Cashman v. Petrie

19 A.D.2d 520, 240 N.Y.S.2d 46, 1963 N.Y. App. Div. LEXIS 3771

Opinion

Order entered on October 26, 1962 denying defendants’ motion to dismiss the complaint for insufficiency, unanimously reversed, on the law, with $20 costs and disbursements to the appellants, the motion granted, with $10 costs and the complaint dismissed, with costs. It is apparent from the complaint — and the respondent in effect so concedes — that this is an action seeking relief by reason of conduct of trustee corporate directors alleged to be violative of the provisions of a testamentary trust. This conduct involves the refusal to declare dividends which would enure to the income beneficiaries of the trust. In the circumstances alleged these trustee directors may not be circumscribed by the provisions of the trust in their exercise of discretion and judgment qua directors in the area of dividend declaration. (See Matter of Shupach, 1 N Y 2d 482; Matter of Doelger, 254 App. Div. 178, affd. 279 N. Y. 646; Boyle v. Boyle é Go., 136 App. Div. 367, affd. 200 N. Y. 597.) Accordingly the complaint must be dismissed. Such dismissal, however, is without prejudice to any appropriate stockholder’s derivative action the plaintiff may be advised to bring. (See Gordon v. Elliman, 306 N. Y. 456.) Concur — Botein, P. J., Breitel, Rabin, Eager and Steuer, JJ.