of Chancery, not the statutory authority lodged in the Chancery Division of the Superior Court by force of subdivision (d) of the rule as appellant would construe it. The amendment was but a clarification of the original purpose, not an amendment of that purpose. * * * The phrase ‘by law’ is operative in futuro; it has no retrospective significance; it was not intended that the conflicting preexisting statutes should remain in force. The rule covers the field to the exclusion of all else.”

The next case dealing with the rule was Katz v. Farber, 4 N. J. 333 (1950), where it was held “There is a fund in court 'where the court has jurisdiction over the fund or *7estat'” (at p. 344). Then came Liberty Title & Trust Co. v. Plews, 6 N. J. 28 (1950), where we held (at p. 44):

“In Rule 3:54-7 this court has specifically, enumerated the types of actions in which allowances to counsel may he made, and the discretion of the trial court is limited to the granting or denying of allowances in such actions.”

As of the time of the decision in Liberty Title & Trust Co. v. Plews, supra, in addition to permitting an allowance of counsel fees in the types of actions and situations herein-before specifically mentioned in paragraphs (a), (b), (e), and (d) of Buie 3 :54-7, an allowance of counsel fees was also permitted by Bule 1:2-28 on appeals in certain cases (made applicable to the Appellate Division of the Superior Court by virtue of Buie 4:2-6); by Buie 2:12-1 providing for the allowance of reasonable compensation to assigned counsel in murder cases; and by Buie 5:2-5, providing for the allowance of counsel fees on workmen’s compensation appeals. Shortly after Liberty Title & Trust Co. v. Plews, supra, was decided, the Supreme Court on December 7, 1950 again amended Buie 3:54r-7 by deleting from paragraph (d) the words “or by law.” The effect of that amendment was to bar an allowance of counsel fees in all cases except those specifically provided for in the rules themselves, thereby completely eliminating any statutory basis for such an allowance. It is readily apparent, therefore, that authority for the allowance of counsel fees is to be found exclusively in Buie 3:54^7. Eor the sake of completeness it should be noted that Buie 3:54r-7 was last amended effective January 1, 1952, by the addition of paragraph (e) dealing specifically with the allowance of counsel fees in probate actions.

That Buie 3:5A-7 now constitutes the exclusive source of authority foT the allowance of counsel fees was most recently reiterated by the Supreme Court in Driscoll v. Burlington-Bristol Bridge Co., 8 N. J. 433 (1952), where it was stated (at p. 495) :

“But even if there were no statutory obstacle to the allowance of counsel fees to the plaintiffs, none can be granted in this case *8because the allowance of fees is a matter of procedure governed by rule of court and there is here. no ‘fund in court’ or other basis within the provisions of Buie 3 :54-7 warranting an allowance.”

Such, then, was the state of the law with respect to the allowance of counsel fees on March 4, 1952, when the court below entered its judgment in the instant case denying the request of the defendant Otis Elevator Company for the allowance of reasonable counsel fees and disbursements. It should be noted in this regard that the allowance of costs and.counsel fees, being a matter of procedure, is governed by the state of the law at the time of the entry of the judgment, John S. Westervelt's Sons v. Regency, Inc., supra (at p. 479); Liberty Title & Trust Co. v. Plews, supra (at p. 44).

Before proceeding to a consideration of the question as to whether Rule 3:54^7 authorizes an allowance of counsel fees to the defendant Otis Elevator Company in the instant case it is necessary to consider the meaning and effect of N. J. S. A. 2:53-23. The pertinent portions of this section of the Escheat Act provide as follows:

“Before so depositing the proceeds of said escheated property in the public fund, he [the Treasurer of the State of New Jersey] shall deduct therefrom five per centum (5%) of the moneys so received and shall pay the same to the escheator as a reward for having supplied the information and evidence upon which the escheat has been successfully prosecuted and shall pay such other fees and costs as the decree shall direct.
The Court of Chancery [now the Chancery Division of the Superior Court] shall, in its final decree, fix the fees and expenses of the attorney or counsellor who shall have prosecuted the escheat in the Court of Chancery [now the Chancery Division of the Superior Court], The fees and expenses shall be deducted from the moneys received by the State Treasurer or from moneys realized by him from the sale of said personal property and shall be paid by him as directed by said decree.”

