Appellee filed a petition to settle accounts of a common trust fund and notified the beneficiaries through publication in a local newspaper. Appellant argued this violated due process.
To satisfy due process, service of process must reasonably reach a defendant, convey the required information, and afford a reasonable amount of time to respond.
Central Hanover Bank & Trust (Appellee) filed a petition to settle 113 accounts of a common trust fund in New York. Some of the beneficiaries were nonresidents of New York. Appellee served the beneficiaries through publication in a local newspaper, as required by New York Banking Law § 100-c(12). The guardian of the beneficiaries who did not respond to the notice (Appellant) argued that publication was insufficient notice because the beneficiaries had not been personally served.
Did service of process through publication in a local newspaper, as required by New York Banking Law § 100-c(12), satisfy the requirements of due process?
No, the requirements of New York Banking Law § 100-c(12) did not satisfy due process for known beneficiaries. The lower court’s decision is reversed and remanded.
Justice Burton argued that sufficient notice should be governed by the states instead of the Federal Constitution, because state legislations created the common trust funds.
The Court determined that notice of the lawsuit through service by publication was not sufficient for known beneficiaries. The Court found that the Appellee’s publication did not name any specific beneficiary and had little chance of adequately notifying anyone. Though this may be reasonable for unknown beneficiaries, the Court reasoned that known beneficiaries with addresses easily attained through the trustees could reasonably be informed and given adequate time to respond.