Zschernig v. Miller

389 U.S. 429, 88 S. Ct. 664, 19 L. Ed. 2d 683, 1968 U.S. LEXIS 2714

• Court: Supreme Court of the United States
• Decided: January 15, 1968
• Docket: 21
• Status: Published

Opinions

Mr. Justice Douglas

delivered the opinion of the Court.

This case concerns the disposition of the estate of a resident of Oregon who died there intestate in 1962. Appellants are decedent’s sole heirs and they are residents of East Germany. Appellees include members of the State Land Board that petitioned the Oregon probate court for the escheat of the net proceeds of the estate under the provisions of Ore. Rev. Stat. § 111.070 (1957),¹ which provides for escheat in cases where a nonresident alien claims real or personal property unless three requirements are satisfied:

(1) the existence of a reciprocal right of a United States citizen to take property on the same terms as a citizen or inhabitant of the foreign country;

(2) the right of United States citizens to receive payment here of funds from estates in the foreign country; and

(3) the right of the foreign heirs to receive the proceeds of Oregon estates “without confiscation.”

The Oregon Supreme Court held that the appellants could take the Oregon realty involved in the present case by reason of Article IV of the 1923 Treaty of Friendship, Commerce and Consular Rights with Germany² (44 Stat. 2135) but that by reason of the same Article, as construed in Clark v. Allen, 331 U. S. 503, they could not take the personalty. 243 Ore. 567, 592, 412 P. 2d 781, 415 P. 2d 15. We noted probable jurisdiction. 386 U. S. 1030.

The Department of Justice, appearing as arnicas curiae, submits that, although the 1923 Treaty is still in force, Clark v. Allen should be overruled insofar as it construed the personalty provision of Article IY. That portion of Article IV speaks of the rights of “[nationals of either High Contracting Party” to dispose of “their personal property of every kind within the territories of the other.” That literal language and its long consistent construction, we held in Clark v. Allen, “does not cover personalty located in this country and which an American citizen undertakes to leave to German nationals.” 331 U. S., at 516.

We do not accept the invitation to re-examine our ruling in Clark v. Allen. For we conclude that the history and operation of this Oregon statute make clear that § 111.070 is an intrusion by the State into the field of foreign affairs which the Constitution entrusts to the President and the Congress. See Hines v. Davidowitz, 312 U. S. 52, 63.

As already noted³ one of the conditions of inheritance under the Oregon statute requires “proof that such foreign heirs, distributees, devisees or legatees may receive the benefit, use or control of money or property from estates of persons dying in this state without confiscation, in whole or in part, by the governments of such foreign countries,” the burden being on the nonresident alien to establish that fact.

This provision came into Oregon’s law in 1951. Prior to that time the rights of aliens under the Oregon statute were defined in general terms of reciprocity,⁴ similar to the California Act which we had before us in Clark v. Allen, 331 U. S., at 506, n. 1.

We held in Clark v. Allen that a general reciprocity clause did not on its face intrude on the federal domain. 331 U. S., at 516-517. We noted that the California statute, then a recent enactment, would have only “some incidental or indirect effect in foreign countries.” Id., at 517.⁵

Had that case appeared in the posture of the present one, a different result would have obtained. We were there concerned with the words of a statute on its face, not the manner of its application. State courts, of course, must frequently read, construe, and apply laws of foreign nations. It has never been seriously suggested that state courts are precluded from performing that function, albeit there is a remote possibility that any holding may disturb a foreign nation — whether the matter involves commercial cases, tort cases, or some other type of controversy. At the time Clark v. Allen was decided, the case seemed to involve no more than a routine reading of foreign laws. It now appears that in this reciprocity area under inheritance statutes, the probate courts of various States have launched inquiries into the type of governments that obtain in particular foreign nations — whether aliens under their law have enforceable rights, whether the so-called “rights” are merely dispensations turning upon the whim or caprice of government officials, whether the representation of consuls, ambassadors, and other representatives of foreign nations is credible or made in good faith, whether there is in the actual administration in the particular foreign system of law any element of confiscation.

