Zschernig v. Miller

PETITIONER:Zschernig
RESPONDENT:Miller
LOCATION:Lafayette Diner

DOCKET NO.: 21
DECIDED BY: Warren Court (1967-1969)
LOWER COURT:

CITATION: 389 US 429 (1968)
ARGUED: Nov 07, 1967
DECIDED: Jan 15, 1968

Facts of the case

Question

Audio Transcription for Oral Argument – November 07, 1967 in Zschernig v. Miller

Earl Warren:

Number 21, Oswald Zschernig et al., appellants versus William J. Miller, Administrator et al.

Mr. Schwabe.

Peter A. Schwabe, Sr.:

Mr. Chief Justice, may it please the Court.

This is an appeal from a decree of the Supreme Court of the State of Oregon as cheating the estate of a woman by the name the Pauline Schroeder (ph).

Under an Oregon Reciprocity and Inheritance Rights Statute number ORS 111070, the trial court in the case escheated all of the estate in the State of Oregon on a finding that the heirs who are residents of the Russian zone of occupation, East Germany were not eligible to inherit under the Reciprocity and Inheritance Rights Statute.

On appeal, the Supreme Court affirmed escheat of the personal property but held that under a 1923 Treaty which I’ll explain in just a moment the heirs were entitled to the real property.

The facts very briefly are not disputed in anyway.

This woman died in September 1962 in Portland, Oregon.

She left an estate of approximately $17,000 of which $4,500 was a small home that she had, the balance was cash and personal property.

Her heirs, she died intestate were brother and sister and number of nieces and nephews in Leipzig (ph) in the Russian zone, Germany, which is also called East Germany, the GDR, Deutsche Demokratische Republik, German Democratic Republic whatever you please.

Under our concept and the concept of the United States government, it is simply an occupied portion of Germany.

The heirs contended that they were entitled to inherit the whole of this estate under the Article 9, subsection 3 of the Treaty between the United States and Federal Republic of Germany in 1954, which provides without question for Reciprocity and Mutual Rights of Inheritance.

They claim that they although they lived in the Russian zone of Germany, nevertheless they were German citizens, have the same citizenship as German national and therefore they had the benefits of that treaty.

The state came back into the trial the case, produced a letter by the state department to the Attorney General of Oregon, saying that no the 1950 Treaty did not have territorial application to the East zone or the Russian zone of Germany.

In their opinion they thought the 1923 Treaty might have application.

The 1923 treaty has been heretofore construed by this Court in Clark versus Allen handed down in 1947 in which the Court held that under Article 4 of 1923 Treaty there were Rights of Inheritance guaranteed in respect of real property, but under the language of the treaty that such rights were not guaranteed in respect of personal property.

The heirs also challenged the constitutionality of the Reciprocity Inheritance Rights Statute on the ground that it was an unlawful invasion by the State of Oregon by an individual state into the exclusive power of the Federal government to regulate the foreign relations of the United States.

The court in respect to that simply said in very few words, this argument was put to bed by Clark versus Allen.

The rulings of the lower court, the Oregon Supreme Court in respect to the treaties was not appealed here, but we have appealed on the constitutional ground because we feel very strongly that the statute does constitute as I have said an unlawful intrusion by an individual state on the exclusive Federal power to regulate the foreign relations of the United States, and that is we feel a very grave and a very serious issue.

Potter Stewart:

As I recollect my understanding of the government to make this brief they say that as far as the government itself is concerned it’s not any greater power or have I misunderstood?

Peter A. Schwabe, Sr.:

Your Honor read that correctly.

The state department in the Solicitor General’s brief, the state department where he said, that the state department had found that it had very little effect on the management of the foreign relations of the United States.

They did say that, but —

Potter Stewart:

The government is on your side in the case I know, but not precisely for this reason here?

Peter A. Schwabe, Sr.:

I claim Your Honor that whether it has actually to this point, if you can put your finger on whether it has adversely affected the foreign relations of the United States with the affected government, I am speaking now primarily of the iron curtain countries because this is a iron curtain country case, I will point out that our contention is that even though you may not have a demonstrable effect, you may not be able to pinpoint that alright we’ve had trouble with the Soviet Union because of the (Inaudible) case in 1961, but this not the issue.

The issue is, does it have a potential, does it have a — is it an actual interference with the exclusive power of the Federal government, does that answer your question sir?

Now then the fundamental issue here is this.

Can any individual state imposed by statute, conditions upon the Rights of Inheritance of nonresident aliens within that state.

Now it’s been held and we do not contend here that a state may not pass laws prohibiting all aliens or nonresident aliens from inheritance, but we are presented here with the case where the State of the Oregon in its statute ORS 111070, which we are attacking here, lays down three requirements.

They say number one, you’ve got to, the foreign government must, a foreign country must allow American citizens the same Rights of Inheritance that they allow their own citizens.

Peter A. Schwabe, Sr.:

In another words there must no discrimination as to the inheritance rights of the American citizens within that country.

Number two, they require that the American citizen must have immediate unconditional right to the payment of these inheritances from the foreign country.

