1. Where, by the terms of a state law, aliens were entitled to
file articles of incorporation for certain purposes if so
privileged by a treaty of the United States, and not otherwise, and
the highest court of the state granted them a writ of mandamus
against state officers upon the ground that such privilege,
specially set up and claimed, was secured by the treaty, a review
of the case at the instance of the officers is within the
jurisdiction of this Court under Jud.Code, § 237(b). P.
278 U. S.
126.
2. Obligations of treaties should be liberally construed to
effect the apparent intention of the parties to secure equality and
reciprocity between them. Where a treaty admits of two
constructions, one restricting the rights that may be claimed under
it and the other enlarging them, the more liberal construction is
to be preferred. P.
278 U. S.
127.
3. The treaty of commerce and navigation between the United
States and Japan authorizes citizens of Japan to carry on trade
within the United States and
"to lease land for residential and commercial purposes, and
generally to do anything incident to or necessary for trade upon
the same terms as native citizens or subjects, submitting
themselves to the laws and regulations there established.
Page 278 U. S. 124
Held that this includes the operation of a hospital as
a business undertaking, the leasing of land for that purpose, and
the exercise of these privileges through a corporate agency. Pp.
278 U. S. 126,
278 U. S.
129."
201 Cal. 236 affirmed.
Certiorari, 277 U.S. 580, to a judgment of the Supreme Court of
California which granted a writ of mandamus against the present
petitioners, the Secretary of State and Deputy Secretary of State,
of California, commanding them to file articles of incorporation
tendered by the respondents, who were Japanese aliens.
MR. JUSTICE STONE delivered the opinion of the Court.
The respondents, subjects of Japan residing in California,
presented for filing in the office of the Secretary of State of
California, one of the petitioners, proposed articles of
incorporation of the "Japanese Hospital of Los Angeles." The
articles provided for the creation of a business corporation with a
share capital of $100,000. They purported to authorize the
corporation to construct and operate in Los Angeles a general
hospital with a home for nurses and resident physicians, and to
lease land for that purpose.
Although the articles complied with all provisions of the
California statutes governing the organization of a corporation for
such purposes, the petitioners refused to file them on the ground
that, as the respondents were citizens of Japan, the Alien Land Law
of the state did not permit an incorporation by them for the
purposes named. The respondents then brought, in the Supreme Court
of California,
Page 278 U. S. 125
a proceeding in mandamus to compel the petitioners to file the
proposed articles and to issue a certificate of incorporation to
the hospital. The mandamus petition set up that the treaty of
commerce and navigation between the government of the United States
and the Empire of Japan, proclaimed April 5, 1911, 37 Stat. 1504,
and now in force, conferred on citizens and subjects of the empire
of Japan the right to incorporate in the United States for the
purposes named in the proposed articles.
The state court granted the writ as prayed, basing its
determination on the construction of the treaty.
Tashiro v.
Jordan, 201 Cal. 236, 256 P. 545. This Court granted the
petition of the Secretary of State of California for certiorari May
14, 1928. 277 U.S. 580.
Section 2 of the Alien Land Law of California, as amended by the
Act of the legislature approved June 20, 1923, Stats.1923, p. 1020,
provides that aliens of a class in which respondents are included
may acquire, possess, and enjoy real estate within the state
"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."
Section 3, in like terms, permits (a) acquisition of land by a
corporation, the majority of whose stockholders are aliens, and (b)
the purchase by aliens of stock in corporations owning or leasing
land, only for purposes prescribed by such a treaty.
The statutes of California do not otherwise forbid the
organizing of a corporation by citizens of Japan residing in the
state, and by these enactments there was effected perfect harmony
in the operation of the statute and of the treaty. What the treaty
prescribes the statute authorizes. There is thus no possibility of
conflict between the exercise of the treatymaking power of the
federal government and the reserved powers of the state such as
that
Page 278 U. S. 126
suggested in
Geofroy v. Riggs, 133 U.
S. 258,
133 U. S. 267,
on which petitioners placed reliance on the argument.
