Hanson v. Denckla – Oral Argument – March 11, 1958

Media for Hanson v. Denckla

Audio Transcription for Oral Argument – March 10, 1958 in Hanson v. Denckla

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Earl Warren:

— Elizabeth Donner Hanson, et al., versus Katherine N. R. Denckla, et al., and Number 117, Dora Stewart Lewis, et al., versus Elizabeth Donner Hanson.

Mr. Foulk, you may proceed.

William H. Foulk:

If Your Honors please.

At adjournment yesterday, I had said that the appellant’s first pleading in the trial court in Florida was a motion to dismiss on the ground of the Florida court like jurisdiction of the subject matter of the suit which was the 1935 trust, and of the trustee and the appointees of the property of that trust who were nonresident parties.

The trial court heard that motion and properly found as we thought, though this case is primarily concerned with the valid — validity and effect of certain powers of appointment rather than a will, recognizing our position right there.

He went on to hold that he was inclined to think that the matter sought to be presented by this motion can best be determined at the final hearing.

We weren’t satisfied with that and we petitioned the Supreme Court of Florida for certiorari on the ground that the trial court had no jurisdiction and that the parties should not be put to the expense of a final hearing if the Court had no jurisdiction.

The Supreme Court of Florida heard us but deny our petition.

The executrix send and pleaded all of the parties in — an action in the Court of Chancery in the State of Delaware, which, as Your Honors will recall, had the raise in its State and had control over the Wilmington Trust Company as trustee of the 1935 trust.

Having — she brought that suit for two valid reasons.

One, because she wanted to expedite the settlement of the State and two, she had been charged in the Florida proceedings with a failure to capture assets and therefore a dereliction in her duty as executrix.

Having brought that suit in Delaware, she came back and filed her answer or the appellants joined with her in filing an answer in which she said to the Court, “Now, the Delaware law applies to this trust.

It’s a trust that has its home in Delaware.

And we are filing with this complaint a copy of our complaint or with this answer, a copy our complaint in Delaware and we’re again raising in this answer the question of the jurisdiction of your Court.”

At the same time, the appellants filed a motion to stay the Florida action pending the determination of the validity of the trust in Delaware.

The respondents or the plaintiffs in the lower court, the appellees here immediately filed a — an application for an injunction against the executrix pursuing the suit in Delaware.

It was a rather meaningless gesture because she had merely acted as an inner pleader in the Delaware proceeding and asked the Court to decide who was entitled to her mother’s property in this trust, whether or not her stepsisters or half sisters got property under the will or her children got $470 — $400,000 and the other appointees, $17,000.

Surprising it may seem in that application for an injunction, the plaintiff said that the Circuit Court had already decided the question of jurisdiction and that the executrix was guilty of bad faith in going to Delaware and filing this action to do just what they charged then with not doing, and they went on to charge that she was trying to lose the case in Delaware to benefit her children.

The Court — another judge then the trial judge who had heard the motion to dismiss, granted the injunction.

Thereafter, both of the parties filed motions for summary decree or summary judgement in the trial court in Palm Beach, and that hope, I neglected to say, we again appeal or petition the, so far as the Supreme Court from certiorari from the denial of the trial court to grant our petition to stay and from its grant of the injunction against the executrix going forward in Delaware.

That was denied.

Then we — both parties filed cross motions for summary judgment.

And the case was argued before the trial court, and the trial court found that as to jurisdiction, the trust assets and the trustee in Delaware, no personal service has been handed upon the defendants who have failed to answer.

Therefore, the trial court dismissed the case as to the Wilmington Trust Company trustee and as to the persons who were appointed to the $417,000 under the power — powers of appointment.

But it went on to say that as to the answering defendants, the executrix and her three children that the Court was going to decide, determined that this trust agreement of 1935 was testamentary in character and not having met the requirements of the statute of wills, it was valid, and therefore all of the property, the $417,000 plus the remaining million dollars that went to the executrix under the power, anyway, passed under the will to the — the beneficiaries of the will rather than the trust.

Was the — was the executrix trying to account in anyway in the Florida proceeding?

William H. Foulk:

She had filed an accounting and exceptions had been filed to that accounting.

Accounting of what?

William H. Foulk:

Her final accounting as executrix.

That was in the County Judges Court which is a different court from the Circuit Court.

William H. Foulk:

And those exceptions are still pending, awaiting the determination of this case.

In the proceeding that’s involved here, there was no accounting aspect of the suit it’s simply —

William H. Foulk:

No.

— a suit to declare rights under the will, is that it?

William H. Foulk:

This was simply a suit with the avowed purpose of determining what passed under the will of a Florida domiciliary.

We claim that the will was crystal clear and needed no determination that the whole crux and the only question in this case is the validity of a Delaware trust.

We asked for a rehearing from the trial court on the basis that the trial court had held that it had no jurisdiction over indispensable parties and it could enter a final force — enforceable decree because the indispensable parties were not there, that motion was denied without argument.

We then appealed to the Supreme Court of Florida on two bases.One, that the Court had no jurisdiction because of the absence of the trust res and indispensable parties including the trustees and the appointees, and two, that they were wrong in — that they had not applied Delaware law and that they were wrong in the law that they did apply which presumably was — was Florida law.

In the meantime, the Delaware case had proceeded and before we got to the argument in the Florida Supreme Court, the Delaware Chancery — chancellor, ruled that he was not bind down by the decision of the Florida trial court and that the trust was a Delaware trust and under Delaware law it was valid.

We filed a petition in the Supreme Court of Florida to remand and dismiss on the basis of the Florida or the Delaware Chancellor’s decision and again brought to the Court’s attention that Delaware was the only jurisdiction which had the right to declare the validity of this trust and it is spoken in — it was entitled to full faith and credit and res judicata.

That motion was heard at the same time appearing on the appeal.

And in its judgment, the Supreme Court of Florida found — dismissed that petition to remand and determine that it had jurisdiction over all parties because this was in reality the construction or the determination of what passed under a will.

And it went on to — to find that the lower court is right in finding that this was a testamentary disposition and it added to that that it was a mere — that the trust was a mere agency agreement and therefore, no rights passed under the power of appointment, and that was true under Delaware law.

It specifically rejected the application of Delaware law.

William O. Douglas:

(Inaudible)

William H. Foulk:

No — no

It was in Florida ever.

Mrs. Donner, to go back to the facts that we got yesterday, was a resident of Pennsylvania in 1935 when she created this trust and the —

William O. Douglas:

She died in Florida.

William H. Foulk:

She died in Florida in 1952 after moving there in 1944.

Do you think your situation would have been any different if the construction question had been raised in the accounting proceeding which is not involved?

William H. Foulk:

It might perhaps, if Your Honor please because there, it would perhaps come up under an administrative function of the Florida court and not under the guise of determining what passed under the crystal clear will.

So that I — I think that that distinction might be well taken.

Now, we filed a petition for rehearing in the Florida court and we raised every question we could think of that we raised up until then lack of jurisdiction full faith and credit failure to grant due process in applying the applicable or the proper choice of law and that was denied without argument.

Then before the time run out for the appeal to this Court, the Supreme Court of Delaware sustained the chancellor in Delaware and found that — that was not stopped by reason of the Florida court’s decision and that the trust was a valid Delaware trust and it had the right to determine the policy of the State of Delaware on the press that existed in its State.

Felix Frankfurter:

Fully apart from full faith and credit, why wasn’t it — was it not res judicata because the parties had not been before the power of the Court or had not been served is that right?

William H. Foulk:

Some of the parties were not before the Florida court.

We of course claim that indispensable parties were not before the Florida court because no proper service had been had on them because of the absence of any property of theirs in the State or because of their personal presence there.

Florida attempted to serve them under a statute which gives them the right to determine matters of wills.

Now this —

Felix Frankfurter:

This so-called interim proceeding to establish the will if —

William H. Foulk:

That’s right.

And that — that the will had already been probated and it — it was — the estate was practically administered when this started.

This suit started 14 moths after the — the death of Mrs. Donner and our position is always been, that this is a plain out of action to construe or determine the valid — the validity of a Delaware trust —

Felix Frankfurter:

Yes.

William H. Foulk:

And the will hasn’t anything to do with it and the statute is used just as a — as an implement to get Florida’s jurisdiction over these assets.

Felix Frankfurter:

So the case get down to this ultimately, that Florida, in search for power to pass on the validity of the — to pass on the legal significance of this power of appoint — of this trust on the theory that she had jurisdiction over the estate of Mrs. Donner.

She could determine what was swept within the term of the estate, is that the ultimate question?

William H. Foulk:

That’s — that’s their position that —

Felix Frankfurter:

Is that the ultimate question?

William H. Foulk:

That’s right.

Felix Frankfurter:

Namely, —

William H. Foulk:

Now —

Felix Frankfurter:

— whether — whether a power of — whether a trust establishes a lifetime of the — of the donor has to be determined by the law of the State in which the trust was established or whether, the estate of the testamentary domicile could determine what passes under the will.

William H. Foulk:

That is right.

Felix Frankfurter:

That’s the issue, was it?

William H. Foulk:

Well, that’s one of the issues.

