Pennoyer v. Neff

Brief Fact Summary.

Neff was sued in Oregon state court by Mitchell. The Oregon court entered judgment by default against Neff. Neff was not personally served in the proceeding, he did not appear in the proceeding, and he was not an Oregon resident at the time the judgment was issued; constructive service of the summons was made by publication. Mitchell executed on the judgment against Neff’s property, located in Oregon; Pennoyer was the purchaser of the property.

Synopsis of Rule of Law.

Judgments obtained ex parte against nonresidents of a state, where service of process is made by publication, would be “constant instruments of fraud and oppression.” Substituted service by publication (or in any other form) may be sufficient to inform parties of  proceedings against property where the property is brought under the control of the court and the action is in rem (but not here, where the proceeding was to determine a defendant’s personal rights and obligations).

Facts.

A third party attorney (Mitchell) brought an action against Neff in Oregon state court for legal fees. Mitchell The obtained a default judgment against Neff; Neff was not personally served in the proceeding, he did not appear in the proceeding, and he was not an Oregon resident at the time the judgment was issued. The default judgment was entered after Neff failed to answer the complaint, and after constructive service of summons by publication. Thereafter, Mitchell executed on the judgment against Neff’s property, located in Oregon. Pennoyer was the purchaser of the property, under a sheriff’s deed.

Issue.

Was the Oregon judgment entered against Neff valid?

Held.

No. The Oregon judgment was not valid because the court lacked jurisdiction over Neff; the personal judgment was not valid and did not authorize the sale of the property.

Discussion.

Personal service by publication on individuals residing out of state or absent from a state is unlikely to be seen by those parties; there is great potential for fraud and oppression if such service ultimately leads to an ex parte judgment. In the case of an in rem proceeding, by contrast, such service may be sufficient where the property in issue is brought under the control of the court.