Kristt v. Whelan

Decision Date28 December 1943
Parties, 155 N.E.2d 116 Milton J. KRISTT, Appellant, v. John J. WHELAN et al., as Trustees, and Ralph G. Groskoph, as Successor Trustee, under a Deed of Trust dated
CourtNew York Court of Appeals Court of Appeals

Appeal from Supreme Court, Appellate Division, First Department, 4 A.D.2d 195, 164 N.Y.S.2d 239.

Former employee, individually and as a representative of all beneficiaries under trust deed, brought action against former employer and trustees under the trust deed to recover amount allegedly due former employee under the trust deed and for other relief.

The action arose under a non-contributory profit-sharing trust created by former employer for the benefit of its employees pursuant to section 165(a) of the Revenue Code of 1939, as amended, 26 U.S.C.A. § 165(a). By the terms of the trust the former employer and trustees reserved the right to amend the trust provided that the amendment did not operate to divest any beneficiary of his interest in the trust fund held for his benefit. While the former employee was a beneficiary of the trust and had an accumulated credit balance thereunder of $2,523.49, the trust deed was amended to include a provision providing for the forfeiture of the entire interest of any beneficiary who, whether he should then be in the employ of the former employer or not, should engage or be employed in any occupation or business which was in competition with the former employer in any of the publishing fields then engaged in by the former employer. The former employee, with notice and knowledge of such amendment, voluntarily terminated his employment and entered into direct business competition with former employer, and the former employee's credit balance of $6,233.71 was, at former employer's request, declared forfeited by the trustees.

The Supreme Court, Special Term, New York County, samuel J. Joseph, J., Kristt v. Haire, 155 N.Y.S.2d 362, entered judgment for the former employee, on ground that the amendment violated provision of the agreement that an amendment should not operate to divest any beneficiary of his interest in the trust fund held for his benefit. The trustees appealed to the Appellate Division from such part of the judgment as adjudged that former employee recover on his first cause of action, and the former employee cross-appealed from such part of the judgment as dismissed the third, fourth, fifth and sixth causes of action.

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44 cases
  • Murphy v. Gutfreund
    • United States
    • U.S. District Court — Southern District of New York
    • April 3, 1984
    ... ... The Court of Appeals of this Circuit found that the New York courts had not adopted the doctrine because Kristt v. Whelan, 12 a 1958 summary affirmance of an "employee choice" case, by the New York Court of Appeals had not been followed or applied in any of ... ...
  • Cohen v. Lord, Day & Lord
    • United States
    • New York Court of Appeals Court of Appeals
    • December 19, 1989
    ...engaging in competition with former associates (see, Kristt v. Whelan, 4 A.D.2d 195, 164 N.Y.S.2d 239, aff. without opn. 5 N.Y.2d 807, 181 N.Y.S.2d 205, 155 N.E.2d 116 [citing Simons v. Fried, 302 N.Y. 323, 98 N.E.2d 456]; Sarnoff v. American Home Prods. Corp., 798 F.2d 1075, 1083-1084 [7th......
  • Woodward v. Cadillac Overall Supply Co.
    • United States
    • Michigan Supreme Court
    • April 21, 1976
    ...under the burden.11 For 'employee's choice' cases, See Kristt v. Whelan, 4 A.D.2d 195, 164 N.Y.S.2d 239, Aff'd, 5 N.Y.2d 807, 181 N.Y.S.2d 205, 155 N.E.2d 116 (1958); Alldredge v. City National Bank & Trust Co. of Kansas City, 468 S.W.2d 1, 4 (Mo.1971); Van Pelt v. Berefco, Inc., 60 Ill.App......
  • Rochester Corporation v. Rochester, 15408.
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • November 5, 1971
    ...of cases in support of its contrary contentions. Except for Kristt v. Whelan (1957) 4 A.D.2d 195, 164 N.Y.S.2d 239, affd. 5 N.Y.2d 807, 181 N.Y.S.2d 205, 155 N.E.2d 116, which we do not find persuasive in its reasoning, such cases generally involved plans significantly different in language......
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