Now I’ll demonstrate to Your Honors in just a moment by Oregon decision, that the Oregon Supreme Court has construed that requirement to mean that unless an American citizen can say I want my money in American dollars right now unconditionally, immediately then, and they don’t give it because the country has foreign exchange control regulations, which every county has including our own, that then the right to take, the Right to Inherit is destroyed because the right to receive and to receive immediately not conditionally and not tomorrow, the next day but today that destroys the right to Inherit and this is been the holding of the California Supreme Court, its been the holding of the Supreme Court in the State of Oregon repeatedly.

On top of that, I’d like to say here for just a moment, that these two requirements of the statute are almost identical with the statute as it was at the time Clark versus Allen was decided and the date of that case was 1942, those two requirements; the no discrimination and the right to immediate payment of an inheritance were in the California Statute.

Now Oregon in 1951 when they adapted this statute with which we are concerned put in another requirement.

They said that the alien, nonresident alien must have the free use benefit and control of his money without confiscation by his government in whole or in part.

Now this is a partial adaptation of the, what we call Eastern statutes, which are recording statute, New York has it in 269(a) of the New York Circuits Court Act, Massachusetts has it, Pennsylvania has it, New Jersey has it.

In those states, by statute the surrogate’s probate judges may order actual distribution if in their opinion the foreign heir is not going to get the full enjoyment of these inheritance of free benefit use and control.

This was the forum, I would say this 269(a) of the New York Circuit Court Act was before this Court in Ioannou versus New York in 1962 in which the Court declined to take jurisdiction because it felt there were no substantial Federal question.

However Mr. Justice Douglas joined by Mr. Justice Black filed a dissent in which they said that they felt that it was time to reexamine Clark versus Allen, that this issue was not foreclosed by Clark versus Allen.

So, then as I say on the top of pre-use benefit and control they imposed this that the foreign country may not partially or wholly confiscate the Right of Inheritance or the inheritance of the foreign heir coming from the State of Oregon.

Now obviously no foreign country is ever going to admit or say or confess that they are confiscating anything much less an inheritance coming from an estate from the state of Oregon to them.

How you can prove that, that they do or don’t is something that I think no one can answer.

However, the Supreme Court of Oregon found it very, very convenient answer to that.

It came out the estate of Pikaicho (ph), these are cited in my brief, a Czechoslovak, a man who was a resident of Czechoslovakia, citizen of Czechoslovakia, domiciliary of Czechoslovakia had come over before the first war, had gone back shortly after the end of the first war, had a family there, he left a bank account in Portland.

And he lived and there was no question about him being a domiciliary, he died some eight or ten years after he had returned home, he left his bank account.

In that case involving Czechoslovakia, the Court escheated it, disregarded the rule that the law of the domicile of decedent governs the succession of personal property, ignored that or refused to adopt it that way and escheated the estate.

And they decided it on this third ground which I just mentioned by simply saying that Czechoslovakia is on the list of the Treasury Department Circular 655, which is a circular issued under a Federal regulation that no checks of United States, well the United States Treasury maybe sent to that country.

And as a result of that no social security checks, no veteran checks, no subject of that kind go to these countries.

They are, they’re what you might say the Communist led countries, Red China, the North Korea, North Vietnam and so forth, Soviet Union is also on it and Czechoslovakia also was at that time and still is I would say.

But anyway they said that the very fact that Czechoslovakia was on that Treasury Department list of countries that in itself was evidence that that was at least partial confiscation by the government of Czechoslovakia of the inheritances of these people and therefore on basis of that they escheated the estate.

Now as I said again the fundamental question is may any State of the Union lay down its own conditions and say to the foreign country if you don’t confirm your inheritance laws to ours your people can’t inherit.

If you do not allow American citizens immediate payment disregard your foreign exchange control or disregard any internal laws that you may have to govern your foreign — supply, if you withhold that money for, even in instance if he can’t have it on demand that then there the prosecution fails and we will began to confiscate your people’s inheritance.

On the third requirement they say if you don’t give these people the free use benefit and control of the money whatever these words mean, they can mean almost anything, but they say if you don’t give them the free use benefit and control of that money and if you confiscate any portion of it then we again will not allow you to inherit.

Abe Fortas:

May I ask you whether the statute in Oregon differs from some of the other statues in respect of the remedy that is to say does the New York Statute for example a deferral statute, a withholding statute, withholding the inheritance rather than one of escheat?

Peter A. Schwabe, Sr.:

That is correct.

Abe Fortas:

Is Oregon — are there other states have escheat statutes rather than withholding a statute?

Peter A. Schwabe, Sr.:

There are about 10 statutes, they are listed in my brief, the states with which we are primarily concerned here, and I’ll say again Oregon is the most let’s say brutal statute, the most demanding statute because they not only require Reciprocity of inheritance, they not only require the immediate right of payment but they have this free use benefit control without confiscation.

Abe Fortas:

Apart from that [Inaudible] whether the other statutes are as escheat statutes are merely withholding or referral statutes?

Peter A. Schwabe, Sr.:

California’s is also an escheat statute but each of them California, Oregon, Iowa, Nebraska, North Carolina have provisions whereby if the non-resident alien do not inherit they escheat only if there is no eligible heir, if there is no other heir living outside the country, For instance if he has an relative in Great Britain or if he had a relative in this country, in Canada, Australia, wherever it is.

Abe Fortas:

What about New York for example?

Peter A. Schwabe, Sr.:

There is no escheat provision in the New York statute.

There is no escheat provision in any of the eastern states.

I am speaking of Massachusetts, Pennsylvania, New Jersey and so forth.

