The lengthy, bitter, and complex Arnold Arboretum case entered its final phase yesterday as arguments were heard in the Commonwealth's Supreme Judicial Court.

Observers say that a decision ending almost seven years of legal battling between the University and 17 distinguished plaintiffs, may be handed down within the next two months.

Although the case could conceivably go to the U.S. Supreme Court on appeal, that is considered unlikely. Most lawyers feel that it does not involve any principle likely to interest the Court.

What it does involve is Harvard's reputation and--if the University lost in court--the expendture of several hundreds of thousads of dollars.

Harvard stands accused of numerous breaches in the administration of the 93-year-old charitable trust under which it runs the Arnold Arboretum. The Arboretum was established on, and still occupies, 265 acres in the Jamaica Plain section of Boston.

But most of its library and collection of botanical specimens are in Cambridge. Harvard transfered 57,000 of its 64,000 books and pamphlets and 600,000 of its 700,000 specimens to the Harvard University Herbarium, at 22 Divinity Ave., in 1953.

The 1200-member Association for the Arnold Arboretum, a non-profit corporation formed the same year, is seeking to have the material returned. Seventeen of its members--including Samuel Eliot Morison '08, Jonathan Trumbull Professor of American History, Emeritus, and Francis T. P. Plimpton, an Overseer and former deputy U.S. representative to the United Nations--brought the present suit in 1958.

A key document in the case is the indenture under which the trustees of James Arnold gave Harvard $100,000 in 1872. The money was to be held until it grew to $150,000 and until the land in Jamaica Plain could be acquired. It was then to be used to establish an arboretum containing, "as far as is practicable, all the trees, shrubs, and herbaceous plants, either indigenous or exotic which can be raised in the open air" at that site.

The indenture warned that the fund was not to be diminished "by supplementing any other object, however meritorious, or kindred in its nature.". The University argues in its latest brief that the object of the trust is "to increase and disseminate scientific knowledge in the field of trees and shrubs in the public interest." Since the transfer served that purpose, it concludes, it was not a breach of trust.

The petitioners charge that in amalgamating its biological facilities, the University ignored the Arboretum's interests in favor of its own. One strains to conceive of a more flagrant perversion of the Indenture of 1872," they observe.

A "master" appointed by the Supreme Court to make findings of fact reported in October 1961 that the transfer had injured "the reputation, prestige and standing of the Arboretum" as a distinct institution. The University brief contends that the indenture "did not impose any obligation...to create or maintain any reputation or prestige, separate or otherwise."