Then we didn’t — we say that Florida, assuming that they had jurisdiction, must apply Delaware law because it’s a Delaware trust, the assets are in Delaware.

And we say that in denial of the choice of Delaware law, it violated due process under the Home Insurance Company versus Dick and Hartford Accident & Indemnity cases versus Delta & Pine Land Company.

Then of course, we say —

Felix Frankfurter:

This is a little different if I remember that case, that’s the insurance case?

William H. Foulk:

That’s right.

Felix Frankfurter:

That’s a very different story.

William H. Foulk:

But —

Felix Frankfurter:

It’s what I think it is because here, that aspect of the case and say there are others, turns on the authority of the estate of a deceased person to determine what estate he left in that State that controls the — the winding up of the testamentary disposition.

And they hold here, as I understand from what you’re telling me, they held in Florida that this was a testamentary disposition and whether it was or wasn’t, Florida, which passes on what the will is and what its scope is and not Delaware which doesn’t pass on that.

That’s the issue, isn’t it?

William H. Foulk:

Well that’s — that’s the way they have it.

We of course dispute that.

I think —

Felix Frankfurter:

What is the dispute about it?

I mean let’s find out — before you can get an answer to a question, one wants to agree on what the questions is.

William H. Foulk:

Well, we —

Felix Frankfurter:

— fly off giving answers without agreeing on the question.

William H. Foulk:

Well, we say of course, that there was no need to determine what passed under this will that everything passed under the will that she hadn’t disposed of in her lifetime and that under the law of Delaware, which was the side and home of this trust, she had made a valid disposition of this property.

So, there wasn’t anything left for Florida to — to determine, but in determining what passed under their will, they had to determine whether or not the trust which has its home in (Inaudible) in Delaware was valid under Delaware law.

Felix Frankfurter:

You say that she made or attempted to make some disposition of property inter vivos in Delaware.

William H. Foulk:

That’s right.

Felix Frankfurter:

The property was situated there, the parties were there.

William H. Foulk:

The trustees were there.

Felix Frankfurter:

And what’s the effect?

What’s the legal significance of that disposition of property is — is for the State in which it took place where the property was —

William H. Foulk:

That’s correct.

Yes.

Thank you.

Earl Warren:

Mr. Rosenblatt.

Sol A. Rosenblatt:

Sir, we were advised that the order was (Inaudible)

Earl Warren:

Whatever — whatever order you say, I just haven’t (Voice Overlap).

It’s perfectly all right.

Sol A. Rosenblatt:

We (Inaudible)

Earl Warren:

Proceed (Voice Overlap).

Yes.

All right, all right.

Sol A. Rosenblatt:

I’d be glad to.

Earl Warren:

No.

Just proceed the way you’re supposed to.

The only —

Sol A. Rosenblatt:

All right.

Earl Warren:

— the only name that I have here is Mr. Rosenblatt.

Proceed gentlemen, the way you’re — I understood.

Earl Warren:

Mr. Logan.

Arthur G. Logan:

I’m Arthur Logan —

Earl Warren:

Yes, sir.

Arthur G. Logan:

— for the petitioners in 117.

Frankly, I regret that I cannot answer Mr. Foulk.

Mr. Rosenblatt will do so.

Many things he said which will, however, touch upon the case I have.

They’re companion cases.

Were you on the same side of defense with Mr. Rosenblatt?

Arthur G. Logan:

Yes.

Yes.

Arthur G. Logan:

I’m representing — I’m a petitioner in the Delaware case.

In the Delaware case.

Arthur G. Logan:

Yes.

The Delaware case — we’re here because the Delaware Supreme Court would not accord full faith and credit to the Florida Supreme Court judgement.

Felix Frankfurter:

Why do you say you can’t answer Mr. Foulk because —

Arthur G. Logan:

I’m not in his —

Felix Frankfurter:

— unless I misconceive if Mr. Foulk’s position is that the construction of this trust, the legal significance of the trust is to be determined by Delaware law.

You’re contesting for — you’re contesting — do you contest that or do you contest that the Delaware court gave a wrong construction of what its law is?

Arthur G. Logan:

No, I — I don’t contest that.

But I mean — when I said I can’t answer him, I’m not in his case.

My — a lot of what I will say will be answered to him.

Felix Frankfurter:

All right.

You’re on opposite view —

Arthur G. Logan:

We’re on opposite sides.

Oh yes, I’m —

Felix Frankfurter:

You disagree what he just said when he sat down.

Arthur G. Logan:

I have disagree with (Voice Overlap)–

Felix Frankfurter:

(Inaudible)

All right.

Arthur G. Logan:

And everything.

Felix Frankfurter:

But I should think that you —

Arthur G. Logan:

I think the more —

Felix Frankfurter:

— when I say it.

Arthur G. Logan:

The more I study these two cases and with this idea of that, that Delaware should have followed Florida.

Florida had a judgment against all these people first.

I come to the conclusion the progressive power was very astute when he said which is quoted in Mr. Justice Harlan’s dissent in Vanderbilt versus Vanderbilt.

It seemed so simple that it should be obvious to anyone who has never become confused by studying law.

That’s I think where we are.

And here we have two cases.

One started in Florida and one later in Delaware.

Same parties, same facts, same issues, same problem who gets $400,000, same type of relief, declaratory judgments requested in both cases.

Same procedures followed that both groups in both cases by across motions for summary judgment as there were no facts in dispute.

Everything was the same except the opinions of the Court and the judges.

So the parties are the same?

Arthur G. Logan:

Yes, identical for all necessary forms.

Charles E. Whittaker:

It has necessary party.

Arthur G. Logan:

Yes, an indispensable parties.

Charles E. Whittaker:

(Inaudible)

Arthur G. Logan:

Yes.

All — all parties are the same except in Mr. Steel’s brief, he — I — I will get to that.

He raised some question about a remote contingency made of that — had been named in Florida.

What I mean from the standpoint of this $400,000 we’re talking about, all the parties have any claim of possession to it in Florida.

Charles E. Whittaker:

(Inaudible) in Florida.

Arthur G. Logan:

It was by constructive service, publication and mail.

That’s what I want to come to under the McGee case.

Felix Frankfurter:

Well, all the facts are the same but not that significant, is that right?

Arthur G. Logan:

Well, the only difference of the significance is that they were construed differently and —

Felix Frankfurter:

That’s what I mean by significance.

Arthur G. Logan:

The two courts, each said that this was — this was a matter of first impression, as to the type of trust created.

Arthur G. Logan:

Each came to a different conclusion.

Felix Frankfurter:

I know but Florida said we can get hold of the Wilmington Trust Company if that’s his name because we can’t pass on the — on what the will says and Wilmington and Delaware says, “No, this is an inter vivos situation and Florida must give of personal services,” is that right?

Arthur G. Logan:

Florida said we have jurisdiction.

Florida Supreme Court said we have jurisdiction all — of all the parties including Wilmington Trust Company and Delaware trust company by constructive service or process on them.

Felix Frankfurter:

But it isn’t the case of — it isn’t the case of a state court having got hold of a — of a litigation in which the parties were in exactly the same situation in State number one.

And State number one made an adjudication and then one of the parties, personally before State number one, tried to upset that conclusion in State number two, isn’t that kind of a situation.

Arthur G. Logan:

Well the conclusion hasn’t been reached but it is that type of case.

Felix Frankfurter:

Well, that’s —

Arthur G. Logan:

If — if —

Felix Frankfurter:

— the case except the difference whether Florida can make that adjudication.

Arthur G. Logan:

The — if the constructive service was good, then it is that case.

Felix Frankfurter:

Certainly, it is.

That’s the big interest of this —

Arthur G. Logan:

That’s the — if we want to reach and I think McGee case decided here last December to solve that question.

Your Honor asked about whether this case in Florida started in the probate court, made any difference.

In our brief, we pointed out that this case was started in a Circuit Court under a statutory authority, giving the Circuit Courts down there.

Section 8702 of the Florida statute annotated, deals with declaratory decrease, provide that any person claiming to be interested or who may be in doubt as to his rights under will, may have any question of construction or validity arising under such will determine and obtain a declaration of his rights thereunder.

That statutory authority was placed in the Circuit Court not in probate court and also by statute provided that constructive service of process may be passed upon defendants in — in a case of that sort.

Now, if I may, those court of competent jurisdiction, I think Your Honor had — probably had in mind the Mullane case, it’s some kind of a bank where it was I think in a court — statutory court with the settlements of accounts, but this is a court of competent jurisdiction.

It’s never been questioned in Florida.

Now, if I may go back.

Mrs. Donner died leaving many children and many grandchildren and the will and a trust agreement under which she had powers to appoint at her death.

She moved to Florida in 1944 and lived there until 1952 when she died.

When she died, found that she had exercised a power of appointment under this so-called trust, providing that — this $400,000 we’re talking about.

Under that power of appointment, that $400,000 will be taken out of these trust assets and placed in two existing trust for two of her grandchildren who were children of her daughter, Mrs. Hanson, who was named the executrix.

So over here, we have — if the trust of the State is good and if the power is good, the $400,000 go into two trusts, existing trust for two grandchildren.