Oregon, California, now Montana has a particularly strong escheat statute in this respect that in Oregon, in California, in Iowa, Nebraska they will allow an eligible heir to take.

However, in -–

Oregon —

Peter A. Schwabe, Sr.:

No — yes Oregon will too, but in Montana the share of the ineligible heir escheat.

For instance in Oregon if he has a brother in Portland and if he has a brother in let’s say Czechoslovakia or East Germany then the brother in Portland will get the whole estate, but in Montana, Montana will escheat the half interest of the brother who in ineligible if the brother in this country for instance the eligible heir take it off.

Now the unconstitutionality of this lies of course in the fact that in the entire concept of these statutes is to on the part of the state to force a foreign government to confirm its laws and its rights of inheritance and monetary policies and so forth to those of State of Oregon.

I like to read to you if I may the declaration of purpose as stated by the Oregon Supreme Court in Claston versus Schmidt quoted on page 15 of my brief.

They say here the purpose of 61107 which is the immediate predecessor of this statute is clear and beyond doubt.

It was enacted to assure receipt for rights of inheritance to American citizens and alien residents or citizens.

It was in a sense an inducement to foreign nations to so frame the inheritance laws of their respective countries in a manner which would ensure to Oregonians the same opportunities to inherit and to take personal property abroad that they enjoy in the state of Oregon.

Now Mr. Justice Douglas in his dissent in the Ioannou case pointed out that if the New York Statute was intended to prevent a foreign country from getting American funds then there was a serious question if it was not an attempt to regulate the foreign relationships of United States and that I think is exactly the point that I am making here on the unconstitutionality.

Abe Fortas:

Well government doesn’t, the government brief is not go along with your man, does it?

Peter A. Schwabe, Sr.:

No sir it does not.

Abe Fortas:

Then why do you insist on unconstitutionality rather than the anomaly in the construction of the —

Peter A. Schwabe, Sr.:

For the reason Your Honor I personally and I was the one of course who, to a large extent recommended the ground to appeal here was the fact that I think that this Court, Mr. Justice Douglas was right in his interpretation although it was a strict interpretation of Article 4 of the treaty of 1923 in Clark versus Allen.

Abe Fortas:

I see on your basis, you wouldn’t have to modify Clark against Allen, on the government’s basis we may have to?

Peter A. Schwabe, Sr.:

On the government’s basis we might have to and secondarily also not only that but we think that Clark versus Allen has been overcome by the developments of the last 20 years between 1947 and 1967.

Since that time all of these decisions have come down as vast amount of litigations has gone through the courts.

We have had the situation in California where in 1961 the, a substantial estate was taken away from the Russian heirs on 12 reporting page analysis of the government of the Soviet Union of their ideology, their constitution.

There were charges there that had secret laws and laws that although they were on the books weren’t enforced and so forth.

It was a long, long opinion and on basis of that it was held that the Russian heirs had no right to inherit that estate.

Now in 1966 in Latin versus Terry, just recently the California Supreme Court ruled for reciprocity with the Soviet Union and held that all this logic that we recited, I should say the District Court of Appeal, not the Supreme Court recited, was wrong.

That if we were do the very thing that they did in (Inaudible) take the Soviet Judicial system, the Soviet legal system, those foreign funds control the whole things take it apart, the minute we do that we are interfering and risking the constitutionality of the statute.

And this is exactly what we contend here that when the courts of estate must take a foreign country’s laws, it’s constitution, it’s ideology, its judicial system apart and say well yes but we don’t think that you do allow American citizens the right to inherit.

Yes you have foreign exchange control laws, but under those laws you don’t give our American citizens immediate right to inherit, therefore you have lost your right of inheritance.

When they try to take it apart and say well you are actually confiscating the inheritances coming out of Oregon possibly by an unrealistic rate of exchange by any number of articles is that that it might be accused of using, that the state is definitely invading the field of the Federal government.

Peter A. Schwabe, Sr.:

Now it is said and I there is myself Mr. Justice Fortas and as of your question, you say the State Department say, well this hasn’t — has that little effect.

They didn’t say no effect they said this had little effect on the conduct of the foreign relations of the United States.

I say that again that that is not the test of constitutionality.

It’s the potential and it’s the possibility.

Now, to this point only 10 States of the United States have Reciprocal Inheritance Right Statute and they are listed in my brief and with the confiscatory provisions that if these conditions are not met then we can’t escheat.

[Inaudible]

Peter A. Schwabe, Sr.:

Yes, sir.

[Inaudible]

Peter A. Schwabe, Sr.:

I think the Solicitor General suggested that in his brief that if this Court were to hold that the 1954 treaty applied to residents of the Russian occupied zone of Germany or if the Court were now to say that Article IV of the 1923 treaty does provide for Reciprocal Rights of Inheritance in respect to personal property then there would be, I would say that the Court could duck the issue of constitutionality.

[Inaudible]

Peter A. Schwabe, Sr.:

Yes, that’s substantially so not, the only the part —

[Inaudible]

Peter A. Schwabe, Sr.:

Oh yes, yes, there’s no question about that.

But what we say about Clark versus Allen, the part of that Clark versus Allen which rejected the, let me remind you this was the argument of the Attorney General of the United States that the California statute which is almost what the same is the Oregon statute now that that invaded the foreign relations field of the Federal Government that is — the Attorney General of the United States in respect to that California statute which is almost what is the Oregon statute said that it was not a statute of inheritance it was a statute of confiscation and retaliation.

