Possible Duplicate:
“My wife and I’s seafood collaboration dinner”
What is the correct way of these two sentences?
Strictly linguistically, sentence 2 should be the correct one, since the crown belongs to the queen and not to England but it sounds really awkward to pronounce.
It is a common misconception, partly because of bad use of terminology, that the English 's construction is closely equivalent to a genitive in languages like Latin, German etc with overt case marking.
But in reality, 's works quite differently: it can be appended to the whole noun phrase, including adjuncts such as prepositional phrases and relative clauses. This means that the following are in principle perfectly common and grammatical:
(a) [The girl next door]'s dog just died.
(b) [That man I saw yesterday]'s car is parked in my space.
(c) [The queen of England]'s crown is worth its weight in gold.
Of course, if you find that having a lengthy or syntactically complex noun phrase is clumsy to read, you can always rephrase. In reality, a case such as (b), though fairly common in spontaneous usage, would probably be avoided by careful writers. But a phrase such as "The queen of England" is short and simple enough that there's no need to contort the sentence in my opinion.
To avoid confusion, I personally avoid applying the term "genitive" to this construction in English. That way you avoid false expectations if you're used to the more prototypical "genitive" of other languages.
Only (1) is grammatical. The apostrophe comes at the end of an entire noun phrase. The crown belongs to, or is at least worn by, the queen of England.