However, if either their trust agreement was invalid or if the power of appointment was not properly exercised, then under the terms of the will, that same $400,000 would go into two different trusts for two other daughters of hers other than Mrs. Hanson, the executrix.

Now these two daughters started this action to challenge the validity of the trust and the exercise of the power under it.

They named as defendants, these two grandchildren, their mother, and many other people who are really unnecessary to this question because there were other earlier powers and everybody practically whoever been named was put in as defendant.

The two children preserved and then their mother came in and had herself appointed as a guardian ad litem.

Arthur G. Logan:

So the executrix within the Florida court, she was guardian ad litem for her children in a family squabble over $400,000.

Every single one of these people, who were interested in that money, lived in Florida and had for a long time.

This is a Florida fight in a Florida court between two rival groups of beneficiaries for this $400,000, $400,000 would go into this trust or the other trust.

Now —

Charles E. Whittaker:

Mr. Logan.

Arthur G. Logan:

Yes.

Charles E. Whittaker:

In that situation, are you not ignoring — let me ask you this?

Where was legal title at that time assuming the validity of the trust?

Arthur G. Logan:

Assuming the validity of the trust, the legal title was in the trust company in Delaware.

Charles E. Whittaker:

Well, there were two trust companies.

First is Wilmington Trust Company of 1935 Trust.

Under the power of appointment, the $400,000 then goes to Delaware trust company under two trusts, doesn’t it?

Arthur G. Logan:

Yes, sir.

Charles E. Whittaker:

Now, if those trusts are valid their legal title was vested right there, wasn’t it?

Arthur G. Logan:

That’s correct.

Charles E. Whittaker:

All right.

Arthur G. Logan:

Now, I say all the beneficial parties were in Florida.

Felix Frankfurter:

Under those — under those trusts making the assumption you just made that the trust is valid, did the Delaware trustees have power of changing into corpus and so on, do they had some broad power —

Arthur G. Logan:

No.

Felix Frankfurter:

— that a trustee usually had?

Arthur G. Logan:

I want to — trustees didn’t have it, she has it.

Mrs.(Voice Overlap) in her lifetime, Mrs. Donner.

The trust which she has established with Wilmington Trust Company was one where she reserved the right to revoke it, change it in any way she wanted, withdraw a part with all the corpus to change the trustees, to change advisors, the trustees had to do what the advisors told her and she reserved the right to name who she’d take upon her death.

Felix Frankfurter:

That’s the basis of holding.

It’s the testamentary not inter vivos?

Arthur G. Logan:

It — it was held really, that it was created merely an agency, not a true trust and that the power, the exercise of the power under by one witness only did not comply with Florida or Delaware for that testamentary.

Felix Frankfurter:

In the lifetime of Mrs. Donner, the two trustees were dry trustees?

Arthur G. Logan:

No.

Well, Wilmington Trust — there’s only one trustee involved that would have —

Felix Frankfurter:

Yes —

Arthur G. Logan:

— really a dry trust — there’s testimony in the record we took that they never took a single act of their own but only acted under the control and advise of the advisor.

Every transaction is dictated by the advisor of the trust.

They never once exercised judgment.

They never even reviewed these things.

They were given some securities.

They were told when to sell, or when to buy and they just sat there, took coupons, took their fee and turned over to her during her lifetime the income.

And that’s why the Florida court held it wasn’t a trust at all.

It’s an agency agreement.

In Delaware, they were holding assets for — now answering your question, Justice Whittaker, if Florida is right, the title was in Florida because then he was only an agent in Delaware holding the (Inaudible).

You — you asked me the question, you ask assuming that it was a true trust —

Charles E. Whittaker:

Yes.

Arthur G. Logan:

If it’s true trust then you would have a title in Delaware.

Charles E. Whittaker:

Yes.

Arthur G. Logan:

But if Florida — the Florida court is right, then you have a title in Florida.

Felix Frankfurter:

But the — the crucial — the crucial question is what jurisdiction has power to — to say which it was.

Arthur G. Logan:

That’s the question.

Now, the Wilmington Trust Company and Delaware trust company were named in Florida served by constructive process.

William J. Brennan, Jr.:

Well, let me ask you, Mr. Logan.

Arthur G. Logan:

Yes.

William J. Brennan, Jr.:

— in connection with the problem that we have, are we going to have to decide whether Delaware Supreme Court or the Florida Supreme Court is right?

Arthur G. Logan:

I don’t think so.

I don’t think that’s a question that should be entertained even by this Court.

I think you must come to the conclusion of whether or not when all these parties — when the parties —

William J. Brennan, Jr.:

Because I mean only on the merits —

Arthur G. Logan:

I mean on the merits.

Yes, sir.

I mean you might whether — whether or not it’s a trust or an agency.

William J. Brennan, Jr.:

Yes.

Arthur G. Logan:

Now, our position is this.

Florida took jurisdiction first over the beneficiary certainly and by constructive service of process which I say under the McGee case, Mr. Justice Black wrote in December a constructive service of process over Wilmington trust and Delaware trust was sufficient to enable Florida to render a judgment binding on them —

William J. Brennan, Jr.:

What’s the relation on McGee to the presence of the Delaware trust company?

Arthur G. Logan:

McGee, it was an action on insurance policy.

William J. Brennan, Jr.:

Yes, I know.

So what’s its relation?

I don’t know.

Arthur G. Logan:

The standard setup, minimum contact with the State.

William J. Brennan, Jr.:

What was the contact in this?

Arthur G. Logan:

We’ll take Wilmington trust first.

The 19 — from the time Mrs. Donner moved to in Florida 1944 whether we take the Florida court decision that it was an agency or whether we take and say it’s a trust agreement, Wilmington Trust acted for her, took coupons, took its fee, remitted the proceeds to her.

Took instructions from the adviser she appointed and she changed her advisers from time to time.

She at one time asked to the senders part of the corpus which they did.

She did return it.

She had had to.

She could’ve taken all of them.

She had Wilmington Trust Company acting for her from 1944 while she was a Florida resident in 1952 and certainly they have more than minimum contacts in my humble view.

There — this — in other words, this trust company is acting really either — it’s either her trustee or her agent.

She’s in Florida all the time.

And on — as they’re all doing is clipping coupons, taking instructions from her advisers as to — well they — they issued orders to buy and sell and change the securities.

The instructor would say, “Buy this, sell that, pay that, take that money” and — and they followed those instructions, testimony in the (Voice Overlap) —

William J. Brennan, Jr.:

Well, in contacts, I gather from your description where largely as between Mrs. Donner in Florida and the trust company, correspondence made all those kinds of things, is that it?

Arthur G. Logan:

Oh yes, certainly.

I mean, after all if your eight — if your trustee is up there for eight years, you certainly in — in quarterly —

William J. Brennan, Jr.:

Well I think so far as the trust company is concerned in that sense, it was in Florida only to the extent that its correspondents —

Arthur G. Logan:

The minimum —

William J. Brennan, Jr.:

— reach that (Voice Overlap) —

Arthur G. Logan:

Yes.

I feel that the minimum contacts there are as great if not greater of the minimum contacts in McGee where mail was being used to send premiums.

Well it had no independent contacts to its own in Florida.

Arthur G. Logan:

In McGee, the insurance company had none.

Felix Frankfurter:

Well suppose that McGee really turns on it.

Felix Frankfurter:

The — the question I — I gather which Mr. Justice Brennan once told.

McGee turned on a — on a large question as to the power of a State to subject an insurance company to sue with all the implication of the relation of insurance company and policy owners under the long historic amenability of insurance companies to sue because of the difficulty between an insured and the insurance company.

Arthur G. Logan:

I think that —

Felix Frankfurter:

How can you transfer this over to a question of whether or not Delaware can say, “We determine what the significance of a trust agreement is”.

Arthur G. Logan:

McGee goes much further than insurance company probably.

Felix Frankfurter:

I don’t know whether it goes much further.

That’s what it’s about.

Arthur G. Logan:

Yes.

That was —

Felix Frankfurter:

— that means that (Voice Overlap) what they’re about.

Arthur G. Logan:

It talks about striking down to a certain extent, state lines and allowing judgments where they call them in personam in rem or what we call them to be made binding upon nonresidents —

Felix Frankfurter:

Do you think —

Arthur G. Logan:

— when they have a minimum contact (Voice Overlap) —

Felix Frankfurter:

Do you think that the fact that it was an insurance company had nothing to do with the result in that case?

Arthur G. Logan:

Well, I — I certainly it was an insurance company but the language is not confined to the insurance company and it talks about minimum contacts.

It says that there’s no real standard as to how they could be set up for every case.

Every case may — really has to be decided probably on its own.

But the strict doctrine in Pennoyer versus Neff has been breaking down, breaking down, breaking down as pointed out in that case and earlier in Mullane versus Central Hanover.

Felix Frankfurter:

Well, I had supposed in Vanderbilt against Vanderbilt and Pennoyer and Neff were very strongly relied upon there.

Arthur G. Logan:

Yes.

Felix Frankfurter:

It wasn’t broken down there.

It was lifted up.

Arthur G. Logan:

The Court please.