And the Attorney General in Clark versus Allen case said in his brief that the statute has already been a recurrent source of friction in the foreign relations of the United States, the Attorney General of the United States said that.

[Inaudible]

Peter A. Schwabe, Sr.:

Unfortunately not.

However, I still say that that is not the test.

If you can — the fact that you can’t demonstrate that a case such as the Russian Case which I just told you, now we had one case in California where the California Supreme Court denied reciprocity with Yugoslavia in San Francisco on identically the same case, identically the same witnesses including the Ambassador of Yugoslavia, the Los Angeles case held against reciprocity, held with for reciprocity in the San Francisco Court held against reciprocity and the California Supreme Court sustained it.

Abe Fortas:

You know their position as to whether the 1923 treaty or 1954 treaty governs —

Peter A. Schwabe, Sr.:

We contented sir that the 1954 treaty governs that these people and there was an evidence of certificate by the foreign office of the government in Bonn to the effect that the people in the Russian Zone of Germany have the same citizenship exactly as the citizens and the residents of the Federal Republic, and that therefore they were entitled to the benefits of the 1954 treaty however, the state department took a contrary position.

Abe Fortas:

What is, how do they reconcile that, we have not recognized the East Germany have we, we don’t know —

Peter A. Schwabe, Sr.:

No sir.

Abe Fortas:

We still recognize Bonn as a government of all of Germany.

Peter A. Schwabe, Sr.:

We’ve recognized Bonn as the only legitimate government for the entire —

Abe Fortas:

Is there anything in the 1954 treaty which confines itself for instance?

Peter A. Schwabe, Sr.:

Yes sir, there is.

There is a provision in the 1954 treaty that its territorial application shall be to the territory over which the Federal Republic exercises sovereignty.

Abe Fortas:

And that is the defined as excluding the —

Peter A. Schwabe, Sr.:

Excluding the Russian zone, yes sir.

Abe Fortas:

I see.

Peter A. Schwabe, Sr.:

And in the letter to the State — by the State Department to the Attorney General of Oregon and also in their publication, the State Department publishes a guidance but — they say it does not apply I would like to reserve five minutes for rebuttal.

Wayne M. Thompson:

Mr. Chief Justice, may it please the Court.

There’s one fact in addition to those that Mr. Schwabe’s has presented before the Court that I’d like to mention to the Court as it maybe called upon to bear some weight.

And that is that in the findings in order of the probate court in the State of Oregon it was stated that there was not sufficient evidence to make a finding of reciprocity under the requirements of Oregon revised statutes, the Reciprocal Inheritance Right Statute to find reciprocity with the German Democratic Republic.

There was originally no evidence on this basis.

The only testimony was that of Dr Hess Kaufman (ph) who was the counsel for the Northwestern United States in Seattle and his testimony relates almost exclusively to the construction of the treaties, the authority of the Federal Republic and things of this nature.

There was very little if anything that could be directly related to the rights or to the laws of East Germany, The German Democratic Republic.

We are here concerned very simply stated with whether the Oregon revised statute 11107, the Reciprocal Inheritance Law is an unconstitutional invasion of the Federal Government’s right to govern and regulate foreign affairs under Article I, Section 8 and 10 of the United States Constitution.

Now as has been recognized by the Court, this brings into new focus again the case of Clark versus Allen.

We’re here concerned with only one of the questions of Clark versus Allen, entered upon and decided.

However, the two cases are remarkably similar. Once again we have German nationals, we are concerned with the 1923 treaty, we are concerned with state reciprocity statutes, we are concerned with similar state reciprocity statute here Oregon and California.

The largest differences exist between the fact or in the facts that Germany has since been divided and we do not recognize the East Germany as the, under a form of government which is I should say we do not recognize it is having a sovereign government, we recognize the occupation of Soviet Russia.

Another difference we have, the new treaty of 1954, the treaty of friendship, commerce and navigation between United States and the Federal Republic.

Finally, we have the guidepost decision of Clark versus Allen which did not exist at that time.

Now, the position of the State of Oregon is that this Court’s decision in Clark versus Allen was a determination that still continued in its validity and application on this particular question that of the constitutionality of the Reciprocal Inheritance Statute.

This is because as was stated in that case, in the absence of a conflicting overriding Federal policy that the right of the States to govern, control, and regulate the disposition or succession to estates within their territories would remain in the states.

Now we submit that here there is no overriding of Federal policy.

There could be policy if any can be said to exist is that this does not conflict the State Department had said so through the briefs of the Solicitor General upon the request of, which is provided upon the request of the Court.

Earl Warren:

We’ll recess now.[Recess]

Wayne M. Thompson:

Mr. Chief Justice, may it please the Court.

As I was saying it is the position of the State of Oregon in this case that the determination in Clark versus Allen on the question of the constitutionality of State reciprocity statutes continues to be a valid and applicable principle that though the State acts may indirectly affect foreign countries and as is the State reciprocity statutes, that in the absence of a conflicting and overriding Federal policy that the state should continue to be allowed to regulate the succession in disposition of the estates within the boundaries of those States.

Now here we have no conflicting Federal policy.

