ANADIAN BA I

Vol. V. ,TORONTO, JUNE, 1927. No. 6

RECENi CASES ON G'O ICT OF LAWS.

The past year has been remarkable for several decisions on the, subject of -decisions which have either definitely settled important general questions about which there was some doubt or definitely,raised again questions of -far-reaching consequence without, unfortunately, settling the doubts which exist. . In the former class is the case of Attorney-General of Alberta v. Cook'- In the latter class are In re Annesley, Davidson v. Annesley,a and Republica de Guatemala v. NwneZ.3

1 . ATTORNEY-GENERAL V. COOré

Attorney-General v. Cook (supra) (in the Privy Council, on appeal from Alberta) seems definitely to settle, in the negative, the question whether a wife can acquire a new of choice different from that of her husband, in any circumstances, so long as the marriage subsists . The case was an extreme one in that the wife had obtained a decree of judicial separation in Alberta upon. evidence which satisfied the court that both spouses were resident in Alberta. The husband then left Alberta and, so far as was known, went to British Columbia. It was held, however, that he had never lost his Ontario domicile of origin, and therefore an action against him in Alberta for divorce was dismissed for want of . The case appears definitely to settle that in the absence of unity of law throughout the provinces in matters which depend upon domicile the territorial unit for the purpose of domicile is the province, not the Dominion-notwithstanding the practice, of the Dominion Parlia- ment of passing acts of divorce, in each of which it is recited that the parties are domiciled in Canada. The distinction is irdma-terial '[19261 A.C. 444, [19,61 2 D.L.R.762, (1926) 1 W.W.R. 742. a [19261 Ch. 692. e [19271 1 K.B. 669. 26--c.s.R:vm. v.

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in the case of the Dominion Parliament, but its is crucial in the case of a court exercising divorce jurisdiction in a particular pro- vince, and it is submitted that in the interest of exact and uniform terminology Parliament should adopt the correct practice according to which domicile i~ predicated only of a particular province.

Il. IN RE ANNESLT&Y .

The case of In re Annesley, (supra), is of extraordinary interest . Russell, J., does some satisfactory things, but leaves the main prob- lem in a worse state than before, if that is possible. Mrs. Annesley, whose domicile of origin was English and nation- ality British, and who married a domiciled Englishman and British subject, became a widow in 1884, and thereafter lived continuously in France, except for four short visits to England, until her death in 1924, when she was over 80 years of age. Admittedly she had acquired a domicile of choice in France,, unless this result was prevented (a) by the fact that she had not applied for or obtained an authorization from the French government under article 13 of the French Civil Code (and therefore had not acquired a formal French "domicile"), or (b) by the fact that in a will made in 1919 and a codicil made in 1921 she declared that it was not her intention to abandon her English domicile of origin. Russell, J ., held that neither of these facts was sufficient to outweigh the other relevant facts proving a clear animus manendi combined with the factum of long residence. . The judgment is useful as showing that a mere declaration of intention in favour of this or that domicile is imma- terial in the face of clear evidence derived from the conduct of the person in question, though doubtless such a declaration would have some weight if the other evidence were not clear. As to the effect of the absence of the authorization from the French government, the judgment is useful as restating the principle, that when an English court has to decide whether or not a particular person has acquired a domicile in a foreign country, it must decide this according to English rules of Conflict of Laws upon the facts proved, without regard to the question whether he has acquired a domicile by the law of the foreign country. This had been decided in a number of earlier cases, but had been questioned in In re Johmon,4 and ha re Bowes . In the former case, however, Far- well, J's., view on this particular question constituted only one of two alternative grounds of his judgment, and Swinfen Eady, J .'s,

'[19031 1 Ch. 821 . (1906) 22 T.L.R. 711 .

r - .

