Amicus Curiae Brief — Goldstein v. Cox

Beye

| es

JUN 17 1989

IN THE

Supreme Cowt of the setteh_Souays |

October Term, 1968

—— ..Ars

ANGHEL GOLDSTEIN, a/k/a Andrei Pietraru, TULIU

NASTA, a/k/a Julius Nasta and GHEORGHE FUNDI,

on behalf of themselves and all others similarly situated,

Appellants,

VS.

JOSEPH A. COX and SAMUEL DiFALCO, Surrogates

of the County of New York, EDWARD F. SILVER,

Surrogate of the County of Kings, CHRISTOPER C.

McGRATH, Surrogate of the County of Bronx, JOHN

T. CLANCY, Surrogate of the County of Queens,

ARTHUR LEVITT, State Comptroller,

Appellees.

BRIEF OF AMICUS CURIAE

Wotr Poprer Ross Wotr & Jongs,

By Martin Popper,

$45 Third Avenue,

New York, New York 10022,

Amicus Curiae.

Martin Poprrr,

of Counsel.

RP PONS GS AME YRS I EATEN VN TE Mr Pe

ERS oa ON NET AA RCA IE SD AM eR

INDEX

ee ee

ee ee ee ee ee

Statute Involved on This Appeal .................

ARGUMENT:

Post I—SCPA 2218 as it has been applied by the

Courts of New York is an unconstitutional in-

trusion into the area of foreign policy reserved

exclusively to the Federal Government .......

Porxst II—SCPA 2218 as it has been applied by

the Courts of New York violates the due process

and equal protection clauses of the Fourteenth

NE cd ease Goch dawn ee Red at ewes

Porxt III—SCPA 2218 is unconstitutional on its

face because it intrudes illegally into the area

a et IIE os Sc oc ac wa ween aren ve bans

Point IV—SCPA 2218 is unconstitutional on its

face because it violates the due process and

equal protection clauses of the Fourteenth

PIE GaN Li cticn phd awa t Wiel vera aks

EISEN Ce ene! Sg SPIES. BP Se Ria RAD RET RRR a

Appenpix I—Section 2218 of the Surrogate’s Court

Procedure Act of New York ...........c.cc00-.

Appenvix I]—-Treasury List—As Amended J une 28,

Ee aac vat a seb ir bcs a ha RE EES Van eawe sak

Ww

Ww

28

30

31

33

eee ae |

li INDEX

Cases

PAGE

American Commuters Assn. v. Levitt, 279 Fed.

a Bee PRO mE pinup en pm e Awa e Aw 29

In re Best (1951), Surrogate, New York County, 200

ie: @ oe a & 1... Cee eee 15

Bjarsch v. DiFaleo, U.S. D.C. S. D., 68 Civ. 4216 .. 3,19

In re Bold’s Estate (1940), Surrogate, New York

County, 173 Mise. 545, 18 N. Y. S. 2d 291 ...... 14

Bolling v. Sharpe, 347 U. S. 497, 74S. Ct. 693 .... 25

Matter of Borok (1966), Surrogate, New York

County, 49 Mise. 2d 870, 268 N. Y. S. 2d 669 .... 1)

Matter of Braier, 305 N. Y. 148, 111 N. E. 2d 424

(1953) appeal dismissed sub nom 2, 14, 26

Estates of Chounouzides, de Lowe, Halajko, Ka-

ganotf, New York Law Journal, July 18, 1967,

RESET SUR Tecan A Sie ARNE the pl A ee Mt 20fn

(1947)

Cockrill v. California, 268 U. S. 258, 45 S. Ct. 490 .. 29fn

In Re Draganoff’s Estate. 46 Mise. 2d 167, 259

i a SE REE. Ss Bar ee ke

French v. Banco Nacional de Cuba, 23 N. Y. 2d 46,

ge ee ee SP | ea ate ene

Frick v. Webb, 263 U. S. 326, 44 S. Ct. 115 ........

Matter of Geiger, 7 N. Y. 2d 109, 195 N. Y. S. 2d

831 (1959)

te ee ee ee oe ee ee ee ee a a ee ee

INDEX ill

PAGE

Goldstein v. Cox, 389 U.S. 581, 88 S. Ct. 694 (1968) Sfu

Matter of Greenberg, 17 N. Y. 2d 417 ...... ae ees 10

Matter of Greenberg, 46 Mise. 2d 883, 261 N. Y. S.

