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February 4, 1954


The opinion of the court was delivered by: MEANEY

Leslie A. Lummis died testate June 25, 1948, a resident of Morris County, New Jersey, his will being duly probated and recorded in the Morris County Surrogate's office July 14, 1948. This will set up a trust naming as trustees Arnold R. Boyd, Margaret Beaumont Roebelen and Marguerite L. Keesey, who, having duly qualified, continue in that position. Pursuant to the terms of the will one-half of the income of the trust estate is payable to Marguerite L. Keesey (widow of the testator) and one-quarter to Margaret Beaumont Roebelen (a fourth quarter is payable to a former wife of the testator not concerned in this action). Arnold R. Boyd and Margaret Roebelen are residents of New York, Mrs. Keesey of Connecticut. The major asset of the trust estate is the capital stock of Lummis Glass Co., a New York corporation. The three trustees are the officers and entire board of directors thereof. By the terms of the will a majority of the trustees was to control the administration of the estate as well as the 'operation, conduct and management' of the Company.

In May, 1953 Marguerite Lummis Keesey (hereinafter referred to as defendant) feeling aggrieved at what she conceived to be violations of fiduciary duties as directors, brought an action in the Supreme Court of New York against the other two trustees (hereinafter called plaintiffs) to declare certain of their actions void, and for other remedies.

 In June, 1953 plaintiffs brought proceedings in the Morris County Court, Probate Division, for advice and directions as to whether defendant had by her action in the New York Supreme Court forfeited her interest in one-half the income of the trust pursuant to paragraph 11 of the will which provided that 'If any beneficiary (under this will) * * * shall take legal steps * * * to prevent the full and complete carrying out of any of the provisions thereof as herein set forth', such beneficiary forfeits his or her entire interest under the will.

 A motion by defendant in the New York proceeding for an injunction to restrain plaintiffs from proceeding in the New Jersey court was denied.

 On July 13, 1953 the defendant filed a petition for removal to this court on the ground of diversity of citizenship. It is this petition that is opposed by the motion before the court. The court will consider this opposition in the nature of a motion to remand to the state court.

 Service upon defendant was made in accordance with N.J.S.A. 3A:2-4 which provides: 'The county court of each county, in any proceeding in the probate division against executors, administrators, guardians, trustees or other persons, may proceed by order to show cause, a copy of which shall be served, as the court may direct, upon the person therein named, whether or not he is within the county.' The actual service was made by mailing defendant a copy of the order in accordance with the directions of the court. This service, argues defendant, was inadequate for obtaining the necessary jurisdiction over her person for these reasons:

 1. This is a civil action over which any court having general equitable jurisdiction has original jurisdiction (including the U.S. District Court where the required diversity of citizenship and amount in controversy exist).

 2. Though the suit has the appearance of an in rem action concerning only the administration of a trust, it is, in fact, an action for construction of a will in which an adverse decision could deprive defendant of her individual rights in the property of the deceased. In short this is an action in personam requiring personal service over defendant. Such service never being made, the Morris County Court acquired no jurisdiction over her.

 3. The County Court had no jurisdiction of the subject matter.

 4. This court succeeding only to the jurisdiction obtained in the County Court, must dismiss the action.

 Plaintiffs, however, maintain that since this is an action by trustees seeking instructions, it is an action in rem, therefore does not require personal service, and that defendant, as trustee under the will, is at all times subject to the jurisdiction of the court that qualified her in connection with questions arising under the will. Moreover, it is claimed, a federal court has no removal jurisdiction in an in rem action brought in a state court of competent jurisdiction.

 That the federal courts have no original jurisdiction with respect to the administration of decedents' estates, nor may a federal court, by removal, interfere with state in rem proceedings, was settled as long ago as Byers v. McAuley, 1893, 149 U.S. 608, 13 S. Ct. 906, 37 L. Ed. 867. Yet it is likewise settled by a long line of decisions that the federal courts cannot be deprived of jurisdiction 'to hear and determine a controversy between citizens of different states when such a controversy is distinctly presented, because the judgment may affect the administration or distribution in another forum of the assets of the decedent's estate.' Hess v. Reynolds, 1885, 113 U.S. 73, 77, 5 S. Ct. 377, 378, 28 L. Ed. 927, citing Gaines v. Fuentes, 1875, 92 U.S. 10, 23 L. Ed. 524; to the same effect Payne v. Hook, 1868, 7 Wall. 425, 19 L. Ed. 260, and Hyde v. Stone, 1857, 20 How. 170, 15 L. Ed. 874; see, also, Clark v. Bever, 1891, 139 U.S. 96, 11 S. Ct. 468, 35 L. Ed. 88. Byers v. McAuley, supra, further established that in taking jurisdiction a federal court will not draw to itself the entire administration of the estate but could entertain jurisdiction in favor of citizens of other states to determine and award by decrees binding in personam their shares in the estates. Waterman v. Canal-Louisiana Bank Co., 1909, 215 U.S. 33, 45, 30 S. Ct. 10, 54 L. Ed. 80.

 'The jurisdiction of federal courts to entertain suits against (fiduciaries) is clear, * * * when instituted in order to determine the validity of claims against the estate or claimants' interests therein. Such proceedings are not in rem; they seek only to establish rights; judgments therein do not deal with the property and order distribution; they adjudicate questions which precede distribution.' Commonwealth Trust Co. v. Bradford, 1936, 297 U.S. 613, 619, 56 S. Ct. 600, 602, 80 L.Ed 920; see Riehle v. Margolies, 1929, 279 U.S. 218, 225, 49 S. Ct. 310, 73 L. Ed. 669; U.S. v. Klein, 1938, 303 U.S. 276, 281, 58 S. Ct. 536, 82 L. Ed. 840.

 Moreover, while this court may not exercise its jurisdiction to disturb and affect the possession of property in the custody of a state court, it may exercise its jurisdiction to adjudicate rights in such property when the final judgment does not undertake to interfere with the state court's possession save to the extent that the state court is bound by the judgment to recognize the right adjudicated in the federal court. Markham v. Allen, 1946, 326 U.S. 490, 66 S. Ct. 296, 90 L. Ed. 256. See, ...

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