McMurray v. Chase Nat. Bank of City of New York

• Decision Date: 06 May 1935
• Docket Number: No. 2414.,2414.
• Citation: 10 F. Supp. 960
• Parties: McMURRAY v. CHASE NAT. BANK OF CITY OF NEW YORK.
• Court: U.S. District Court — District of Wyoming

10 F. Supp. 960

McMURRAY v. CHASE NAT. BANK OF CITY OF NEW YORK.

No. 2414.

District Court, D. Wyoming.

May 6, 1935.

Walter W. Hoye, of Los Angeles, Cal., and Joseph R. Sullivan, of Laramie, Wyo., for plaintiff.

N. E. Corthell, of Laramie, Wyo., for respondent.

KENNEDY, District Judge.

The plaintiff has filed this suit for equitable relief, and the bill of complaint is challenged with a motion to dismiss, which is the matter now before the court. The bill alleges that the plaintiff is a citizen and resident of the state of California, and that the respondent is a national banking corporation organized under the laws of the United States, with its principal place of business in the city of New York and within the Southern judicial district of the state of New York; that the amount involved in the controversy is in excess of $3,000, and the value of the property claimed by the plaintiff is $350,000; that the jurisdiction of the court is based upon 28 USCA § 118 (section 57, Judicial Code), in that the plaintiff claims an undivided one-half of the beneficial interest in the income, rents, royalties, and earnings from certain oil and gas leasehold estates and working agreements covering real property situated in the judicial district of Wyoming and located in the counties of Albany and Carbon in said state, which said properties are operated by the Ohio Oil Company and which income, royalties, and earnings derived from said property are paid over to the respondent as trustee under the terms of agreements formerly made between said Ohio Oil Company and the respondent's predecessor in interest, one Klingerman; that plaintiff claims a present contingent title in said leasehold estates in the event of plaintiff living until August 10, 1937, amounting to an undivided one-half interest; that the legal descriptions of the property are attached to and made a part of the bill; that the plaintiff is the mother of one Donald McMurray, now deceased, and that one Aimee Christine McMurray is the widow of said Donald McMurray, they having been united in marriage in July, 1932; that Aimee Christine McMurray is the stepdaughter of one Myron Reynolds and prior to her marriage resided with Reynolds and his wife, the mother of Aimee; that on August 10, 1927, Donald McMurray executed an indenture of trust conveying to said Klingerman as trustee certain property in trust for the benefit of himself and the plaintiff and any widow which Donald McMurray might leave surviving him, together with certain other contingent beneficiaries, a copy of the indenture of trust being attached and made a part of the bill; that the corpus of that trust includes the identical property and assets which the respondent trustee now holds under a trust agreement dated May 26, 1933; that on the 16th day of May, 1928, McMurray executed a supplemental trust agreement which carried substantially the same provisions of the first trust agreement and extended the time of such trust agreement until August 10, 1937, or until the death of McMurray, should he die prior to the expiration of the trust leaving surviving him the plaintiff and a widow, and then and in that event said trust should not terminate on the death of McMurray but should be kept in force and effect until August 10, 1937, upon which date it should be divided equally between plaintiff and the surviving widow and in the meantime the plaintiff and widow should receive equal portions of the income from the trust estate; that after the marriage of McMurray the stepfather of Aimee, armed with a power of attorney from Donald McMurray, came to Los Angeles and approached the plaintiff, exhibiting to her the power of attorney and represented that it was desirable to terminate the old trust agreement with Klingerman as trustee because of his inefficiency and incompetency and the fee which he was receiving being exorbitant; that Reynolds requested plaintiff to join with him in securing the removal of Klingerman as trustee and if this were done a new trust would be set up with another trustee, but with the same provisions as to the rights of plaintiff being preserved thereunder; that relying upon the promises of said Reynolds and having faith in the integrity and good intentions of her son Donald McMurray, plaintiff co-operated in securing the removal of Klingerman as trustee, which was accomplished through a court proceeding including the resignation of Klingerman and a reconveyance of the property in the trust agreement to Donald McMurray; that the court proceeding was in the superior court of the state of California in and for the county of Los Angeles; that in said proceeding the plaintiff filed an answer which in effect consented to the termination of the trust by that court; that plaintiff retained no attorneys for her protection in the premises, but that such attorneys who did appear were employed by and acted solely in the interest of Reynolds, Donald McMurray, and Aimee; that after the entry of the decree said Klingerman as trustee delivered instruments of conveyance of the trust estate to Donald McMurray and delivered all papers in connection therewith to Reynolds; that Reynolds thereupon returned to New York and on May 26, 1933, and in conjunction with Donald McMurray caused another trust agreement to be made in which the respondent herein was named as the trustee, a copy of which instrument is attached to the bill; that said latter instrument was executed by Donald McMurray in the city of Paris, and that since the execution of said instrument the respondent has had possession of the corpus of the trust estate as trustee and is managing the same under the terms of said trust agreement; that the plaintiff did not become aware of the execution of the new trust agreement until some three months after the death of said Donald McMurray in February, 1934; that the terms of the new trust agreement are substantially different than the original trust agreement and the supplement thereto, in that the whole beneficial interest of the trust estate passed thereunder on the death of Donald McMurray to Aimee, his widow, and that the promises of the said Reynolds in connection with the re-establishment of the trust with the new trustee were not kept, in that the provisions of the new trust are wholly different; that Aimee has accepted all the benefits under the new trust by virtue of the fraud which had been practiced upon the plaintiff; that the intention of Reynolds acting under the power of attorney from Donald McMurray and of the said Donald McMurray were to induce the plaintiff to consent to a change in the trust agreement under the false and fraudulent representations set forth; that the plaintiff received no consideration for giving her consent to the termination of the original trust; that plaintiff received $1,800 paid over to her by the respondent and that respondent paid more than $1,000 on account of a life insurance policy insuring the life of Donald McMurray in which plaintiff was named as beneficiary, all of which was received and accepted by the plaintiff without any knowledge on her part that there had been a change in the trust agreement in relation to her beneficial interest; that the plaintiff is ready and willing to do what the court deems equitable in the premises regarding anything of value which she has received under the trust agreement; that she is entitled under said original trust agreement to receive certain sums which are specifically set forth in the bill; and that plaintiff is without an adequate remedy at law. Plaintiff seeks a decree entitling her to have the trust property in the hands of the respondent impressed with a constructive trust for her use and benefit in accordance with the terms of the original trust agreement and the supplement thereto, together with an accounting from the respondent, the naming of a new trustee by the court, and other equitable relief.