Bo BPR EAR Tee ee Be neem Keane, A 10 |

Matter of Greenberg, 24 A. D. 2d 435, 260 N. Y. S.

SEA, vr WO eae ewes arden ein tee eon 11

Matter of Herz’ Will, 7 Mise. 2d 217, 163 N. Y. S.

Re SNE A cb ea eek oie oad eine eb ules oy)

Hines v. Davidowitz, 312 U. S. 52, 61 S. Ct. 399

PEE > <i-S ot Ruta ee SES 2 Se PAR ee pane Ca eee 24, 29

Kalmane v. Green, 346 U. S. 802, 74 S. Ct. 32

RR ee reat ene mm en tn Chere OMAN REP 2 ACR eae aD 2, 14

Matter of Kina, 49 Mise. 2d 598, 268 N. Y. S. 2d

131, rev'd. 29 A. D. 2d 563, 286 N. Y. S. 2d 773,

See ee Be Oe WO kbc tote aib cea cdeccs: 2,17,18

BE Pitutbsetens pecan exeuue gave coed socuseeds 7

In re Lauraitis’ Estate (1954), Kings County, 134

eee OEE oink wis cand See oe ee ie 15

Estate of Lehotsky, New York Law Journal, Jan.

i Sey AR hi coo ober eee es Sfn

Matter of Leikind, 22 N. Y. 2d 346, 292 N. Y. S. 2d

I ie ee ed 3, 9, 18, 19

Matter of Marek, 11 N. Y. 2d 740, 226 N. Y. S. 2d

444 (1962) aff’d 13 A. D. 2d 917 (First Depart-

ment) 217 N. Y. S. 2d 1010, app. dism. sub nom

Ioannou v. New York, 371 U. S. 30, 83 S. Ct. 6

CUED rsvp s dca dure ak treeds lee ae 14

ee wees

iv INDEX

PAGE

Oyama y. State of California, 332 U.S. 633, 68 S.

Se NE eh Sila bs Nba hss barre oa 23, 24, 29

Matter of Polubatko (1964), 21 A. D. 2d 735 (Fourth

Department), 249 N. Y. S. 2d 929 ............... ij

Porterfield v. Webb, 263 U.S. 225, 44S. Ct. 21... 29f1)

Robertson y. Ott, 254 Fed. Supp. 735 dy

eo ee eo ee

Russian Volunteer Fleet v. U. S.. 282 U.S. 481, 51

S. Ct. 229 (1939)

Bier the ee Gree gw are Re dix wlio es OE u4

In re Rysiakiewiez’s Will (1952). Surrogate, Queens

owmey, SEG BR. ZT. 0. Ba GOW oo. ev ccnssccanses 5

Sardino v. Federal Reserve Bank of New York, 361

I’. 2d 106 (1966) ......... ieee ee stearveesecs MED

Schneider v. Rusk, 877 U. S. 163, 84 S. Ct. 1187

POE Ns Saou uh een id Raw od bata oak ae DUO a eck 24, 25

In Re Shefsick’s Estate, Surrogate, Westchester

County, 50 Mise. 2d 293 (1966) 270 N. Y. S. 2d

ME Dvurkeesresadabb ered‘ Aad ee Pe 12

In Re Siegler’s Will, 248 App. Div. 436, 132 NX. Y. 8

SME Sa2e crochet int bcs cece ie ete at n)

Estate of Struchmanezuk, 44 D.C. 2d 155 ......... 28

Estate of Szekac, New York Law Journal. June

Wes eG izes re oe ak he ea 20fn

Terrace v. Thompson, 263 U.S. 197, 44S. Ct. 15 .. 29fn

Torao Takahashi v. Fish and Game Commission, 334

U.S. 410, 68'S. Ct. 1138 (1948)