It is the contention of the State that this statute provides the necessary authorization of an allowance of counsel fees to the attorney specially appointed by the Attorney-General to prosecute the escheat, but that it fails to authorize an allowance to counsel for the defendant and, therefore, none *9can be awarded to him. This argument is obviously without merit, for it is based upon the premise, previously demonstrated herein to be false, that the allowance of counsel fees is a matter of statute rather than exclusively a matter within the rule-making power of the Supreme Court.

N. J. S. A. 2:53-23, however, is not without its effect. Chapter 20 of the Laws of 1944 (N. J. S. A. 52:174.-1 et seq.) establishing a Department of Law in the State Government (N. J. S. A. 52:174.-2) administered by the Attorney-General, imposed on the department the duty, among others, to “Attend generally to all legal matters in which the State * * * is a party or in which its rights or interests are involved” (N. J. 8. A. 52:17A-i'g). It provided that no member of the department “shall receive any compensation, fees or costs in addition to his regular salary for or by reason of any service performed by him for the State * * * except by allowance or appropriation by the Legislature” (N. J. 8. A. 52:17A-10). It further provided that “Uo special counsel shall be employed for the State * * * except by authority of the Attorney-General, and then only with the approval of the Governor, and provided that appropriations have been made therefor, unless the matter be of such an emergency and shall be so declared by the Governor” (N. J. 8. A. 52A7A-13). Thus, when the Escheat Act was adopted two years later (L. 1946, c. 155), unless special provision had been made therein the Attorney-General would have been without authority to appoint special counsel to prosecute proceedings thereunder and he or his representatives would have been prohibited from receiving any allowance of fees that the former Court of Chancery might otherwise have been empowered to award, see Driscoll v. Burlington-Bristol Bridge Co., supra (at p. 494). N. J. S. A. 2:53-23, while it cannot constitute the basis for the award of counsel fees in escheat proceedings, does have the effect of removing the statutory obstacles theretofore existing so as to permit the court to make an award of fees to counsel for the state in escheat proceedings in the event that such an award is authorized by Bule S :54r-7.

*10Does Buie 3 :54-7 authorize an allowance of counsel fees in proceedings under the Escheat Act? Quite obviously it does not unless there is a -“fund in court” within the meaning of paragraph (b) of the rule. This court has had several occasions to consider the question of'when there is a “fund in court,” Katz v. Farber, supra; Farley v. Manning, 4 N. J. 571 (1950); Milberg v. Seaboard Trust Co., 7 N. J. 236 (1951); Driscoll v. Burlingtov-Bristol Bridge Co., supra; In re Koretzky, 8 N. J. 506 (1951); Haines v. Burlington County Bridge Commission, 8 N. J. 539 (1952); Janovsky v. American Motorists Insurance Co., 11 N. J. 1 (1952). None of these cases, however, is immediately dispositive of the question in the instant case.

In construing Buie 3:54-7 and paragraph (b) thereof it is to be borne in mind that the purpose of the rule limiting the kinds of cases in which counsel fees might be allowed was to eliminate the abuses of the power to grant counsel fees that prevailed under the former practice in the Court of Chancery. As pointed out in Janovsky v. American Motorists Insurance Co., supra, in promulgating the rule “this’ court adopted the philosophy, long accepted in the federal courts, that the interests of sound judicial administration will be best advanced by having every litigant bear his own counsel fee except in a few specially designated situations.” And in Liberty Title & Trust Co. v. Plews, supra, this court stated (at p. 44): .

“It was not contemplated that the rule would or could be completely dispensed with in individual cases under the provisions of Rule 3:1-2.”

