Skolnik v. Rose

Order, Supreme Court, New York County, entered April 27, 1979, reversed, to the extent appealed from, on the law, and the complaint dismissed, and the cross appeal, having been rendered academic, is dismissed, with costs. The declaration of trust, the basic agreement between the parties, was, as recited in the preamble thereto, entered into in Massachusetts; further, it provides that it "is executed by the Trustees and delivered in the Commonwealth of Massachusetts and with reference to the laws of that Commonwealth and the rights of all parties and the construction, validity and effect of the provisions hereof and the administration of the Trust created hereby shall be subject to and construed according to the laws of that Commonwealth.” (Art 7, §2.) Massachusetts law is to the effect that demand upon shareholders of a corporation is prerequisite to commencement of a derivative action. (Pomerantz v Clark, 101 F Supp 341, 343.) Pursuing the same analogy relied on by plaintiff, i.e., to read the Business Corporation Law of this State to apply to the subject business trust, we regard this prerequisite to apply to this derivative action. Concededly, this precondition to suit was never complied with, and the action may not be maintained. Concur—Ross, J. P., Markewich, Silverman, Bloom and Carro, JJ.