Reynolds v. Remick, Civil Action No. 8077.
| Decision Date | 10 February 1949 |
| Docket Number | Civil Action No. 8077. |
| Parties | REYNOLDS v. REMICK. |
| Court | U.S. District Court — District of Massachusetts |
Frederick M. Schlater, and Duer & Taylor, both of New York City, and Daniel J. O'Connor, Jr., of Lynn, Mass., for plaintiff.
Lewis L. Wadsworth, Jr., Paul C. Reardon, and Haussermann, Davison & Shattuck, all of Boston, Mass., for defendant.
Defendant moves to dismiss this complaint. From its allegations and from the exhibits submitted without objection, the following appears to be the substance of plaintiff's case:
Plaintiff is a citizen of New York; defendant is a citizen of Massachusetts. In 1930 their father died leaving a will admitted to probate by the Massachusetts Probate Court. Defendant is one of the trustees and beneficiaries under a trust created by that will, and plaintiff is another of the beneficiaries. Included in the trust were an unincorporated department store business and the real property on which it was located.
The trustees proposed first, to organize two corporations, to one of which they would transfer the department store in consideration of all the shares of that corporation and to the other of which they would transfer the realty in consideration of all the shares of that corporation; and second, to have the realty corporation lease the premises for ten years at an agreed rental to the department store corporation. The trustees set forth their plan in a petition filed with the Probate Court October 19, 1938, and assented to by all known beneficiaries, including plaintiff. October 25, 1938, that Court decreed that the trustees "be authorized * * * to cause said department store business and said real estate to be respectively incorporated substantially as set forth in said plan, and thereupon convey * * * the business * * * and the * * * real estate." The decree did not specifically approve the proposed lease described in the petition.
The trustees carried through the plan including the organizing of the two corporations, the transfer of all the shares of each to the trustees, the conveyances of the realty and the business to the two corporations respectively and the execution of the lease by the realty corporation to the department store corporation.
August 1, 1939, the trustees sold to defendant for $4,994 the one thousand shares of the department store corporation. While the complaint and exhibits do not so state, it may parenthetically be noted that apparently defendant simultaneously paid substantial sums to plaintiff and perhaps others. The sale of the one thousand shares to defendant as well as the rent received by the realty company were shown in the first account of the trustees filed with the Probate Court January 18, 1941, and assented to by all known beneficiaries, including plaintiff. April 14, 1941, the Probate Court allowed the account.
February 1, 1949, the trustees filed in the Probate Court an account covering the period from February 1, 1940, through January 31, 1949. Hearings in that Court are expected to take place in the near future.
The complaint in this Court alleges two causes of action. In the first, it is claimed that defendant dominated the two corporations, that he negotiated the lease, and that the rental thereunder is grossly inadequate. In the second cause of action, it is alleged that defendant has wastefully expended trust money to improve the realty for his own personal benefit and to the damage of the beneficiaries. Plaintiff prays that defendant account for his personal profits derived from the breach of trust, that he cause the lease to be cancelled, that he pay for the fair value of the use of the realty since August 1, 1939 and that he be surcharged with the cost of those improvements of the realty which were made for his benefit.
The complaint must be dismissed because it presents charges relating exclusively to that type of administration of and accounting in a probate estate with which federal courts do not intermeddle. Princess Lida of Thurn and...
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