Mullane v. Central Hanover Bank & Trust Co.

Central Hanover Bank and Trust Company (Hanover) (plaintiff) established a common trust fund. A common trust fund pools multiple small trusts into one large, collective trust for easier administration, with the collective trust’s income and expenses being allocated proportionally among the constituent trusts. Hanover was required to make periodic accountings. Once an accounting was settled, Hanover’s decisions for that period could not be challenged. When Hanover petitioned a New York court for settlement of its first accounting, interested parties were given notice only by publication in a local newspaper, which complied with the minimum requirements under New York banking law. At the time, there were 113 small trusts in the common trust. Hanover had addresses for some interested persons, particularly the income beneficiaries to whom income was currently being paid. However, Hanover lacked information regarding other potentially interested persons. Some beneficiaries were New York residents, and others were out-of-state residents. The court appointed Mullane (defendant) as special guardian of persons known or unknown who might have an interest in the common trust’s income. Mullane objected that the notice by publication was inadequate to satisfy Fourteenth Amendment due process. The court nonetheless entered a final decree accepting the accounts. The state’s appellate court and highest court affirmed. Mullane appealed to the United States Supreme Court.