Mullane v. Central Hanover Bank & Trust Co.

Facts

In January 1946, Central Hanover Bank and Trust Company established a common trust fund in accordance with New York Banking Law § 100-c, pooling assets from approximately 113 small trusts (half inter vivos and half testamentary) with a total capital of nearly three million dollars. In March 1947, the bank petitioned the Surrogate’s Court for judicial settlement of its first account as common trustee. The only notice given to beneficiaries was by publication in a local newspaper for four consecutive weeks, listing only the name and address of the trust company, the name and date of establishment of the common trust fund, and a list of participating trusts. This notice complied with the minimum requirements of New York Banking Law. The bank had previously sent mail notice to known beneficiaries when the common fund was first established, but not regarding the accounting proceeding. Mullane was appointed special guardian for beneficiaries with interest in the income, while Vaughan was appointed to represent those with interest in the principal. Mullane objected that the notice provisions violated due process under the Fourteenth Amendment. The effect of the judicial settlement would be to terminate all rights beneficiaries might have against the bank for improper management during the accounting period.