In a California case, involving a reciprocity provision, the United States made the following representation:

“The operation and effect of the statute is inextricably enmeshed in international affairs and matters of foreign policy. The statute does not work disinheritance of, or affect ownership of property in California by, any group or class, but on the contrary operates in fields exclusively for, and preempted by, the United States; namely, the control of the international transmission of property, funds, and credits, and the capture of enemy property. The statute is not an inheritance statute, but a statute of confiscation and retaliation.” In re Bevilacqua’s Estate, 161 P. 2d 589, 593 (Dist. Ct. App. Cal.), superseded by 31 Cal. 2d 580, 191 P. 2d 752.

In its brief amicus curiae, the Department of Justice states that: “The government does not . . . contend that the application of the Oregon escheat statute in the circumstances of this case unduly interferes with the United States’ conduct of foreign relations.”

The Government’s acquiescence in the ruling of Clark v. Allen certainly does not justify extending the principle of that case, as we would be required to do here to uphold the Oregon statute as applied; for it has more than “some incidental or indirect effect in foreign countries,” and its great potential for disruption or embarrassment makes us hesitate to place it in the category of a diplomatic bagatelle.

As we read the decisions that followed in the wake of Clark v. Allen, we find that they radiate some of the attitudes of the “cold war,” where the search is for the “democracy quotient” of a foreign regime as opposed to the Marxist theory.⁶ The Oregon statute introduces the concept of “confiscation,” which is of course opposed to the Just Compensation Clause of the Fifth Amendment. And this has led into minute inquiries concerning the actual administration of foreign law, into the credibility of foreign diplomatic statements, and into speculation whether the fact that some received delivery of funds should “not preclude wonderment as to how many may have been denied ‘the right to receive’....”. See State Land Board v. Kolovrat, 220 Ore. 448, 461-462, 349 P. 2d 255, 262, rev’d sub nom. Kolovrat v. Oregon, 366 U. S. 187, on other grounds.

That kind of state involvement in foreign affairs and international relations — matters which the Constitution entrusts solely to the Federal Government — is not sanctioned by Clark v. Allen. Yet such forbidden state activity has infected each of the three provisions of § 111.070, as applied by Oregon.

In State Land Board v. Pekarek, 234 Ore. 74, 378 P. 2d 734, the Oregon Supreme Court in ruling against a Czech claimant because he had failed to prove the “benefit” requirement of subsection (l)(c) of the statute said:

“Assuming, without deciding, that all of the evidence offered by the legatees was admissible, it can be given relatively little weight. The statements of Czechoslovakian officials must be judged in light of the interest which they had in the acquisition of funds for their government. Moreover, in judging the credibility of these witnesses we are entitled to take into consideration the fact that declarations of government officials in communist-controlled countries as to the state of affairs existing within their borders do not always comport with the actual facts.” Id., at 83, 378 P. 2d, at 738.

Yet in State Land Board v. Schwabe, 240 Ore. 82, 400 P. 2d 10, where the certificate of the Polish Ambassador was tendered against the claim that the inheritance would be confiscated abroad, the Oregon court, appraising the current attitude of Washington, D. C., toward Warsaw, accepted the certificate as true. Id., at 84, 400 P. 2d, at 11.

In State Land Board v. Rogers, 219 Ore. 233, 347 P. 2d 57, the court held Bulgarian heirs had failed to prove the requirement of what is now § (1) (b) of the reciprocity statute, the “right” of American heirs of Bulgarian decedents to get funds out of Bulgaria into the United States. Such transmission of funds required a license from the Bulgarian National Bank, but the court held the fact that licenses were regularly given insufficient, because they were issued only at the discretion or “whim” of the bank. Id., at 245, 347 P. 2d, at 63.⁷

As one reads the Oregon decisions, it seems that foreign policy attitudes, the freezing or thawing of the “cold war,” and the like are the real desiderata.⁸ Yet they of course are matters for the Federal Government, not for local probate courts.

This is as true of (l)(a) of § 111.070 as it is of (l)(b) and (1) (c). In Clostermann v. Schmidt, 215 Ore. 55, 332 P. 2d 1036, the court — applying the predecessor of (l)(a) — held that not only must the foreign law give inheritance rights to Americans, but the political body making the law must have “membership in the family of nations” (id., at 65, 332 P. 2d, at 1041), because the purpose of the Oregon provision was to serve as “an inducement to foreign nations to so frame the inheritance laws of their respective countries in a manner which would insure to Oregonians the same opportunities to inherit and take personal property abroad that they enjoy in the state of Oregon.” Id., at 68, 332 P. 2d, at 1042.

