In re Schneider’s Estate

Brief Fact Summary.

The decedent was a Swiss-born naturalized American, domiciled in New York.  His will, which was probated in New york, contained a testamentary disposition of real property located in Switzerland that was impermissible under Swiss law.

Synopsis of Rule of Law.

While the law of the situs of real property must control the disposition of that property, it is the whole law of the situs that must be applied, including its conflict of laws rule.

Facts.

Schneider was born in Switzerland but had become a naturalized American citizen of the United States.  He was domiciled in New York and died there.  He left a will disposing of all of his assets.  A portion of his assets disposed of by the will consisted of real property located in Switzerland, which he kept ownership of following his move to the United States.  Internal Swiss law specified that certain portions of a decedent’s property must descend to his legitimate heirs and that any testamentary disposition contrary to this law was void.  The will was probated in New York.  At the time of probate, the administratrix of the estate had liquidated the real property in Switzerland and had brought the resulting funds into New York.  A claim was filed against the estate by the decedent’s heirs in Switzerland claiming the right to the proceeds as determined by Swiss law.  The testamentary disposition was valid under New York law.

Issue.

Where the disposition of real property is to be determined by a court foreign to the situs of the property upon the death of the owner, must the forum court be bound by the local law of the situs without regard to the conflict of laws rule of the situs?

Held.

(Frankenthaler, Surrogate)  No.  First, the court qualified its jurisdiction over the claim by pointing out that the liquidation of the Swiss property and the transfer of the funds to New York effectively removed Swiss jurisdiction over the matter.  However, the court determined that its decision must be made on the grounds that it was dealing with the real property and not the substituted fund.  Therefore, the court recognized the universally accepted principle that the law of the situs of the real property can be the only law applied to controversies over disposition of that property.  The New York court must, therefore, adjudicate the various claims relating to the Swiss property as though it were a Swiss court applying the whole law of Switzerland to the controversy.  The conversion of the property to money and the relocation of that money to New York was held to be a fortuitous act of no consequence.  But reference to the whole law of Switzerland would include a reference to the conflict of laws rule of that country.  The court considered the contention that such reference to the whole law would give rise to the endless circle of “renvoi†when the whole law of the forum required reference to the whole law of the situs which referred the matter back to the whole law of the forum, ad infinitum, with no resolution.  The court rejected this contention by stating that the problem would not arise where the particular foreign conflicts rule is one which refers to the internal or local law alone and not the whole law.  The court decided that a long line of precedent required that the forum court must look to the whole law of the situs, including its conflict of laws rule.  It also determined that New York precedents had established that New York recognized the limited concept of “renvoi.â€Â  The limited version of the concept was stated to be that reference to the law of the domicile meant reference to the local law only.  Upon hearing testimony from expert witnesses on the effect of application of the whole Swiss law would, through its conflict of laws rule, refer the matter to the law of the domicile.  Because the local law of the domicile finds no fault with the testamentary disposition established by the deceased, his will is recognized as valid and in effect.

Discussion.

The concept of “renvoi†as adopted by this court has not been generally followed or approved of.  Instead, most authorities take the position that, faced with a conflicts of law problem such as the one in the Schneider case, the best resolution is to resort to the local law of the situs and decide the case in that framework.  The major criticism of any form of the “renvoi†doctrine is that it creates an untenable legal fiction that creates a lack of uniformity of result.  There can be little question that if the property had not been sold and the case adjudicated in the Swiss courts, that they would either have ignored the law of the domicile or applied the “renvoi†doctrine to effect the Swiss law anyway.  A somewhat unique problem arises when a foreign court feels compelled to refer to the national or whole law of an American citizen.  Should the reference be to the federal law or to the state law of the citizen’s domicile?  A satisfactory resolution of that problem was not arrived at.  Similarly, what law can be applied where a conflict arises involving one or more states and the federal government?  In a case involving negligent maintenance of an airplane attributable to the federal government, the plane had been improperly serviced and took off from Oklahoma, but crashed in Missouri.  A wrongful death action was brought under the Federal Tort Claims Act.  A portion of that Act provided that liability should be determined by the law of the location where the act or omission took place.  Oklahoma did not limit the amount of recovery from wrongful death while Missouri imposed a maximum recovery limitation.  An Oklahoma doctrine provided that the whole law of Oklahoma referred the determination of liability and recovery to the place of the injury.  The Missouri limitation, therefore, was applied.