Pennoyer v. Neff

8. PENNOYER v.
NEFF
95 U.S. 714, October 1878
FACTS:
In the case of Mitchell v. Neff, John Mitchell sued Marcus Neff before the Circuit Court of the
State of Oregon for alleged non-payment of legal fees. At the time of commencement of the
action, Neff was already a non-resident of Oregon. The Circuit Court then allowed the service of
summons by publication for six weeks in a local newspaper called “Pacific Christian Advocate”.
Due to Neff’s default, a judgment was rendered in favor of Mitchell for less than $300. To
satisfy the judgment, Mitchell seized a property of Neff which Pennoyer acquired under a
sheriff’s deed.
In the present case, Neff filed an action before the Federal District Court of Oregon to recover
the possession of the land asserting title by a patent issued to him under the Donation Law of
Oregon. He claims that the judgment in the case of Mitchell v. Neff was invalid for lack of
personal jurisdiction over him and the property. On the other hand, Pennoyer asserts title by
virtue of the sheriff sale, under an execution sued out upon a judgment against Neff.
The federal court ruled in favor of Neff. Pennoyer lost on appeal before the CA. Hence, the
instant petition.
ISSUE: Whether or not the Circuit Court of the State of Oregon acquired jurisdiction over the
person of Neff, a non-resident and his land
RULING: No.
The State court lacked jurisdiction over the person of Neff for want of personal service of
process on him. If, without personal service, judgments in personam, obtained ex parte against
non-residents and absent parties, upon mere publication of process, which would never be seen
by the parties interested, could be upheld and enforced, they would be the constant instruments
of fraud and oppression. Thus, the personal judgment recovered in the State court of Oregon
against Neff, then a non-resident of the State, was without any validity, and did not authorize a
sale of the property.
Further, despite Neff being a non-resident of Oregon, the State court can have “in rem” or “quasi
in rem” jurisdiction over his property located therein. That is the State, through its tribunals, may
subject the property to the payment of the demand of its own citizens against them; and such
exercise of jurisdiction in no respect infringes upon the sovereignty of the State where the
owners are domiciled. It is in virtue of the State's jurisdiction over the property of the non-
resident situated within its limits that its tribunals can inquire into that non-resident's obligations
to its own citizens, and the inquiry can then be carried only to the extent necessary to control the
disposition of the property.
But the State court’s “in rem” or “quasi in rem” jurisdiction over the non-resident’s property can
only be exercised if the property is timely and properly attached to a suit while the suit was
proceeding, or where the property is once brought under the control of the court by seizure or
some equivalent act. In the case, there was no attachment or seizure of Neff’s land during the
suit, but only after the default judgment. Therefore, the state court never acquired jurisdiction
over the land.
DOCTRINE: Justice Fields provides two well-established principles of public law respecting
the jurisdiction of an independent State over persons and property.
One of which is that every State possesses exclusive jurisdiction and sovereignty over persons
and property within its territory. As a consequence, every State has the power to determine for
itself the civil status and capacities of its inhabitants; to prescribe the subjects upon which they
may contract, the forms and solemnities with which their contracts shall be executed, the rights
and obligations arising from them, and the mode in which their validity shall be determined and
their obligations enforced; and also the regulate the manner and conditions upon which property
situated within such territory, both personal and real, may be acquired, enjoyed, and transferred.
The other principle of public law referred to follows from the one mentioned; that is, that no
State can exercise direct jurisdiction and authority over persons or property without its territory.
The several States are of equal dignity and authority, and the independence of one implies the
exclusion of power from all others. And so it is laid down by jurists, as an elementary principle,
that the laws of one State have no operation outside of its territory, except so far as is allowed by
comity; and that no tribunal established by it can extend its process beyond that territory so as to
subject either persons or property to its decisions.
Further, substituted service by publication, or in any other authorized form, may be sufficient to
inform parties of the object of proceedings taken where property is once brought under the
control of the court by seizure or some equivalent act. Such service may answer in all actions
which are substantially proceedings in rem. But where the entire object of the action is to
determine the personal rights and obligations of the defendants, that is, where the suit is
merely in personam, constructive service in this form upon a non-resident is ineffectual for any
purpose.

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