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Mullane
v Central Hanover Bank
339 U S 306 [1950]
Author:- Sam
Biers
NOTICE
Relevant
Facts: In 1946 Central, as trustee, established a common trust
fund where a number of small trust estates were pooled into
one. Until 1947 113 trusts, participated in the common
trust fund, totaling nearly 3 million dollars. In 1947,
Appellee petitioner the Surrogate Ct for settlement of its
account. The only notice given to the beneficiaries was by
publication in a local newspaper. That publication contained the
name and address of the trust company, the name and date of
establishment of the fund, and a list of all participating
estates, trusts, and funds. Initially, the trust company
had notified by mail each person whose name and address were
known and were entitled to share in the income.
Appellant-Mullane was appointed special guardian and attorney for
certain persons known or unknown not otherwise appearing by the
Surrogate Ct. Appellee-Vaughan was appointed to represent
those similarly interested in the principal.
Legal
Issue 2: Whether statutory notice by newspaper publication was
insufficient with respect to known present beneficiaries of a
known place of residence and did not satisfy the requirements of
due process of law?
Court’s
Holding: No.
Procedure:
Ct of App answered certified questions and affirmed an order of
the S Ct, App Div which affirmed a decree of the Sur Ct accepting
the accounts. Special guardian appealed; The Supreme Court
reversed and remanded.
Law
or Rule(s): At a minimum due process requires that deprivation of
life, liberty, or property by adjudication be preceded by notice
and opportunity for a hearing appropriate to the nature of the
case.
Court
Rationale: A fundamental requirement of due process of law in any
proceeding which is to be accorded finality is notice reasonably
calculated under all the circumstances to apprize interested
parties of the pendency of the action and afford them an
opportunity to present their objections; and the notice must be
of such nature that it reasonably conveys the required
information, and must afford a reasonable time for those
interested to make their appearance; but if, with due regard for
practicalities and peculiarities of the case, those conditions
are reasonably met, the constitutional requirements are
satisfied. To those beneficiaries who are known and
represented by appellant, but whose whereabouts can not be
ascertained by due diligence publication within the statutory
notice requirement is sufficient. Where the names and
addresses of those affected by a proceeding are at hand, the
reasons disappear for resort to means less likely than the mail
to apprise them of its pendency. Notice reasonably certain
to reach most of those interested in objecting is likely to
safeguard the interest of the entire class of beneficiaries.
Plaintiff’s
Argument: Mullane) The notice and statutory provisions for notice
to beneficiaries were inadequate to afford due process under the
14th, and therefor the ct was w/o jurisdiction to
render a final judgment.
Defendant’s
Argument: A requirement of personal service on the large number
of known resident or non resident beneficiaries would by reason
of delay and increase expense, seriously interfere w/ the proper
administration of the fund.
Issue
1 : Whether statutory notice by newspaper publication setting
forth merely the name and address of the trust company, name and
date of establishment of the common trust fund, and a list of all
participating estates, trusts or funds was sufficient as to
beneficiaries whose interests or whereabouts could not with due
diligence be ascertained and as to those whose interests were
conjectural or future or did not in the due course of business
come to the knowledge of the trustee? Yes
A
proceeding on judicial settlement of accounts by the trustee of a
common trust fund established under the New York Banking Law may
cut off rights of beneficiaries to have the trustee answer for
negligent or illegal impairment of their interests, and may
subject their interests to diminution by allowance of fees and
expenses to one who in their name but without their knowledge may
conduct a fruitless or uncompensatory contest, and hence notice
and hearing must measure up to the standards of due process of
law.
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