Truax v. Raich, 239 U. S. 33, 36 S. Ct. 7

INDEX Vv

PAGE

Matter of Tybus, 28 Mise. 2d 278, 217 N. Y. S. 2d

© Sie SE Re Aa esl ee eign Se Sd 17,18

U.S. v. Pink, 315 U. 8. 203, 62 8. Ct. 552 ......... 24

Matter of Waessel (1960), Surrogate, Kings County,

27 Mise. 2d 694, 210 N. Y. S, 2d 647 ............ 15

Webb v. O’Brien, 263 U. S. 313, 44S. Ct. 112 ..... 29fn

Yickwo v. Hopkins, 118 U. S. 356, 6 S. Ct. 1064 .. 24

Zschernig v. Miller, 589 U. 8. 429, 88 S. Ct. 664 . 4, 5,7,

imams

Statutes

Surrogate’s Court Procedure Act of New York:

Section 2218 ............ 2, 3, 4, 5, 6, 7, 8, 11, 18, 19fn,

21, 22, 23, 26, 27, 28, 31

Ore. Rev. Stat. (1965, §111.070(i)(¢)) .......0... 5)

P. L. No. 828, See. 5, 54 Stat. 1086, 31 U. S. C. A.

3123 (approved Oct. 9, 1940) .................. 16

Surrogate’s Court Act:

I ae ariel tnuweleo eer uss 22, 23, 28

Trading with the Enemy Act, 50 App. USCA 65 .. 29

Fourteenth Amendment .................. 2, 23, 24, 25, 29

FR EE ESS ee naan Lepynien Salers 25

vi INDEX

Other Authorities

PAGE

Letter of Legal Adviser, State Department to

Governor Rockefeller, dated November 9, 1961 .. 10

Circular No. 655, 351 C.F. R. 6211 (Treasury List)

14, 15, 16, 17, 24, 33

Federal Register:

Vol. 22, No. 130, July 4, 1968, page 9708 ...... 16

; Vol. 33, No. 123, June 25, 1968, pages 9302

a CE cae sab aad vee dewd teh eeb ene ere eh 16

a

; Vol. 33, No. 120, July 2, 1968, page 9317 ...... 16

ed

* s0th Cong, See. 12761.2; Report No. 2177 of Com-

Ne AE nk ee areal cd dnearcdseisnss 17

2 l'reasury Department Circular No. 655, March 19,

: oN i os oe CRATE eek hr ethene waded eres 17

3 MecKinney’s Laws of New York, Annotated ...... 22

2

Teh Ni RAR ORD Ri rR

seh ancaaealls kel ea ena

IN THE

Supreme Court of the United States

October Term, 1968

MS bio os

AncueL GoLpsTEIN, a/k/a Andrei Pietraru, IuLivu Nasra,

a/k/a Julius Nasta and Gueorcue Funpi, on behalf of

themselves and all others similarly situated,

Appellants,

vs.

Josepu A, Cox and Samvuet DiFaxco, Surrogates of the

County of New York, Epwarp F. Sizver, Surrogate of

the County of Kings, Curistopner C. McGrarn, Surro-

gate of the County of Bronx, Joun T. Cuancy, Surrogate

of the County of Queens, Arruur Levitt, State Comp-

troller,

Appellees.

7%

vr

BRIEF OF AMICUS CURIAE

Interest of Amicus Curiae

Amicus Curiae herein are attorneys-at-law, duly ad-

mitted to practice in all of the state courts of the State

of New York, and three of them, including of counsel here-

in, are admitted to practice befere the Bar of this Court.

We are the attorneys for the Chiefs of the Consular

Sections of the Embassies of the Union of Soviet Socialist

Republics, Czechoslovakia, Hungary, Bulgaria and for the

Consul General of Poland, in connection with their repre-

sentation of the interests of their nationals who are lega-

tees and distributees in estates in the City and State of

New York. We also represent the Chief of the Consular

Section of the Roumanian Embassy in numerous estate

matters in the City of New York and, under powers of

attorney, the legal interests of hundreds of legatees and

ye eae ees. |

* Hereinafter referred to as SCPA 2218.

te

distributees in estates in the City and State of New York

who are nationals of the above-described countries and

persons who are nationals of the German Democratic

Republic and Albania.

The decision of this Court in this case will necessarily

affect the legal interests of all of our above-described

clients.

The complaint herein challenges the constitutionality,

on its face and as it has been applied, of Section 2218 of

the Surrogate’s Court Procedure Act of the State of New

York * as an invasion by the State of New York of the

exclusive power of the Federal government to conduct

foreign relations and as a violation of the Fourteenth

Amendment.