The language — Your Honors are all familiar with the language in McGee I’m sure and as it applies here, I am convinced that certainly to use the word minimum contacts and in the next standard, notions of fair play and substantial justice.

Fair play, take that.

Is it unfair to ask Wilmington Trust Company, I’m treating with that first because Delaware trust company practically stepped into its shoes in $400,000 over as soon as they’re involved, is it fair to ask them to go to Florida where their beneficiaries were when their trust was challenged?

Was it unfair?

Felix Frankfurter:

I could ask you another fair and unfair.

Was it unfair for Mrs. Donner in Delaware if Delaware allowed it to make this kind of an arrangement?

Was it unfair?

Arthur G. Logan:

No, I don’t suppose it was unfair.

Let’s get back to the plaintiff —

Felix Frankfurter:

Why do you suspect that?

Arthur G. Logan:

Let’s get back — let’s get back to the plaintiff in the Delaware case, Mrs. Hanson, the executrix of the will.

After this family fight, it was at issue and going in Florida ready for decision.

Nobody lived in Delaware.

The two Trust Companies were up there, she named 22 defendants, 29 residents.

And she stayed home.

The case would have been decided there.

She ran to Delaware.

A Florida resident not satisfied to this except the judgment of her own state and her own state enjoined her from proceeding with the case.

But of course, she did not plan so many people by then the case went on.

But was it unfair — of course it’s the winter of 1954 and 1958.

I think the weather was better, it was unfair to ask the attorneys for Wilmington Trust Company and Delaware trust company to go down to Florida and let me point out something here which I think some choose this question.

They don’t even care enough about that to ask to argue their position here.

They turned it over to Mr. Steel who’s been carrying the ball and he’s going to carry here in this Court.

And he is representing three of the children of Mrs. Hanson who ran to Delaware and they are Florida residents.

So you will hear not from Wilmington Trust.

They did file a brief here saying that they were not subject to service in Florida.

But is it unfair to ask them to do what they’re really doing in this Court.

They’re not down here to argue this case.

Charles E. Whittaker:

Isn’t a question of what’s there?

Isn’t it a question of the law that’s been (Inaudible) the jurisdiction —

Arthur G. Logan:

Well, the standard in McGee is our — is our minimum contact — minimum contacts which I say there are when you have this relationship of whether it’s trustee, beneficiary, principal agent.

Those are enough contacts to give the court in Florida in this case under its statute which allows someone who wants a construction of a will to come in and serve them by constructive process.

Charles E. Whittaker:

Do you contend not if I can understand this.

Suppose all that were involved was the original 1935 Trust made in (Inaudible), could Florida without the presence of the corpus or the trustee in litigation merely between beneficiaries of the trust determine the validity of the trust in your view?

Arthur G. Logan:

I think so when you treat the practical effect of having a trustee and a beneficiary living in different states.

The trustee has the assets for investment and reinvestment.

This case will tell you how to do it.

Arthur G. Logan:

They were subject to being removed at any moment.

They were in constant contact with their trustee.

They were collecting the money.

They’re getting paid to do it.

They’re collecting the money and giving it to her.

Charles E. Whittaker:

Well that’s —

Arthur G. Logan:

That’s the contact that (Voice Overlap) —

Charles E. Whittaker:

That was provided for in a trust company.

Arthur G. Logan:

That’s right.

Oh, yes.

Well I say that’s the contact.

Their contact with Florida, is they’re making their money out of Florida.

Under your theory, a beneficiary could always require a trustee to account where the beneficiary wanted to live.

Arthur G. Logan:

Maybe under that —

Under McGee, you think.

You don’t think McGee goes upward, do you?

Arthur G. Logan:

Well, if you take this minimum contact.

Now what — I think you got more than minimum contact when you’re talking about a trustee and a beneficiary, they’re a daily contact.

Well, a lot of your position depends upon construing this instrument as an agency rather than a trust.

You have a much more troublesome case in your standpoint if this is regarded as a trust.

Arthur G. Logan:

That’s true.

No doubt about that.

Arthur G. Logan:

No doubt about that.

Therefore the essence of the problem is who’s got the right, which court has got the right to decide what this instrument is.

Arthur G. Logan:

That’s — that’s right.

If — if —

You don’t advance yourself very much by saying and arguing to us if this is an agency and bypassing the question of whose or which court has got the right to decide whether it’s an agency or a trust.

Arthur G. Logan:

That’s — that’s true.

If it’s an agency there’s no question of what the Florida court had complete jurisdiction.

The assets were there.

Arthur G. Logan:

Everything was there.

Now —

Hugo L. Black:

Is it all together a question of which court has the right to decide it under the law of what State is much to decide.

Arthur G. Logan:

Well, I — I think that gets into a question really of merit where assuming —

Hugo L. Black:

Suppose — suppose that trust company is known in Florida —

Arthur G. Logan:

Yes.

That’s exactly what it was.

Hugo L. Black:

The parties could have tried without them.

Arthur G. Logan:

Assuming the trust company had gone into Florida and the Florida court — they had appeared and the Florida court had come up with this judgment, that would certainly be binding on these parties even though they applied Florida law because on the full faith and credit you cannot go into the question of whether the merits have been properly decided, you can go into the question of jurisdiction.

Hugo L. Black:

You’re talking about on your case but in the Florida case I’d suppose that if the Court had been reckless, it should be decided which assuming that all the parties were there properly, it should be decided and have to be decided, which state law governs would it not as to the construction of the trust.

Arthur G. Logan:

Now, I would doubt is this Court could entertain that question if Wilmington Trust Company and Delaware Trust had voluntarily appeared and we have the same judgment we have, I don’t think there would be any jurisdiction in this Court to question Florida’s right to apply Florida law in that situation.

Felix Frankfurter:

Well, if it were Florida — suppose it was a Florida — suppose a Delaware statute had spelled out explicitly what the Delaware court had spelled out by decision and the question then arose as it was hypothesized in the colloquy between Justice Black and yourself.

Suppose the statute and the Florida court said we pay no attention to the Delaware statute then it could come up to this Court.

Arthur G. Logan:

I think so, it could then.

I might say this when the — when these courts were dealing with this question, it’s the question of whether or not all these cumulative reserve powers in this woman, whether they didn’t break it down as a trust to make it an agency, Florida says, that was so, it was an agency.

Delaware now with its cumulative powers did not transfer it from a trust to an agency.

But both courts said, it was a matter of first impression with them.

So when you’re talking in Florida of what Florida should do even though the Delaware courts later talk about Florida law and of Delaware law, Florida was hoping to find the answer to this question of these cumulative powers in this situation and had the beneficiary before it and as we say had before it the constructive service of the two trustees who were the stakeholders.

And Florida decided that the money should go into the trust for the daughters and not into the trust for the grandchildren.

Felix Frankfurter:

And for us, this isn’t a — as Mr. Justice Whittaker indicated, this is not a problem for us, is it?

Arthur G. Logan:

No.

And I don’t think —

Felix Frankfurter:

Somebody is going to benefit by this suit but that’s quite immaterial to us and the problem before the court is the relationship of states in this complicated thing called the United States.

Arthur G. Logan:

That’s right.

I mean the — somebody — $400,000 is either going to two grandchildren or two daughters and I don’t think anyone’s going to starve whichever it goes but —

William J. Brennan, Jr.:

Well Mr. Logan —

Felix Frankfurter:

Somebody is going to lose —

Arthur G. Logan:

Somebody is going to lose.

William J. Brennan, Jr.:

Mr. Logan, suppose there were no Delaware cases before us here at all and the only case we have here was the Florida case.

Wouldn’t we turn the result simply on the question whether the Delaware companies with parties in the manner that you insist they were, that is by contacts with the State of Florida, without ever reaching the question whether the Florida court was to treat with the validity of the trust under –under Delaware law?

Arthur G. Logan:

You mean the question whether there’s jurisdiction in the Florida court in that situation regardless of —

William J. Brennan, Jr.:

Yes.

Arthur G. Logan:

— full faith and credit.

William J. Brennan, Jr.:

Yes.

Arthur G. Logan:

Well that of course, Mr. Rosenblatt will treat that.

He — he is the appellee in the — for the appellee in the (Voice Overlap) —

William J. Brennan, Jr.:

What I’m — what I’m trying to reach for is why we have to be concerned perhaps we do.

I’m just not clear about it with whether this is an agency or a trust.

Arthur G. Logan:

Well —

William J. Brennan, Jr.:

If — if the Delaware decree, if that validity in a constitutional sense depends upon whether there was proper service upon these Delaware companies.

What difference is it whether the trust was an agency or a trust?

Arthur G. Logan:

Well, the agency — there wouldn’t be any question.

It can’t be.

It can’t be any question as Florida has a complete jurisdiction on it.

William J. Brennan, Jr.:

That is without — they would not need the Delaware companies before them?

Arthur G. Logan:

I don’t think so because the principle then would be in Court.

Charles E. Whittaker:

(Inaudible)

Arthur G. Logan:

That would be an adjudication.

Then of course the adjudication would determine as it — we say it has done in Florida.

The adjudication then determines —

Charles E. Whittaker:

Do we have to get back (Inaudible) isn’t that right?

