Mullane v. Central Hanover Bank & Trust Co.

339 U.S. 306 (1950)


A New York statute allowed corporate trustees to pool the assets of numerous small trusts administered by them to allow a more efficient and economical administration of the funds. The trustees had complete control of the assets, but there were periodic balance sheet checks by the court within twelve to fifteen months after formation and thereafter every three years. Beneficiaries were to be notified if something was amiss but, once the court approved the balance sheets, the claims of the beneficiaries were to be barred as to any matter set forth in the accounting. Central Hanover Bank (P) established a fund under the New York statute by consolidating 113 separate trusts under their control. P then petitioned the Surrogate Court for judicial settlement of the account as a common trustee. The decree granted by the court under the statute would terminate all rights of the beneficiaries against the trustee for improper management. Notice by publication, as required by the statute, was sent to all interested parties along with the relevant portions of the statute. Notice of the accounting was by publication in a New York paper. Mullane (D) was the appointed guardian for all parties who had an interest in the trust but had not appeared. D made a special appearance and objected to the statutory notice provisions; they violated the Due Process Clause of the 14th Amendment. Notice by publication was not a reasonable method of informing interested parties that their rights were being abrogated, especially those who lived outside the state. This was particularly true when P had the names and addresses of the beneficiaries. D's objections were overruled in state court. The Appellate Division and the Court of Appeals affirmed. The Supreme Court granted certiorari.