Mullane v. Cent. Hanover Bank & Trust Co., U.S. Supreme Court (1950)
Author: Bram

Cause of action: The following is a judicial proceeding to determine if the use of notification by publication is not appropriate notice for claim in a trust fund as per the due process clause of the 14th amendment.

Procedural History: Upon filing petition for the settlement of accounts, appellant was appointed special guardian and attorney for all persons known or unknown not otherwise appearing who had or might thereafter have any interest in the income of the common trust fund; and appellee Vaughan was appointed to represent those similarly interested in the principal.

Appellant made a special appearance, objecting that notice and the statutory provisions for notice to beneficiaries were inadequate to afford due process under the 14th amendment, and thus the court was w/o jurisdiction to render a final and binding decree.  Objections overruled, the surrogate (judge) holding that the notice required and given was sufficient.  A final decree accepting the accounts has been entered, affirmed by the Appellate Division of the Supreme Court and by the Court of Appeals.

Facts: 1/1946: DF bank established a common trust fund and it petitioned the Surrogate's Court for settlement of its 1st account as common trustee.  113 trusts participated in the common trust fun, with a gross capital of $3 million.  Only notice given beneficiaries was publication in a local paper in strict compliance with NY Banking Law, which says the notice should be in a publication for not less than once in each week for 4 consecutive weeks in a paper designated by the court.  No other notice was required.

At the time of the first investment in the common fund was made on behalf of each participating estate, however, the trust company, pursuant to another NY law (100-c(9)), had notified by mail each person whose name and address was then known to it and was "entitled to share in the income therefrom (or) who would be entitled to share in the principal if the event upon which such estate, trust or fund will become distributable should have occurred at the time of sending such notice."

PL: notice too limited, not enough to satisfy due process requirement; DF: notice fine under NY law, and thus 14th.

Issue(s): Under law of civil procedure, does notice by publication for a shared trust, which complies with the minimum standard under NY Banking law, comport with the due process clause under 14th amendment, which requires freedom of life, liberty and property, when some people might not even know there are privy to the trust?

Court's Rationale/Reasoning: Notice in this situation should be taken under a reasonableness standard, in which the reasonableness not only of potential people involved in the shared fund could be involved, but also those interests of the trustee and bank.  If the law in this situation directed the bank to go farther in its notification purposes, it would step into the realm of impossibility.  This is a situation where the peculiarities and practicalities of the case dictate a situation where notice must meet just the minimum standard.

It is true the newspaper may not be the best way to give notice, as lots of cases have come to the courts b/c of just such a reason, and it is true there are situations where notification by publication may not be enough, but this situation, where whereabouts of certain people might not be ascertained without very diligent methods, the minimum standard must prevail.

Rule: At minimum, the due process clause requires that deprivation of life, liberty, or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.

Holding: Yes.  The NY standard is enough in this case where notification by any other means would be too time-taking and expensive to undertake.