Petitioners Reply Brief — Kolovrat v. Oregon

ere

Oa Barre rent tee pmaen

h

a

a ea

INTHE eae a

Supreme Court of the United States

OcTOBER TERM,.1959 .

No. eee } “oN de

Axprsa Konovrat,. Draco Stogic, Dracica “Sunaic,

Nepa Turk. Josip Buncan, - JURE ZIvVANovVIC,

Mara Torte and Miran Srosic, and also ‘Branko -

KanabzoLe, Cousul General of Yugoslavia at

San Franeiseo, California, Petitioners :

Vv. ‘ , +

SPATE OF OneGON, acting by and through the State

Land Board, “Respondent

Live ZeKic, Inno Zexic, Warwa Terkovic, Dzkps a

* Popovac, SEFKO Merappasic, Dika MUnRApBASIc,

. Merra Brkicy Minka Zekic, JASMINA ZEKIC and

Rarka Zekic, and Branko Karapzore, Consul

“General of Yugoslavia at San Franciseo, Cali-

fornia, Petitioners

v.

e \ ‘ ‘

SPATE OF OrEGON, acting by and through the State

Land Board, Réspendent

PETITIONERS’ REPLY BRIEF

LAWRENCE S, LESSER

1210 18th Street, N. W.

Washington 6, D.C. *

Prrer A. ScHWABE

Pacifie Building

Portland 4, Oregon

Counsel for Petitioners.

Pini, LESSER, Many, REIMER & LUXFORD,

Of Counsel

Press or Byron S. Apams, Wasnincton. D.C.

\lise: FLLANEOUS:

American Law Institute, Restatement of the Foreiqn

Relations —- of the United States (Tentative

Draft No. 3, 1959) $ WRG... Peewee weer cence

International Mone ‘tary und, Eleventh Annual Re port

on Exchange Re strictions (1960) ss 4 idaek os

V Hackworth, Dig. Int. L, (1943) S99 6... ee ee ee

6...

INDEN

(asks: . ‘ *s . : Page

Asakura v. Seattle, 265 ELS. 332 (19: 24) .. Oe eshing dhe ee 2

Castro v. Det riarte, He Bed (AS.D.NLY. Ish) er TTS ae.

Charlton v. We ly, 250 US: S4F (IDES) |. kc. 035 sss LO. on

Clark v. Allen, Big BR te gee ht ae Oe

Dielieofrov v. ices: Oe a ee CCIE nev asiss Peace 2

* Factor vo Laubenheimer, 290 U S. 276 (F955) .. ><. on

Ford ve United States, 273 iS. 306 (1927) Parts eg 2

Penitz vy. Bohemian Discount Bank, 304 N.Y. 533, 110

4 o£ 2) | en Pe ee ee ee:

- Pigeon, River Improvement. Slide & Boom Co. ve.

- Charles W. Cox, Ltd., POF, UL. 188 (1984) 02.2... 4

. ‘Ross, In re, 140 ULS. 453 (S91) ae etale Bowes eeeeccess pl

‘Santovineenzo v. Egan, 2s4 if % Kk | er 2

Sullivan v: Kidd, ° a oe ee OO kaso yes ak 2.5, 3n

- Tedok v. Union State Rank 8] US. 445 (1930) eee a

United States v. Pink, QLQaU.S. 205 (1942) 2... 3n, 7

United States ve Reid, 75 Tk. 24 153 (CLA. Mth, 1934), .

cert. denied 299 ULS, 544 2.2.6... Pe ee re ey 4

Wright v. Henkel, 190 U a. « 011903) Sot eereesesecees 2

STATUTES :

Public Law 472, sith € One. (30s Stat. 137,

TH... 22 USL See. GO. See eee m7

Tit, 22 U.S.C. See. t513¢b) (2). .....- uous menace. 8

Treaties, Ete. , |

Keonomic ¢ ‘operation Agreement of 195 D2, v nited

States Y¥ ugoslavias. T.LA.S. 2384, Article LP ...... 7

$n

IN THE ie

‘Supreme Court of the United States.

