Mullane v. Central Hanover Bank

Facts

The Central Hanover Bank & Trust Co. ("the bank"), which is based in New York, pooled together 113 small trusts into one large common trust fund pursuant to Section 100-c of the New York State Banking Law. It thereafter filed a Petition before a New York court to settle its first account in connection with the common trust fund. Under Section 100-c of the New York State Banking Law, the only notice required to be given to the beneficiaries of the trusts making up the common trust fund was a publication in a local newspaper. Kenneth Mullane ("Mullane"), who was appointed as a special guardian and attorney for those parties known or unknown who had any interest in the income of the fund, objected to the adequacy of the publication in affording the defendants due process.

Issue

Whether or not publication is sufficient notice.

Held

No. Notice by publication is not adequate notice in the present case.

Ratio Decidendi

The means used in the service of notice must be reasonably certain to actually inform the affected parties. The means used in the service of notice must be reasonably certain to inform those who are affected. If such means are not possible, then the alternate means adopted must not be substantially less likely to inform the concerned parties. A large number of cases brought before the court on the issue of notice involves those served by publication. In any, case, the bank has a record of the names and addresses of the income beneficiaries. It has not been shown that the bank has made any serious effort to inform the said beneficiaries personally of the settlement proceedings through the said addresses.