Arthur G. Logan:

Yes, sir.

Charles E. Whittaker:

In action (Inaudible) isn’t that right?

Arthur G. Logan:

Well the trust had to be construed to find out what went under the will because —

Charles E. Whittaker:

(Inaudible)

Arthur G. Logan:

Yes.

Charles E. Whittaker:

(Inaudible)

Arthur G. Logan:

The will provides that any unexercised powers would go under the residuary clause, and also if these — if there was — of this is an agency, of course, that assets belong into the estate.

So you’ve got to — to construe the will to find out what goes under the will, it’s necessary to test whether or not this trust agreement is a trust agreement or an agency and next whether or not the power was properly exercised because if the power wasn’t exercised properly, then under the trust agreement itself, this $400,000 goes back under the will.

These are all the contacts which are —

Supposing the (Inaudible) the court says that Florida has jurisdiction, what is (Inaudible)

Arthur G. Logan:

Well —

In Delaware —

Arthur G. Logan:

That’s his problem but if — if the Delaware — if — if this Court holds that Delaware erred and not acquiring full faith and credit to the Florida judgment, then I assume the Delaware courts will act accordingly and enforce the Florida judgment in Delaware and see that the $400,000 held by the Delaware trust company, curiously enough they’ll still keep $200,000 in another — in a different trust and they’ll turn over $200,000.

Felix Frankfurter:

It certainly had another complicated fact (Inaudible) cases are simple.

Is the Florida tax and the securities in Delaware?

Arthur G. Logan:

She returned, as I understand, she returned these securities at all time and paid Florida tax on.

And —

Felix Frankfurter:

Well, wait a minute.

Paid what for what?

Is it a part of income tax or — or did she pay a personal —

Arthur G. Logan:

Florida — Florida intangible personal property tax are paid on these securities at all times.

There’s another contact really.

And furthermore —

Felix Frankfurter:

If she did choose — if Florida — if she has resisted, Florida could impose it?

I don’t know what —

Arthur G. Logan:

I don’t know.

Felix Frankfurter:

— the scope of the (Inaudible) case is.

I don’t know the scope of the principle.

Arthur G. Logan:

They — she did pay it.

I know that’s in the record.

And also, this very $417,000 was returned by the plaintiff in the Delaware case, the executrix as part of the Florida State.

Her return in the probate court in Florida, she lists this $400,000 as an asset —

In her inventory.

Arthur G. Logan:

What’s that?

In her inventory.

Now there’s — I’m about to get the red light and here and there’s one point that I want to — I can’t get back.

Mr. Steel in his brief makes much ado about a Curtin Winsor, Jr. who was the third son of Mrs. Hanson, the executrix.

And the two of her sons are these beneficiaries.

He says that this son was not named in Florida and that somewhere or other prevents the Florida judgment to be unbinding.

He was a remote contingent beneficiary.

It would be necessary that if one of his brothers to die without issue and without having exercised the power of appointment where he will ever to come into anything.

He never came into anything.

They’ve got the parties in our brief including the principles announced by this Court that he was — was not necessary to name him but of the decree to be binding upon him because if he ever invested in anything, he would step into the shoes of his brothers and be able to enforce any decree which is in favor that is bound by this one which was against him.

Earl Warren:

Mr. Rosenblatt.

Sol A. Rosenblatt:

Yes, Your Honor.

I think that the Court should have some facts before I get into the discussion of the law.

Mr. Justice Frankfurter asked about the payment of any taxes by this domiciliary of Florida.

She paid them since she became a domiciliary of Florida.

And under the authority of Graves against Schmidlapp, 315 United States, and Bullen against Wisconsin, 240 United States, Florida has the right and collected the taxes on the exercise of a power to dispose of intangibles even though the trust fund and trustee were outside of the State.

Hugo L. Black:

What page was it, 315?

Sol A. Rosenblatt:

657, sir.

These two cases are the only United States Supreme Court cases which are cited by the Supreme Court of Florida in making its decision in a case involving nothing but Florida domiciliaries and involving two trust companies both of whom were mentioned in the will.

Felix Frankfurter:

But Mr. Rosenblatt —

Sol A. Rosenblatt:

Yes, sir.

Felix Frankfurter:

This had been a collection of (Inaudible) and Rembrandt in Delaware as far as it could have imposed a tax.

And that is because of the major so-call intangibles.

Sol A. Rosenblatt:

Sir, if you want a straight forward answer which you’re entitled to for me sir, I don’t care what the situation is in the State of Delaware.

Felix Frankfurter:

Well, but I’m telling you —

Sol A. Rosenblatt:

I’m only interested —

Felix Frankfurter:

I’m telling you that if they have been Rembrandt pictures —

Sol A. Rosenblatt:

Yes, sir.

Felix Frankfurter:

They could have been passed by Florida under this agreement.

That’s what the (Inaudible) case is and it seems nothing else.

Sol A. Rosenblatt:

I understand that, sir, but we’re talking of the peculiar intangible property tax which a great number of our States imposed.

Felix Frankfurter:

All right.

Sol A. Rosenblatt:

And which are imposed upon the substance of trust whether they’re located in the State or elsewhere.

Felix Frankfurter:

The fact that Florida has power to tax the person rendered in Florida with non-physical properties such as intangible proceeds certificates, it doesn’t give me the answer to who decide what the meaning of this instrument is.

Sol A. Rosenblatt:

Well sir, I would like to start from the time that this lady died.

Because when she died on November the 20th, 1952 as a domiciliary of Florida, she left a will which had been made on December 3rd, 1949 and she left executed on that same day, December 3rd, 1949 a so-called power of appointment.

Sol A. Rosenblatt:

And thereafter, another paper of July, 1950, and she says in the original trust that the disposition of that trust shall be upon her death in accordance with her last writing accepted by the trust company.

And her last writing doesn’t even exercise the power of appointment.

So after she died, eight days letter — later, Mr. Foulk, who is in these affidavits, submitted to the Court, describes a general counsel for the Donner estate.

Mr. Foulk wrote a letter and he’s telling some beneficiaries on November 28 at page 79 of the Florida record, about this trust with the Wilmington Trust and he says that certain monies are to be paid to this executrix after the payment of the following specific legacies and he’s talking about legacies in describing the so-called remainders in the trust.

I didn’t use the language.

And thereafter sir, this executrix and her counsel Mr. Foulk filed an inventory as required by the Florida law and listed these assets of the Wilmington Trust Company trust as part and parcel of this Florida State.

More, she, the executrix of Florida domiciliary, Mr. Foulk her lawyer permitted in Florida to represent her, both took fees and commissions on that inventory which included these assets even though they were located in the State of Delaware.

These were the facts that came before the Court.Our people who are the appellees here had a right to rely upon that inventory.

And when the time was passing, and nothing was happening about disposing of the estate, the appellees brought this suit in the State of Florida and please let’s not be confused further, page 12 of the record in Florida shows that the plaintiffs pray one, that the Court construe and determine the question of what portion of the trust property involved herein passes under the residuary clause of the will of the decedent.

Why is that?

Because in her will, she said that her Florida State should pay all the taxes even on this trust, which he described in Delaware.

So when this action was commenced, what happened first?

Well, low and behold, Mr. Foulk and the executrix rushed into the court in Florida, went to pay back the money and correct the inventory.

Up to that time, they’d never done anything of a kind.

The Florida court refused to take back the money.

That procedure is stayed to this very moment.

Now what did they do next?

Everybody including these trust companies had been cited.

I said that in her will she gave directions to the Wilmington Trust Company.

It’s mentioned in the will.

I said that under her will, the Delaware trust company which Mr. Foulk is the Director and Head of the Trust Committee by the way, that Delaware trust company is a legatee under this will, and both of those trust companies were notified like all the other parties by constructive service, mailing by the clerk to their last known address under the records of Florida statute.

Same as we do in New York or Nebraska or any other State in the United States and when we have before us a question relating to a deed and estate or a will of a domiciliary of our State.

(Inaudible)

Sol A. Rosenblatt:

Yes sir.

(Inaudible)

Sol A. Rosenblatt:

We had more than a corpus in Florida, sir.

(Inaudible)

Sol A. Rosenblatt:

These securities, no, sir.

(Inaudible)

Sol A. Rosenblatt:

No sir.

Sol A. Rosenblatt:

Never was in Florida.

(Inaudible)

Sol A. Rosenblatt:

The litigation concerned the position of the parties before the Florida court, the executrix, and the beneficiaries, and the claimants to the fund.

And that’s why I say to you, sir.

I don’t care if they never bring a cent from Delaware to Florida, the executrix, all of the beneficiaries, the children by her as their guardian ad litem the beneficiaries to these (Inaudible), all of these parties are before the Florida court.

Felix Frankfurter:

And you would say the same thing if these were an incontestable trust?

Sol A. Rosenblatt:

I would not say the same thing if it was an incontestable trust, sir.

Felix Frankfurter:

Although all the parties except the trustee was before the Florida court.

Sol A. Rosenblatt:

That’s right, sir, because this is an ambulatory trust.

This trust under the law of Florida, decided by the Supreme Court of Florida again and again.