In In re Estate of Krachler, 199 Ore. 448, 263 P. 2d 769, the court observed that the phrase “reciprocal right” in what is now part (l)(a) meant a claim “that is enforceable by law.” Id., at 455, 263 P. 2d, at 773. Although certain provisions of the written law of Nazi Germany appeared to permit Americans to inherit, they created no “right,” since Hitler had absolute dictatorial powers and could prescribe to German courts rules and procedures at variance with the general law. Bequests “ ‘grossly opposed to sound sentiment of the people’ ” would not be given effect. Id., at 503, 263 P. 2d, at 794.⁹

In short, it would seem that Oregon judges in construing § 111.070 seek to ascertain whether “rights” protected by foreign law are the same “rights” that citizens of Oregon enjoy. If, as in the Rogers case, the alleged foreign “right” may be vindicated only through Communist-controlled state agencies, then there is no “right” of the type § 111.070 requires. The same seems to be true if enforcement may require approval of a Fascist dictator, as in Krachler. The statute as construed seems to make unavoidable judicial criticism of nations established on a more authoritarian basis than our own.

It seems inescapable that the type of probate law that Oregon enforces affects international relations in a persistent and subtle way. The practice of state courts in withholding remittances to legatees residing in Communist countries or in preventing them from assigning them is notorious.¹⁰ The several States, of course, have traditionally regulated the descent and distribution of estates. But those regulations must give way if they impair the effective exercise of the Nation’s foreign policy. See Miller, The Corporation as a Private Government in the World Community, 46 Va. L. Rev. 1539, 1542-1549 (1960). Where those laws conflict with a treaty, they must bow to the superior federal policy. See Kolovrat v. Oregon, 366 U. S. 187. Yet, even in absence of a treaty, a State’s policy may disturb foreign relations. As we stated in Hines v. Davidowitz, supra, at 64: “Experience has shown that international controversies of the gravest moment, sometimes even leading to war, may arise from real or imagined wrongs to another’s subjects inflicted, or permitted, by a government.” Certainly a State could not deny admission to a traveler from East Germany nor bar its citizens from going there. Passenger Cases, 7 How. 283; cf. Crandall v. Nevada, 6 Wall. 35; Kent v. Dulles, 357 U. S. 116. If there are to be such restraints, they must be provided by the Federal Government. The present Oregon law is not as gross an intrusion in the federal domain as those others might be. Yet, as we have said, it has a direct impact upon foreign relations and may well adversely affect the power of the central government to deal with those problems.

The Oregon law does, indeed, illustrate the dangers which are involved if each State, speaking through its probate courts, is permitted to establish its own foreign policy.

Reversed.

Mr. Justice Marshall took no part in the consideration or decision of this case.

1 “(1) The right of an alien not residing within the United States or its territories to take either real or personal property or the proceeds thereof in this state by succession or testamentary disposition, upon the same terms and conditions as inhabitants and citizens of the United States, is dependent in each case:

“(a) Upon the existence of a reciprocal right upon the part of citizens of the United States to take real and personal property and the proceeds thereof upon the same terms and conditions as inhabitants and citizens of the country of which such alien is an inhabitant or citizen;

“(b) Upon the rights of citizens of the United States to receive by payment to them within the United States or its territories money originating from the estates of persons dying within such foreign country; and

“(c) Upon proof that such foreign heirs, distributees, devisees or legatees may receive the benefit, use or control of money or property from estates of persons dying in this state without confiscation, in whole or in part, by the governments of such foreign countries.

“(2) The burden is upon such nonresident alien to establish the fact of existence of the reciprocal rights set forth in subsection (1) of this section.

“(3) If such reciprocal rights are not found to exist and if no heir, devisee or legatee other than such alien is found eligible to take such property, the property shall be disposed of as escheated property.”

2 Article IV provides:

“Where, on the death of any person holding real or other immovable property or interests therein within the territories of one High Contracting Party, such property or interests therein would, by the laws of the country or by a testamentary disposition, descend or pass to a national of the other High Contracting Party, whether resident or non-resident, were he not disqualified by the laws of the country where such property or interests therein is or are situated, such national shall be allowed a term of three years in which to sell the same, this term to be reasonably prolonged if circumstances render it necessary, and withdraw the proceeds thereof, without restraint or interference, and exempt from any succession, probate or administrative duties or charges other than those which may be imposed in like cases upon the nationals of the country from which such proceeds may be drawn.

