Palermo v. Stockton Theatres, Inc.

195 P.2d 1, 32 Cal. 2d 53, 1948 Cal. LEXIS 201
California Supreme Court·Decided June 15, 1948·No. Sac. 5758·Published·Cited by 266 cases

Opinions

SCHAUER, J.

In a suit for declaratory relief plaintiff seeks to have adjudged violative of the California Alien Land Act (Stats. 1921, p. lxxxiii, as amended; 1 Leering’s Gen. Laws, Act 261), and consequently void and of no effect, a lease of commercial real property in California executed by plaintiff’s predecessor in interest, as lessor, to defendant corporation, as lessee. The defendant lessee corporation also is the successor in interest of the lessees’ rights, if any there be, under a previously executed lease of the same property to certain Japanese nationals. The capital stock of defendant lessee is and at all times concerned has been “principally and almost wholly” owned by nationals of Japan; i. e., by aliens not eligible to citizenship in this country.

Under the provisions of the Alien Land Act (§3), as amended in 1923 (Stats. 1923, p. 1021), the right to lease, or otherwise use or enjoy, real property in this state is granted to such a corporation “to the extent and for the purposes prescribed by any treaty now existing between the . . . United States” and Japan. The trial court rendered judgment in plaintiff-lessor’s favor, declaring that the lease “is, and at all times was, void,” and defendant-lessee appealed. Following decision of the District Court of Appeal, Third Appellate District, reversing the judgment, this court granted a hearing for the purpose of giving further study to the problems presented and to consider in particular the question of a possible infringement by the state statute upon the treaty powers of the federal government. After such study we have concluded that the opinion "of the District Court of Appeal, prepared [56]*56by Mr. Justice Peek, correctly treats and disposes of all issues essentially involved, and it is therefore, with further discussion concerning the asserted conflict between state statute and federal treaty power, and comment as to a suggested constitutional pronouncement, adopted as the opinion of this court. Such opinion (with appropriate deletions and additions of introductory, conjunctive, and other pro forma matter as indicated) is as follows:

“[ ] The record [ ] discloses [ ] the following [undisputed] facts:
“On January 3,1930, respondent’s [plaintiff lessor’s] predecessor leased to appellant’s [defendant lessee’s] predecessors, who were nationals of Japan, certain premises situated in the city of Stockton, California, for "theater purposes for a term of 10 years, commencing January 1,1931, under the provisions of the Alien Land Act of this state (Stats. 1921, p. lxxxiii, as amended; 1 Peering’s Gen. Laws, Act 261), and in accordance with the provisions of the commercial treaty which had been concluded between the United States and Japan on April 5, 1911 (37 Stats, at L. 1504). On December 22, 1934, respondent’s predecessor gave the lessees an option for a term of 10 years longer than the term of the original lease. Said option recited that it was given for a valuable consideration, and that it was attached to and became a part of the condition of said lease. On January 16, 1935, the lessees, with the consent of the lessor, transferred all their right, title and interest in said lease and option to the appellant, a corporation, the capital stock of which was almost wholly owned by nationals of Japan. On January 26, 1940, the treaty between the United States and Japan was abrogated. On February 14, 1940, appellant served respondent’s predecessor with a written notice of its election to exercise said option for an additional term of 10 years, commencing January 1, 1941, and on September 13, 1940, pursuant to said option the parties entered into a written agreement of lease for the additional term of 10 years. On October 27, 1941, respondent’s predecessor died, and respondent became the legal owner of the premises in question.
“The record further discloses that on October 19, 1944, respondent, who had been employed by appellant in the operation of the theater from 1936 to the time the present action was filed, served on appellant a demand that the latter vacate the premises forthwith, on the ground that the occupancy thereof by appellant was illegal under the provisions of the [57]*57Alien Land Act of California. On November 20, 1944, the present action was brought by respondent to have the rights of the parties adjudicated.
“The trial court found generally in favor of respondent, and particularly that the lease of September 13, 1940, was ‘partially a new Lease and partially an extension of the preexisting Lease,’ that no notice of appellant’s election to exercise the option was served on respondent’s predecessor until February 14, 1940, which was subsequent to the termination of the treaty between the United States and Japan, and that, while there was no proof of a conspiracy to violate the law, the said lease was void and of no force or effect whatsoever. In a written memorandum of decision the trial court predicated its holding on the ground that the treaty removed the lease from the operation of the California statute and that in the absence of a treaty, a Japanese alien cannot enter into a lease of commercial property in the State of California.
“While other issues were raised in the proceedings in the trial court and are argued in the briefs on appeal, the basic question on which the correctness of the judgment herein turns is the effect of the abrogation of the treaty between the United States and Japan on the permissive provisions of the Alien Land Act with respect to the right of a corporation in which a majority of the issued capital stock is owned by non-eligible aliens of Japanese nationality to acquire or enjoy an interest in real property in this state which could have been acquired or enjoyed under the terms of said treaty.
“The pertinent provisions of the act in question, sections 1, 2 and 3 of the Alien Land Law (1 Deering’s Gen. Laws, Act 261), as adopted by the electorate of this state in 1920, and thereafter [pursuant to permission contained in § 13 of the initiative act] amended by the act of the Legislature approved June 20, 1923 (Stats. 1923, p. 1021), and as they read at the time herein involved, provided as follows:
“ ‘1. All aliens eligible to citizenship under the laws of the United States may acquire, possess, enjoy, use, cultivate, occupy, transfer, transmit and inherit real property, or any interest therein, in this state, and have in whole or in part the beneficial use thereof, in the same manner and to the same extent as citizens of the United States, except as otherwise provided by the laws of this state.
“ ‘2. All aliens other than those mentioned in section one of this act may acquire, possess, enjoy, use, cultivate, occupy [58]*58and transfer real property, or any interest therein, in this state, and have in whole or in part the beneficial use thereof, in the manner and to the extent, and for the purposes prescribed by any treaty now existing between the government of the United States and the nation or country of which such alien is a citizen or subject, and not otherwise.
“ ‘3.

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Palermo v. Stockton Theatres, Inc., 195 P.2d 1, 32 Cal. 2d 53, 1948 Cal. LEXIS 201 (Cal. 1948).

195 P.2d 1 (Palermo v. Stockton Theatres, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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