Pennoyer vs Neff

Note: This is a 1878 case.

Facts:
1. Mitchell, a lawyer, sued Neff, who was based in California, his client, in an Oregon state court
for unpaid legal fees.
2. At the time Defendant was a non-resident of the state who was not personally served with
process.
3. Constructive service was issued upon Defendant by publication.
4. Defendant did not come to court or otherwise resist the lawsuit, and default judgment was
entered against him.
5. After the default judgment, Defendant acquired 300 acres of land in Oregon. To satisfy his
judgment against Defendant, Mitchell had the sheriff seize and sell Defendants land.
6. The land was purchased by Pennoyer, who received a sheriffs deed as evidence of title. The
sheriff then turned the sale proceeds over to Mitchell.
7. Shortly after the sheriffs sale, Defendant discovered what had happened to his land and
brought suit against Plaintiff to recover the land. This appeal followed after Defendant lost his suit
against Plaintiff.
8. Neff argued that the sale was improper because the court that issued the judgment against him
did not have personal jurisdiction over him.
Issues: Can judgments obtained against non-residents who fail to appear in court be sustained
by default judgments where service of process is accomplished solely through publication (i.e.
constructive service)?
Is constructive service sufficient notice to attach property within the forum state owned by a nonresident?
Held: No. The personal judgment recovered in the state court of Oregon against Plaintiff was
without validity, and the decision of the Court of Appeals overturning that judgment was affirmed.
When a suit is merely in personam (i.e. against a person), constructive service through
publication upon a non-resident is ineffective.
People or property outside the boundaries of a state may not be subject to its direct jurisdiction,
and substituted service of process in actions against non-residents may be permitted only for in
rem actions. There could be no judgment regarding the personal rights of the parties without
personal jurisdiction, so the sale was void. However, the sale would have been valid if the plaintiff
had attached the real property in the state when the action was brought, which would have
conferred in rem jurisdiction.
No state can exercise direct jurisdiction and authority over persons or property without its territory.
However, a state may subject property within its boundaries to the payments of its citizens, even
when the land is owned by a non-resident, without infringing upon the sovereignty of the state of
residency of the landowner.
Discussion: Here the Supreme Court of the United States is distinguishing between suits in
personam, and in rem. An in personam suit is a suit against a person, whose purpose is to

determine the personal rights and obligations of the defendant. An in rem action, meanwhile, is an
action where jurisdiction pertains to property. Thus the court reasoned that constructive service is
sufficient to inform parties of action taken against any properties owned by them within the forum
state, because property is always in possession of the owner, and seizure of the property will
inform the owner of legal action taken against him.