Two residents of Oregon died intestate, leaving personal
property there and no heirs or next of kin except certain residents
and nationals of Yugoslavia. Claiming that the Yugoslavian
relatives were ineligible to inherit such property under an Oregon
statute, the State sued in a state court to have the property
declared escheated to the State.
Held: an 1881 treaty between the United States and
Serbia, which is now a part of Yugoslavia, entitles residents and
citizens of Yugoslavia to inherit personal property located in
Oregon on the same basis as American next of kin, and these rights
have not been taken away or impaired by the monetary policies of
Yugoslavia exercised in accordance with later agreements between
that country and the United States. Pp.
366 U. S.
188-198.
(a) Under the 1881 Treaty, with its "most favored nation"
clause, these Yugoslavian relatives have the same right to inherit
their American relatives' personal property as they would have if
they were American citizens living in Oregon. Pp.
366 U. S.
191-196.
(b) The International Monetary Fund Agreement of 1944, to which
the United States and Yugoslavia are parties, and an Agreement of
1948 between the United States and Yugoslavia, coupled with the
continued adherence of the United States to the 1881 Treaty,
preclude any State from deciding that Yugoslavian foreign exchange
laws meeting the standards of those Agreements can be the basis for
defeating rights conferred by the 1881 Treaty. Pp.
366 U. S.
196-198.
220 Ore. 448,
349 P.2d
255, reversed.
Page 366 U. S. 188
MR. JUSTICE BLACK delivered the opinion of the Court.
Joe Stoich and Muharem Zekich died in Oregon in December, 1953,
without having made wills to dispose of personal property they
owned in that State. Their only heirs and next of kin, who, but for
being aliens, could have inherited this Oregon property under
Oregon law, were brothers, sisters, nieces and nephews who were all
residents and nationals of Yugoslavia. But § 111.070 of the Oregon
Revised Statutes rather severely limits the rights of aliens not
living in the United States to "take" either real or personal
property or its proceeds in Oregon "by succession or testamentary
disposition." [
Footnote 1] And
subsection
Page 366 U. S. 189
(3) of the same Oregon statute provides that, where there are no
next of kin except ineligible aliens and the deceased made no will,
the property of the deceased shall be taken by the State as
escheated property.
The State filed petitions under this provision in an Oregon
Circuit Court to take for itself the personal property of both
decedents, [
Footnote 2]
alleging that there were no next of kin eligible to take under
Ore.Rev.Stat. § 111.070. The answers filed by the Yugoslavian
relatives and the San Francisco Consul General of that country (who
are petitioners here) alleged that, "in fact and in law, reciprocal
rights of inheritance as prescribed by ORS 111.070 did exist"
between the United States and Yugoslavia when the decedents died,
and that the Yugoslavian relatives therefore were eligible to take
under Oregon law. After hearings in which evidence was taken, the
trial court found that the reciprocal right of inheritance required
by § 111.070(1)(a) did exist, and that, both at the time the two
deceased died and at the time of the trial, there existed
"rights of citizens of the United States to receive payment to
them within the United States . . . of moneys originating from the
estates of persons dying within the country of Yugoslavia,"
as required by § 111.070(1)(b). The State Supreme Court
reversed, holding that petitioners had failed to prove "the
ultimate fact" that there existed "as a matter of law an
unqualified and enforceable right to receive as defined by ORS
111.070." [
Footnote 3] It found
instead that such an unqualified right did not exist, because the
laws of Yugoslavia give discretion to Yugoslavian authorities to
control foreign exchange payments in a way that might prevent
Americans from receiving the full value of Yugoslavian
inheritances. It was accordingly held that Oregon state law,
standing alone, barred
Page 366 U. S. 190
these Yugoslavian nationals from inheriting their relatives'
personal property in Oregon.