June, 1927] Recent Cases on Conflict of Laws. 391

judgment in In re Bowes, (supra), which had masqueraded for ten years as a' considered judgment, was laid bare by Russell, J ., as having been delivered pursuant to the consent of the - parties and as being therefore of no value as a precedent. We are; however; only at the .beginning of--the..difficulties of In re Annesley, (supra) . Russell, J ., having decided that Mrs. Annesley was domiciled in France at the time of her death, then proceeded to apply the law of the domicile-French law-to the distribution of her English movables . But what French law? (a) The local or internal French law applicable to Frenchmen, or (b) the whole French law, including the French rules of Conflict of Laws? Russell, J ., would have liked simply to take the direct route (a) to French internal law, and distribute the movables as if 'they were assets of a Frenchman in France. But, upon principle (b), which had been acted upon in earlier English cases, he consulted French law, to ascertain what a French court would do in the case of a British subject domiciled (in the English sense) in France, and then (depart- ing as I submit from the principle) he decided on a review of the French decisions and "jurisprudence" that a French court would (1) refer to English law as the decedent's national law and (2) finding that English law would refer to, the law of the domicile, that is, French law, as the appropriate law,- would apply French law, that is, would accept the or reference back. Russell, J ., therefore applied internal French law, thus reaching the same result which he would, have preferred to reach by adopting . principle (a) . The result seems at first sight simple and satisfactory, but if the reasoning is worth anything it ought to produce the same result no matter which side of the English Channel one starts from. Now suppose that a French court is administering the French movables of the same estate. According to French law, the national law of the decedent applies, that is, English law. But what English law? {a.) The local or internal law of England applicable to Englishmen, or (b) the whole law of England, including English rules of Conflict of Laws? As English law accepts the doctrine of "the renvoi the French court should apply English internal law, either on principle (a), or -on principle (b) construed according to Russell, J . The result, as regards the estate as a whole, is nonsense. The English court applies French law and the French court applies English law. By another equally logical and more orthodox process one might arrive at another nonsensical result, though not quite so, devoid of common sense as the foregoing. The English court applies the law of the domicile, that is, French law, including the French rules of

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Conflict of Laws, and, finding that the French law refers questions of succession to movables to the national law, that is, English law, English law accepts the renvoi and distributes the movables as if they were the movables of a domiciled Englishman. By a similar course of reasoning the French court distributes the French movables accord- ing to the internal French law. In any of the foregoing cases the court, English or French, which accepts the renvoi, has cut the Gordian knot of the circulus inextri cabilis-that is, the theoretical everlasting series of references back and forward from the law of the domicile to the national law and vice versa, or what Russell, J., has renamed the "endless oscillation" --either arbitrarily, or by adopting the deceptively simple formula of Collier v. Rivaf,6 namely, that the court should decide the ques- tion as if it were sitting in the foreign country. But in getting out of one circulus inextricabilis the court has got into another, namely, that if there are movables of the same estate in two countries, one of which adopts domicile as the test of personal , and the other , and if the two countries apply the same doctrine of the renvoi, the one to the law of the domicile, the other to the national law, the result always is that the movables will be dis- tributed in different ways in the two countries, either each court applying its own internal law, or each court applying the internal law of the other. The same result would follow if each country adopted Russell, J.'s, suggestion, namely, that the reference to the foreign law should, be interpreted as a reference to the internal law of the foreign country, excluding all question of the renvoi. Each court would apply the internal law of the other country. Russell, J., ingeniously, but I submit illogically, contrived in In re Annesley to reach the satisfactory conclusion that the English and the French movables should be distributed by the same Jaw, namely, French internal law, but he did so by supposing that different versions of the renvoi were applicable in France and in England respectively. He has incidentally complicated the question of the renvoi in a singular manner by involving the court of the forum in an enquiry, not as to its own doctrine of the renvoi, but as to the doctrine of the renvoi held by the court of the domicile. To sum up, there have hitherto been two principal views as to what the reference to the foreign law means (a) The foreign internal law; and (1841) 2 Curt. 855.

