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CRS Annotated Constitution

CRS Annotated Constitution

Fourteenth Amendment -- Table of ContentsPrev | Next

Actions in Rem: Estates, Trusts, Corporations.—Probate administration, being in the nature of a proceeding in rem, is one to which all the world is charged with notice.162 Generally, probate will be opened in the proper court of the decedent’s domicile, and as to the assets in that State the probate judgment is in rem and determinative as to all; insofar as it affects property, land or personalty, beyond the State, the judgment is in personam and can bind only parties thereto or their privies.163 That is, the full faith and credit clause and statute would not prevent an attack in the forum of the situs of the property on the first court’s finding of domicile as a predicate to deciding the disposition of the property.164 The difficulty of characterization of the existence of the res in a particular jurisdiction is illustrated by the in rem aspects of[p.1721]Hanson v. Denckla.165 There, the decedent, while a resident of Pennsylvania, created a trust with a Delaware corporation as trustee. She reserved the power to appoint the remainder, after her reserved life estate, either by testamentary disposition or by inter vivos instrument. After she moved to Florida, she executed a new will and a new power of appointment under the trust, which did not satisfy the requirements for testamentary disposition under Florida law. Upon her death, dispute arose as to whether the property passed pursuant to the terms of the power of appointment or in accordance with the residuary clause of the will. While the Florida courts had in personam jurisdiction over individual defendants, they attempted to assert in rem jurisdiction over the Delaware corporation. Asserting the old theory that a court’s in rem jurisdiction “is limited by the extent of its power and by the coordinate authority of sister States,”166 i.e., whether the court has jurisdiction over the thing, the Court thought it clear that the trust assets that were the subject of the suit were located in Delaware and thus the Florida courts had no in rem jurisdiction. The Court did not expressly consider whether the International Shoe test should apply to such in rem jurisdiction, as it has now held it generally must, but it did briefly consider whether Florida’s interests arising from its authority to probate and construe its domiciliary’s will, under which the foreign assets might pass, were a sufficient basis of in rem jurisdiction and decided they were not.167 The effort of International Shoe in this area is still to be discerned.

The old Pennoyer rule, that seizure of property was sufficient to give notice to nonresident or absent defendants, was likewise applied in statutory proceedings for the forfeiture of abandoned property. Judgments in proceedings to determine succession to property in escheat were held binding on all when personal service of summons was made on all known claimants and constructive notice by publication to all claimants who were unknown or nonresident.168 But in Mullane v. Central Hanover Bank & Trust Co.,169 the Court held that the characterization of an action as in rem or in personam did not determine what process was due in a statutory proce[p.1722]dure whereby a bank managing a common trust fund in favor of nonresident as well as resident beneficiaries could obtain a judicial settlement of accounts which was conclusive on all, with the only notice being publication in a local paper. Such notice by publication was necessarily sufficient as to beneficiaries whose interests or addresses were unknown to the bank, the Court held, but as to those, resident and nonresident alike, whose whereabouts were known, it was feasible to make serious efforts to notify them at least by mail to their addresses on record with the bank. The rule has been applied in the escheat situation, and the Court finding that a “contacts” test would not be workable in this field has held that, inasmuch as due process would prevent more than one State from escheating a given item of property, because of ease of administration rather than logic and jurisdiction, the State of residence shown by the last known address on a company’s books would have the authority to take by escheat the uncollected claims against a corporation located in a particular State.170

Notice: Service of Process.—It is not enough, however, that a State be potentially capable of exercising control over persons and property. Before a State legitimately can exercise such power to alter private interests, its jurisdiction must be perfected by the employment of an appropriate mode of serving process deemed effective to acquaint all parties of the institution of proceedings calculated to affect their rights.171 “An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”172 Personal service guarantees actual notice of the pendency of a legal action; it thus presents the ideal circumstance under which to commence legal proceedings against a person, and has traditionally been deemed necessary in actions styled in personam.173 But less rigorous notice procedures have been accepted, in light of history and of the practical obstacles to providing personal service in every instance, and these procedures do not carry with them the same certainty of actual notice that inheres in personal service.174 But, whether the action be in rem or in personam, there is a constitu[p.1723]tional minimum; if it be shown that the notice used was not reasonably calculated to provide the necessary information, its age and history will not sustain it.175