The state court went on to say that this holding disposes of
petitioners' claims
"[u]nless the area of alien succession over which the state of
Oregon seeks to control through ORS 111.070,
supra, has
been preempted by some treaty agreement subsisting between
Yugoslavia and the United States"
at the time of the decedents' death. On this point, the court
said:
"We are mindful that rights of succession to property under
local law may be affected by an overriding federal policy when a
treaty makes different or conflicting arrangements. In such event,
the state policy must give way.
Clark v. Allen,
331 U. S.
503,
331 U. S. 517 (1645). . .
."
220 Or. 448, 462,
349 P.2d
255, 262-263. Thus, recognizing quite properly that state
policies as to the rights of aliens to inherit must give way under
our Constitution's Supremacy Clause to "overriding" federal
treaties and conflicting arrangements, the state court considered
petitioners' contention, supported in this Court by the Government
as
amicus curiae, that petitioners were entitled to
inherit this personal property because of an 1881 Treaty between
the United States and Serbia, which country is now a part of
Yugoslavia. The state court rejected this contention on the basis
of its interpretation of the Treaty, although it correctly
recognized that the Treaty is still in effect between the United
States and Yugoslavia. [
Footnote
4] The state court also rejected petitioners' contention that
their claims could not be defeated solely because of the possible
effect of the Yugoslavian Foreign
Page 366 U. S. 191
Exchange Laws and Regulations since those laws and regulations
admittedly meet the requirements of the Bretton Woods Agreement of
1945, [
Footnote 5] to which
both Yugoslavia and the United States are signatories. We granted
certiorari because the cases involve important rights asserted in
reliance upon federal treaty obligations.
Kolovrat v. State of
Oregon, 364 U.S. 812.
For reasons to be stated, we hold that the 1881 Treaty does
entitle petitioners to inherit personal property located in Oregon
on the same basis as American next of kin, and that these rights
have not been taken away or impaired by the monetary policies of
Yugoslavia exercised in accordance with later agreements between
that country and the United States.
I
The parts of the 1881 Treaty most relevant to our problem are
set out below. [
Footnote 6] The
very restrictive meaning
Page 366 U. S. 192
given the Treaty by the Oregon Supreme Court is based chiefly on
its interpretation of this language:
"In all that concerns the right of acquiring, possessing or
disposing of every kind of property . . . citizens of the United
States in Serbia and Serbian subjects in the United States, shall
enjoy the rights which the respective laws grant . . . in each of
these states to the subjects of the most favored nation."
This, the State Supreme Court held, means that the Treaty
confers a right upon a United States citizen to acquire or inherit
property in Serbia only if he is "in Serbia" and upon a Yugoslavian
citizen to acquire property in the United States only if he is "in
the United States." The state court's conclusion, therefore, was
that the Yugoslavian complainants, not being residents of the
United States, had no right under the Treaty to inherit from their
relatives who died leaving property in Oregon. This is one
plausible meaning of the quoted language, but it could just as
plausibly mean that, "in Serbia," all citizens of the United States
shall enjoy inheritance rights, and "in the United States," all
Serbian subjects shall enjoy inheritance rights, and this
interpretation would not restrict almost to the vanishing point the
American and Yugoslavian nationals who would be benefited by the
clause. We cannot accept the state court's more restrictive
interpretation when we view the Treaty in the light
Page 366 U. S. 193
of its entire language and history. This Court has many times
set its face against treaty interpretations that unduly restrict
rights a treaty is adopted to protect. [
Footnote 7]
The 1881 Treaty clearly declares its basic purpose to bring
about "reciprocally full and entire liberty of commerce and
navigation" between the two signatory nations, so that their
citizens "shall be at liberty to establish themselves freely in
each other's territory." Their citizens are also to be free to
receive, hold and dispose of property by trading, donation,
marriage, inheritance or any other manner "under the same
conditions as the subjects of the most favored nation." Thus, both
paragraphs of Art. II of the Treaty which have pertinence here
contain a "most favored nation" clause with regard to "acquiring,
possessing or disposing of every kind of property." This clause
means that each signatory grants to the other the broadest rights
and privileges which it accords to any other nation in other
treaties it has made or will make. In this connection, we are
pointed to a treaty of this country, made with Argentina before the
1881 Treaty with Serbia, [
Footnote
8] and treaties of Yugoslavia with Poland and Czechoslovakia,
[
Footnote 9] all of which
unambiguously provide for the broadest kind of reciprocal rights of
inheritance for nationals of the signatories which would precisely
protect
Page 366 U. S. 194
the right of these Yugoslavian claimants to inherit property of
their American relatives.