The court below was of the opinion that there was a fund in court, since the purpose of the Attorney-General in bringing the action in behalf of the State was “to create or preserve a fund for the benefit of a class,” the people of New Jersey, citing Cintas v. American Car A Foundry Co., 133 N. J. Eq. 301 (Ch. 1943), modified 135 N. J. Eq. 305 (E. & A. 1944). This conclusion'is entirely sound, but one does not need to find a class to support the doctrine of a *11fund in court. In United States v. Equitable Trust Co., 283 U. S. 738, 51 S. Ct. 639, 75 L. Ed. 1379 (1930), fees were awarded to the counsel of the next friend of an incompetent Indian whose property had been dissipated with the approval of the Secretary of the Interior; see Katz v. Farber, supra, 4 N. J. 333 (1950), and cases there cited.

There is another equally compelling reason, arising out of the very nature of escheat, for holding that there is here a fund in court. In State v. Standard Oil Co., 5 N. J. 281 (1950), affirmed, 341 U. S. 428, 71 S. Ct. 822, 95 L. Ed. 1078 (1951), this court stated (at p. 297) :

“In modern usage ‘escheat’ signifies the falling of property to the sovereign for want of an owner; and this category embraces not only property which has no other owner, but also property whose owner or whose owner’s whereabouts is unknown. Under the common law of England escheats came to be classified as ‘another branch of the king’s ordinary revenue.’ Blachstone’s Comm. 302. What was originally an incident of tenure is now an incident of sovereignty. Matthews v. Ward, 10 Gill, & J. (Md.) 443, 451; In re Melrose Avenue, 234 N. Y. 48, 136 N. E. 235, 23 A. L. R. 1233 (1922). The doctrine of escheat, at the early common law operative only upon that which was the subject of tenure, since it related to the reversionary right of the lord to take for want of a tenant, was eventually extended to include personal property, tangible and intangible. The principle was that the right to take that which belonged to no one appertained to the Crown, as jura regalia. Dyke v. Walford, 5 Moo. P. C. 434, 13 Eng. Rep. Full Reprint 557. The Crown steps in to take the property because it is vacant. Property described as tona vacantia is taken or assumed by the State, as its own. Property of this class falls ‘to the Crown as a matter of right in the exercise of its sovereign power.’ Re Barnett’s Trust (1902), 1 Ch. (Eng.) 847, 3 B. R. C. 198. ‘In personal estates, which are allodial by law, the King is last heir where no kin.’ Lord Mansfield in Burgess v. Wheate, 1 W. Bl. 123, 96 Eng. Rep. Full Reprint 67, 10 Eng. Rul. Cas. 614 (1884). Property escheats to the State as part of the common ownership. Hamilton v. Brown, 161 U. S. 256, 16 S. Ct. 585, 40 L. Ed. 691 (1896) ; Sands v. Lynham, 27 Grat. (Va.) (1876), 291, 295. ‘With tenures abolished, succession is by like right whether the subject of escheat is' personal estate or real.’ In re Melrose Avenue, supra.”

It thus appears that an escheat action is one by which the State comes into court seeking an accounting of property of which it is the residual owner and a judgment as to its *12title thereto. The complaint, using the language of the statute (N. J. 8. A. 2:53-21), alleges that certain property “has escheated to the State” and seeks discovery and an accounting of all such property in the possession or custody of the defendant. It is well recognized that in an action such as this in the nature of an accounting the property is brought within the control of the court and constitutes a “fund in court” within the meaning of Rule 3:54-7(5). Cintas v. American Car & Foundry Co., 133 N. J. Eq. 301 (Ch. 1943); see Milberg v. Seaboard Trust Co., 7 N. J. 236 (1951).

II.

Having shown that the allowance of counsel fees has always been deemed a matter of procedure in this State, that the sole source of authority for the allowance of counsel fees where there is a fund in court is Rule 3 :54-7, and that there is a fund in court, it remains to consider certain arguments advanced by this State.

