## Facts

- King Faisal II of Iraq was killed on July 14, 1958 during a revolution that replaced the monarchy with a republic later recognized by the United States.
- The new Iraqi government issued Ordinance No. 23 (July 19, 1958), confiscating “all property” of the former dynasty.
- At death, the King held New York-situs assets with a New York custodian: approximately $55,925 in cash and 4,008 shares of a Canadian investment trust held in deposit/custody accounts.
- A New York Surrogate’s Court issued letters of administration to First National City Bank as administrator of the King’s New York assets.
- Iraq’s consul notified the custodian that Iraq claimed the assets under Ordinance No. 23.
- Despite notice, the custodian transferred the cash and share certificates to the administrator; the shares were later sold.
- Iraq sued in federal court to recover the cash and the share-sale proceeds from the administrator.

## Issues

1. Whether federal diversity jurisdiction exists over an in personam action by a foreign state against an estate administrator, notwithstanding the probate exception.
2. Whether a forum court must recognize and enforce a foreign sovereign’s confiscatory decree to divest title to assets situated in New York.
3. Whether New York public policy bars recognition of an uncompensated, politically motivated foreign confiscation with extraterritorial effect.

## Decision

- The Second Circuit affirmed dismissal of Iraq’s complaint.
- The court held the district court had subject-matter jurisdiction under 28 U.S.C. § 1332(a)(2) because the suit sought to establish an in personam claim against the administrator and did not attempt to probate a will, administer the estate, or assume control of property in state-court custody.
- On the merits, the court declined to give effect to Ordinance No. 23 as to New York-situs assets, concluding New York law would not recognize a foreign confiscatory decree operating extraterritorially in a manner contrary to New York public policy.
- Because Iraq’s claim depended on the confiscatory ordinance, Iraq could not recover the funds or proceeds from the administrator.

## Legal Principles

- The probate exception limits federal jurisdiction to the extent a federal court would probate a will, administer an estate, or take control of property in the custody of a state probate court; it does not bar federal adjudication of in personam claims against estate fiduciaries to establish asserted rights.
- A foreign sovereign’s legislative confiscation has no automatic effect on property located in New York; recognition depends on forum law, including public policy.
- New York generally refuses to recognize uncompensated foreign confiscations that purport to divest title to assets situated in New York through extraterritorial operation of a foreign decree.

## Conclusion

Federal courts may hear in personam claims against estate administrators without intruding on state probate control, but New York will not enforce a foreign confiscatory decree to transfer title to New York-situs assets when recognition would contravene New York public policy; accordingly, Iraq’s action to recover the decedent’s New York assets failed.


Republic of Iraq v. First Nat’l City Bank, 353 F.2d 47 (2d Cir. 1965)