The Supreme Court of California, in passing upon the application
for mandamus, granted the relief prayed not as a matter of
statutory construction, but because it thought the conduct of a
hospital by Japanese citizens through the instrumentality of a
corporation, organized under the laws of the state, was a privilege
secured to the respondents by the treaty which the state statute
did not purport to withhold. The privilege challenged by
petitioners is one specially set up or claimed under a treaty of
the United States and sustained by the state court, and the case is
thus one within the jurisdiction of this Court conferred by §
237(b) of the Judicial Code.
Compare Red Cross Line v. Atlantic
Fruit Co., 264 U. S. 109,
264 U. S.
120.
The question presented is one of the construction of the treaty,
the relevant portions of which are printed in the margin.
* It in terms
authorizes the citizens of Japan to carry on trade within the
United States and
"to lease land for residential and commercial purposes, and
generally
Page 278 U. S. 127
to do anything incident to or necessary for trade upon the same
terms as native citizens or subjects, submitting themselves to the
laws and regulations there established."
The petitioners insist that the construction and operation of a
hospital is not one of the purposes prescribed by the treaty,
which, it is argued, are limited so far as "trade" and "commerce"
are concerned to the purchase and sale or exchange of goods and
commodities, and that, in any case, the treaty does not confer upon
Japanese subjects, resident in California, the privilege of forming
a corporation under the laws of California or of leasing lands
through a corporate agency for such a purpose.
The principles which should control the diplomatic relations of
nations, and the good faith of treaties as well, require that their
obligations should be liberally construed so as to effect the
apparent intention of the parties to secure equality and
reciprocity between them.
See Geofroy v. Riggs, supra; Tucker
v. Alexandroff, 183 U. S. 424,
183 U. S. 437;
Wright v. Henkel, 190 U. S. 40,
190 U. S. 57;
In re Ross, 140 U. S. 453,
140 U. S. 475.
Upon like ground, where a treaty fairly admits of two
constructions, one restricting the rights that may be claimed under
it and the other enlarging them, the more liberal construction is
to be preferred.
Asakura v. Seattle, 265 U.
S. 332;
Tucker v. Alexandroff, supra; Geofroy v.
Riggs, supra.
While in a narrow and restricted sense the terms "commerce," or
"commercial," and "trade" may be limited to the purchase and sale
or exchange of goods and commodities, they may connote, as well,
other occupations and other recognized forms of business enterprise
which do not necessarily involve trading in merchandise.
Asakura v. Seattle, supra. And although commerce includes
traffic in this narrower sense, for more than a century it has been
judicially recognized that, in a broad sense, it
Page 278 U. S. 128
embraces every phase of commercial and business activity and
intercourse.
See Gibbons v.
Ogden, 9 Wheat. 1,
22 U. S. 189.
Considerations which led this Court to conclude that the terms
"trade" and "commerce" as used in this treaty do not include
agriculture, and the circumstances attending the making of the
treaty which were deemed to exclude from the operation of its broad
language any grant of the privilege of acquiring and using lands
within the United States for agricultural purposes, were discussed
in the opinions in
Terrace v. Thompson, 263 U.
S. 197,
263 U. S. 223,
Webb v. O'Brien, 263 U. S. 313,
263 U. S. 323,
Frick v. Webb, 263 U. S. 326,
263 U. S. 333,
and need not now be detailed. But in
Asakura v. Seattle,
supra, it was held that the language of this treaty securing
to Japanese citizens the privilege of carrying on trade within the
United States was broad enough to comprehend all classes of
business which might reasonably be embraced in the word "trade,"
and included the privilege of carrying on the business of a
pawnbroker. In
Clarke v. Deckebach, 274 U.
S. 392,
274 U. S. 396,
in considering the treaty with Great Britain of July 3, 1815, 8
Stat. 228, and August 6, 1827, 8 Stat. 361, granting reciprocal
liberty of commerce between the United States and Great Britain,
and in holding that the guarantee that " . . . the merchants and
traders of each nation, respectively, shall enjoy the most complete
protection and security for their commerce," did not extend to a
British subject engaged in keeping a poolroom within the United
States, we took occasion to point out that the language of the
present treaty with Japan was of broader scope than that then
before the court.