First it is argued that the rule of Westerveli’s v. Regency, Inc., supra, 3 N. J. 472, 478 (1950) (“The rule [3:54-7 as to counsel fees] covers the field to the exclusion of all else.”); the rule of Katz v. Farber, supra, 4 N. J. 333, 344 (1950) (“There is a fund in court ‘where the court has jurisdiction over the fund or estate5 55) ; and the rule of Winberry v. Salisbury, 5 N. J. 240, 255 (1950) (“The rule-making power of the Supreme Court is not subject to overriding legislation, but * * * is confined to practice, procedure and administration55) must give way when the State is a party to the action. In such cases it is maintained the Legislature may prescribe the procedure and that such legislatively prescribed procedure may be in conflict with the rules of court relating to practice, procedure and administration and will override the rules of court. We can find no basis in law or equity for such a view, but on the contrary we cannot but regard such a suggestion as fraught with great inconvenience, because it would lead to two systems of procedure, one for *13ordinary litigation, the other for litigation involving the State. Indeed, in this view the Legislature might prescribe as many different systems of procedure as there are or might be proceedings to which' the State is a party, thus defeating the objectives of uniformity, simplicity and flexibility that are the goals of our new procedural system and that it is conceded throughout the country have been in large measure achieved here. If the doctrine urged on us were accepted, it might even be extended to all criminal trials because the State is necessarily a party.

But far more important than the procedural difficulties of a rival or even a multiple system of practice and procedure is the grave substantive danger of conceding to the State a preferred position in the courts as a plaintiff. One of the signal triumphs of the common law as distinguished from continental systems of jurisprudence is that for centuries it has been a recognized principle that everyone is subject to the rule of law and that no man is above or beyond the law. Said Bracton, the greatest of the early writers on English common law, “Rex non debet esse sub Tiomine sed sub deo et sub lege guia lex facit regem.” (“The king should not be under any man but under God and under the law, because the law makes the king.”) Be Legitus et Gonsuetudinibus Angliae, I. 8. s. 5; 4 Publications, Selden Society, Select Passages from the Worles of Bracton and Azo (edited by Maitland, London, 1895). See also Lord Coke’s use of this passage in his celebrated encounter with James I. Prohibitions del Roy, 12 Golee Rep. 63, 65, 77 English Reprint 1342, 1343 (1612). -This principle long had an exception in substantive law:

“(1) The rule that the King can do no wrong; (2) the procedural rule that the King cannot be sued in Ms own courts — a rule derived from feudal days when a lord could not be sued in his own court.” Wade and. Phillips, Constitutional Law (London, 1950), 309.

In England, however, this exception has gradually disappeared; property has long been recoverable from the Crown by a petition of right; contract obligations enforced against *14the Crown since 1860, idem, and “with important exceptions the Crown Proceedings Act, 1947, sec. 2, establishes against the Crown liability in tort as if it were a private person of full age and capacity; it can be made liable for the torts of its servants or agents,” Idem 312.

In this State; as in this country generally, the doctrine of the infallability and the nonsuability of the sovereign lingers on in the guise of the doctrine of sovereign immunity. This doctrine is applied, however, to suits against the State, but it has no application to suits such as this brought by the State. In this case the State is coming into court to assert its derivative, residual rights to the personal property of unknown or absentee owners, State v. Standard Oil Co., supra, 5 N. J. 281, 297 (1950). Its standing is neither greater nor higher than that of the unknown or absentee individual owners. The State as a plaintiff in such circumstances does not stand in any preferred position over any citizen. Seeking equity in the form of an accounting and a judgment of title, the State must, like every other suitor in equity, itself do equity. This fundamental principle that the State itself is as much subject to law as any private citizen grows in practical importance as the State in modern times constantly assumes more functions and greater activities with respect to its various functions;

Next it is contended by the State that even though the court has the right to exercise the rule-making power, it should, out of comity, yield to legislative provisions as to procedure in cases where the State is concerned. The rule-making power of the Supreme Court, however, is not a privilege to be exercised by it at its option; on the contrary, it is a duty that the justices of the Supreme Court must exercise as part of their constitutional obligations in cases involving the State quite as much as in private litigation, the language of the Constitution making it clear:

“The Supreme Court shall make rules governing the administration of all courts in the State and, subject to law, the practice and procedure in all such courts.” Const. 1947, Article VI, Section, 2, paragraph 3.