Since 1951, petitioners have been involved in the pre-

sentation of these constitutional issues in the courts

throughout the State of New York from the Surrogate’s

Courts to the Court of Appeals, the highest Court of the

State. Petitioners first raised the issue of New York’s

involvement in the conduct of foreign relations before

this Court in 1953. Matter of Braier, 305 N. Y. 148, 111

N. E. 2d 424 (1953), appeal dismissed sub nom; Kelmane

v. Green, 346 U. S. 802, 745 S. Ct. 32 (1953).

Subsequent to the decision in Zschernig v. Miller, 389

U. S. 429, 88 S. Ct. 664 we asked the Court of Appeals

of the State of New York to apply the standards enunci-

ated by this Court to Section 2218 of the Surrogate’s

Court Procedure Act of New York. The Court of Appeals

declined to deal with the constitutional issue, although pe-

titioners in their brief presented a comprehensive history

of the manner in which the New York courts had applied

Section 2218 of the Surrogate’s Court Procedure Act of

New York in contravention of the Zschernig decision.

Matter of Kina, 23 NX. Y. 2d 720, 268 N. Y. S. 2d 773. Pre-

viously, the Court of Appeals had decided that Section

2918 is constitutional on its face and that it was unable

on the record then before it to find that the statute had

heen unconstitutionally applied. Matter of Leikind, 22

\. Y. 2d 346, 292 N. Y. S. 2d 681 (1968).

We represent the plaintiffs before a three-judge court

of the United States District Court for the Southern

District of New York in Bjarsch vy. DiFalco, U. 8. D. C.

Ss. D., 68 Civ. 4216, decision pending, in which the plain-

tiffs are residents of the German Democratic Republic.

They are challenging the constitutionality of SCPA 2218

both on its face and as applied, including subsections 1(a)

and (b) of the statute which became effective in June,

1968. In the instant case the Court below quoted the en-

tire statute as part of its decision, including subsections

1(a) and (b). The Attorney-General of New York, in his

motion to dismiss the appeal herein has asserted that the

constitutionality of subsections 1(a) and (b) is not in-

volved. Since his position is at variance with the posi-

tion taken by him in the oral argument of the motion

before the United States District Court for the Southern

District of New York requesting the convening of a three-

judge court and because this Court in its order noting

probable jurisdiction set forth no limitation, we are not

certain whether SCPA 2218 in its entirety will be reviewed

by the Court, or only sections 2 and 3 thereof.

In any event, it is our position that the arguments

applicable to sections 2 and 3 are equally applicable to

subsections 1(a) and (b). There are also independent

reasons Why, in our opinion, subsections 1(a) and (b) are

unconstitutional. We have presented these to the three-

judge court in the Bjarsch case and we would, of course,

present them to this Court, if it were disposed to receive

them.

We have received the consent of all the parties in this

case to file this amicus curiae brief.

Questions on This Appeal

The questions on this appeal are whether on its face

and as applied by the New York courts SCPA 2218 is an

3 illegal intrusion by the State into the area of foreign

: relations and whether it violates the due process and equal

protection provisions of the Fourteenth Amendment.

Statute Involved on This Appeal

The New York statute involved in this appeal is section

2218 of the Surrogate’s Procedure Act of New York

(Appendix 1).

ARGUMENT

POINT I

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SCPA 2218 as it has been applied by the Courts of New

York is an unconstitutional intrusion into the area of

foreign policy reserved exclusively to the Federal Gov.

ernment.

ta ia

Twenty-two years ago, in Clark v. Allen, 331 U.S. 503,

67 S. Ct. 1481 (1947), the Court upheld the constitution-

ality of a California statute *‘defined in general terms of

reciprocity.’’ The statute was attacked as ‘‘an invasion

of the exclusively Federal field of control over foreign

relations,’* but the Court found no intrusion on the face

of the statute and concluded that it would have only

‘*some incidental or indirect effect in foreign countries”

(id. at p. 517).

On January 15, 1968, the Court decided Zschernig v.