In fact the position of the Federal Government has been made clear in their memorandum brief at the request to the Court.

In answer to the jurisdictional statement, they indicated that as has been stated here that such acts including the Oregon statute have had little effect.

Further, in the brief of the United States as amicus curiae they have stated that the government’s position is no way or they do not contend that the Oregon statute constitutes an undue interference in foreign relations.

Now, regarding this position of the Federal Government I’d like to address for a moment and refer to the position of the appellants, the heirs regarding the case of, the estate of Anthone Belemechich I believe is pronounced, the heirs I believe content that there is an inconsistency in the position of the Federal government there as opposed to the position here. Belemechich case was one concerned with the Pennsylvania withholding statute.

And the Pennsylvania Court found that the treaty of 1881 with Serbia which has been applied by this Court to the country of Yugoslavia did not override or was not supreme to the state withholding statute, the so called Iron Curtain Rule.

Now the position as I understand it of the Federal government in that case was merely that insofar as there was a Federal treaty, a treaty between United States and Serbia which was than abide as being valid to Yugoslavia that this was an overriding policy and no state law would be allowed to intervene.

The position of the Federal government was that any agreements or any requirements of the state would be an imposition upon that treaty.

Wayne M. Thompson:

We would state that the rule of Clark versus Allen possesses the necessary flexibility to continue as a practical and applicable principle for any control that might be deemed necessary in this area.

Or in the event that the Federal government should concluded at sometime in the future that the states are unduly interfering with the Federal government’s right to regulate foreign affairs and foreign relations then the overriding Federal policy could be annunciated and implemented whether it be by international agreement or congressional act or some other means.

Referring Your Honor to Article 4 of the treaty excluding personal property having been transferred to nonresident aliens is that correct, to German aliens.

I would say, Your Honor that this Court has had both sides presented to it and I really haven’t taken a position, I don’t feel a position one way or the other.

On interpreting the treaty yes, Your Honor, now I have in my brief and will speak briefly here today on the position that has been raised by the Federal government that the treaty should be reinterpreted.

The position of the State of Oregon that was presented to the Courts of Oregon is that if this treaty is to be reinterpreted such reinterpretation must of necessity look to the point of whether the 1923 treaty with Germany, the treaty of friendship, commerce and consular rights is existing today.

We would contend that there are events that have occurred that might very well result in that treaty being interpreted as having been terminated by the ordinance.

Byron R. White:

That may be so if United States claims otherwise?

Wayne M. Thompson:

Yes, Your Honor however as this Court stated in Kolovrat versus Oregon regardless of the fact of the position of the Federal government and the agency given the power to negotiate and implement these treaties and recognize in a great way that must be given to this position and to the position taken by the government, the Court will still interpret the treaties for itself.

Byron R. White:

What if you loose on all this?

Do you think — you don’t — you are reluctant to take a decision on the interpretation of the treaty?

Wayne M. Thompson:

No, Your Honor I’m not reluctant to take a position I think —

Byron R. White:

You think the cases have settled it —

Wayne M. Thompson:

I think the cases have settled it and if it goes the other way, if the treaty is interpreted as by this Court, reinterpreted as applying to personal property as well as real property in Article 4 of 1923 than this will cover this case.

Byron R. White:

Well they do — does the State of Oregon have any suggestion as the why the people of that treaty would limit the inheritability of personal property through that property that is located in the, in another country?

Wayne M. Thompson:

No, Your Honor I have — the court did not consider it, neither of the courts in Oregon.

Byron R. White:

They just rely on the language, you say your language, that’s what the language says and even though that doesn’t make much sense —

Wayne M. Thompson:

That’s correct Your Honor.

Now this case as I stated was substantially in fact strikingly similar to Clark versus Allen.

Clark versus Allen was sited as controlling authority in almost every point in this case by the Oregon Supreme Court.

Byron R. White:

Do you know what the common law rule or in absent of treaty or in the absence, what was the rule in Oregon the before – this 1937 statute?

Wayne M. Thompson:

No, Your Honor the 1937 statute was the one previously referred to by Mr. Schwabe, the OCLA statute 61107 that was the statute in Oregon in 1937.

Byron R. White:

When was that?

Wayne M. Thompson:

That was in 1937.

Byron R. White:

That’s what I mean.

Wayne M. Thompson:

We are not dealing with that statute today though we are dealing with ORS 111070 which was passed in 1951.

Byron R. White:

Alright but what was the rule in Oregon on 1937?

Wayne M. Thompson:

Your Honor, I’m sorry — on that point, couldn’t say.

Byron R. White:

Well absent, wasn’t the old rule, the absent of treaty, absent of treaty or absent of statute or let say absent of statute is that a normal state rule or the inheritability of personal property and the non-inheritability of real estate, isn’t that true?

Wayne M. Thompson:

As far as aliens are concerned yes, Your Honor.

Wayne M. Thompson:

Aliens had a right —

Byron R. White:

Absent the statute?

Wayne M. Thompson:

Absent the statute.

Byron R. White:

Absent the statute, the non-resident alien could have inherited this personally?

Wayne M. Thompson:

I believe that is correct Your Honor.

I wouldn’t make a certain statement but I believe that is correct because in Oregon as in many states we had an alien land laws and we’re concerned with these in several cases and I believe that the situation was that an alien could not inherit or could not in some cases buy real property.