The rights conferred by the 1881 Treaty, broadly stated as they
are, would fall far short of what individuals would hope or desire
for their complete fulfillment if one who, by work and frugality,
had accumulated property as his own could be denied the
gratification of leaving his property to those he loved the most,
simply because his loved ones were living in another country where
he and they were born. Moreover, if these rights of "acquiring,
possessing or disposing of every kind of property" were not to be
afforded to merchants and businessmen conducting their trade from
their own homeland, the Treaty's effectiveness in achieving its
express purpose of "facilitating . . . commercial relations" would
obviously be severely limited. [
Footnote 10] It is not in such a niggardly fashion that
treaties designed to promote the freest kind of traffic,
communications and associations among nations and their nationals
should be interpreted, unless such an interpretation is required by
the most compelling necessity. There is certainly no such
compulsion in the 1881 Treaty's language or history.
While courts interpret treaties for themselves, the meaning
given them by the departments of government particularly charged
with their negotiation and enforcement is given great weight.
[
Footnote 11] We have before
us statements, in the form of diplomatic notes exchanged between
the responsible agencies of the United States and of Yugoslavia, to
the effect that the 1881 Treaty, now and always, has been construed
as providing for inheritance by both countries' nationals without
regard to the location
Page 366 U. S. 195
of the property to be passed or the domiciles of the nationals.
And relevant diplomatic correspondence and instructions issued by
our State Department show that the 1881 Treaty was one of a series
of commercial agreements which were negotiated and concluded on the
basis of the most expansive principles of reciprocity. The
Government's purpose in entering into that series of treaties was,
in general, to put the citizens of the United States and citizens
of other treaty countries on a par with regard to trading, commerce
and property rights. [
Footnote
12]
The Oregon Supreme Court apparently thought itself bound to
decide this question of treaty construction against petitioners
because of our decision in
Clark v. Allen, 331 U.
S. 503. We do not agree. In that case, we held that a
1923 Treaty with Germany, 44 Stat. 2132 did not confer rights upon
German nationals residing in Germany to inherit from American
citizens. The German Treaty did contain some language which, when
considered in isolation, could be thought to be sufficiently
similar to the controlling provisions of the 1881 Treaty to suggest
that these parts of the two treaties should be interpreted to have
the same meaning. [
Footnote
13] But the differences between the two treaties are crucial.
The German Treaty covered only disposal of property; the 1881
Treaty very broadly covers acquisition of property, as well as
disposal. The treaty before us, as we have pointed out, contains
the highly significant "most favored nation" clause, long used to
broaden the scope of rights protected by treaties;
Page 366 U. S. 196
the German Treaty had no "most favored nation" clause. Moreover,
the language of other treaties which was almost identical with the
pertinent provision in the German Treaty had previously been given
a very limited construction by this Court, a construction from
which we were unwilling to depart in
Clark v. Allen.
Finally, the relevant history of the negotiations for, the
interpretation of, and the practices under the 1881 Treaty support
petitioners' claims, but no such supporting history was brought to
our attention with respect to the German Treaty.
We hold that, under the 1881 Treaty, with its "most favored
nation" clause, these Yugoslavian claimants have the same right to
inherit their relatives' personal property as they would if they
were American citizens living in Oregon; but, because of the
grounds given for the Oregon Supreme Court's holding, we shall
briefly consider whether this treaty right has in any way been
abrogated or impaired by the monetary foreign exchange laws of
Yugoslavia.
