The Doctrine of Reference may still have some relevance in the context of trust | Charles E. Rounds, Jr. – Suffolk University School of Law

0

The trustees were held absolutely liable for the improper distribution of income and/or principal. In a multi-jurisdictional setting, an incorrect assessment by a fiduciary as to which body of law governs in a given situation could result in such misdelivery. Consider a conflicting doctrine governing the validity of a land trust. If there is no valid express trust, we have a resultant trust and the property in question belongs outright and without trust, for example, to the legal heirs of the settlor. If there is a valid express trust, the equitable interest in the property in question accrues to the beneficiaries named in the terms of the trust. Let’s say that the law of the forum would produce one result while the law of the situs (of the land) would produce the other. Making a mistake risks being poorly delivered.

Suppose a dispute over rights and duties is being arbitrated; presume that the law in force in the jurisdiction of the forum court calls for general deference to the law of a foreign jurisdiction, including the conflict of laws rules of that foreign jurisdiction; finally, suppose that the conflict of laws rules of the foreign jurisdiction call for the application of the substantive law of the forum. Such an application by rebound of the substantive law of the forum is an example of referral, which in French means to send back or to return unopened. “If, in the application of the doctrine of remission, the conflict of laws rules of the foreign jurisdiction applied the law of the forum, this remission of the forum to its own law is called ‘remission’, and if the laws of the jurisdiction transfer the forum court to the law of a third jurisdiction, this is called “transmission”. See 15A CJS Conflict of Laws §37. The German term for the legal process of “surrender” is Rückverweisung; the German term for the legal process of “transmission” is Weiterverweisung. “The word ‘dismissal’ itself does not appear in English or American judicial opinion before 1903.” See Schreiber, The Doctrine of the Reference in Anglo-American Law, 31 Harv. L.Rev. 523 (1918).

Here is an example of how the doctrine of remand might be encountered in the context of contemporary trust case law (United States). Suppose the validity of an inter vivos land trust is challenged in a jurisdiction other than where the land is located. There is then the law of the forum and the law of the situs (of the land). Which law is applicable?

The (second) restatement of the conflict of laws, in particular §278, provides that “the validity of a trust of an interest in land is determined by the law which would be applied by the courts of the situs [of the land].” If the respect for the law which would be applied by the courts of the situs is sufficiently broad to encompass the rules of conflict of laws which would be applied by the courts of the situs, then it is possible that these rules call for the application of the substantive law of the forum. so that there is dismissal.

The relevant language of the Restatement (First), specifically §241, however, is/was not so expansive: “The validity of a trust of an interest in land is determined by the law of the state where field.” Arguably, the words “where the land is” were effectively an exclusion of any application of the doctrine of reference in this particular context.

Article 17 of the Hague Convention on the law applicable to trusts and on their recognition expressly excludes the application of the doctrine of reference for its purposes. Here is the wording: “In the Convention, the word “law” designates the rules of law in force in a State other than its rules of conflict of laws.” This Hague Convention, which the United States has not yet ratified, is discussed generally in §8.12.2 of Loring and Rounds: A Trustee’s Handbook (2022). The handbook itself is available via https://law-store.wolterskluwer.com/s/product/loring-rounds-a-trustees-handbook-2022e-misb/01t4R00000OVWE4QAP. §8.12.2 of the Manual is reproduced in its entirety in the appendix below. The conflict of laws is generally dealt with in §8.5 of the Manual.

Share.

Comments are closed.