Miller, 389 U.S. 429, 88 S. Ct. 664, in which the same

attack was made upon an Oregon statute which provides

for the escheat of the interests of non-resident aliens in

Oregon estates unless there is full reciprocity for United

States citizens and ‘tproof that such foreign heirs .

may receive the benefit or use or control of money

without confiscation.’’ Ore. Rev. Stat. (1965, {111.070

(1)(c)). The California statute upheld by the Supreme

Court in Clark vy. Allen, supra, had no benefit, use or con-

trol provision.

Based on more than two decades of intervening ex-

perience, the Supreme Court concluded that ‘*The Oregon

law does, indeed, illustrate the dangers which are involved

if each State speaking through its probate courts, is per-

mitted to establish its own foreign policy,’’ and held the

Act to be an unconstitutional invasion of the field of

foreign policy.

The basis for the decision in Zschernig was the manner

in Which statutes like the Oregon statute and the New

York benefit, use and control statute (SCPA 2218) have

been applied. The Court said:

‘*\t the time Clark v. Allen was decided, the case

seemed to involve no more than a routine reading

of foreign laws. It now appears that in this reci-

procity area under inheritance statutes, the pro-

hate courts of various States have launched in-

quiries into the type of governments that obtain

in a particular foreign nation—whether aliens

under their law havt enforceable rights, whether

the so-called ‘rights’ are merely dispensations turn-

ing upon the whim or caprice of government of-

ficials, whether the representations of consuls, am-

bassadors, and other representatives of foreign

nations are credible or made in good faith, whether

there is in the actual administration in the particu-

lar foreign system of law any element of confisca-

tion.

QPieon cir diniullicke renee iA GRR Ss Nw

“As we read the decisions that followed in the

wake of Clark vy, Allen, we find that they radiate

some of the attitudes of the ‘cold war’, where the

search is for the ‘democracy quotient’ of a foreign

regime as opposed to the Marxist theory. The

Oregon statute introduces the concept of ‘confisea-

tion,’ which is of course opposed to the Just Com-

pensation Clause of the Fifth Amendnient. And this

has led into minute inquiries concerning the actual

administration of foreign law, into the credibility

of foreign displomatic statements, and into specula-

tion whether the fact that some received delivery

of funds should ‘not preclude wonderment as to

how many may have been denied ‘‘the right to

PTO as

. ¥ iad

“That kind of state involvement in foreign

affairs and international developments—matters

which the Constitution entrusts solely to the Fed-

eral Government—is not sanctioned by Clark vy,

Allen. Yet such forbidden state activity has in-

fected each of the three provisions of ¢111.070, as

applied by Oregon.

**As one reads the Oregon decisions, it seems that

foreign policy attitudes, the freezing or thawing of

the ‘cold war,’ and the like are the real desiderata.

Yet they of course are matters for the Federal

Government, not for local probate courts.’’

The opinion is equally applicable to SCPA 2218 which

is identical with that part of the Oregon act, found uw-

constitutional by the Court, requiring a showing that

foreign heirs will have the benefit, use or control of their

awarded funds without confiscation. No doubt with a

view to making clear the intended scope of its decision,

Sed

the Court extended its discussion to the statutes and deci-

sions of California, Montana, New York and Pennsy]-

vania,

The reference to New York appears in a footnote to the

last paragraph quoted above in the Zschernig decision,

389 UL S. at 487, 88S. Ct. at 669, in which the Court said:

“Such attitudes are not confined to the Oregon

courts. Representative samples from the other

States would include statements in the New York

courts, =“

The criteria and attitudes proscribed by the Supreme

Court in Zschernig have permeated the decisions of the

New York courts throughout the entire history and opera-

tion of SCPA 2218 and this is as true of the Court of

Appeals of New York as it is of intermediate Appellate

Courts and the Surrogates Courts.

The application of SCPA 2218 by the New York courts

to residents of the ‘*Communist’’ countries began in

1939. Estate of Hyman Landau, 172 Mise. 651, 16 N. Y. S.

2d 3. In that decision, the Court said:

“It is a matter of common knowledge that private

ownership of property has been abolished in the

Soviet Union, with the result that none of its na-

tionals there resident is permitted by its laws to

*~ have the personal control of any property, which is

deemed to belong solely to the State. In other

words, there is here presented the precise situation

contemplated in the note to the amendment to Sec-

tion 269 at the time of its enactment, to the remedy

of which the law was passed that ‘transmission or

payment to a beneficiary, legatee or other person

resident in a foreign country might be circumvented

by confiscation in whole or in part.’ So far as Rus-

sian nationals are concerned, such confiscation by

}

*

2

:

:

«

*

a

| eyes icles

and for the use of the government would be of the

fund in its entirety and this is not altered by the

indication in a current Congressional inquiry that

it would be used by the agencies of the Soviet Goy.

ernment in this country to attempt to undermine

our institutions and to sabotage our industries.”