II
Oregon law, its Supreme Court held, forbids inheritance of
Oregon property by an alien living in a foreign country unless
there clearly exists "as a matter of law an unqualified and
enforceable right" for an American to receive payment in the United
States of the proceeds of an inheritance of property in that
foreign country. The state court held that the Yugoslavian foreign
exchange laws in effect in 1953 left so much discretion in
Yugoslavian authorities that it was possible for them to issue
exchange regulations which might impair payment of legacies or
inheritances abroad, and, for this reason, Americans did not have
the kind of "unqualified and enforceable right" to receive
Yugoslavian inheritance funds in
Page 366 U. S. 197
the United States which would justify permitting Yugoslavians
such as petitioners to receive inheritances of Oregon property
under Oregon law. Petitioners and the United States urge that no
such doubt or uncertainty is created by the Yugoslavian law, but
contend that, even so, this Oregon state policy must give way to
supervening United States-Yugoslavian arrangements. We agree with
petitioners' latter contention.
The International Monetary Fund (Bretton Woods) Agreement of
1945,
supra, to which Yugoslavia and the United States are
signatories, comprehensively obligates participating countries to
maintain only such monetary controls as are consistent with the
terms of that Agreement. The Agreement's broad purpose, as shown by
Art. IV, § 4, is
"to promote exchange stability, to maintain orderly exchange
arrangements with other members, and to avoid competitive exchange
alterations."
Article VI, § 3, forbids any participating country from
exercising controls over international capital movements
"in a manner which will restrict payments for current
transactions or which will unduly delay transfers of funds in
settlement of commitments. . . ."
Article 8 of the Yugoslavian laws regulating payment
transactions with other countries expressly recognizes the
authority of "the provisions of agreements with foreign countries
which are concerned with payments." [
Footnote 14] In addition to all of this, an Agreement of
1948 between our country and Yugoslavia [
Footnote 15] obligated Yugoslavia, in the words of the
Senate Report on the Agreement,
"to continue to grant most favored nation treatment to Americans
in ownership and acquisition of assets in Yugoslavia . . . [and]
Yugoslavia
Page 366 U. S. 198
is required, by article 10, to authorize persons in Yugoslavia
to pay debts to United States nationals, firms, or agencies, and,
so far as feasible, to permit dollar transfers for such purpose.
[
Footnote 16]"
These treaties and agreements show that this Nation has adopted
programs deemed desirable in bringing about, so far as can be done,
stability and uniformity in the difficult field of world monetary
controls and exchange. These arrangements have not purported to
achieve a sufficiently rigid valuation of moneys to guarantee that
foreign exchange payments will at all times at all places and under
all circumstances be based on a "definitely ascertainable"
valuation measured by the diverse currencies of the world.
Doubtless these agreements may fall short of that goal. But our
National Government's powers have been exercised so far as deemed
desirable and feasible toward that end, and the power to make
policy with regard to such matters is a national one from the
compulsion of both necessity and our Constitution. After the proper
governmental agencies have selected the policy of foreign exchange
for the country as a whole, Oregon, of course, cannot refuse to
give foreign nationals their treaty rights because of fear that
valid international agreements might possibly not work completely
to the satisfaction of state authorities. Our National Government's
assent to these international agreements, coupled with its
continuing adherence to the 1881 Treaty, precludes any State from
deciding that Yugoslavian laws meeting the standards of those
agreements can be the basis for defeating rights conferred by the
1881 Treaty.
The judgment of the Supreme Court of Oregon is reversed, and the
cause remanded for proceedings not inconsistent with this
opinion.
Reversed and remanded.
[
Footnote 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."
[
Footnote 2]
The Circuit Court consolidated the two cases, and they have been
treated as one since.