Upon the filing of the bill of complaint a warning order was taken out under section 118, supra, and duly served upon the respondent in the Southern district of New York. Before the appearance date the respondent interposed a motion for enlargement of time for defense until January 10, 1934, in which liberty to object to the jurisdiction of the court was expressly reserved. The motion was supported by affidavit of counsel, and the time was by order enlarged up to and including January 10, 1934. On the latter date the respondent, appearing specially for the sole purpose of objecting to the jurisdiction of the court, filed a motion to dismiss upon the grounds, in substance: (1) That the court has no jurisdiction of the subject of the suit; (2) that the court has no jurisdiction of the person of the respondent; (3) that the suit is not brought in the district of the residence of either the plaintiff or defendant; (4) that the legal representatives of the estate of Donald McMurray are indispensable parties; (5) that Aimee Christine McMurray is an indispensable party; and (6) that persons who are legal heirs under the laws of the state of California are indispensable parties.

It is claimed by the plaintiff that the respondent in the foregoing circumstances has entered a general appearance, and that therefore in so far as any objection to jurisdiction over the person of the defendant, there is a waiver. The general rule as to special appearances is expressed in the syllabus in Big Vein Coal Co. v. Read, 229 U. S. 31, 33 S. Ct. 694, 57 L. Ed. 1053, in the following language: "In the Federal courts an appearance may be made for the sole purpose of raising jurisdictional questions without thereby submitting to the jurisdiction of the court over the action; and where, as in this case, no issue involving the merits was made, a special appearance to object to the jurisdiction does not give the court jurisdiction to issue an attachment."

It will be noted that in the motion for enlargement of time the respondent...