What the hell happened in Pennoyer v. Neff, S. Ct. 1877?
Understanding the very complicated facts of Pennoyer is not essential. I did not understand it until years after I took Civ Pro. I will explain the take-aways for you in class. Still, it would be nice to understand it nonetheless, so here is what happened.
Facts: Mitchell is the plaintiff in this case. Who was Mitchell? Mitchell was Neff’s lawyer. Mitchell wants to be paid and to recover his lawyer’s fees. Mitchell sues Neff in State Court of Oregon in a contract case around 1866.
(1) Mitchell v. Neff, Oregon State Court, for Breach of Contract (relating to Attorney’s Fees)
Neff was not a citizen/resident of Oregon, nor was Neff present in Oregon at the time. He was instead living in California at the time. Mitchell does not serve him personally. Instead he does a constructive service by publication, which an Oregon statute lets him do. Neff does not show up to court, and a default judgment against him is entered for $300. So our first action ends with a win for Mitchell, and a Default against Neff.
What happens when you don’t pay what is owed? Same thing then as now, state can seize your property and sell it and use the proceeds to satisfy the judgment against you. The sheriff auctions off Neff’s tract of land in Oregon to satisfy the judgment Mitchell has against him, and who buys the land? Mitchell does! Mitchell buys the land for around $300, the same price as what is owed to him; apparently he was the only bidder at the auction. So he walks away with the land and has to pay nothing for it. Mitchell then goes ahead and sells the land 3 days later at a huge profit ito Pennoyer. Pennoyer lives on the land and improves it for a few years.
Several years later (the case ends up in S. Ct. in 1877) Neff comes back in the picture and is shocked to find Pennoyer living on his land. Neff sues Pennoyer in federal court to recover the land (the basis of SMJ is diversity). This action is:
(2) Neff v. Pennoyer, Federal Court, to recover the land.
Neff says, hey I have this original deed to the land in question I got the Oregon Donation Law, and says the sheriff’s deed (based on the default judgment against him in (1) above) purporting to transfer it to Mitchell was void, on the theory that if the deed transferring it to Mitchell is void, so is the later deed transferring that to Pennoyer. Whether the transfer of the deed was void in turn depends on whether the default judgment was itself valid in the Mitchell v. Neff suit. So this case is really about suit (1), since whether what happened in suit (1) was kosher will determine whether what should happen in suit (2).
The Circuit court agrees with Neff (this is actually the trial court, back then called “circuit courts”). The default judgment which started the ball rolling was problematic, because there were defects in the publication notice. The defect was that Oregon notice by publication law required a sworn statement (affidavit) by Mitchell, but it was inadequate.
Cert to U.S. S. Ct.
It says that the defects in affidavit of publication can only be challenged on direct appeal (i.e., appealing the (1) Mitchell v. Neff contract case) not “collaterally” through his action for ownership of the land. Instead they affirm on the basis that there was no personal jurisdiction in action (1).
The Actual holding is very narrow. The Mitchell v. Neff action is a quasi-in-rem action, and the court holds that in such an action the property has to be grabbed to begin with, since it is the basis for the jurisdiction. “The validity of every judgment depends on the jurisdiction of the court before it was rendered, not upon what may occur subsequently.”
Then there is a long discussion of the 14th Amendment and in personam jurisdiction which we will discuss in class.