Ever since, the New York Court of Appeals, either by

affirmative action or in denying leave to appeal from the

decisions of lower courts, has adopted for its own, policies

found unconstitutional in Zschernigq. bags. in the Matter

of Geiger, 7 N. Y, 2d 109, 195 N. Y. S. 2d 831, 833 (1959),

the Court of Appeals of New York said:

‘*So long as the distributive shares are properly

being withheld by the Surrogate because of the spe-

cial circumstances in which the beneficiaries find

themselves as domiciliaries in an iron-curtain coun-

try, they are in no position presently to assign any

part of the funds withheld.”’

This same rationale is to be found in Matter of Leikind,

supra, decided in June, 1968, six months after this

Court’s decision in Zschernig, in which the Court of

Appeals decided that SCPA 2218 is constitutional on its

face and that it was unable on the record then before it

to find that the statute had been unconstitutionally ap-

plied.* However, the Court of Appeals read Zschernig as

possibly suggesting that in a later case this Court might

hold that no statutes such as SCPA 2218 could ever be

restricted to a ‘‘routine reading’’ of foreign laws. See

footnote at 22 N. Y. 2d 352, 295 N. Y. S. 2d 675.

* Prior to this decision by the Court of Appeals, the Surrogate of

Bronx County, on the basis of this Court’s decision in Zschernig and its

remand of Goldstein v. Cox, 389 U. S. 581, 88 S. Ct. 694 (1968), held

he had no right to pay proceeds belonging to Czechoslovak nationals into

court and ordered that the funds be transmitted to them. Estate of

Lehotsky, New York Law Journal, Jan. 29, 1968, p. 18.

{This observation was prophetic because the New York

Courts since Zschernig have continued, despite the Leikind

decision, to apply SCPA 2218 in the manner proscribed by

Zschernig. See post-Zschernig citations, infra at p. 19.

In Matter of Geiger, supra, the Court of Appeals cited

with approval Matter of Herz’ Will, 7 Mise. 2d 217, 163

XN, Y. S. 2d 349, 350 (1957), in which the Surrogate of

Nassau County said:

‘‘No new facts are presented in the papers which

should cause this Court to reach a determination

differing from that reached In Re Siegler’s Will,

248 App. Div. 486, 182 N. Y. S. 2d 392 and Matter

of Braier’s Estate, 305 N. Y. 148, 111 N. E. 2d 424.

Recent events in Hungary have not been reassuring

so as to render it likely that the beneficiaries would

have the benefit, use or control of the property in

question.”’

The decision of the Appellate Division, Third Depart-

ment, In Re Siegler’s Will, cited with approval by the

Court of Appeals in Herz, supra, affirmed the decree of the

Surrogate’s Court, Schoharie County, which directed de-

posit into Court of legacies belonging to Hungarian na-

tionals on the ground that a certificate from the Envoy

Extraordinary and Minister Plenipotentiary of Hungary

to the United States, stating that the Hungarian legatee

would have the full benefit, use and control of the monies

representing their legacies, should not be accepted. The

Court said:

‘“. . , the controlling issue presented is whether

the Surrogate was obliged to accept the certificate

of the Hungarian Envoy at its face.

‘‘In normal times we assume that a local court

would probably accept the certificate of an envoy

to this country from a friendly power as to internal

conditions in his country. But these are not normal

times.’’

10

In Matter of Greenberg, 17 N. Y. 2d 417, the Court of

Appeals denied leave to appeal from an order refusing

transmission of estate benefits to Roumanian nationals,

The Surrogate of New York County had ordered the funds

deposited with the Director of Finance of the City of New

York and, in so doing, had concluded as follows:

“Tt must be recognized that, whether or not

Roumania imposed restrictions within the meaning

of $269-a, it is an Iron Curtain country under Soviet

dominance and, for such reasous, facts either as to

the operation of Roumanian laws or that country’s

monetary practices are not available to an inquirer

who might be regarded as influenced by capitalist

doctrines. It would appear that this was the un-

fortunate position in which the Attorney-General

found himself. The Attorney General was able to

offer evidence of certain restrictive provisions of

Roumanian law governing the ownership and use

of property generally and these restrictions are well

recognized as consistent with the communist pro-

gram of subordinating individual freedom for the

material advancement -of the communist. state.”