[
Footnote 3]
220 Or. 448, 461,
349 P.2d
255, 262.
[
Footnote 4]
The Treaty is reported at 22 Stat. 963. Official recognition
that it is still in effect can be found in the Settlement of
Pecuniary Claims Against Yugoslavia Agreement between the United
States and Yugoslavia of July 19, 1948, 62 Stat. 2658, T.I.A.S.
1803, Art. 5.
[
Footnote 5]
60 Stat. 1401, T.I.A.S. 1501.
[
Footnote 6]
"The United States of America and His Highness the Prince of
Serbia, animated by the desire of facilitating and developing the
commercial relations established between the two countries, have
determined with this object to conclude a treaty. . . ."
"
Article I"
"There shall be reciprocally full and entire liberty of commerce
and navigation between the citizens and subjects of the two high
contracting powers, who shall be at liberty to establish themselves
freely in each other's territory."
"
Article II"
"In all that concerns the right of acquiring, possessing or
disposing of every kind of property, real or personal, citizens of
the United States in Serbia and Serbian subjects in the United
States, shall enjoy the rights which the respective laws grant or
shall grant in each of these states to the subjects of the most
favored nation."
"Within these limits, and under the same conditions as the
subjects of the most favored nation, they shall be at liberty to
acquire and dispose of such property, whether by purchase, sale,
donation, exchange, marriage contract, testament, inheritance, or
in any other manner whatever, without being subject to any taxes,
imposts or charges whatever, other or higher than those which are
or shall be levied on natives or on the subjects of the most
favored state."
"They shall likewise be at liberty to export freely the proceeds
of the sale of their property, and their goods in general, without
being subjected to pay any other or higher duties than those
payable under similar circumstances by natives or by the subjects
of the most favored state."
[
Footnote 7]
See, e.g., Bacardi Corp. v. Domenech, 311 U.
S. 150,
311 U. S. 163;
Jordan v. Tashiro, 278 U. S. 123,
278 U. S.
128-129.
[
Footnote 8]
Treaty of Friendship, Commerce, and Navigation, Between the
United States and the Argentine Confederation of 1853, 10 Stat.
1005, 1009, I Malloy 20. Article IX of this Treaty provides:
"In whatever relates to . . . acquiring and disposing of
property of every sort and denomination, either by sale, donation,
exchange, testament, or in any other manner whatsoever, . . . the
citizens of the two contracting parties shall reciprocally enjoy
the same privileges, liberties, and rights, as native citizens. . .
."
[
Footnote 9]
Yugoslav-Polish Treaty, 30 League of Nations Treaty Series 185;
Yugoslav-Czechoslovakian Treaty, 85 League of Nations Treaty Series
455.
[
Footnote 10]
Besides the obvious relevance of Art. II of the Treaty even when
considered alone, Art. III specifically contemplates the
interchange of "merchants, manufacturers, and trades people" or
"their clerks and agents."
[
Footnote 11]
See, e.g., Factor v. Laubenheimer, 290 U.
S. 276,
290 U. S.
294-295.
[
Footnote 12]
See, e.g., Report on Negotiations dated Nov. 30, 1850,
printed as Senate Confidential Document No. 1, 31st Cong., 2d
Sess., 5 Miller, Treaties and Other International Acts of the
United States 861; D.S., 15 Instructions, Argentina, 19-26, 6
Miller,
supra, 219.
[
Footnote 13]
The language relied upon by the Oregon Supreme Court was:
"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. . . ."
(349 P.2d 265.)
[
Footnote 14]
Law to Regulate Payments to and from Foreign Countries, Foreign
Exchange Law, Official Gazette of the Federal People's Republic of
Yugoslavia, Oct. 25, 1946, Belgrade, No. 86, Year II.
[
Footnote 15]
See note 4
supra.
[
Footnote 16]
S.Rep. No. 800, 81st Cong., 1st Sess., p. 4.