Byron R. White:

Why wouldn’t the people that engrafted a treaty assume the existence of the inheritability of person located in this country?

Wayne M. Thompson:

I believe they should have assumed it Your Honor, I believe —

Byron R. White:

Well yeah, well they assumed it all right and their only problem was that person is located elsewhere.

That’s the only problem they addressed themselves to?

Wayne M. Thompson:

Their problem was person had located elsewhere or the possible interpretation of an ambiguous statement in the treaty.

I believe this is where much of this arises from.

I think this particular portion of Article 4 relating to personal property can be interpreted either way and I think the position of the Solicitor General in their brief for the United States amicus curiae points this out.

We would state that regarding the matter of the overruling or modification of Clark versus Allen, the determination there possess the flexibility necessary to allow it to be a continuing principle.

That if the time is reached when the government feels that there has been an interference with foreign affairs then the overriding Federal policy may be enunciated.

Now that point hasn’t been reached at this time as evidenced by the statements of the government.

We would further contend that the regrettable disappointment of a prospective heir, prospective alien heir is not the basis for limiting or removing from the states, the right to regulate or control a succession of the decedents’ estates within their boundaries.

Now the heirs, the appellants seek to advance the active state doctrine to aid their position in this matter.

However, we would submit that the act of state doctrine has no applicability here.

In the first place as I have said in this case there was no internal, there were no internal acts of a foreign state considered.

Now this is not just to say that the state would not have consider such acts, I would not deny this.

They would have considered such acts, they have been consider before another cases but they were not in evidence here and they were not considered here.

Now the statement of the act of state doctrine as was set forth in Sabatino case which is cited in both briefs was that the there would not be an examination of the, and I underscore that where validity, of an internal act of a recognized foreign sovereign in the absence of an agreed legal principle.

And usually this relates to the taking of property within that foreign country but we have two aspects missing here, first we don’t have a recognized sovereign.

The United States doesn’t recognize East Germany, German Democratic Republic.

Secondly and more importantly we are not concerned in these cases with the validity of an internal act to a foreign country.

We are concerned with this act but not with the validity of the act.

The consideration of such acts would be as these acts would bear on the eligibility of the individual, we would not be concerned with the effectiveness of the acts, the foreign acts with the authoritativeness or with the enforceability of those acts.

We are only concerned with the content and perhaps the effect as those acts would reflect on the eligibility of the individual perspective heir.

Now with regard to this point Mr. Justice Reid in United States versus Burneson which is cited in our brief made the comment that the transfer of decedents’ properties could be viewed as one transaction or it could be separable, it could be viewed as a separate or as a series of separate transactions, and that the states in regulating the succession to a decedent’s property were acting upon the right of the decedent to give that property, not upon the right of an individual or the United States or anyone else to take the property or receive it.

Wayne M. Thompson:

They were acting upon their right of the decedent to give it.

We would submit that here this is what, what is being by done by the state.

Granted, we still recognize the possible effect, indirect effect in foreign countries, but here the state is saying that an individual may not give property to a non-resident or an alien.

Potter Stewart:

What’s not clear to me is what would happen if a resident and citizen of Leipzig should die leaving heirs out in (Inaudible) what would happen?

Wayne M. Thompson:

Your Honor I would —

Potter Stewart:

If that’s a real and personal property?

Wayne M. Thompson:

As to real and personal property unless the treaty of 1923 with Germany could be carried into effect and its reciprocity provisions there, with the non-recognition of East Germany, I don’t see how anything would happen except that the property would remain in Leipzig and that the -–

Potter Stewart:

[Inaudible]

Wayne M. Thompson:

To East Germany, Your Honor?

Potter Stewart:

Yes.

Wayne M. Thompson:

I have no idea.

Potter Stewart:

It’s something I would think that would happen?

Wayne M. Thompson:

Well it would happen under, it would happen under East German law, Your Honor, and about this, there’s nothing in the record.

I have no idea what the aspect of East German law would be in this case or Russian law whichever might prevail in that case.

The law of the German Democratic Republic, I have no knowledge on this subject.

Potter Stewart:

And the record —

Wayne M. Thompson:

The record has no bearing here.

The only bearing on the status of a matter in East Germany I believe was testified to by Mr. Peckman, Dr. Peckman, the consul, when he made reference in the probate court to the fact that in some instances properties in West Germany, assets in West Germany are I believe sometimes held there for the benefit of those in East Germany, sometimes food parcels and things of this nature are transmitted.

But other than this, there’s nothing in the record regarding East German laws or anything of this nature.

Potter Stewart:

Now weren’t you just talking about West Germany?

Wayne M. Thompson:

I was talking of West Germany, yes, Your Honor.

Potter Stewart:

That part is controlled by the Bonn government.

Wayne M. Thompson:

Yes, Your Honor, the Federal Republic of Germany.

Now the heirs have taken the position that the statute denies the rights of inheritance of the foreign heirs.

We would simply state this that except for the laws of the State of Oregon, the heirs have no rights of inheritance, except for the laws of the state of Oregon and any international agreement that may supersede or be supreme above those laws because of the reflection on foreign affairs.

Now I’d like for a moment to go to this point of the reconsideration of the 1923 treaty as was proposed by the Solicitor General in the brief for the United States as amicus curiae.

There are several factors that I believe would be prerequisite to the interpretation of this treaty.