OCTOBER +eam, 1959,

ee No. 958

AxpJjA -KoLovrat, Draco Srosic,-Dracica SuNJIC,

Nepa Turk, Josip) BeLGanxn, JURE* ZIVANOVIC,

Mara Toitc and MILan Stosic, and also KRaANKo

KgrapzoLk, Consul General of Yugoslavia at

San Francisco, California, Petitioners .

a

Srark. OF OREGON, acting by and through the State:

3 ‘Land. Board, Respondent

~* Lervo Zexic, [pro Zexic,. asta Turkovic, Dzepsa

Porovac, SEFKO Mtrappasic, DIKA MUBADBASIC,

Murra Brkic, MILKA ZEKIC,- JASMINA ZeKIC and

Raska Zeki, and Branko KAraApsOLE, Consul

General’ of Yugoslavia at San Francisco, Cali-

fornia, Petitioners

v. : a*

Srave OF OREGON, acting by and through the State

Land Board, Respondent

°

PETITIONERS’ REPLY BRIEF

“I

The respondent assumes, as did the Court below, that

vonstruing a treaty is a sort-of mechanical process in

- Which the meaning of phrases.can be deterniined with-

out regard to theit context, and wholly without refer-

ence to the t treaty’s purpose. Thjs is, however, a mis-

=a \

i e * =

.

%

% = 2

taken assumption, for ‘tall parts of ‘a treaty are to

receive a reasonable construction with a view to giving -

a fair ‘operation to the - whole’, Sullivan v..

Kidd, 254 U.S. 483, 439 (1921), since [i]t is a canon

of interpretation to so construe a * * * treaty as to give

effeet to the object designed, and for that purpose all

of its provisions must-be examined * * *°. In re Ross,

10: U.S. 453, 475 (1891). In applying this principle,

this Court na for example, construed “Americans”

as’ including—foreign seamen shipping .on American

vessels, Jn re Ross, supra; “States of the Union" as

including the Ddestrict of Columbia and the several

territories, Lv (reofroy Vv. Biggs, 133 U.S. 258 (1890);

“trade’us encompassing the operation of a pawn-shop,

Asalurd Vv. Seattle, 265 ULS..332 (1924): “vessel” a

~ including its cargo and all persons aboard, Ford vy.

United States, 273 U.S..598 (1927); and **goods and

effects”? as including realestate. Todok v. Union State,

Bank, 231 U.S. 449 (1930). |

Since treaties “*must receive a fair interpretation

8 seas te carry out) their i poking purpose’’,

Wright ve Menkel, YO US. 40, 7 (1903), it. follows

that {ilu order to determine tehether ** * 4 construc. -

tign ix admissible, regard should. be had to the purpose

of the treaty”. Santovincenzo v. Egan, 284 U.S. 30,

yi C151). AccordingWy, this Court will rejec ta con-

struction: that is *tineonsistent with the general pur-~

pose and object’? of the treaty, Sullivan y. Kidd, 254

“UUS. 433, 440 41921), or that would render, it ‘null

and inefficignt’’. DOG eofroy. Riggs, 133 U.S. 258, 270

(1890). The Petition (pp. 16-22) makes it abundantly

“clear, and the respondent makes no effort to refute

that the constimgion ‘adopted by the Court below is

. Sineonsistent with Me general purpose and object’ of

pf.

4

co 3

the Conve ution and masta render it substantially “null

ud ineffici ‘ie nt”

“Il

There is, of course, no question but that it is for the

Courts to determine the construction to be given a

‘treaty, and the petitioners do not* contend otherwise.

But in its day-to-day conduct of foreign affairs and

protection of American rights abroad, the Execitiyy

must necessarily, and does construe international agree-

ments fo which the United States is a pfitty.’” While-

ronceded|y. sueh constructions are not binding on the

Courts, they are not to be disregarded, as the respond-

ent scems to contend. Onthe contrary, they are always

tojbe accorded “tiuch weight’. Charlton v. Kelly, 229°

U.S. 447, 468 (1913): Sullivan v. Kidd, 254 US. 433,

420 (1921). Moreover, in the cireumstances of this

rase (pet. pp. 18-21) the Executive construction here

would appear to be entitled to even greater weight.

‘The truncated 191 statement of Secretary Knox quoted by

The respondent (pp. 1516) does not represent the policy of the

State Department as it was then or at any other time. The

De ‘parigent of State has, indeed, on innumerable oceasions under-

taken to@énstrue treaties, in exchanges of notes and otherwise. See,

ete., United Statés vo Pink; 315 U.S, 208, 224 n. 7 (1942): Factor

v. Laubenheimer, 290 U.S. 276, 295 (1933); Sullivan v. ‘Kidd,

294 US, 433, 438 (1921) ; Charlton vy. Kelly, 229 U.S. 447, 466- 472,

15 (1912); Castro v. DeUriarte, 16 Fed: 9: 3, 98 (S.D.NLY. 1883).

