Mullane v. Central Hanover Bank & Trust Co.

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Mullane v. Central Hanover Bank & Trust Co.,

339 U.S. 306 (1950),[1] was a case in which the
Supreme Court of the United States set forth the
constitutional requirements for notice of judicial
proceedings t o a potential party under the
Fourteenth Amendment to the United States
Constitution.

Contents
1 Background
2 Facts and procedural history
3 Majority opinion
4 Dissent
5 See also
6 References
7 Further reading
8 External links

Background
Section 100-c of the New York State Banking
Law provided for the pooling of small trusts into a
large common fund administered by a
corporate fiduciary, with the income, expenses,
and capital gains and losses shared by the
constituent trusts in proportion to their
contribution to the common fund. The purpose of
this legislation (and similar laws in other states)
was to provide corporate fiduciary services to
modestly sized trusts which would be too costly to
manage individually, promoting economies of
scale in the American trust management industry
and better risk management for smaller trusts.
Central Hanover Bank & Trust Co. in New York
City was the manager & trustee of one such
common trust fund.

Mullane v. Central Hanover Bank & Trust

Co.

Supreme Court of the United States

Argued February 8, 1950
Decided April 24, 1950
Full case Mullane, Special Guardian, v. Central Hanover
name
Bank & Trust Co., Trustee, et al.
Citations 339 U.S. 306
(https://supreme.justia.com/us/339/306/case.html)
(more)
70 S. Ct. 652; 94 L. Ed. 865; 1950 U.S. LEXIS
2070
Prior
on writ of certiorari from the New York Court of
history Appeals; 299 N.Y. 697, 87 N.E.2d 73, reversed.
Holding
Notice of judicial proceedings must be reasonably
calculated to reach those who are known to be affected by
such proceedings.
Court membership
Chief Justice
Fred M. Vinson
Associate Justices
Hugo Black Stanley F. Reed
Felix Frankfurter William O. Douglas
Robert H. Jackson Harold H. Burton
Tom C. Clark Sherman Minton
Case opinions
Majority Jackson, joined by Vinson, Black, Reed,
Frankfurter, Minton, Clark
Dissent Burton
Douglas took no part in the consideration or decision of the case.

Laws applied
U.S. Const. amend. XIV, New York State Banking Law
100-c
Wikisource has original
text related to this article:
Mullane v. Central

Facts and procedural history

Hanover Bank & Trust

Company

The common trust fund at issue in this case was established on January 17, 1946, and 100-c provided for
an accounting of each fund to be undertaken twelve to fifteen months after the establishment of a fund,
and then for every three years thereafter .
In March 1947, Central Hanover petitioned the New York Surrogate's Court for a settlement of its first
account as common trustee. By this time there were approximately 113 trusts participating in the fund,
about half inter vivos trusts and half testamentary trusts, with combined gross capital assets of nearly three
million dollars.
The only notice of the settlement proceedings required by 100-c to be given the trusts' beneficiaries was
that after filing such petition for judicial settlement of its account the petitioner shall cause to be issued by
the court in which the petition is filed and shall publish not less than once in each week for four successive
weeks in a newspaper to be designated by the court a notice or citation addressed generally without
naming them to all parties interested in such common trust fund and in such estates, trusts or funds
mentioned in the petition , all of which may be described in the notice or citation only in the manner set
forth in any related court order and without setting forth the residence of any such decedent or donor of
any such estate, trust or fund. When the fund had just been started , however, Central Hanover sent notice
by mail of the future proceedings. Subsequent notice in its paper included only the name of the trust , the
date of establishment and the estates in the trust . The names of beneficiaries were not included . Appellant
Kenneth Mullane was appointed special guardian and attorney for those parties known or unknown who
had any interest in the income of the fund, and James N. Vaughan was appointed to represent those parties
with interest in the principal.
Mullane appeared specially to object to the statutory provision for notice , claiming that it was inadequate to
afford the due process required by the Fourteenth Amendment. The Surrogate overruled Mullane's
objections, and entered a decree accepting the accounting and terminating any rights the beneficiaries may
have had against Central Hanover for mismanagement of the trust. The New York Supreme Court Appellate
Division subsequently affirmed, as did the New York Court of Appeals. The U.S. Supreme Court then
granted certiorari.

Majority opinion
Justice Jackson began his examination of the issues of the case by discussing the nature of the jurisdiction
which the Surrogate's Court was exercising. He explained some of the differences in the service of process
required in in rem, quasi in rem, and in personam actions. Mullane had argued that this was essentially an
in personam action , and that the Surrogate could not exercise jurisdiction on out-of-state residents upon
whom personal service had not been made.
Jackson did not explicitly determine what type of jurisdiction was being exercised here, but held that the
Fourteenth Amendment applied to all of them regardless of how the state classified the action. The
beneficiaries' property rights were at stake here, and without proper notice, the "right to be heard" provided
by the Fourteenth Amendment was of no practical consequence. Constructive service via newspaper
publication , wrote Jackson, was an unreliable method of giving notice, because newspapers have limited
circulation and even then, many people do not examine the legal notices, which are usually in small
typeface on the back pages. In this case, the legal notice at issue did not even mention the names of the

beneficiaries . Furthermore, under normal circumstances , property holders are directly aware of legal
proceedings regarding their property , either directly or through a caretaker. But in this case, the caretaker
was the beneficiaries' adversary - the trustee itself - which could not be expected to give them reasonable
notice, and the special guardian was also not required to give notice.
Jackson held that notice must be "reasonably calculated" to inform known parties affected by the
proceedings. Thus, 100-c(12), the section of the statute which dealt with notice to beneficiaries, was
unconstitutional. He further held that notice by publication was acceptable for missing or unknown parties ,
for those whose whereabouts could not be ascertained by due diligence , and for those whose future
interests were too conjectural to be known with any certainty . However, Jackson noted that in many cases,
notice to the known parties would help the information of the proceedings to reach those who were
unknown by the trustee.

Dissent
Justice Burton wrote a brief dissent, remarking that since the states created legislation creating the common
trust funds, that the decision of what notice was required in such situations should be left to the states.

See also
List of United States Supreme Court cases, volume 339

References
1. ^ 339 U.S. 306 (http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=CASE&court=US&vol=339&page=306)
Full text of the opinion courtesy of Findlaw.com.

Further reading
Hayward, Marvin C. (1950). "The Effect of Mullane v. Central Hanover Bank and Trust Company
upon Publication of Notice in Iowa". Iowa L. Rev. 36 (1): 4760.

External links
Case Brief for Mullane v. Central Hanover Bank and Trust at Lawnix.com
(http://www.lawnix.com/cases/mullane-central-hanover-bank.html)
Retrieved from "http://en.wikipedia.org/w/index.php?
title=Mullane_v._Central_Hanover_Bank_%26_Trust_Co.&oldid=534832762"
Categories: United States Supreme Court cases United States civil due process case law
1950 in United States case law

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