First in June of 1953, June 2nd, there was a note from the United States to the Government of the Federal Republic, the West German Government, terminating Article 6 of the treaty as is provided in Article 31 there, it provides for unilateral termination by notice.

Article 6 was terminated by the United States Government in such a manner, dealing itself with the Federal Republic as the other treaty party.

Now in June 3, 1953, the two same governments, the United States Government and the Government of the Federal Republic of Germany entered into an agreement relating to the 1923 treaty.

Wayne M. Thompson:

The stated purpose of that agreement was to restore the 1923 treaty to full force and effect except as limited within the agreement.

The limitation within the agreement was that the 1923 treaty should be limited or the forcing effect of the 1923 treaty should be limited to the territory under the sovereignty and authority of the Federal Republic of Germany, West Germany.

It also made provision for carrying this over to Land Berlin upon such time as the political situation should so warrant.

In 1954, the Treaty of Friendship, Commerce and Navigation was entered into between the United States Government and the Federal Republic of Germany.

This was in response to negotiations which were anticipated in the 1953 agreement.

Now in the 1954 treaty, Article 26, once again, limited the application of the 1954 treaty to the territory under the sovereignty and authority of the Federal Republic, that is West Germany.

Further in Article 28 of the treaty, there was specifically and expressly several articles of the 1923 treaty were terminated.

Articles 1 through 5 were terminated, Article 6 had previously been terminated unilaterally by the United States, Article 7 through 16 were terminated, and Articles 29 through 32.

The only articles then remaining in existence by the – under the agreement of — or I should say under the treaty of 1954 were Articles 17 through 28, which were made a part of the 1954 treaty until such time as a consular convention should be arrived at between the two parties.

Now, we would submit that all of these facts must be taken into consideration and wealth could provide the basis for determination of the 1923 treaty has been in fact terminated except for the consular conventions, so called, that it no longer exists including Article 4, which provides reciprocity and which Clark versus Allen and our Supreme Court of Oregon both relied on.

The statements and position of the Federal Government are contrary, and we recognize this.

They have stated that the 1923 treaty still applies as to East Germany that the — I believe their position is not misstated when I say that they have held that the 1954 treaty between the United States and the Federal Republic, at that time the Federal Republic had no authority, no jurisdiction, no sovereignty over East Germany and consequently could not terminate the treaty as to East Germany.

However by the actions and negotiations between the two countries, it was apparent they were acting as one treaty party with another.

And consequently we believe the basis there existed for finding that there has in fact been a termination.

Would you not deny that great weight is to be given to the position to the Federal Government, however as I stated earlier I believe the position of the Court has been that even notwithstanding this weight it will interpret the treaties for itself.

I would say that we would urge the Court that the decision of the Oregon Supreme Court be affirmed unless this Court should find that the Oregon Supreme Court or that the 1923 treaty has been terminated in which case the decision of the lower court would have to be modified.

I thank the Court.

Peter A. Schwabe, Sr.:

Mr. Chief Justice if the Court please.

I would if I may address myself to the question of Mr. Justice White on the policy or the law of the State of Oregon prior to the enactment of the reciprocity statute.

I think I can correctly and definitively inform, Your Honor, that prior to the enactment of the reciprocity statute, the first one in 1937, there was never any question about the right of inheritance of any non-resident alien real or personal property.

We did of course years ago had alien land laws which were set aside by assertive decisions of this Court which prevented aliens not eligible for citizenship to owning their property in California or even Washington, there’s a series of cases on there.

But prior to 1937, there was no restriction whatsoever in respect to either real or personal property of non-resident aliens regardless of where they resided.

Of course in 1937 the political situation in the world was quite different, prior to the war and the upheaval since that time did not exist.

So it does affect, the Reciprocal Inheritance Rights statute did for the first affect the right, inheritance rights of any non-resident aliens.

Now speaking of the termination of the 1923 treaty, I’d like to direct the Court’s attention number 1 to the fact that we appealed only on the constitutionality question.

We did not appeal on the interpretation of the treaty, although the Attorney General of Oregon has, by his brief and by his argument today sought to interject that issue.

We say to Your Honor you can’t have it both ways.

He says that the west, by correspondence and dealing with the West German government, the Bonn government and the United States government, the 1923 treaty has been rescinded and advocated terminated, but he doesn’t — in the same communication in which the state department said that the 1923 treaty still applies to the Russian zone of occupation and that same — in that same communication they said the 1954 treaty does not apply and you can’t have it both ways.

You can’t say that the Bonn government can terminate the 1923 treaty in respect to the Russian zone and — but that they can’t say that the 1954 treaty extends to our citizens, our nationals in the Russian zone. And that carries me to next point.

It has been said here that there was no evidence in the record of reciprocity.

Peter A. Schwabe, Sr.:

Mind you reciprocity can be proven either by treaty or by reciprocity, the fact that you go into the laws of the country, inheritance laws, the property change control laws, you produce mountains of decrees by probate courts of the foreign countries, you produce lists of remittances, you produce the battle of the experts, you get one set of experts that say that there was reciprocity and the next set of experts says no and the question as I think Professor Shatkin pointed out in his Article it’s the person who can hire the most expert and the most expensive experts is the person that usually wins.