The part of Secretary Knox’ statement which the respondent fails

‘to quote shows that his reason for not concurring in Mexico's

construction of the treaty there concerned was that ‘‘it is not

‘entirely clear to the department that the contention which you

wake regarding the meaning of Article. VIII * *.* is the only one

Which may properly be placed upon it * * *.”) VW Hackworth,

Dig.-Int. L. 1943) 399, Secretary Knox did not hesitate to —

sconstrue a treaty when he was confident of its meaning. See,

Charlton v. Kelly, loc. eit, supra.

-

-

4

Thus, in United States V. Reid, 73 F. 2d 153, 156 (CLAS

9th, 1934), cert. denied 299 U.S. 344gthe Court said:

This historical attitude of the State de ‘partment

should be of great, if not controlling, weight in

construing our treaty * * *,

* * *

This rule would apply with even more cogency

where the state department * * * negotiating with

the other treaty-making power concerning the

meaning and effect of a treaty, * * * insists upon

a not unreasonable construction of its terms

Which is acquiesced in by the other power.

Somewhat similarly, the applicable” principle is

_ stated as follows in the American Law Institute’s [e-

statement of the Foreign Relations Law of the United __

- States (Tentative Draft No. 3, 1959), § 136:

In exercising the authority * * * to interpret |

_ international agreements ‘for purposes of deter-

mining their effects as internal law, courts in the

United States give great weight to the interpreta-

tions of the President. In applying this rule the

courts take into account:

(a) The fact that a judic ‘ial interpretation

contrary to.an executive interpretation previ-

ously communicated to another party to the in-

ternational ‘agreement may result im difficulties |

for the United States’in the conduct of its for-

eign relations and possibly subject the United

States to liability under international law for

breach of ‘the international agreement; *** *

Nor, indeed, will the Court reject out of hand a Con-

gressional construction of a treaty inhering to the en-

actment of Jegislation. Pigeon River Improvement,

Slide.& Boom Co. v. Charles W. Cor, Ltd., 291 U.S.

138 (1934). 3 a

_ country-men.

Ill

The * similarity’ which the respoudent and the Court

helow purport to see between the treaty provision. here

involved, and that with which Clark v. Allen, 331 U.S.

503, 514-516 (1947) was coneetfned, is wholly ilusory.

“The latter empowered nationals of one country ‘to dis-

pose of their personal property of every kind within.

the territories of the other’’ and provided that their —

donves, inter vévos or causa mortis, would succeed

thereto, regardless of-the donee’s residence or nation-

ality. Obviously, *‘within the territories of the other”’

describes ‘*their personal property of every kind’’ and

‘not the donors, as the respondent and the Court below

would suggest by, the use of italics and asterisks. See

Resp. Br., pp. 4, 5, 12; Pet.; pp. 12-14, 18a, 19a. Obvi-

ously too, as this Court held in Clark, the treaty provi-

sion there involved did not grant nationals of one

country any right to acquire property located in the

territories of the other, except as donees of the fellow-

Jn the other hand, the treaty provision with which

we.are here concerned, clearly grants to citizens of one

country the much -broader right to. acquire property

Within the territories of the other, by inheritance or

by any other means, without regard to the nationality.

or the residence of the donor or othe transferor. In -

Clark the only question posed (and determined: nega-

tively) was whether under the limited treaty provision .

there in issue, a German national had any right to sue-

ceed by inheritance to property in the United States of.

an American decedent. Here, however, the question is

whether the citizens of one country to whom the Con-.

‘vention grants the broad right to aequire property

f 6 f ‘

located in the territories -of the other by any means,

include such citizens as are not themselves within such

territories.

a¥

The respondent contends:(p. 19) that a State’s power

to deny rights of inheritance to a foreigner solely be-

_cause of the existence:in his country of foreign ex-

change controls, even though such controls are main-_

tained consistently with an international agreement

to which the United States is a party (p. 10), finds sup-:

‘port in holdings of this Court that a State may, with-

out the compulsion of an overriding treaty, voluntarily

abrogate, unconditionally or otherwise, the common-law

. disability of foreigners to inherit. This argument is

as far-fetehed dnd untenable as those rejected in the

cases that respondent cites. |

Rights ‘of inheritanve of non-resident aliens are, of

course, governed by the public policy of a state, as es-

tablished by its law, unless its public policy and its

law are inconsistent with federal publie policy as estab-

lished by federal action within the constitutional com-

petence of the federal government. Clark vy. Allen,

supra, 331 US, at 517. In the absence of relevant fed-

eral public policy so established, a State is’ free to

choose and apply its publie policy as it will. Here,

however, federal publie policy, as established by the

adherence of the federal government to the Interna-.

tional Monetary Fund Agreement, is that Yugoslavia

may ‘maintain exchange controls consistent with the

Avreementé In this cireumstance, it is clearly incon-*

sistent with federal publie policy established by fed-

eral action within the constitutional competence of the

federal government, for a State to deny a Yugoslav

7

resident and citizen rights of inheritance that he would

otherwise. have under its laws, solely because of the

existence “of such exehange controls in’ Yugoslavia.