June, 1927] Recent Caxes on Conflict ofLaws. 393

(b) The whole foreign law, including the foreign rules of Con- Ilict of Laws-this involving' the possibility that the foreign law ,refers back to the law of the forum, which may accept 'the renvoi. Russell, J ., while he would like to adopt alternative (a) does not steel at liberty to do so, but .reaches the same result, not by adopting ,(b), which would lead to a different result, but by construing the reference -to the foreign law as ~follows : (c) The whole foreign law, including the foreign rules of Conflict of Laws and its doctrine of the renvoi, with the result that if the foreign, law accepts (b), and not (a), there is no reference back at 2,11 to the law of the forum. ' It will be seen that (c) is in result the .same as (a), but the resuit is reached in (c) by a double reference-the law of the. forum refers to the foreign law, which refers back to the law of the forum, which in turn refers back to the foreign law.' This is in effect merely a revival of the circulus inextricabilis, arbitrarily broken .after the second reference back instead of the first. The doctrine of the renvoi seems to be on the eve of bankruptcy, .and it is doubtful whether anyone who is not merely interested in spinning intellectual cobwebs would regret the making of a receiv- ing order. If it is too much to hope that an understanding could be reached between countries which adopt the domicile standard and countries ,which adopt the nationality standard with a view of applying one law to the distribution of the movables of the same estate situate in-different countries, it would at least be infinitely simpler to adopt 'Russell, J.'s, suggestion that a reference to foreign law means the ~fareign internal law. As regards the appointment of a personal representative, the ,collection of assets and the payment of the expenses of administra- tion and of creditors' claims, it is not illogical or inconvenient that in each country where there are assets the lox loci or the lox fori should be applied. Diversity of administration is inevitable and -.is a rule does not lead to unhappy results. But the case is different .as regards the distribution of the surplus movable property. The rule which makès the lox doinicilii applicable has obviously for one ,of its objects the securing of uniformity in the distribution of the surplus, regardless of the situs of the assets . It is respectfully submitted that uniformity of distribution of the surplus of the movable property of a British subject domiciled in France might be, and should be, secured by either one of the -two following methods

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(1) If the French court, accepting the renvoi, would apply French internal law to the French movables, let the English court, disregard- mg the doctrine of the renvoi, apply French internal law to the English movables ; (2) or, more generally, let the English court enquire what law the French court would apply to the French movables (or what law the French court has applied, if judicial proceedings have already been taken in France), and then let the English court, without further question, apply the same law to the English movables.

11 1. REPU13LICA DE GUATEMALA v. NUNEZ The case of Republica de Guatemala v. NuneZ, (supra), decided by the Court of Appeal in December, 1926, is also of extraordinary interest-chiefly because it directs attention to the fact that on certain important points no one knows what the English law is. The story is a picturesque one. Cabrera, dictator-president of Gautemala from 1898 to 1920, deposited, in or about the year 1906, a large sum of money with certain London bankers. In 1921 Cabrera, having anticipated deposition by resignation, and being in prison in Guatemala, wrote two letters, admitting that the money deposited by him belonged to the Republic of Guatemala and directing the bankers to pay the money to the Republic. The Republic brought action against the bankers, who took out an interpleader summons on the ground that the money was claimed by one Nunez, an illegi- timate son of Cabrera, the claim of Nunez being based upon an assignment from his father purporting to be made in 1919. On the trial of the issue between the Republic as plaintiff and Nunez as defendant, Greer, J., dismissed the claims of both parties-- that of the Republic because it was not proved that the deposit had been made out of public funds and because the letters under which the Republic claimed were obtained by duress, that of Nunez (a) because the assignment under which he claimed, though in fact made in 1921 prior to the letters under which the Republic claimed, was fraudulently antedated as of 1919, and (b) because the question of the validity of the assignment was governed by the actus, and by Guatemalan law the assignment was invalid because made in favour of a minor without certain formalities and without the inter- vention of a next friend judicially appointed. Admittedly, if the assignment was governed by English law, it was valid, and written notice of the assignment was given to the bankers before they received any notice of the Republic's claim.