Matter of Greenberg, 46 Mise. 2d 883, 261 N. Y. §.

2d 176.*

Upon appeal from the decision of the Surrogate, the

Appellate Division, First Department affirmed the order,

depositing the funds, stating:

‘‘The substantial differential between the Rou-

manian internal rate of exchange applicable to

* And this, in the face of a letter from the State Department to the

Governor of New York requesting the Governor, “In view of the foreign

policy aspects of this matter . . .,”’ to bring “to the attention of the

appropriate authorities of your State, the Department's conclusion that

legatees or distributees living in Roumania have the benefit or use or

control of such bequests . . .” Letter of Legal Adviser, State Depar-

ment, to Governor Rockefeller, dated November 9, 1961, judicially noted

by the Surrogate.

11

estate distributions received from foreign countries

and the external rate of exchange establishes that

the distributee ‘would not have the benefit or use

or control of the money or other property due him’

as required by §269-a of the Surrogate’s Court

Act."’ Matter of Greenberg, 24 A. D. 2d 435, 260

N. Y. S. 2d 818.

At variance with the finding in Greenberg, supra, that

the existence of foreign exchange regulations justifies the

application of SCPA 2218, is the recent decision of the

Court of Appeals in a breach of contract action involving

Cuban interests, in which it said:

‘This is not an era, surely, in which there is any-

thing novel or internationally reprehensible about

even the most stringent regulation of national cur-

rencies and the flow of foreign exchange. Such

practices have been followed, as the exigencies of

international economics have required—and despite

resulting losses to individuals—by capitalist coun-

tries and communist countries alike, by the United

States and its allies as well as by those with whom

our country has had profound differences. They are

practices which are not even of recent origin but

which have been recognized as a normal measure

of government for hundreds of years, if not, indeed,

as long as currency has been used as the medium

of international exchange.’’ French v. Banco Na-

cional de Cuba, 23 N. Y. 2d 46, 63, 295 N. Y. S. 2d

433, 449 (1968).

The uninhibited tendency of the New York courts in con-

strung SCPA 2218 to exhibit ‘‘cold war’’ attitudes and te

intervene in the internal administration of the laws of

certain of the countries of Eastern Europe is evident in

many decisions.

12

Thus, Zn Re Shefsick’s Estate, Surrogate, Westchester

County, 50 Mise. 2d 293 (1966) 270 N. Y. S. 2d 34, the

Court based its decision on the fact that

‘No proof was offered, although required by the

Court’s prior decision, as to the marketplace rate

of exchange; i.e., the rate at which Czech currency

could be purchased on the ‘black’ or ‘grey’ market

or in New York banks. . .

~ * *

‘*... the court takes judicial notice that the

official rate of exchange of the Czechoslovak crown

is an artificial rate, and that this rate, and the rate

at which United States dollars may be exchanged

through the medium of the Tuzex program, both re-

flect a substantial over-valuation of the Czechoslovak

crown, as related to the dollar; ...”’

* * .

‘The added argument that the ‘standard crown’

ix purely a domestic currency that cannot be legally

brought into Czechoslovakia, and that the price at

which it is procurable in this country has no rele-

vancy to the issues herein, avoids the issue...”

Similarly, the Surrogate of Westchester County In Re

Draganoff’s Estate, 46 Mise. 2d 167, 259 N. Y. S. 2d 20

(1965), stated:

‘Courts are not required to work in a vacuum.

They are allowed to recognize that while the Com-

munist movement may no longer be monolithic, past

actions by the governments of ‘Iron Curtain’ coun-

tries in appropriating foreign inheritances by one

means or another do create ‘special cireumstances

{which may] make it appear desirable that such pay-

ment should be withheld’ (Surrogate’s Court Act,

§269-a); and it is such and other actions of gov-

ernments which motivated the legislature to enact

-269-a and its predecessor enactments which have

created the uncertainty that the alien non-resident

distributees or legatees of an ‘Iron Curtain’ coun-

try will have the benefit or use or control of the

funds due them (Matter of Geiger’s Estate, 12 Mise.