And as late as 1956, in a case called Forsythe against Spielberger has held consistently just as the courts in Illinois, courts in Georgia, courts in Mississippi, even the courts in Pennsylvania, that if a trust is made of this kind and there are no vested remainders because they can be amended or changed from time to time or revoked, no gift tax is paid whatsoever, no one has any present interest, everything has to pass later, then those are considered in those states, in those jurisdictions including Florida as testamentary disposition.

Felix Frankfurter:

What about other States?

Can Florida determine what Delaware should consider such an instrument?

Sol A. Rosenblatt:

Can Delaware determine what Florida should but that’s what Delaware has done.

We don’t care what Delaware did.

Felix Frankfurter:

Well, you may have to care if Delaware has the controlling authority of saying, “What disposition should be made of a property situation within Delaware?”

Sol A. Rosenblatt:

But wouldn’t it be a terrible thing, Your Honor, for Delaware to be able to say as to what passes and how the taxes are to be apportioned on the estate of a Florida domiciliary with a Florida executrix and before the Florida court?

Felix Frankfurter:

Tell me this —

Sol A. Rosenblatt:

How could Delaware do?

Felix Frankfurter:

Tell me this.

Now, if I go to Professor Scott, second edition of his trust.

Will I find there that he said such a trust though Delaware is funny and fanciful and unique and having it is no good, can we say that?

Sol A. Rosenblatt:

I tell you what Professor Scott said.

We used to call him Scotty at 43 Harvard Law Review, 521, page 529.

It’s cited in the decision of the Supreme Court of Florida.

Felix Frankfurter:

I know, but does he say that such a recognition of a trustee in Delaware violates all notions of trust.

And he say that in this (Voice Overlap) —

Sol A. Rosenblatt:

He says in such a case — in such a case there’s authority to the effect that the trust is in substance testamentary and is invalid unless declared in an instrument executed in accordance with the requirements of the statute of will.

Felix Frankfurter:

Does he say there’s no authority the other way?

Sol A. Rosenblatt:

No.

Felix Frankfurter:

Well, that’s the whole question.

Sol A. Rosenblatt:

But the question — well, you can cite all of the text writers Bogart, Page on Wills, every text writer there is but isn’t this, Your Honor, a case of determination by the State which concerns itself with the estate of his domiciliary.

They — we have a motion pending before this Court.

I like to discuss that motion for two minutes.

I would like to tell the Court that they have backed in apparently, to try to get jurisdiction in this Court.

They say, and I’m reading from the appellant’s reply brief, the judgment appealed from rest on an adequate federal basis.

They bottomed the appeal on three federal grounds.

This is the Florida case which we moved to dismiss, (a) lack of due process under the Fourteenth Amendment.

Due process to who, Your Honors?

Not to the executrix, not to the guardian ad litem.

They’re Florida — Floridians.

Lack of due process to who, to the Wilmington Trust and the Delaware trust who don’t appear?

Your Honors have held again and again that you won’t take any jurisdiction of any appeal when somebody is heard to complain about what happens to third parties.

That’s the Liberty Warehouse case in 276 United States, Smith against Indiana, 191 United States.

(Inaudible)

Sol A. Rosenblatt:

The trustees, Your Honor, were cited by the Florida court.

Choosing not to enter the Florida court does not give the executrix the right to object.

The executrix is supposed to handle this will and its affairs, the estate impartially.

Is she to be heard to complain that they weren’t before the Florida case court?

That’s what she said as her declaration which Mr. Foulk also filed in Delaware that they haven’t been validly served in Florida.

What business is it of hers, Your Honor?

They didn’t come in here and asked to have this judgment reviewed from the Supreme Court of Florida.

They’re not even parties except that they were served and there’s a decree against them but they’re not before this Court in the Florida case.

Felix Frankfurter:

And a potential beneficiary, who is governed by Delaware law has no standing here either?

Sol A. Rosenblatt:

The potential beneficiary, sir —

Felix Frankfurter:

Beneficiary —

Sol A. Rosenblatt:

I governed as Floridians, as Florida citizens by the law of the State of Florida not by the law of the State of Delaware.

Felix Frankfurter:

(Voice Overlap) that is.

Sol A. Rosenblatt:

Sir?

Felix Frankfurter:

I’m asking whether they have no standing here since your colleague, Mr. Logan says it makes a difference who gets the $417,000.

Felix Frankfurter:

I think that’s a substantial amount of standard.

Sol A. Rosenblatt:

Sir, I hope because the clerk arranged the order of this argument that I’m not in privity, so to speak, in all accounts with my friend Mr. Logan.

Felix Frankfurter:

But isn’t it a fact that it makes the difference of who gets the $417,000.

Sol A. Rosenblatt:

You bet your boots it makes the difference.

Felix Frankfurter:

All right.

Sol A. Rosenblatt:

And I say it should go according to the way the law of Florida has decided.

Felix Frankfurter:

You’re suggesting to that — that usually fell standing $417,000.

Sol A. Rosenblatt:

Well, I never saw that much money.

So, I’m very happy if my clients get it.

I say that this lady has no right to back into this Court claiming lack of due process against these trust companies.

The second ground is the alleged failure of the Florida courts to give full faith and credit to the judgment in the Delaware courts.

If Your Honors will take the time which I’m sure you do to read this fantastic decision of the Supreme of Court Delaware, which is cited as authority for their having a right to come here, you will see that the Supreme Court of Delaware has analyzed the decision of the Supreme Court of Florida which preceded it, and has said that the Supreme Court of Florida doesn’t even know what the law of Florida is.

The Supreme Court of Florida cited the case which has been very much used in their jurisdiction called Henderson against Usher, 167.

The Supreme Court of Delaware says, “It doesn’t mean at all,” what the Supreme Court of Florida said it meant although the Supreme Court of Florida decided the case.

And that’s the way they go all the way through the decision.

You think that they were sitting as an appellate court over the Supreme Court of Florida.

The third thing is the failure to apply the proper state law in violation of the Fourteenth Amendment.

Well, that’s a good ground that I never heard of, because Florida has the right to apply Florida law to a Florida situation.

And I don’t think even this Court can require that Florida should apply Delaware law to a Florida estate.

It resolves itself, in my opinion, to a very narrow issue and you can recall that I take the position, that if this Court in reviewing my motion to dismiss this case were to hold that there couldn’t be any constructive service on the Wilmington Trust Company or the Delaware trust company, even though they’re mentioned in the will of legatee.

If you — you held that, I say that under Pennoyer against Neff, I am still entitled to the judgment of the Supreme Court of Florida as between all of the Floridians.

I say, that that’s binding between the people who were before the Court.

Of the innocent victim that was on the wrong side in that Vanderbilt versus Vanderbilt case last year, that’s got nothing to do with this at all.

But Pennoyer against Neff, which does apply, certainly entitles me to say that as between the parties in Florida who were there and in this case, that that is a binding decree of the Supreme Court of Florida.

Now, so far, I haven’t asked to enforce that decree and the Supreme Court of the United States has said again and again that until there’s some real question before it, it won’t anticipate.

I haven’t asked that my judgment of the Supreme Court of Florida be considered as something which I’m asking this Court to execute and impose upon all the other States yet.

Yes, in the brief, we said that the dignity of the Florida Supreme Court should be upheld and that its judgement entitled to full faith and credit.

But I don’t care, as Mr. Logan cares, that there is a decision of the Delaware Supreme Court, my people were never parties to the decision in Delaware, the infants who are beneficiaries, under the so-called power of appointment.

Those beneficiaries are represented by a guardian ad litem, their own mother in the State of Florida.

They didn’t have to be, until she and Mr. Foulk run up to Delaware.

Sol A. Rosenblatt:

She didn’t — they didn’t have to have a Delaware guardian ad litem.

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

Yes, Your Honor.

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

Without any question.

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

But I don’t care if you say it wasn’t.

I do.

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

It was for — on the following basis.

Mr. Logan developed a theory of nexus here, the acts of the Delaware — the Wilmington Trust Company etcetera.

I say that in view of the provisions of the will itself, referring to the Wilmington Trust Company and in view of the provisions making that Delaware trust company a legatee, that the State of Florida under its statute, which is appended to our brief in a declaratory suit, has the same right to ask that those companies be heard or forever keep their peace as it has any others interested in an estate.

The Supreme Court of Florida has cited a case from New Jersey on the problem.

It has also cited a case where it itself gave service to the Chase National Bank which was a trustee in New York, similar to the Wilmington Trust Company in Delaware.

There is authority within the State of Florida upholding its right in this kind of a declaratory action to cite in those that it considers ought to be before the Court.

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

The raise itself was the will, the estate, the necessity for finding tax money, the assets of this estate.

That’s the raise —

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

I certainly do.

And particularly, Your Honor, have I right to do that, when the executrix before there was any suit and Mr. Foulk who furnished the information before there was any suit, listed it as an inventory asset of this estate.

Charles E. Whittaker:

(Inaudible)

Sol A. Rosenblatt:

If it’s a valid trust and that the Wilmington Trust Company claimed any rights.