‘United States v. Pink, 315 US, 203 (1942); Perutzs ve.

Bohemian Discount Bank, 304-N.Y. 533, 110 NUE. 2d

6 (19538). a: '

The emptiness of the respondent’s position ‘on this

score is evidenced by the fact that the complaint is

merely that Yugoslavia has foreign exchange controls,

and not that the American distributees of Yugoslav

estates are not -receiving their distributive shares in

dollars in the Unifed States. See, Pet: pp. 9, 10.) Tn

this connection, it should be noted that in the Interna-

tional Monetary Fund's Eleventh Annual Report on

Exchange Restrictions. (1960), p. 352, the following is

said concerning transfers of capital from Yugoslavia:

All transfers of a capital nature by residents or

- nonresidents are subject to individual license. * * *

A’ Decision of the Yugoslav Federal Executive _

Council of October 14, 1955 requires the Yugoslav

authorities to continue to permit the remittance of

inheritances to citizens of the United States, pro-

vided that the remittance is requested within three

-vears from the date of distribution of the estate.

[Emphasissnpplied:] - pe

It is significant, too, that Article II of the Economic

Cooperation Agreement of 1952 between the United

States and Yugoslavia, T.LA.S. 2384,? provides that

1. In order to achieve the maximum economic

strength through the employment of assistance re-

ceived from the Government of the United States

of America, the Government of the Federal.

= Entered into pursuant to Public @Law 472,- 80th Cong., as

amended, 60 Stat. 137, Tit. 22 UIS.C. See. 1501 ét seq.

People’s Republic of Y ugontavia will use its best

_ endeavors:

* ee

(¢) to assure the stability of its curreney, the

validity of its rate of exchange, and its internal

financial stability...

_ This provision was inchided in such agreement pur-

suant to the statutory requirement, Tit. 22 U.S.c.

§1513(b) (2), that foreign economic cooperation agree-

_ments provide for the taking by #the recipient

country of . |

** * financial and monetary measures necessary to

stabilize its currency, establish or maintain a valid

: rate of exchange * * * and generally to restore of

maintain confidence in its monetary syste m***

Obviously, such “endeavors” and “measures”-must

include, when appropriate to the achievement of the

required ends, the regulation. of foreign exchange

transactions, particularly capital transfers.

In the cirenmstances, it is wholly. incongruous that

a State be permitted to consider the existence of for-

eign exchange controls in Y ugoslavia as being offensive.

to its public policy, and on that ground to deny to

citizens*of Yugoslavia rights of inhe ritance to which

they otherwise would be entitled under its laws.

IN CONCLUSION

This controversy involves much more than the inheri-

tances which the Court below has denied the petitioners,

—awmnd has permitted Oregon to escheat. It involves not

only the meaning and effect of a treaty in its internal

application—as granting or not granting rights to

non-resident aliens—but it is fraught with implication —

9

for American rights abroad. It raises questions, tod,

of the force and dignity te-be accorded the construction

given to a treaty by the Executive, communicated to,

and accepted by the other party to it, and relied on by

the Congress and the Executive as a basis for the pro-

tection. of American rights abroad. Tt poses for reso-

lution the question Whether a State may deny rights to

foreigners by reason of measures. taken by their gov-

ernment with the approval and consent of the United

States given in the furtherance of its foreign policy.

While the outeome is, of course, important to the peti-

tioners. it must be of imme vasurably greater importance

to the United States. ‘The Court has the benefit of the

views Of Oregon. bt would, we think, be but titting if

the United States were able to express its views, for its

interests, no less than the petitioners’, are challenged

shy what Oregon has done, |

The petition should be granted.

Respe c fully ronmeectas

Law RENCE S. —

1210 18th Street, N. W.

Washington 6, D. €.

- Perer A Scuwase

Pacifie Building

Portland 4, Oregon .

3

Counsel for Petitione rs

VEHLE, LESSER, Manx. Rewer & Luxrorp,

Of Counsel

te