*15They called on committees of experts to make an initial draft of the rules; they submitted the tentative draft of the rules to the entire bench and bar; and they have continued the process by providing in Rule 1:7 — 3 for an annual judicial conference, “to consider improvements of procedure in the courts.” The Judicial Conference is made up of all the judges except the municipal magistrates, the leaders of each branch of the Legislature, the Attorney-General and the 21 county prosecutors, the dean of each approved law school, the state bar examiners, the officers and trustees of the State Bar Association, the president of each county bar association, 60 delegates from the bar appointed by the president of each county bar association in the same proportion as members of the General Assembly, and ten laymen appointed by the Chief Justice. Months before the annual conference request is made by publication in the New Jersey Law Journal and by letters to the bar associations for suggestions for improving the rules of court. Special committees are frequently appointed to report on topics of major difficulty. These reports and all suggestions are carefully considered and debated pro and con at the Judicial Conference. Thereafter the justices undertake the arduous work of considering and passing on each recommendation. Rule-making is by all odds the most difficult task they have assigned to them. They realize that a very large part of the progress that has been made by the new judicial establishment springs from the improvements in practice, procedure and administration prescribed by the new rules of court. They therefor regard the rule-making power not only as. an arduous task but also as a high responsibility that rests upon them continually year after year. They know full well that any judicial system that rests on its laurels will soon stagnate.

We agree that within constitutional limits the courts should cooperate with the Legislature in serving the public. In Massett Building Company v. Bennett, 4 N. J. 53, 59 (1950), we have listed 21 different types of nonjudicial functions that they perform as legislative agents at the express request of the Legislature expressed in appropriate *16statutes. Indeed, few states have gone further in this direction. In doubtful situations we have not hesitated to yield to the power of the Legislature in a spirit of comity. Thus in the exercise of our exclusive jurisdiction over the admission of members of the bar and in the absence of any legislation on the subject, we fixed the fees to be paid by applicants for admission to the bar examinations, Rule 1:8-8(2). Thereafter the Legislature by L. 1948, c. 390, R. 8. 2:16-64, presented a different schedule of fees. We thereupon promptly conformed our rule to the statute in recognition of the primacy of the Legislature in fiscal matters, even within a field of the Supreme Court’s exclusive jurisdiction. Such examples might be multiplied. But we cannot accede to the argument that the court may divide its constitutional duty with respect to rule-making with any other branch of government because the State is a party or interested in the outcome of litigation, or that it may shirk or abdicate its constitutional responsibility in the name of so-called judicial deference.

The Constitution of 1947 wisely superseded the common law prerogative writs and substituted in place thereof proceedings in lieu of prerogative writs in civil matters "as of right ,” Article VI, Section V, paragraph 4, chiefly because, among other reasons, “It was thought, too, that the right to sue out a prerogative writ should not be dependent on obtaining the allocatur of a court or of a justice thereof. It was believed that the allowance of a prerogative writ should not be a matter of judicial discretion any more than the filing of a bill in equity or the issuance of a subpoena to answer,” Ward v. Keenan, 3 N. J. 298, 304 (1949). Similar consideration should stay our hand here in developing the federal doctrine of judicial deference which has been employed by the United States Supreme Court on occasion to prevent individuals and sovereign states alike from having constitutional questions of the greatest moment adjudicated. The classic examples of such results are Massachusetts v. Mellon, 262 U. S. 447, 43 S. Ct. 597, 67 L. Ed. 1078 (1923), where the doctrine was invoked to prevent both Massachu*17setts and an individual taxpayer from obtaining an adjudication as to the constitutionality of the Maternity Act which could be justified only under the general welfare provision of the Federal Constitution, and Ashwander v. Tennessee Valley Authority, 297 U. S. 288, 56 S. Ct. 466, 80 L. Ed. 688 (1935), where the stockholders of a corporation sought to test the validity of a contract between their corporation and the Tennessee Yalley Authority. The victory of the people in supplanting the judicial discretion that controlled the granting of the old prerogative writs will prove illusory indeed if it merely gives place to the much criticized federal doctrine of judicial .deference. We will do well to avoid falling into the same error in this state. On the other hand, we must and do realize that our work as a judicial establishment is always subject to the will of the people; if we do not do our task well, they can and should and undoubtedly would make such changes that they may think wise by way of constitutional amendment.