“Nationals of either High Contracting Party may have full power to dispose of their personal property of every kind within the territories of the other, by testament, donation, or otherwise, and their heirs, legatees and donees, of whatsoever nationality, whether resident or non-resident, shall succeed to such personal property, and may take possession thereof, either by themselves or by others acting for them, and retain or dispose of the same at their pleasure subject to the payment of such duties or charges only as the nationals of the High Contracting Party within whose territories such property may be or belong shall be liable to pay in like cases.”

3 Supra, n. 1.

4 Ore. Comp. L. Ann. §61-107 (1940).

5 In Clark v. Allen, 331 U. S. 503, the District Court had held the California reciprocity statute unconstitutional because of legislative history indicating that the purpose of the statute was to prevent American assets from reaching hostile nations preparing for war on this country. Crowley v. Allen, 52 F. Supp. 850, 853 (D. C. N. D. Calif.). But when the case reached this Court, petitioner contended that the statute was invalid, not because of the legislature’s motive, but because on its face the statute constituted “an invasion of the exclusively Federal field of control over our foreign relations.” In discussing how the statute was applied, petitioner noted that a California court had accepted as conclusive proof of reciprocity the statement of a foreign ambassador that reciprocal rights existed in his nation. Brief for petitioner in Clark v. Allen, No. 626, October Term 1946, pp. 73-74. Thus we had no reason to suspect that the California statute in Clark v. Allen was to be applied as anything other than a general reciprocity provision requiring just matching of laws. Had we been reviewing the later California decision of Estate of Gogabashvele, 195 Cal. App. 2d 503, 16 Cal. Rptr. 77, see n. 6, infra, the additional problems we now find with the Oregon provision would have been presented.

6 See Estate of Gogabashvele, 195 Cal. App. 2d 503, 16 Cal. Rptr. 77, disapproved in Estate of Larkin, 65 Cal. 2d 60, 416 P. 2d 473, and Estate of Chichernea, 66 Cal. 2d 83, 424 P. 2d 687. One commentator has described the Gogabashvele decision in the following manner:

“The court analyzed the general nature of rights in the Soviet system instead of examining whether Russian inheritance rights were granted equally to aliens and residents. The court found Russia had no separation of powers, too much control in the hands of the Communist Party, no independent judiciary, confused legislation, unpublished statutes, and unrepealed obsolete statutes. Before stating its holding of no reciprocity, the court also noted Stalin’s crimes, the Beria trial, the doctrine of crime by analogy, Soviet xenophobia, and demonstrations at the American Embassy in Moscow unhindered by the police. The court concluded that a leading Soviet jurist’s construction of article 8 of the law enacting the R. S. F. S. R. Civil Code seemed modeled after Humpty Dumpty, who said, ‘When I use a word ... , it means just what I choose it to mean — neither more nor less.’ ” Note, 55 Calif. L. Rev. 592, 594r-595, n. 10 (1967).

7 The Rogers case, we are advised, prompted the Government of Bulgaria to register a complaint with the State Department, as disclosed by a letter of November 20, 1967, written by a State Department adviser to the Oregon trial court stating: “The Government of Bulgaria has raised with this Government the matter of difficulties reportedly being encountered by Bulgarian citizens resident in Bulgaria in obtaining the transfer to them of property or funds from estates probated in this country, some under the jurisdiction of the State of Oregon. . .

8 Such attitudes are not confined to the Oregon courts. Representative samples from other States would include statements in the New York courts, such as “This court would consider sending money out of this country and into Hungary tantamount to putting funds within the grasp of, the Communists,” and “If this money were turned over to the Russian authorities, it would be used to kill our boys and innocent people in Southeast Asia. . . .” Heyman, The Nonresident Alien's Right to Succession Under the “Iron Curtain Rule,” 52 Nw. U. L. Rev. 221, 234 (1957). In Pennsylvania, a judge stated at the trial of a case involving a Soviet claimant that “If you want to say that I’m prejudiced, you can, because when it comes to Communism I’m a bigoted anti-Communist.” And another judge exclaimed, “I am not going to send money to Russia where it can go into making bullets which may one day be used against my son.” A California judge, upon being asked if he would hear argument on the law, replied, “No, I won’t send any money to Russia.” The judge took “judicial notice that Russia kicks the United States in the teeth all the time,” and told counsel for the Soviet claimant that “I would think your firm would feel it honor bound to withdraw as representing the Russian government. No American can make it too strong.” Berman, Soviet Heirs in American Courts, 62 Col. L. Rev. 257, and n. 3 (1962).