June, 1927] Recent 'Cases osa Conflict of Laws: 395

Both parties appealed to the Court of Appeal . The court, (Bankes, Scrutton and Lawrence, L.JJ.) unanimously dismissed the appeal of the Republic at the close of the argument . The court, also, after reserving judgment, dismissed the appeal of Nunez-unanim- cusly in' the result, but for diverse reasons. The most interesting judgment is that of Scrutton, L.J . He held,the assignment to Nunez to be invalid on three grounds: (a) to contract as to movabes is governed either by the or by the léx loci actus, and in this case the domicile and the locals actus were the same-Guatemala-and by the law of Guatemala Nunez, was incapable of taking under the assignment . (b) A contract which is void, and not merely inadmissible in evidence, by the lex loci actus by reason of the omission of formalities or stamp, is void everywhere, and in this case the assignment was void by the law of Guatemala. (c) The validity of the assignment of an intangible movable or debt is. governed, not as Dicey says, by the lex' sites of the debt (in so far as by analogy a situs can be attributed to a debt), but by the lex loci actus, that is by the law of Guatemala. Scrutton, L.J., drew attention to the fact that while the law of Guatemala was the lex loci actus as well as the lex domicilii, the law of England was the lex sites of the debt and the lex loci solu tionis of the bankers' contract to pay. He also added that he was not satisfied that the same result would not be obtained by treating the assignment in favour of Nunez as a ; fraudulent document and declining to enforce it-it having probably been executed by Cabrera while he was in prison 'in 1921 and therefore unable to comply with the formalities required by the law, but antedated as of 1919 with the intention of deceiving somle person or. court. The result, on whatever ground it was based, was that both claims on the _fund in court failed ; the court had notice that the trustee in bankruptcy of Cabrera claimed the fund, and the fund ,must remain in court until that or any other claim made to the court should be disposed of. Lawrence, L.J., was of opinion that Dicey's rule correctly states the law, that is, that the validity of an assignment of a debt is governed by the lex sites of the debt, and therefore the assignment to Nunez was valid-subject, however, to the question of the donee's incapacity by reason of infancy. The incapacity of Nunez was not a matter of formality, but one of substance, and as capacity is governed either by the lex donnicilîi or by the lex loci actus, -and in

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this case the domicile and the locus actes were the same (Guatemala), the -gift to Nunez was invalid by reason of the donee's incapacity. Bankes, L.J ., considered that it was unnecessary to decide whether Dicey's rule is correct, because in this case there was not a dispute on the original contract, but a question of priorities. As between these two claimants brought face to face in the interpleader issue, both domiciled and resident in Guatemala, the dispute ought to be decided by the law of Guatemala, and by that law the assign- ment to Nunez was invalid. There is here, I submit, a manifest confusion of thought. As between two assignments, each valid in itself, if the only question is one of priority, there is nothing unreason- able in applying some law common to the two claimants, as for instance the law of their common domicile, or, failing such common law, then the lex sites of the debt, or even the . But what application can any such rule as to priorities have to a case in which the court has already unanimously dismissed one claim as invalid and is engaged in considering the validity of the other claim? On Bankes, L.J.'s, reasoning, one or other of the two claims ought to have been allowed, but both are dismissed . From the foregoing there emerge the following results : (1) That it is uncertain what law governs the validity of the assign- ment of a debt-Greer, J ., and Scrutton, L.J ., being in favour of the lex loci actes, while Lawrence, L.J., agrees with Dicey that the Iex loci rei sitee governs, and Bankes, L.J., refrains from expressing an opinion. (Z) That it is uncertain what law governs capacity to contract or to take an assignmentthe lex domicilii or the lex loci actes.

JOHN D. FALCONBRIDGE. Osgoode Hall Law School.