Then it is urged by the State that the Escheat Act would be unconstitutional if it did not contain procedural provisions. It is undeniable that all judicial proceedings, whether originating in the common law or in statute, are necessarily subject to the constitutional requirements of procedural due process. But that does not mean that in judicial proceedings authorized by statute the procedure must be provided by statute where, as in this State, matters of practice and procedure have been committed to the courts by constitutional mandate. If the Legislature prescribes a new right, the court has the corresponding duty.to set up the procedure for its enforcement, if one does not already exist. It would, however, defeat the desired objectives of simplicity and flexibility in procedure, if statutory procedures might be engrafted on the rules of court.

In fact, the Legislature has taken precisely this view of our rule-making responsibility in two comprehensive revisions. Sensing the undesirability of the commingling of substantive and procedural law in Title 3 of the Revised Statutes dealing with the administration of civil and criminal *18justice and in Title 3 dealing with the administration of estates, the Legislature in June 1950, appointed an Advisory Committee on the Revision of Statutes (L. 1950, c. 171) to revise these two titles comprising about one-sixth of the total bulk of the Revised Statutes and to delete the procedural matter therein, and on December 5, 1951 it enacted the recommendations of its Advisory Committee as Titles 2A and 3A of the Revised Statutes (L. 1951, cc. 344, 345). Again, in June 1952 it appointed a Legislative Commission on Statute Revision to perform a similar task with respect to the remaining 56 titles of the Revised Statutes (L. 1952, c. 11) and on February 9, 1953 it enacted the recommendations of its Advisory Committee as S. 1 to S. 54 and these bills are now before the Governor for executive action. Likewise, the Governor has consistently supported the rule-making power of the Supreme Court by vetoing legislation encroaching thereon; see the vetoes of S. 58 (1947-1949, p. 103); S. 237 (1950, p. 76); A. 87 (1950, p. 38); A. 256 (1950, p. 49); and A. 634 (1952, p. 113), in Veto Messages of Hon. Alfred E. Driscoll, Governor of New Jersey.

Finally, it is insisted that the’ State may escheat personal property administratively without judicial action. With this view we find ourselves in complete disagreement. Court action has been uniformly required in escheat proceedings. If the State may appropriate property other than contraband to its absolute use without compensation, a great and unbounded inroad on private property rights will have made its way into the law without any constitutional warrant.

III.

There being a fund in court out of which an allowance of counsel fees might be made under Rule 3:54^7(6), the question is next presented as to whether the court below abused its discretion in denying the allowance of a reasonable counsel fee to the defendant Otis Elevator Company while at the same time granting a substantial allowance to counsel for the State. Three reasons were advanced by the trial *19court for denying the defendant’s request: (1) the fund must be preserved in as full measure as possible for the use of the State; (2) the Escheat Act indicates a willingness on the part of the Legislature to compensate counsel for the State but not counsel for the defendant; and (3) there is a danger in these cases that an allowance of counsel fees will inspire a show of legal activity without reasonable justification. The first and third reasons call as much for a denial of an allowance to counsel for the State as to counsel for the defendant, and the second reason is the result of a misinterpretation of N. J. 8. A. 2:53-23. As we have previously pointed out, this section merely has the effect of lifting the statutory restrictions on the Attorney-General or his representatives receiving an allowance when otherwise permitted. It was not intended to deny an allowance to counsel for the defendant; indeed, it specifically provides that “the Treasurer of the State of New Jersey * * * shall pay such other fees and costs as the decree shall direct.”