But the point is that there was no evidence of reciprocity in this record for the simple reason that from the inception of this case, the East German people took the position that they were governed by German law, that they were entitled to the German — the benefit of the German Treaty of 1954.

The Foreign Office of the Federal Republic took that position on a special document which is in evidence here, which is quoted in our brief and, they said those people have the same nationality as the residents of the Federal Republic therefore they are entitled to the benefits of the 1954 treaty as it applies to inheritance rights, having in mind that there is differentiation if the Court please between territorial application of the treaty and the personal rights granted by a treaty.

The personal rights granted by a treaty are given to nationals of that country, not that the nationals have to reside within the borders of that country.

They can be residing in Australia, in Timbuktu, in Alaska, any place in the world but every German is bound by that treaty if he is a German national and that is the position that we took that these people granted that they were residing east of the border, granted that they are residing east of the wall, but they’re still Germans, they are governed by German law and they’re entitled to German treaty, that’s the position we took and it’s quite impossible under those circumstances if you take that position to say we’re going to bring in evidence of reciprocity for a country that doesn’t exist.

Abe Fortas:

But you still say you’re not relying on the 1954 Treaty, but rather on the point with respect to constitutionality?

Peter A. Schwabe, Sr.:

Yes Your Honor, because we did not appeal on that subject and it think I gave Your Honor the reason for that.

I don’t say that if this Court rejects our argument on the constitutionality that we would not welcome the 1950 — the 1923 treaty being re-construed to include personal property, but that’s not our position here.

We did not appeal on that ground and we don’t ask the Court to do that here, I don’t think we can.

By the same token I don’t think that the distinct not having cross appealed on the Oregon Supreme Court’s finding that the 1923 treaty applies, I don’t think the state cannot come and say that the treaty was —

Abe Fortas:

Well there’s a little offering that’s here, it seems to me because we have a brief from the Attorney General of the United States in which he argues a treaty point and you say you don’t rely on it.

We will be glad to have a benefaction on the treaty point if we can’t decide it on constitutional basis.

There’s nobody here that’s really taking the position that the Attorney General expressed in his brief to this Court, isn’t that?

Peter A. Schwabe, Sr.:

Are you speaking of the Attorney General of Oregon or the —

Abe Fortas:

The United States.

Peter A. Schwabe, Sr.:

We take the position Your Honor that we did not respond to his brief for the reason that, that was brought in on his own volition.

He is the one that asked the Court to re-construe and reexamine it’s construction of the 1923 treaty in Clark versus Allen.

We did not ask that.

He brought that in and we felt that having appealed solely on the constitutional issue that it was not up to us to argue that point.

I would like to just in conclusion I think would just like to say that I pointed our earlier that are now ten states of the union that would have these reciprocity statues.

There are great many cases in California, in Oregon, in Montana, other reciprocity states being held in abeyance waiting for this Court to decide on the constitutionality of these reciprocity inherent right statue.

I will say this, if the Court does place the stamp of approval of constitutionality on the Oregon statue and by doing that on the rest of the statues these are certainly going to proliferate and although the state department may say no that at this point there has been no — there has been only little effect on the foreign relations of United States I can visualize a very grave serious situation developing in later years and in the future if these statutes are held to be constitutional and thereby I ask that the Courts rule to be unconstitutional.

Yes, Your Honor.

[Inaudible]

Peter A. Schwabe, Sr.:

That is what the state department should say.

[Inaudible]

Peter A. Schwabe, Sr.:

No it’s just a treaty between the United States and the Federal Republic of Germany.

[Inaudible]

Peter A. Schwabe, Sr.:

The United States has a number of treaties with foreign countries, which for instance there is an 1852 treaty with Argentina which is frequently cited in these cases, because for instance with Yugoslavia there was the mutual most favored nation clause in the Yugoslavia Treaty of 1881 and the Serbian treaty and it was held — it was argued and also inferentially held that the most favored nation provision of the Serbian Treaty, the Argentine Treaty applied. The Swiss have a treaty, the French have a treaty, the British have a treaty and nobody ever questions reciprocity with any of the Western countries.

It’s an Iron Curtain rule, the only countries against which the reciprocity statues have ever been asserted and they’ve gone to any higher court is in respect to the Iron Curtain country.

[Inaudible]

Peter A. Schwabe, Sr.:

The same constitutional provisions which Mr. Justice Douglas and with your concurrence with Mr. Justice Black, ruled that whenever a state inheritance law effects the foreign relations of the United States interferes in anyway with the foreign relations of the of the United States then it is in conflict with the exclusive Federal power to govern foreign relations, which in essence is based on Article 1 Section 10 of Constitution, which is generally cited.

There is also at times is recited a Commerce Clause and the Due Process Clause.

But basically our appeal has been on Article 16 —

[Inaudible]

Peter A. Schwabe, Sr.:

I’m very sorry sir, I do not follow your question.

[Inaudible]

Peter A. Schwabe, Sr.:

Yes sir and that any incursion by any state upon the field of foreign relations in any of its domestic legislation is unconstitutional.

It may not given effect and that I think is the — also in Clark versus Allen that very statement was made that while traditionally rights of inheritance are within the province of the individual state, when the legislation in respect to inheritance does crossover into the field of foreign relations affecting the relations of the United States with a foreign country that then it becomes an unconstitutional and an unauthorized invasion by the state with the exclusive Federal part of government to foreign relations.