The function of mail, indeed, as conveying sufficient notice, has become quite established,176 and the development of the ability of States, quite contrary to the Pennoyer theory, to assert in personam jurisdiction extraterritorially upon individuals and corporations having “minimum contacts” with the forum State, resulted in the passage of “long–arm” jurisdictional statutes under which notice was practically always by mail.177 In a class action, due process is satisfied by notification by mail of out–of–state class members, with opportunity to “opt out” but with no requirement that inclusion in the class be contingent upon affirmative response.178 Other service devices, and substitutions, have been pursued and show some promise of further loosening of the concept of territoriality even while complying with minimum due process standards of notice.179

Footnotes
162 Goodrich v. Ferris, 214 U.S. 71, 80 (1909) ; McCaughey v. Lyall, 224 U.S. 558 (1912) .
163 Baker v. Baker, Eccles & Co., 242 U.S. 394 (1917) ; Riley v. New York Trust Co., 315 U.S. 343 (1942) .
164 Id. at 353.
165 357 U.S. 235 (1957) . The in personam aspect of this decision is considered supra, p. 1714.
166 Id. at 246.
167 Id. at 247–50. The four dissenters, Justices Black, Burton, Brennan, and Douglas, believed that the transfer in Florida of $400,000 made by a domiciliary and affecting beneficiaries, almost all of whom lived in that State, gave rise to a sufficient connection with Florida to support an adjudication by its courts of the effectiveness of the transfer. Id. at 256, 262.
168 Hamilton v. Brown, 161 U.S. 256 (1896) ; Security Savings Bank v. California, 263 U.S. 282 (1923) . See also Voeller v. Neilston Co., 311 U.S. 531 (1941) .
169 339 U.S. 306 (1950) .
170 Western Union Telegraph Co. v. Pennsylvania, 368 U.S. 71 (1961) ; Texas v. New Jersey, 379 U.S. 674 (1965) .
171 “There . . . must be a basis for the defendant’s amenability to service of summons. Absent consent, this means there must be authorization for service of summons on the defendant.” Omni Capital Int’l v. Rudolph Wolff & Co., 484 U.S. 97 (1987) .
172 Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) .
173 McDonald v. Mabee, 243 U.S. 90, 92 (1971) .
174 Greene v. Lindsey, 456 U.S. 444, 449 (1982) .
175 In Greene v. Lindsey, 456 U.S. 444 (1982) , the Court held that in light of substantial evidence that notices posted on the doors of apartments in a housing project in an eviction proceeding were often torn down by children and others before tenants ever saw them, service by posting did not comport with due process. Without requiring it, the Court observed that the mails provided an efficient and inexpensive means of communication upon which prudent men could rely and that notice by mail would provide a reasonable assurance of notice. Id. at 455. See also Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983) (personal service or notice by mail is required for mortgagee of real property subject to tax sale); Tulsa Professional Collection Servs. v. Pope, 485 U.S. 478 (1988) (notice by mail or other appropriate means to reasonably ascertainable creditors of probated estate).
176 E.g., McGee v. International Life Ins. Co., 355 U.S. 220 (1957) ; Travelers Health Ass’n ex rel. State Corp. Comm’n, 339 U.S. 643 (1950) .
177 See, e.g., G.D. Searle & Co. v. Cohn, 455 U.S. 404, 409–12 (1982) (discussing New Jersey’s “long–arm” rule, under which a plaintiff must make every effort to serve process upon someone within the State and then only if “after diligent inquiry and effort personal service cannot be made” within the State, then “service may be made by mailing, by registered or certified mail, return receipt requested, a copy of the summons and complaint to a registered agent for service, or to its principal place of business, or to its registered office.”). Cf. Velmohos v. Maren Engineering Corp., 83 N.J. 282, 416 A.2d 372 (1980), vacated and remanded, 455 U.S. 985 (1982) .
178 Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) .
179 E.g., Watson v. Employers Liability Assurance Corp., 348 U.S. 66 (1954) (authorizing direct action against insurance carrier rather than against the insured).
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