Wyatt v. Fulrath, 16 N.Y.2d 169 (1965)

New York law governs the disposition of property located within New York when foreign nationals intentionally place it there and request that New York law apply, even if their domicile’s law dictates a different outcome.

Summary

The case concerns the estate of a Spanish couple (Duke and Duchess of Arion) who deposited community property in New York bank accounts with survivorship provisions. Upon the husband’s death, the wife claimed full ownership based on New York law, while the husband’s estate argued Spanish community property law should apply, entitling them to half the assets. The New York Court of Appeals held that New York law applied to the accounts established in New York during the husband’s lifetime due to the couple’s explicit actions invoking New York law, but remanded for further findings regarding assets transferred to New York after the husband’s death.

Facts

The Duke and Duchess of Arion, Spanish nationals and domiciliaries, transferred community property to New York for safekeeping and investment during a period of political instability in Spain.
They established joint bank accounts in New York with survivorship provisions, explicitly agreeing that New York law would govern these accounts.
The husband died in 1957, and the wife died in 1959.
After her husband’s death, the wife took control of the New York property and executed a will according to New York law, disposing of the assets.
She also transferred additional property from joint accounts in London to New York after her husband’s death.

Procedural History

The husband’s ancillary administrator in New York sued the wife’s executor to claim half of the property held in New York and London banks.
The Special Term found for the defendant (wife’s executor), and the Appellate Division affirmed without opinion.
The New York Court of Appeals reviewed the case.

Issue(s)

Whether New York law or Spanish community property law governs the disposition of property placed in New York by Spanish domiciliaries when they established bank accounts with survivorship provisions.
Whether the same choice-of-law principle applies to property transferred from London to New York after the husband’s death.

Holding

Yes, New York law governs the property placed in New York during the husband’s lifetime because the couple intentionally submitted the property to New York law by establishing the accounts and agreeing to survivorship provisions.
The Court did not rule on the property transferred from London, remanding for further findings.

Court’s Reasoning

The court recognized that typically, the law of the domicile governs rights flowing from legal acts of citizens and domiciliaries of that country. However, New York has the right to determine, as a matter of public policy, whether to apply its own laws to property located within its jurisdiction, even if owned by foreigners.
The court found it preferable to honor the foreign owners’ request that New York law apply to property they brought to New York. The court stated, “It seems preferable that as to property which foreign owners are able to get here physically, and concerning which they request New York law to apply to their respective rights, when it actually gets here, that we should recognize their physical and legal submission of the property to our laws”.
This approach aligns with the principle that owners who bring property into a jurisdiction subject themselves to its laws.
The court distinguished the property transferred from London after the husband’s death. It reasoned that the policy considerations supporting the application of New York law did not necessarily extend to property placed in a third country during the spouses’ lifetimes.
For the London property, the court directed the Special Term to determine the form of the custody accounts and how English law would regard the title. If English law would apply Spanish community property law, or if English law was unclear, then Spanish law should govern.
The Court cited Hutchison v. Ross, 262 N.Y. 381 (1933) for the proposition that “When the owner of personal property authorizes its removal from his domicile or acquires property elsewhere, he must be deemed to know that his property comes under the protection of, and subject to the laws of the jurisdiction to which it has been removed”.