And by the way, I don’t want to spend too much time with the decision of the State of Florida but I think it’s so well reasoned and the citations of authority are so good that it will stand as one of the great decisions on the question of whether or not a trust is really a trust or an agency agreement.

But answering your question, where was the Wilmington Trust Company had notice and the Delaware trust company who was a legatee?

Where were they?

They were waiting to see if they could get the thing dismissed in Florida and then waiting that the executrix would run to Delaware and arrange to lose a case.

That’s where they were and that’s where they are now.

(Inaudible)

Sol A. Rosenblatt:

No.

Sol A. Rosenblatt:

If the executrix who was there stooge could get the case dismissed.

They could have come in Your Honor.

They could have raised all these points.

(Inaudible)

Sol A. Rosenblatt:

I don’t think so according to the law of Florida.

And I wish Your Honors to please consider very carefully the alleged basis for jurisdiction from the Florida judgment.

I think I made it clear and I’m saying it now for the fourth time that I’m not at all interested in the decision from Delaware.

It’s my duty and my burden here which I hope I’ve discharged to show that there is no jurisdiction in this Court to hear the appeal from the Supreme Court of Florida.

No certiorari has been granted here.

They just raised these points for the first time in a petition for rehearing after the Supreme Court of Florida decided its case.

These alleged grounds are for the first time brought to the State of Florida on the petition for rehearing after the decision of the Supreme Court of Florida.

And I’ve cited plenty of authority that they can’t back in on that basis either.

Now, may it please this Court.

I think that there is one thing that ought to be made clear.

There has been great comment by text writers, newspaper personnel, strangers, those not members of the Bar, who are constantly complaining that this Court that takes itself into considerations of state law so that there is no grounding for the alleged federal questions.

I have emphasized my position because timely, we move to dismiss this appeal which had been taken in my opinion without any warrant or without any authority, and on the basis of points raised for the first time in the petition for rehearing the decision of the Supreme Court of Florida.

I asked that this Court consider the Florida case per se.

I ask that the Court read the Florida judgement as springing from the holdings long established of Florida law.

I ask that the Court consider that whether this judgement of the Supreme Court of Florida is sought to be enforced otherwise or elsewhere that the Supreme Court of Florida had the right to make its decision.

And that it has like all the other States the right to supervise and oversee the acts, the deeds, the wills, and the estates of its domiciliaries.

The Supreme Court of Florida has held that on an inter vivos trust where no present interest have been given, the Supreme Court of Florida says that there is a republication of the so-called trust instrument when an attempt is made to amend it after a person has become a resident of Florida.

In 1949, the trust having originated in 1935 and had been amended theretofore twice.

In 1949 sir, there was one so-called exercise of the power of appointment.

And in July 1950, and I ask you please to see what this last writing contains because it certainly is not an exercise of any power of appointment.

Yes.

Sol A. Rosenblatt:

But in 1950, there was another one.

And the Supreme Court of Florida says, “Just the same as other States that when those amendments were made, that constituted really a republication of the original so-called trust document by its domiciliary.”

And they say that in accordance with long held Florida law that when that was republished, for example the last paper writing being in 1950, it had to be executed with the same solemnity as any testamentary instrument.

(Inaudible)

Sol A. Rosenblatt:

Now has the Florida court the right to say how a testamentary disposition is to be executed? Every State makes certain provisions about them.

Sol A. Rosenblatt:

I don’t know what the law would be in New York or some of the other States as to an ambulatory instrument like this, whether you would call it a trust or an agency, I don’t care.

I have cited in my brief, I think, a very apt decision of the Supreme Court of Mississippi which says, that when an instrument in form of deeds, specifically provides that it shall not take effect until the death of the grantor, it is testamentary in character and void as a deed.

And may it please the Court.

I think that when the Supreme Court of Mississippi so declared, the Supreme Court of Florida has the right to similarly declare as it did.

When it said a deed in order to be effective as such must pass a present interest to the grantee, although grantee’s right to enter into possession may be deferred to a future time.

And if the deed manifested intention that it shall be operative only upon the grantor’s death, it can never take effect at all unless executed with such formality that it maybe given effect as a testamentary disposition.

And I say that not even this August court of the Supreme Court of the United States has the right to overthrow the long established law of the State of Florida over its own domiciliary.

Can I ask you a question before you sit down?

Sol A. Rosenblatt:

Yes sir.

As I understood your jurisdiction or argument, you say that no federal question was raised by your opponents until the petition for rehearing in the Florida court.

Sol A. Rosenblatt:

That’s right.

I was looking at their reply brief, where they answer that on page 5 and (Voice Overlap) —

Sol A. Rosenblatt:

I can only cite the record itself.

— at the beginning of the whole proceeding and say that it was.

Do you take issue with that statement?

Sol A. Rosenblatt:

I do sir.

And the record will speak for itself.

Earl Warren:

Mr. Steel.

Edwin D. Steel, Jr.:

May it please the Court.

I appear as guardian ad litem appointed by the Court of Chancery for three minors who have beneficial interest under one of the Delaware trust company which was an appointee, one of the Delaware trust company trusts.

The — because of the time limitations or rather I should say the number of counsel limitations which were imposed, the Wilmington Trust Company and Delaware trust company has also consented that I say what need to be said on their behalf.

I have represented neither of those institutions in the litigation.

The interest of my clients, of course, is sustaining the Delaware judgment and the validity of the trust.

Let me cite preliminarily what I think is not an issue here.

This Court is not concerned with the merits of the question of whether the 1935 Trust was an agency agreement or an inter vivos trust that presents no federal question.

There is substantial authority which would support the Delaware view on that.

Recent action taken by the restatement in May of this year, cited on page 5 of the brief of the Wilmington Trust Company is authority for the validity as a trust of such an agreement.

What this Court is concerned with is or are two constitutional questions which were separate in the State.

And as it seems to me clearcut analysis the problem requires at all times that a distinction be kept in mind.

The first is the full faith and credit question as to whether Delaware should be bound by the Florida judgment because as we contend, Florida was lacking in jurisdiction over indispensable parties and hence the judgment is binding on no one.

Edwin D. Steel, Jr.:

The second constitutional question is one which would arise if the Court should resolve that first question adversely to my clients.

On the hypothesis, as to Mr. Justice Black, put it that everybody was, in fact, before the Florida court.

Did Florida choose the right law when it shows Florida law and not Delaware law?

And under teachings of this Court, the erroneous choice of law can interrupt — can deprive a judgment based on the erroneous choice of law of due process.

Now there are two separate questions.

Let me address myself first if I may to the question of the jurisdiction of the Florida court over the Delaware trust company and the Wilmington Trust Company.

That jurisdiction purportedly came about by virtue of a Florida statute which contained 10 subdivisions, 9 of which dealt with in rem actions.

The one, under which the Court purported to act presumably and the decision of Florida says nothing about it, is one which authorized the service by publication for the construction of a will, deed, contract or other written instrument and for the judicial declaration or enforcement of legal or equitable rights thereunder.

And let me start and approach the problem with what I’m going to call pre-McGee law and then speak of McGee against Insurance Company and what if any impact it may have on the problem.

Certainly — certainly, absent the minimum contact theory, the Court where a will has been probated has no jurisdiction in a plenary action to determine whether out-of-state property, owned by out-of-state people or let me put it this way, whether out-of-state property claimed by out-of-state people, ownership of which is claimed by out-of-state people can be rested and determine — taken from and repost in the hands of the administrators.

This isn’t a question and I think the distinction is important as to whether or not out-of-state properties owned by the decedent passes in one way or another under the Florida will.

This is a much more basic question than that.

This is a question of whether out-of-state property is, in fact, owned by the Florida decedent.

And I suggest to Your Honors that this case is no different leaving aside minimum contacts for the moment.

This case is no different that it would have been if the administrator had filed a suit against the Delaware resident who held shares of stock owned by the decedent and claim that those shares of stock had been transferred by the decedent during her lifetime, as a result of fraud and deception practiced upon her and had asked that that ownership or rather claim of ownership out-of-state could be adjudicated in Florida.

I see that there’s no difference this Court in the Bakers, the Eccles case has held that the Court of domicile of a decedent could not determine in a plenary action against the nonresident where intangibles were held that the interest of that nonresident in those intangibles was cut off.

Now that has been — was based on Pennoyer v. Neff and I think Pennoyer v. Neff has never been willed away in those circumstances unless, and I’m going to come to the minimum contact, it was on some minimum contact theory.Let me say preliminary about minimum contact.

Felix Frankfurter:

Before you move on to that, am I right in going inference from what you’ve just said that until the interest of the beneficiaries, potential beneficiaries under the Delaware trust — under the Delaware trust influence, are declared by Delaware court to the nonexisting interest, that they have potentially, if I may use an old fashioned phrase, have vested interest which couldn’t be cut off.

Is that what you’re saying?

Edwin D. Steel, Jr.:

Unless the trust companies were brought in to the Florida court and — and —

Felix Frankfurter:

That’s what I mean.

Edwin D. Steel, Jr.:

Yes.

I would say so.

Now, when we come around to minimum contacts, I want to look at the minimum contact first or let me say before I get to talking about the facts which you brought —

Felix Frankfurter:

Suppose, may I — may I break in.

