§ 1561.Claim of Property Paid Or Delivered to Controller By Holder; Payment Or Delivery of Property Because of Mistake of Law Or Fact

Handing property over to the Controller shouldn't leave a holder exposed if someone later shows up demanding it back, and Section 1561 makes sure it doesn't. If a holder pays or delivers escheated property in accordance with this chapter and someone later claims that property from the holder, or another state asserts its own escheat law against the holder, the Controller has to defend the holder against that claim and indemnify the holder against any resulting liability, once given written notice of it.

The section also handles the opposite mistake, when a holder turns over property that never qualified as escheated in the first place. If that happens because of a mistake of law or fact, and the holder later claims the property back from the Controller, the Controller has to refund or redeliver it without deducting any fee, as long as the Controller hasn't already disposed of it. And to keep the whole indemnity scheme from getting tangled up in interstate priority disputes, the section defines “escheated property” broadly, as property this chapter provides escheats to California, regardless of whether another state is later found to have had the superior right to it at the time or afterward.