PENNOYER v. NEFF name.

It took five months after said judgment before the property was levied for
1878 | Field, J. | Jurisdiction Over the Property execution and sold in public auction because Mitchell had to wait for the land to be
transferred in Neff’s name.)
SUMMARY: Mitchell brought this suit against Neff to recover unpaid legal fees.  When Neff got wind of the sale of his property, he sued Pennoyer in federal district
Mitchell published notice of the lawsuit in an Oregon newspaper but did not serve Neff court in Oregon to recover possession of the property, claiming that the original
personally. Neff failed to appear and a default judgment was entered against him. To judgment against him was invalid for lack of personal jurisdiction over both him
satisfy the judgment Mitchell seized land owned by Neff so that it could be sold at a and the land.
Sheriff’s auction. When the auction was held Mitchell purchased it and later assigned it  The court found that the judgment in the lawsuit between Mitchell and Pennoyer
to Pennoyer. Neff sued Pennoyer in federal district court in Oregon to recover was invalid and that Neff still owned the land.
possession of the property, claiming that the original judgment against him was invalid  Pennoyer lost on appeal before the CA. Hence, the instant petition.
for lack of personal jurisdiction over both him and the land. The court found that the
judgment in the lawsuit between Mitchell and Pennoyer was invalid and that Neff still RULING: Petition DENIED.
owned the land. Pennoyer lost on appeal thus bringing the case with Supreme Court.
The appeal of Pennoyer is denied. Can judgments obtained against non-residents who fail to appear in court be
sustained by default judgments where service of process is accomplished solely
DOCTRINE: Personal jurisdiction over a non-resident in a state may not be achieved through publication? Is constructive service sufficient notice to attach property
through service by publication if the action is based on the personal rights and within the forum state owned by a non-resident? – NO. The lower court did not
obligations of the parties. People or property outside the boundaries of a state may not acquire jurisdiction over Neff nor did it acquire jurisdiction over his property.
be subject to its direct jurisdiction, and substituted service of process in actions against
non-residents may be permitted only for in rem actions. The substituted service of  As a general rule, a court may enter a judgment against a non-resident only if the
process by publication in actions brought against non-residents is valid only where party (1) is personally served with process while within the state, or (2) has property
property in the state is brought under the control of the court, and subjected to its within the state, and that property is attached before litigation begins.
disposition by process adapted to that purpose, or where the judgment is sought as a
 Since the adoption of the Fourteenth Amendment, the validity of judgments may
means of reaching such property or affecting some interest therein; in other words,
be directly questioned on the ground that proceedings in a court of justice to
where the action is in the nature of a proceeding in rem.
determine the personal rights and obligations of parties over whom that court has
no jurisdiction do not constitute due process of law. Due process demands that
Proceedings in a court of law to determine the personal rights and obligations of parties
legal proceedings be conducted according to those rules and principles which have
over whom the court has no jurisdiction are invalid for want of due process of law.
been established in our systems of jurisprudence for the protection and
enforcement of private rights.
FACTS:
 It is a principle of general law that no state can exercise direct jurisdiction and
 Marcus Neff hired an attorney, John Mitchell, to help him with paperwork and authority over persons or property without its territory. However, a state may
other legal matters incidental to his efforts to obtain a land grant under the subject property within its boundaries to the payments of its citizens, even when
Donation Law of the State of Oregon. Neff was ultimately successful in procuring the land is owned by a non-resident, without infringing upon the sovereignty of the
property on the subject ancestral homeland. state of residency of the landowner.
 Mitchell sought payment for legal fees from Neff.  To give legal proceedings any validity, there must be a tribunal with legal authority
 Unable to recover unpaid legal fees, Mitchell filed an action for collection of a sum to pass judgment, and a defendant must be brought within its jurisdiction by
of money against Neff. service of process within the state, or by his voluntary appearance.
 Mitchell published notice of the lawsuit in an Oregon newspaper but did not serve  The substituted service of process by publication in actions brought against non-
Neff personally. residents is valid only where property in the state is brought under the control of
 Neff, who was a non-resident of the State of Oregon, failed to appear. As such, a the court, and subjected to its disposition by process adapted to that purpose, or
default judgment was entered against him. To satisfy the judgment Mitchell seized where the judgment is sought as a means of reaching such property or affecting
land owned by Neff so that it could be sold at a Sheriff’s auction. When the auction some interest therein; in other words, where the action is in the nature of a
was held, Mitchell purchased the property. Mitchell later assigned said property to proceeding in rem.
Pennoyer. (Note: At the time Mitchell instituted the case up until the court ruled in  The Oregon court did not have personal jurisdiction over Neff because he
his favor, the title to the subject property had not yet been transferred in Neff’s was not served in Oregon. The court’s judgment would have been valid if
 Mitchell had attached Neff’s land at the beginning of the suit. Mitchell could not
have done this because Neff did not own the land at the time Mitchell initiated the
suit. The default judgment was declared invalid. Therefore, the sheriff had no
power to auction the real estate and title never passed to Mitchell. Neff was the
legal owner.
 People or property outside the boundaries of a state may not be subject to its
direct jurisdiction, and substituted service of process in actions against non-
residents may be permitted only for in rem actions. There could be no
judgment regarding the personal rights of the parties without personal jurisdiction,
so the sale was void. However, the sale would have been valid if the plaintiff
had attached the real property in the state when the action was brought,
which would have conferred in rem jurisdiction.
 When a suit is merely in personam (i.e. against a person), constructive
service through publication upon a non-resident is ineffective.
 Here the Supreme Court of the United States is distinguishing between suits in
personam, and in rem. An in personam suit is a suit against a person, whose
purpose is to determine the personal rights and obligations of the defendant. An in
rem action, meanwhile, is an action where jurisdiction pertains to property. Thus
the court reasoned that constructive service is sufficient to inform parties of action
taken against any properties owned by them within the forum state, because
property is always in possession of the owner, and seizure of the property will
inform the owner of legal action taken against him.

NOTES:

Case digest originally used in CivPro. Adjusted for PRIL.