Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)

Mullane v. Central Hanover Bank & Trust Co.

No. 378

Argued February &, 1950
Decided April 24, 1950
339 U.S. 306

APPEAL FROM THE COURT OF APPEALS OF NEW YORK

Syllabus

A trust company in New York which had exclusive management and control of a common trust fund established by it under §100-c of the New York Banking Law petitioned under that section for a judicial settlement of accounts which would be binding and conclusive as to any matter set forth therein upon everyone having any interest in the common fund or in any participating trust. In this common fund, the trust company had invested assets of numerous small trusts of which it was trustee and of which some of the beneficiaries were residents, and some nonresidents, of the State. The only notice of this petition given beneficiaries was by publication in a local newspaper pursuant to §100-c(12).

Held:

1. Whether such a proceeding for settlement of accounts be technically in personam, in rem, or quasi in rem, the interest of each state in providing means to close trusts that exist by the grace of its laws and are administered under the supervision of its courts is such as to establish beyond doubt the right of its courts to determine the interests of all claimants, resident or nonresident, provided its procedure accords full opportunity to appear and be heard. Pp. 311-313.

2. The statutory notice by publication is sufficient as to any beneficiaries whose interests or addresses are unknown to the trustee, since there are no other means of giving them notice which are both practicable and more effective. Pp. 313-318.

3. Such notice by publication is not sufficient under the Fourteenth Amendment as a basis for adjudication depriving of substantial property rights known persons whose whereabouts are also known, since it is not impracticable to make serious efforts to notify them at least by ordinary mail to their addresses on record with the trust company. Pp. 318-320.

299 N.Y. 697, 87 N.E.2d 73, reversed.

Overruling objections to the statutory notice to beneficiaries by publication authorized by §100-c of the New York Banking Law, a New York Surrogate’s Court entered a final decree accepting an accounting of the trustee of a common trust fund established pursuant to that section. 75 N.Y.S.2d 397. This decree was affirmed by the Appellate Division of the Supreme Court of New York (see 274 App.Div. 772, 80 N.Y.S.2d 127), and the Court of Appeals of New York (229 N.Y. 697, 87 N.E.2d 73). On appeal to this Court, reversed, p. 320.