Mullane v. Central Hanover Bank Case Brief

Summary of Mullane v. Central Hanover Bank
339 U S 306 [1950]


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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