The nature of proceedings under the Escheat Act is such that in the ordinary case of personal property the defendant is plainly entitled to an allowance of counsel fees where it assists in creating the fund in court. Here it is important to note the difference in escheating personal property and real property. In the escheat of real property pursuant to our former statute B. 8. 2 :53-l ei seq., in effect at the time of the commencement of this action, the burden of the proceedings was placed upon the State. When the Attorney-General had reason to believe that a person seized of real estate had died intestate and without heirs, he was required to cause a writ of inquisition to be issued directed to the sheriff and commanding him as follows:

“* * * we command you, that, by the oath of twelve good and lawful men in your county, you diligently inquire what lands, tenements and hereditaments the said .......... was seized of at the time of his death, if any; and what estate of inheritance, and when he died, and whether he made any, and what, devise thereof, and whether he left any heir, and, if he did, who is his heir, and what is the clear yearly value of such lands, tenements and hereditaments; * * (B. S. 2:53-1)

*20If any occupant of the affected real estate or any person aggrieved traversed the inquisition, a trial was ordered and the burden was on the State to “prove all such matters as are requisite in judgment of law to establish the escheat” (B. 8. 2:53-5).

Contrast this practice with respect to the escheat of real property with the procedure prescribed for the escheat of personal property. There the burden of inquisition and proof is lifted from the State and thrust by the statute on the defendant. The complaint against a person suspected of having custody or possession of escheatable personal property need only be in general terms, yet the defendant may be required by court order

“to furnish to the Attorney-General, or his deputy appointed to prosecute the action, all information such person having possession of such personal property may have with relation to the last-known address of any person having any interest in, together with any other information relating to, such personal property.” (N. J. 8. A. 2:53-21).

The defendant may not default or leave the State to its proof, but the court shall

“Make an order requiring the defendant to answer the petition within a time therein limited. Such order shall contain such other directions as the court may deem appropriate for the speedy determination of the cause, the protection of the property, or for the disclosure of information pertinent to the prosecution of the cause.” (IV. J. 8. A. 2:53-21).

If any person lays any claim to the property sought to be escheated, he is required to

“file his claim in the general form of an answer to the petition, which answer shall set forth in such detail as the court may require why the answering party contends that the property mentioned in the petition should not escheat to the State.” (IV. J. 8. A. 2:53-22).

And in the event a claim is made to the property sought to be escheated the burden is not upon the State to prove the escheat, but it is the “claimant’s burden of clearly establishing by competent evidence that he was the rightful owner *21and presently had a valid claim as such,” see State v. Otis Elevator Company, 10 N. J. 504, 510 (1952), supra, which deals with a claim made in the instant escheat proceeding.

It is thus apparent that a complaint under the Escheat Act with respect to personal property is an extraordinary proceeding, in which the defendant is required to perform the duty that would otherwise fall upon the State of furnishing all the information necessary to give substance to and support the complaint. In these circumstances the statute places the laboring oar in the defendant’s hands and without any wrongdoing on its part commands it to produce the appropriate proof that in the ordinary course of judicial proceedings would come from the plaintiff. In these circumstances it is only equitable that when it comes to the allowance of counsel fees the defendant be given at least as favorable consideration as the State.

In these escheat proceedings, as no doubt is the situation in most such proceedings, the efforts of the defendants were not devoted exclusively to the furnishing of information in furtherance of the State’s claim to the personal property in its possession or control. While at the hearing it did not contest the escheat, in its answer it did raise certain defenses which, if valid, would have defeated the escheat. It is therefore essential in this, and in other similar proceedings, that the trial court in determining whether to make an allowance of counsel fees to the defendant and in fixing the amount thereof consider what portion of the defendant’s efforts redounded to the benefit of the State and, in the event the- escheat is actually contested at the trial, whether the defendant had reasonable justification for so doing. Obviously if a defendant should make a mere “show of legal activity,” as the court below feared, the court would be justified either in denying a counsel fee altogether or even in assessing the costs of the proceeding against it. In the instant case we are of the opinion that the court below, by reason of its misinterpretation of the force of N. J. S. A. 2:53-23 and Rule 3:54 — T, supra, abused its discretion in denying any allowance of counsel fees to the defendant Otis *22Elevator Company, but on the basis of the record before us we are not prepared to say what would be a reasonable allowance. The amount of the fee can best be determined by the court in which the services were rendered.

IY.

The judgment appealed from is reversed insofar as it denied the defendant’s request for the allowance of reasonable counsel fees and disbursements and the cause is remanded to the Chancery Division of the Superior Court for the purpose of making an allowance to the defendant in accordance with the views expressed in this opinion.