Giving to the terms of the treaty, as we are required by
accepted principles, a liberal, rather than a narrow,
interpretation, we think, as the state court held, that the terms
"trade" and "commerce," when used in conjunction with each other
and with the grant of authority to lease land for "commercial
purposes" are to be given a
Page 278 U. S. 129
broader significance than that pressed upon us, and are
sufficient to include the operation of a hospital as a business
undertaking; that this is a commercial purpose for which the treaty
authorizes Japanese subjects to lease lands.
It is said that the elimination from the original draft of this
clause of the treaty of words authorizing the leasing of land for
"industrial, manufacturing and other lawful" purposes (
see
Terrace v. Thompson, supra, p.
263 U. S. 223)
leads to the conclusion that land might not be leased for hospital
purposes by Japanese subjects even though, under the other
provisions of the treaty, they might be permitted to operate such
an institution. But, as the leasing of land for a hospital is
obviously not for an industrial or manufacturing purpose, this
argument presupposes that the phrase "commercial purposes" is
limited to merchandising businesses, which, for reasons already
stated, we deem inadmissible. Moreover, a construction which
concedes the authority of Japanese subjects to operate a hospital
but would deny to them an appropriate means of controlling so much
of the earth's surface as is indispensable to its operation, does
not comport with a reasonable, to say nothing of a liberal,
construction. The Supreme Court of California has reached a like
conclusion in
California v. Tagami, 195 Cal. 522, holding
that this treaty secured to a Japanese subject the privilege of
leasing land within the state for the purpose of using and
occupying it for the maintenance of a health resort and
sanitarium.
The contention that the treaty does not permit the exercise of
the privileges secured by it through a corporate agency requires no
extended consideration. The employment of such an agency is
incidental to the exercise of the granted privilege. But it is not
an incident which enlarges the privilege by annexing to the
permitted business another class of business otherwise excluded
from the
Page 278 U. S. 130
grant, as would have been the case in
Terrace v. Thompson,
supra, had the business of farming been deemed an incident to
the business of trading in farm products.
The principle of liberal construction of treaties would be
nullified if a grant of enumerated privileges were held not to
include the use of the usual methods and instrumentalities of their
exercise. Especially would this be the case where the granted
privileges relate to trade and commerce and the use of land for
commercial purposes. It would be difficult to select any single
agency of more universal use or more generally recognized as a
usual and appropriate means of carrying on commerce and trade than
the business corporation. And it would, we think, be a narrow
interpretation indeed which, in the absence of restrictive
language, would lead to the conclusion that the treaty had secured
to citizens of Japan the privilege of engaging in a particular
business, but had denied to them the privilege of conducting that
business in corporate form. But here, any possibility of doubt
would seem to be removed by the clause which confers on citizens
and subjects of the high contracting parties the right
". . . to do anything generally incident to or necessary for
trade upon the same terms as native citizens or subjects,
submitting themselves to the laws and regulations there
established."
Affirmed.
*
"Treaty of commerce and navigation between the United States and
Japan. . . ."
"Article I. The citizens or subjects of each of the high
contracting parties shall have liberty to enter, travel and reside
in the territories of the other to carry on trade, wholesale and
retail, to own or lease and occupy houses, manufactories,
warehouses and shops, to employ agents of their choice, to lease
land for residential and commercial purposes, and generally to do
anything incident to or necessary for trade upon the same terms as
native citizens or subjects, submitting themselves to the laws and
regulations there established. . . ."
The citizens or subjects of each of the high contracting parties
shall receive, in the territories of the other, the most constant
protection and security for their persons and property, and shall
enjoy in this respect the same rights and privileges as are or may
be granted to native citizens or subjects, on their submitting
themselves to the conditions imposed upon the native citizens or
subjects. . . .