fair play and substantial justice

Dennis Burnham married Francie Burnham in 1976 in West Virginia. In 1977 the couple moved to New Jersey, where their two children were born. In July 1987 the Burnhams separated. Mrs. Burnham, who intended to move to California, was visiting her parents in that State when she filed for divorce in New Jersey on grounds of extreme cruelty, seeking spousal and child support, custody of the children, and possession of the family home. In early August 1987 petitioner visited Mrs. Burnham in California to discuss the children and the separation. He took the children to San Francisco for a few days. Upon returning the children to Mrs. Burnham, petitioner was served with a summons and complaint for divorce filed in California Superior Court that also sought custody of the children. After being served, petitioner returned to New Jersey. In January 1988 petitioner made a special appearance in the California action and moved to quash service of process on the ground that the court lacked personal jurisdiction over him. The Superior Court denied the motion, and the State Court of Appeal affirmed. The California Supreme Court denied review. The United States Supreme Court granted certiorari to resolve a conflict among the state and federal courts.

On May 22, 1974, appellee Heitner, a nonresident of Delaware who owned one share of stock in the Greyhound Corporation, filed a shareholder's derivative suit in the Court of Chancery for New Castle County, Delaware. The complaint named as defendants Greyhound Corporation, its wholly owned subsidiary Greyhound Lines, Inc., and twenty-eight present or former officers and directors of one or both corporations. Heitner alleged that the individual defendants had violated their fiduciary duties by causing the corporations to engage in activities that resulted in a private antitrust judgment of over thirteen million dollars and a criminal contempt fine of six hundred thousand dollars, both arising from events in Oregon. The individual defendants resided primarily in Arizona and conducted their business there. Simultaneously with the complaint, Heitner filed a motion for sequestration of the Delaware property of the individual defendants pursuant to Del. Code Ann., Tit. 10, § 366. The Court of Chancery granted the motion the same day and appointed a sequestrator who seized approximately eighty-two thousand shares of Greyhound common stock belonging to nineteen defendants, along with options belonging to two others and certain debentures, warrants, and stock unit credits. The stock certificates were not physically present in Delaware, but Del. Code Ann., Tit. 8, § 169 deemed the situs of ownership of all stock in Delaware corporations to be in the state, allowing the sequestrator to place stop-transfer orders on the corporation's books. The value of the sequestered stock was approximately one point two million dollars. All twenty-eight defendants received notice of the suit by certified mail to their last known addresses and by publication in a New Castle County newspaper. The twenty-one defendants whose property had been seized entered special appearances and moved to quash service of process and vacate the sequestration order. They argued that the ex parte sequestration procedure violated due process and that they lacked sufficient contacts with Delaware to sustain jurisdiction. The Court of Chancery rejected these arguments in a letter opinion, and the Delaware Supreme Court affirmed the judgment in Greyhound Corp. v. Heitner, 361 A. 2d 225 (1976). The United States Supreme Court noted probable jurisdiction and heard argument on February 22, 1977. The individual defendants whose property was seized became the appellants before the Court. Greyhound Corporation and its subsidiary appeared in the action and moved to dismiss on the ground that the sequestration statute was unconstitutional. The sequestration order remained in effect pending resolution of the constitutional questions presented.

