Does a state court acquire personal or in rem jurisdiction over a nonresident trustee of an out-of-state trust, consistent with the Due Process Clause of the Fourteenth Amendment, solely because the settlor later became domiciled in the forum state, executed a power of appointment there, and the forum state is probating her will, and must a sister state give full faith and credit to a judgment entered without such jurisdiction?

In 1935, Dora Browning Donner, then domiciled in Pennsylvania, created a trust in Delaware naming the Wilmington Trust Co. as trustee, with securities as the corpus. She reserved the income for life and a power to appoint the remainder by inter vivos or testamentary instrument, and retained rights to change the trustee and to amend or revoke the trust. She later moved to Florida, where she was domiciled from 1944 until her death in 1952. On December 3, 1949, she executed a will and a power of appointment in Florida, appointing the balance of the trust corpus to her executrix and $200,000 to each of two Delaware trusts established for her grandchildren, along with modest sums to a hospital and servants. Her will's residuary clause directed that any property over which she held an ineffectively exercised power of appointment pass to trusts for her daughters Denckla and Stewart. The Wilmington Trust Co. had no office in Florida, transacted no business there, and never held or administered trust assets there. Denckla and Stewart sued in a Florida chancery court for a declaratory judgment that the $400,000 passed under the residuary clause. Nonresident defendants, including the Delaware trustees, were notified only by mail and publication, and most did not appear.

Denckla and Stewart petitioned a Florida chancery court for a declaratory judgment about what property passed under the residuary clause. The Chancellor held that he lacked jurisdiction over the nonresident defendants, including the Delaware trustees, and dismissed the cause as to them. As to the parties before the court, he held the power of appointment testamentary and void under Florida law, so the $400,000 passed under the residuary clause. While the Florida case was pending, the executrix filed a declaratory judgment action in Delaware. The Delaware Chancellor held the trust and power of appointment valid under Delaware law and the corpus properly paid to the Delaware Trust Co. and other appointees, and rejected the legatees' res judicata argument based on the Florida decree. The Florida Supreme Court affirmed the application of Florida law and reversed on jurisdiction, holding that jurisdiction to construe the will carried jurisdiction over the absent defendants. The beneficiaries first raised full faith and credit in a rehearing motion, which was denied. The Delaware Supreme Court affirmed its Chancellor, holding the Florida decree not entitled to full faith and credit for lack of jurisdiction over the trustee and the trust res. The Florida case came to the U.S. Supreme Court by appeal, No. 107, and the Delaware case by certiorari, No. 117.

(Warren, J.)

No. Florida lacked in rem and in personam jurisdiction over the Delaware trustee, so the Florida judgment is invalid and Delaware need not give it full faith and credit.

In rem jurisdiction rests on the presence of the property within the forum state. The trust assets were located in Delaware, not Florida. Florida's authority to probate its domiciliary's will does not confer in rem jurisdiction to adjudicate inter vivos dispositions merely because the outcome might augment an estate passing under that will. The settlor's Florida domicile is likewise insufficient, because the maxim that personalty follows the domicile of its owner is a fiction of limited utility. See Riley v. New York Trust Co., 315 U.S. 343 (1942); Baker v. Baker, Eccles & Co., 242 U.S. 394 (1917).

For in personam jurisdiction, due process requires minimal contacts with the forum, and the defendant must purposefully avail itself of the privilege of conducting activities there. International Shoe Co. v. Washington, 326 U.S. 310 (1945). The trustee had no Florida office, transacted no business there, never administered assets there, and solicited no business. The trust agreement was executed in Delaware without connection to Florida, and the cause of action did not arise from any act in Florida. McGee v. International Life Ins. Co., 355 U.S. 220 (1957), is distinguishable: the defendant there solicited and consummated a contract with a California resident, and California had special legislation reflecting its interest. Here the unilateral activity of the settlor in executing an appointment in Florida cannot supply the defendant's contacts. That most claimants live in Florida goes to choice of law, not personal jurisdiction over the trustee.

Because Florida law makes the trustee an indispensable party, the Florida judgment fails as to all parties. Delaware, entitled to conclude that Florida law required the trustee's presence, owed no full faith and credit to the invalid Florida judgment. 28 U.S.C. § 1738. Delaware's judgment is affirmed and Florida's reversed.

Dissent (Black, J.) Florida had power to adjudicate the effectiveness of an appointment made in Florida by a Florida domiciliary, in favor of mostly Florida beneficiaries, as part of administering her Florida-probated will. Under International Shoe and Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), the trustee, which maintained business relations with Mrs. Donner in Florida for eight years, suffered no unfairness from litigating there. Pennoyer's rigid limits have eroded with modern commerce and communication. The Court also errs by reversing Florida on a speculative ground, that the trustee may be indispensable, and affirming Delaware, thereby wiping out the Florida judgment against Florida defendants. The Delaware case should have been held until Florida decided the indispensable-party question, which Florida probably would have answered in the negative. The majority answered that ample Florida authority already settled the question, so holding the Delaware case would mean participating in the litigation instead of adjudicating it.

Dissent (Douglas, J.) The power of appointment was integrated with the will and subject to Florida's construction. The trustee was in privity with the settlor, serving as a mere stakeholder or agent holding assets to be disposed of as she directed, so the settlor and her executrix may stand in judgment for the trustee. The question is whether the procedure is fair and just, and Florida's compelling connection to the intangibles and the close nexus between settlor and trustee give Florida the right to decide without personal service on the trustee. This is a suit to determine interests in intangibles, not to impose liability on the trustee. Atkinson v. Superior Court, 49 Cal. 2d 338, 316 P.2d 960, supports jurisdiction over an absent trustee.