In re Utassi’s Estate, 15 N.Y.2d 436 (1965)
When a foreign jurisdiction’s law designates a municipality as the heir to an estate in the absence of individual heirs, New York courts will recognize this right of succession over claims that the property should be treated as abandoned property in New York.
Summary
Malvina Utassi, a New York resident, bequeathed her estate to her sister Etelka, a U.S. citizen residing in Switzerland. Etelka died in Switzerland without heirs. Swiss law dictates that in such cases, the inheritance passes to the Canton of the last domicile, or its designated municipality, in this case, the City of Lucerne. The New York Attorney General argued that the proceeds of both estates should be treated as unclaimed property under New York law and paid to the State Comptroller. The Court of Appeals held that Swiss succession law should be recognized, and the assets should be transferred to the City of Lucerne, as it was Etelka’s legal heir under Swiss law.
Facts
Malvina Utassi, a New York resident, died in 1935, leaving her entire estate to her sister, Etelka Utassi, who resided in Lucerne, Switzerland.
Etelka Utassi died in Switzerland in 1944 without any known heirs.
Swiss law provides that in the absence of heirs, the inheritance goes to the canton of the decedent’s last domicile or a municipality designated by the canton; in this case, the City of Lucerne.
Malvina’s assets, consisting of bonds and stock in a New York corporation, remained in New York after her death.
Etelka’s assets, consisting of similar bonds and stocks, were located in Switzerland at the time of her death. These were later delivered to her administrator in New York for transfer.
Procedural History
Proceedings were initiated in the New York Surrogate’s Court for both Malvina and Etelka’s estates.
The Attorney General sought a direction from the Surrogate to pay the proceeds of both estates to the New York State Comptroller as unclaimed property.
The Surrogate overruled the Attorney General’s objections and directed payment of the net proceeds of both estates to the City of Lucerne.
The Appellate Division affirmed the Surrogate’s decision, unanimously agreeing that Etelka’s assets should be paid to Lucerne and dividing on the disposition of Malvina’s assets.
The Attorney General appealed to the New York Court of Appeals.
Issue(s)
Whether the assets of Malvina’s estate, located in New York, should be treated as abandoned property and paid to the New York State Comptroller, or whether Swiss succession law should govern, entitling the City of Lucerne to inherit the assets as Etelka’s heir.
Whether the location of the property (in Switzerland for Etelka, in New York for Malvina) affects the choice of law analysis regarding succession.
Holding
Yes, Swiss succession law governs the distribution of both estates, because the law of Etelka’s domicile (Switzerland) designates the City of Lucerne as her heir in the absence of individual heirs, and New York courts will recognize this right of succession.
Court’s Reasoning
The court distinguished this case from Matter of Menschefrend, where no right to succession was claimed under the law of the decedent’s domicile. Here, Swiss law explicitly designated the City of Lucerne as the heir, not by escheat or bona vacantia (ownerless goods), but as a legal heir with a right to inherit.
The court emphasized the importance of comity, stating that New York public policy should not discredit the succession laws of Switzerland, where Etelka was domiciled. The court said, “Nothing in our statutory law relating to abandoned property, which functionally is a statutory mechanism to hold assets found in this State for the benefit of a future lawful claimant, or in any New York public or legal policy, should lead us to discredit law of succession of Switzerland, where Etelka was domiciled and died.”
The court recognized the factual distinction that Etelka’s assets were physically located in Switzerland at the time of her death, clearly subject to Swiss succession law. However, the court extended the same principle to Malvina’s assets in New York, reasoning that because Etelka was entitled to those assets under Malvina’s will, and because Swiss law designated Lucerne as Etelka’s heir, Lucerne was ultimately entitled to both estates.
The court noted expert testimony indicating that under Swiss law, the Canton or municipality would take “as strict legal heirs” and would be “entitled to inherit”, and this not by escheat.