In 1935 Dora Browning Donner, then a domiciliary of Pennsylvania, executed a trust instrument in Delaware naming the Wilmington Trust Company as trustee. The corpus consisted of securities. Mrs. Donner reserved the income for life and retained a power of appointment over the remainder exercisable by inter vivos deed or will. She also retained the rights to amend, alter, or revoke the agreement, to change the trustee, and to require the consent of a trust advisor she appointed for sales of assets, investments, and participation in reorganizations. In 1944 Mrs. Donner became domiciled in Florida and remained there until her death in 1952. On December 3, 1949, while in Florida, she executed both her will and an inter vivos power of appointment. The appointment directed $200,000 to each of two trusts benefiting her grandchildren Donner Hanson and Joseph Donner Winsor, with the balance appointed to her executrix. Mrs. Donner died on November 20, 1952. Her will was admitted to probate in Florida, naming Elizabeth Donner Hanson as executrix. Fourteen months after the death, residuary legatees Katherine N. R. Denckla and Dorothy B. R. Stewart petitioned a Florida chancery court for a declaratory judgment concerning property passing under the residuary clause. Personal service was made on the executrix and beneficiaries. Nonresident defendants including the Wilmington Trust Company and the Delaware Trust Company were served by ordinary mail and local publication under Florida statutes. The Delaware trustee did not appear. After the Florida suit began, the executrix filed a declaratory judgment action in Delaware to determine rights to the trust assets held there. All trust companies and most beneficiaries appeared in the Delaware proceeding. The Florida chancellor initially ruled he lacked jurisdiction over the nonresident trustees because no personal service had been made and the trust corpus was outside Florida. He proceeded as to appearing parties and held the power of appointment testamentary and void under Florida law, so that the $400,000 passed under the residuary clause. The Delaware Chancellor ruled the trust and appointment valid under Delaware law and that the corpus had been properly paid to the appointees. The Florida Supreme Court reversed the jurisdictional ruling, held Florida law applied, and affirmed that the trust was invalid and the appointment ineffective. The Delaware Supreme Court affirmed its own judgment and refused to accord full faith and credit to the Florida decree. The United States Supreme Court postponed the question of jurisdiction in the Florida appeal and granted certiorari to the Delaware Supreme Court. Both state supreme court judgments are before the Court.

The controversy is over a 1/64th interest in profits from operation of Colorado oil properties. Transcontinental on August 31, 1922, contracted to pay Meyer 4/64ths of those profits. Milliken asserted a claim to a two-thirds interest in that 4/64ths share. As a settlement of that dispute Transcontinental on May 3, 1924, contracted to pay Milliken a 2/64ths interest and Milliken assigned to Transcontinental all his claims against Meyer pertaining to the lands in question and to Meyer’s 4/64ths interest in the profits. Later Milliken instituted suit in the Wyoming court alleging a joint adventure with Transcontinental and Meyer and charging a conspiracy on their part to defraud him of his rights. He sought a cancellation of the contracts of May 3, 1924, and an accounting from Transcontinental and Meyer. Meyer, who was asserted to be a resident of Wyoming, was personally served with process in Colorado pursuant to the Wyoming statutes but he made no appearance in the Wyoming cause. Transcontinental appeared and answered. On July 11, 1931, the court entered an in personam judgment against Meyer for the profits which Meyer had withheld from Milliken, together with interest thereon, and enjoined Transcontinental from paying, and Meyer from receiving, more than 3/64ths of the net profits. Thereafter the 1/64th share was withheld from Meyer and paid over to Milliken. In 1935 respondent instituted this suit in the Colorado court praying, inter alia, for a judgment against Milliken for the sums withheld under the Wyoming judgment and paid to Milliken, for an injunction against Milliken attempting to enforce the Wyoming judgment, and for a decree that the Wyoming judgment was a nullity for want of jurisdiction over Meyer or his property. The bill alleged, inter alia, that Meyer at the time of service in the Wyoming court had long ceased to be a resident of Wyoming and was a resident of Colorado. Milliken’s answer alleged, inter alia, that Meyer was a resident of Wyoming at the time of the Wyoming action and that the Wyoming judgment was entitled to full faith and credit in Colorado under the federal constitution. The Colorado court, on issues joined, found that Meyer was domiciled in Wyoming when the Wyoming suit was commenced, that the Wyoming statutes for substituted service were constitutional, that the affidavit for constructive service on Meyer was filed in good faith, substantially conformed to the Wyoming statute and stated the truth, and that the bill should be dismissed. That judgment was reversed by the Supreme Court of Colorado. It did not pass on the question of whether or not the Wyoming court had jurisdiction of the parties and subject matter. It held that the Wyoming decree was void on its face because of an irreconcilable contradiction between the findings and the decree.