A particularly pointed attack was made by Judge Musmanno of the Pennsylvania Supreme Court, where he stated with respect to the Pennsylvania Act that:

“It is a commendable and salutary piece of legislation because it provides for the safekeeping of these funds even with accruing interest, in the steelbound vaults of the Commonwealth of Pennsylvania until such time as the Iron Curtain lifts or sufficiently cracks to allow honest money to pass through and be honestly delivered to the persons entitled to them. Otherwise, wages and other monetary rewards faithfully earned under a free enterprise democratic system could be used by Communist forces which are committed to the very destruction of that free enterprising world of democracy.” Belemecich Estate, 411 Pa. 506, 508, 192 A. 2d 740, 741, rev’d, sub nom. Consul General of Yugoslavia v. Pennsylvania, 375 U. S. 395, on authority of Kolovrat v. Oregon, 366 U. S. 187.

And further:

“. . . Yugoslavia, as the court below found, is a satellite state where the residents have no individualistic control over their destiny, fate or pocketbooks, and where their politico-economic horizon is raised or lowered according to the will, wish or whim of a self-made dictator.” 411 Pa., at 509, 192 A. 2d, at 742.

“All the known facts of a Sovietized state lead to the irresistible conclusion that sending American money to a person within the borders of an Iron Curtain country is like sending a basket of food to Little Red Ridinghood in care of her 'grandmother.’ It could be that the greedy, gluttonous grasp of the government collector in Yugoslavia does not clutch as rapaciously as his brother confiscators in Russia, but it is abundantly clear that there is no assurance upon which an American court can depend that a named Yugoslavian individual beneficiary of American dollars will have anything left to shelter, clothe and feed himself once he has paid financial involuntary tribute to the tyranny of a totalitarian regime.” Id., at 511, 192 A. 2d, at 742-743.

Another example is a concurring opinion by Justice Doyle in In re Hosova’s Estate, 143 Mont. 74, 387 P. 2d 305:

“In this year of 1963, the Central Committee of the Communist Party of the U. S. S. R. issued the following directive to all of its member [s], ‘We fully stand for the destruction of imperialism and capitalism. We not only believe in the inevitable destruction of capitalism, but also are doing everything for this to be accomplished by way of the class struggle, and as soon as possible.’

“Hence, in affirming this decision the writer is knowingly contributing financial aid to a Communist monolithic satellite, fanatically dedicated to the abolishing of the freedom and liberty of the citizens of this nation.

“By reason of self-hypnosis and failure to understand the aims and objective of the international Communist conspiracy, in the year 1946, Montana did not have statutes to estop us from making cash contributions to our own ultimate destruction as a free nation.” Id., at 85-86, 387 P. 2d, at 311.

9 In Mullart v. State Land Board, 222 Ore. 463, 353 P. 2d 531, the court had little difficulty finding that reciprocity existed with Estonia. But it took pains to observe that in 1941 Russia “moved in and overwhelmed it [Estonia] with its military might. At the same time the Soviet hastily and cruelly deported about 60,000 of its people to Russia and Siberia and, in addition, exterminated many of its elderly residents. This policy of destroying or decimating families and rendering normal economic life chaotic continued long afterward.” Id., at 467, 353 P. 2d, at 534.

“[A]ny effort to communicate with persons in Estonia exposes such persons to possible death or exile to Siberia. It seems that the Russians scrutinize all correspondence from friends of Estonians in lands where freedom prevails and subject the recipient to suspicion of a relationship inimical to the Soviet. . . . This line of testimony has the support of reliable historical matter of which we take notice. We mention it as explaining the futility of attempting, under the circumstances, to secure more cogent evidence than hearsay in the matter.” Id., at 476, 353 P. 2d, at 537-538.

10 See Berman, Soviet Heirs in American Courts, 62 Col. L. Rev. 257 (1962); Chaitkin, The Rights of Residents of Russia and its Satellites to Share in Estates of American Decedents, 25 S. Cal. L. Rev. 297 (1952).