Pennoyer v. Neff, 95 U.S. 714, 24 L. Ed. 565 (1878).

Facts
Mitchell brought suit against Neff to recover unpaid legal fees. Mitchell published notice of the lawsuit in an Oregon newspaper but did not serve Neff
personally. Neff failed to appear and a default judgment was entered against him. To satisfy the judgment Mitchell seized land owned by Neff so that
it could be sold at a Sheriffs auction. When the auction was held Mitchell purchased it and later assigned it to Pennoyer.
Neff sued Pennoyer in federal district court in Oregon to recover possession of the property, claiming that the original judgment against him was
invalid for lack of personal jurisdiction over both him and the land. The court found that the judgment in the lawsuit between Mitchell and Pennoyer
was invalid and that Neff still owned the land. Pennoyer lost on appeal and the Supreme Court granted certiorari.
Issue

Can a state court exercise personal jurisdiction over a non-resident who has not been personally served while within the state and whose
property within the state was not attached before the onset of litigation?

Holding and Rule (Field)

No. A court may enter a judgment against a non-resident only if the party 1) is personally served with process while within the state, or 2)
has property within the state, and that property is attached before litigation begins (i.e. quasi in rem jurisdiction).

Since the adoption of the Fourteenth Amendment, the validity of judgments may be directly questioned on the ground that proceedings in a court of
justice to determine the personal rights and obligations of parties over whom that court has no jurisdiction do not constitute due process of law. Due
process demands that legal proceedings be conducted according to those rules and principles which have been established in our systems of
jurisprudence for the protection and enforcement of private rights.
To give legal proceedings any validity, there must be a tribunal with legal authority to pass judgment, and a defendant must be brought within its
jurisdiction by service of process within the state, or by his voluntary appearance.
The substituted service of process by publication in actions brought against non-residents is valid only where property in the state is brought under
the control of the court, and subjected to its disposition by process adapted to that purpose, or where the judgment is sought as a means of reaching
such property or affecting some interest therein; in other words, where the action is in the nature of a proceeding in rem.
The Oregon court did not have personal jurisdiction over Neff because he was not served in Oregon. The courts judgment would have been valid if
Mitchell had attached Neffs land at the beginning of the suit. Mitchell could not have done this because Neff did not own the land at the time Mitchell
initiated the suit. The default judgment was declared invalid. Therefore, the sheriff had no power to auction the real estate and title never passed to
Mitchell. Neff was the legal owner.
Disposition
Judgment for Neff affirmed.