May 14, 2020

Mullane v. Central Hanover Bank & Trust | Case Brief - 339 U.S. 306, 70 S.Ct. 652 (1950) U.S. Supreme Court

FACTS: In January 1964 Central Hanover Bank and Trust Company established a common trust fund in accordance with the provisions found within the New York Banking Law. In March 1947 it then petitioned the Surrogate's Court for settlement of its first account as common trustee. During the accounting period there were total of 113 trusts (1/2 inter vivos and 1/2 testamentary) which participated in the trust.

There were many beneficiaries including some who were residents of New York and some who were not. The only notice of the specific application was by publication in a local newspaper in strict compliance with New York Banking Law. 

This notice had the name and address of the trust company, the name and date of the establishment of the common trust fund, and a list of all the participating estates, trusts, or funds. 

When the first investment in the common fund was made the trust company notified each person whose name and address was then known to it and who was entitled to share in the income of the fund or the principal if the trust was to become distributable. 

The appellant was by order of the court appointed special guardian and attorney for all "persons known or unknown not otherwise appearing who had or might thereafter have any interests in the income of the common trust fund; and appelle Vaughn was appointed to represent those similarly interested in the principal."

Appellant appeared specially claiming the notice to beneficiaries violated due process and the court did not have jurisdiction to render a final and binding decree. 

HISTORY: "The New York Court of Appeals considered and overruled objections that the statutory notice contravenes requirements of the 14th Amendment and that by allowance the account beneficiaries were deprived of property without due process of law."

ISSUE: Were the beneficiaries of the trust deprived of property without due process?

HOLDING: Yes (the ones whose address was known to the trustee)


 - It is fully within the rights of the state that is administering the laws which govern the trust to have jurisdiction over legal matters pertaining to it. 

- the trustee becomes the legal guardian of the property. 

 - "it has been recognized in the case of persons missing or unknown, employment of an indirect and even probably futile means of notification is all that the situation permits and creates no constitutional bar to a final decree foreclosing their rights."

 - there are practical problems and costs associated with investigating so many beneficiaries

 - known beneficiaries are however a different story 

 - under the circumstances it is not reasonably calculated that notice could reach everyone because so much is published in today's world