Suppose the trust instrument had definitely designated the beneficiary under the trust agreement subject to the reserve power of the — of the trust — the donor of the trust and the power to make any changes she pleases, nearly, the potential interest that if she doesn’t make any changes, then the designated beneficiaries under that trust agreement, they have, as I understand certainly (Inaudible), they have an interest which is not defeatable, is that right?

Edwin D. Steel, Jr.:

It’s defeatable only by action by (Voice Overlap) —

Felix Frankfurter:

It was the action of the donor of (Voice Overlap) —

Edwin D. Steel, Jr.:

Yes.

That’s right.

Edwin D. Steel, Jr.:

And that — that was the situation in this 1935 agreement.

Though there were remain — they were remainder interest created by the agreement.

Felix Frankfurter:

In default of none — of none exercise of the reserve power.

Edwin D. Steel, Jr.:

That’s correct.

Florida doesn’t have a minimum contact statute such as California had which provided that if an insurance policy was delivered to a beneficiary in California and premiums were paid from California that that insurance company was amenable to in personam jurisdiction in California.

This statute which I read doesn’t profess to do that, it doesn’t profess to lay down any standards of any kind.

And as a matter of fact the Florida court didn’t base its theory on any minimum contact theory.

And I submit that the Delaware court was entitled to take that Florida decision as it would writ without minimum contacts and measure it against constitutional requirements to see whether it was right or whether it was wrong.

It wasn’t incumbent on the Delaware court to delve around the theories of all sorts to see whether the Florida court might have relied on those theories but didn’t.

But passing that, passing that and coming down to the minimum contact business, the Delaware trust company, as appointee of $400,000, it was the trust company of a trust, as to which the decedent had no — nothing to do.

The decedent wasn’t the settlor of the trust.

The decedent wasn’t the income beneficiary of the trust and the trust was irrevocable.

So that the content which Florida had with the institution which now holds the assets and which held the assets as a result of the distribution which was made before the Florida suit has began.

The only contact which Florida has — had there is because the beneficiary is under that trust resided in Florida, that’s the contact.

Now, is a contact which those beneficiaries have with the trustee because of their beneficial interest?

Such a contact as to permit a third party to come in and say that because of that isolated, insulated type of contact, a third party can hale into the Florida court and get, if you please, not in rem jurisdiction but as the Florida court said clearly, in personam jurisdiction, in personam jurisdiction.

I submit that that’s not the kind of a contact.

It’s not the kind of an evil which this Court was dealing with or considering in the McGee against Insurance Company.

Now, what was the contact which — and I say this.

That in the absence of the Delaware trust company regardless of what contacts the Wilmington Trust Company might have had, in the absence of the Delaware trust company which holds those assets and held the assets when the Florida action was began, Florida had no jurisdiction to make an adjudication unless it had jurisdiction over the trust company and those minimum contacts I’ve described is more than sufficient to give it to him.

Now, so far as the Wilmington Trust Company is concerned, the 1935 Trust was created when Mrs. Donner lived in Philadelphia in 1935.

Nine years later, she moved to Florida.

She exercised of the first two powers when she lived in Pennsylvania.

She exercised the third power when she was residing in Florida.

She exercised it in Pennsylvania as shown by the Delaware record.

And she exercised the fourth power in Montreal, Canada.

And that’s shown in the Gold affidavit which is not mentioned in our brief but is at page 295 of the Delaware record.

Now it’s true that Mrs. Donner did reserve a life interest in the right to exercise these powers.

But that wasn’t a contact which she had when that trust was created.

Wilmington Trust Company didn’t go into Florida by any voluntary act of its own; it was taken into Florida, so to speak, when the settlor moved into Florida.

Edwin D. Steel, Jr.:

And I suggest to you again that that type of contact is completely different than the type of contact you have in a case like International Shoe where you have business being solicited by the defendant who would be held.

The type of contact you had in McGee against Insurance Company or the type of contact you have where you served a non — a nonresident motorist to voluntarily come in.

Now, my friend may argue that — that the Wilmington Trust Company could have gone into Court and asked to have been relieved of its responsibilities and that type of non-action resulted in its further contacts in distributing income, and let me say something about that in some sort of a contact.

But the fact of the matter is the Delaware record shows that there was no income sent down to Florida to Mrs. Donner.

It was all put in the Wilmington Trust Company who worked out and the advisors of the trust in Philadelphia were informed of it.

The record also shows that when there were purchases and sales of securities, Mrs. Donner was never advised of it.

The information all went to these life long associates or her families in Philadelphia who were advisors of the trust and they were told about it.

When proxies were sent for execution, they weren’t sent to Mrs. Donner after the banks had signed them for sending into the company.

They were sent to — in Philadelphia, so that those contacts with Florida were of the minimal variety.

And I suggest that this matter of — of minimum contacts, if given the comprehensive scope which my adversaries would give to it, would result in this sort of a thing.

Stockholder and corporation, many contacts between a stockholder and a corporation, proxy materials sent, proxies are set in, dividends sent and whatnot.

Can it be said that that type of contact gives the State where the stockholder lives, jurisdiction over the corporation in any suit which would be brought against them, they’re much more extensive than these contact are in this situation.

So much for minimum contacts as we see, we think that the doctrine of the McGee against Insurance Company which of course we filed to was a doctrine which was understandable, which was under a statute which prescribe standards of minimum contact, and did result in the avoidance or will result in avoidance of an evil of which — which was — which many of us are cognizant of these polices being written and the burden being put on a — a beneficiary to chase.

Now, let’s pass the question of — of jurisdiction and make the assumption.

That on some theory, the Delaware trust company and the Wilmington Trust Company, were brought in to Florida court.

I think it can’t be sustained for the reasons I have stated.

But if that position should be sustained, then I suggest that you have this further question, namely, whether Florida was wrong in applying Florida law to strike down a relationship which was valid under Delaware and whether or not, that error was not so vital and basic as to constitute a denial of due process.

Now this Court has spoken on that subject on several occasions and I — I’m sure it’s a little naughty problem because one time Court goes one seemingly on fine distinctions goes one way or another.

But the case we rely on is the Hartford against Delta Land Company case, where there was fidelity bond written in the State of Tennessee.

That case, Your Honor, is referred to — on — it’s 292 U.S. 143 and it’s referred to on pages 29 and 30 of our brief.

There was a case where there was a fidelity bond in — written in Tennessee.

A defalcation occurred, a defalcation occurred in Mississippi.

The plaintiff was a Mississippi corporation.

The defendant was an out-of-state corporation but both were doing business in Mississippi where the defalcation occurred.

The bond contained a provision which limited liability after a period of time.

That provision was good in Tennessee where the bond was ready.

It was bad under the statutes and public policy of Mississippi.

Mississippi therefore said, “Plaintiff can recover on the bond.”

The case went to this Court and this Court reversed saying that the contract was a contract which had its intimate relations with the place where it was written and that law and not Mississippi law was controlled.

We suggest that — that this relationship which was created, which I call a trust and my friends call an agency in Delaware was a much more static and less ambulatory or transient type of relationship than you have in the case of a fidelity bond which ensures persons against losses all over the country.

Edwin D. Steel, Jr.:

And by a fortiori reason, by a fortiori reason, the principle of the Hartford case would apply to this situation and that it was wrong for the Florida court to cease all the Florida law to strike down a relationship which was valid in the State where it was entered into.

What do you say about your opponents’ claim that you’re not on this Court, that you might put it wrong?

Edwin D. Steel, Jr.:

Your Honor, I can’t put my finger on that part of the record.

I am not here from the Florida judgment.

You see, I — I was the winner in Delaware and the question has been raised by our adversaries but the choice of law problem was dealt with by the Delaware Supreme Court.

I’m — I’m dwelling on recollection.

I’m reasonably sure that the Florida record — in the Florida record, the question of due — constitutionality of this service over the —

(Inaudible)

Edwin D. Steel, Jr.:

No.

But I — but I’m certain that in the motions and answers — in the answer and in the motion in Florida, you’ll find that the — that the — those due process questions were raised insofar as Florida was attempting to get service over the Delaware trust company and Wilmington Trust Company.

I’m satisfied that that is so.

I’m not guessing, I’m — I’m dwelling on my memory.

I think I might be able to direct Your Honors’ attention to what —

Felix Frankfurter:

Can you tell whether the Florida opinion dealt with the constitutional question that was here?

Edwin D. Steel, Jr.:

The Florida opinion?

Felix Frankfurter:

Yes, the Florida court (Voice Overlap) —

Edwin D. Steel, Jr.:

I don’t recollect that it did, Your Honor.

If it did, I’m sorry.

Felix Frankfurter:

Well, in fact Riley against New York Trust (Inaudible)

(Inaudible)

Edwin D. Steel, Jr.:

Well, I don’t put my hand right on the record reference Mr. Justice Harlan but I know that it’s in the answer and it’s in the Florida motion.

Mr. Attorney General:

If Your Honors please.

I think that I have two or three minutes left.

Mr. Rosenblatt is — is my time up?

(Inaudible)

Mr. Attorney General:

Well, I’m sorry.

I — I thought I have two minutes.