Actions in Rem: Estates, Trusts, Corporations.

Generally, probate will occur where the decedent was domiciled, and, as a probate judgment is considered in rem, a determination as to assets in that state will be determinative as to all interested persons.989 Insofar as the probate affects real or personal property beyond the state’s boundaries, however, the judgment is in personam and can bind only parties thereto or their privies.990 Thus, the Full Faith and Credit Clause would not prevent an out-of-state court in the state where the property is located from reconsidering the first court’s finding of domicile, which could affect the ultimate disposition of the property.991

The difficulty of characterizing the existence of the res in a particular jurisdiction is illustrated by the in rem aspects of Hanson v. Denckla.992 As discussed earlier,993 the decedent created a trust with a Delaware corporation as trustee,994 and the Florida courts had attempted to assert both in personam and 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,”995 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 the domiciliary’s will, under which the foreign assets might pass, were a sufficient basis of in rem jurisdiction and decided they were not.996 The effect of International Shoe in this area is still to be discerned.

The reasoning of the Pennoyer997 rule, that seizure of property and publication was sufficient to give notice to nonresidents or absent defendants, has also been applied in proceedings for the forfeiture of abandoned property. If all known claimants were personally served and all claimants who were unknown or nonresident were given constructive notice by publication, judgments in these proceedings were held binding on all.998 But, in Mullane v. Central Hanover Bank & Trust Co.,999 the Court, while declining to characterize the proceeding as in rem or in personam, held that a bank managing a common trust fund in favor of nonresident as well as resident beneficiaries could not obtain a judicial settlement of accounts if the only notice was publication in a local paper. Although such notice by publication was sufficient as to beneficiaries whose interests or addresses were unknown to the bank, the Court held that it was feasible to make serious efforts to notify residents and nonresidents whose whereabouts were known, such as by mailing notice to the addresses on record with the bank.1000

Footnotes

989
Goodrich v. Ferris, 214 U.S. 71, 80 (1909); McCaughey v. Lyall, 224 U.S. 558 (1912). back
990
Baker v. Baker, Eccles & Co., 242 U.S. 394 (1917); Riley v. New York Trust Co., 315 U.S. 343 (1942). back
991
315 U.S. at 353. back
992
357 U.S. 235 (1957). back
993
The in personam aspect of this decision is considered supra. back
994
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. back
995
357 U.S. at 246. back
996
357 U.S. 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. 357 U.S. at 256, 262. back
997
See discussion of Pennoyer, supra. back
998
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). back
999
339 U.S. 306 (1950). back
1000
A related question is which state has the authority to escheat a corporate debt. See Western Union Tel. Co. v. Pennsylvania, 368 U.S. 71 (1961); Texas v. New Jersey, 379 U.S. 674 (1965). Where a state seeks to escheat intangible corporate property such as uncollected debt, the Court found that the multiplicity of states with a possible interest made a “contacts” test unworkable. Citing ease of administration rather than logic or jurisdiction, the Court held that the authority to take the uncollected claims against a corporation by escheat would be based on whether the last known address on the company’s books for the each creditor was in a particular state. back