2d 1043, 1044, 175 N. Y. S. 2d 588, 590 aff'd 7 A. D.

2d 1004. 185 N. Y. S. 2d 227, aff’d 7 N. Y. 2d 109,

112, 195 N. Y. S. 2d 831, 833, 164 N. BE. 2d 99, 100;

Matter of Geffen’s Estate, 199 Misc. 756, 104 N. Y. S.

2d 490; ae of Getream* s Estate, 200 Mise. 543,

o44, 107 N. Y. S. 2d 225, 226; Matter of Klein’s

Estate, Pee Mise. 762, 765-767, 123 N. Y. 8. 2d 866,

869-871; Matter of Reidl’s Estate, 39 Mise. 2d 805,

807, 242 N. Y. S. 2d 105, 107; Matter of Schmied]l,

N.Y. L. J., March 24, 1964, p. 14 col. 3 [not otherwise

reported]). This uncertainty does exist in these

countries, as opposed to countries such as Great

Britain (see Matter of Geffen’s Estate, supra), which

also has currency controls.’’

The Court in Draganoff, supra, also refused to give cre-

dence to the testimony of a distinguished Bulgarian law

expert about the laws of his country. In this connection,

the Surrogate said:

‘The Court cannot disregard the fact that Mr.

Stephanov is not a free and independent attorney,

an impression he sought to create, but a member of

a lawyer’s collective (ef. Matter of Mitzkel’s Estate,

36 Misc. 2d 671, 675-676, 233 N. Y. S. 2d 519, 523,

924), subject to the restrictive pressures commonly

applied in ‘iron-eurtain’ countries. As he was about

to return to Bulgaria he could not be expected to say

Scie WSheaay tty Olas Sai

Ree

ay

l4

anything in derogation of his country or its fiscal

policies.’’

Another line of reasoning adopted by the New York Courts

is that the inclusion of a country on Cireular No. 655, 31

C. F. R. §211,* is presumptive evidence that residents of

such countries will not receive the benefit, use or control

of their funds. Matter of Braier, 805 N. Y. 148, app. dism.

sub nom., Kalmane v. Green, 346 U.S. 802 (1958) 74S. Ct.

32. To the same effect is Matter of Marek, 11 N. Y. 2d 740,

226 N. Y. S. 2d 444 (1962) aff’d 13 A. D. 2d 917 (First

Department) 217 N. Y. 8S. 2d 1010, app. dism. sub. nom

Ioannou v. New York, 871 U.S. 30, 83.8. Ct. 6 (1962).

This view has been adopted by Surrogates throughout

the state and remains the basis for establishing a prima

facie case in support of depositing funds and for requiring

a foreign legatee to come forward with evidence relating to

the legal, social, economic and political systems of his

government. When the laws of the foreign governments

are introduced, the Attorney-General of the State or the

Public Administrators of the county involved, with the

approval of the Court, attacks the credibility of the laws,

or of the representatives of the foreign government, exam-

ines into the internal administration of these laws and

bases his request for a deposit of the funds upon a critique

of the legal, economic, political and social systems of the

foreign governments whose residents are petitioning to

receive their legacies. On frequent occasions the Courts,

by judicial notice, or independent investigation, exercises

these foreign policy functions on their own.

The cases cited above substantiate the conclusion stated

herein. See alse:

In re Bold’s Estate (1940), Surrogate, New York

County, 173 Mise. 545, 18 N. Y. S. 2d 291;

* Hereinafter referred to as the Treasury List. See Appendix II.

15

In re Best (1951), Surrogate, New York County,

200 Mise. 332, 107 N. Y. S. 2d 224;

In re Lauraitis’ Estate a Kings County,

134.N. Y. 8.24907; _

Matter of Polubatko (1964); 21 A. D. 2d 735

(Fourth Department), 249 N. Y. S. 2d 929;

Matter of Borok (1966), Surrogate, New York

County, 49 Mise. 2d 870, 268 N. Y. S. 2d 669;

Matter of Waessel (1960), Surrogate, Kings

County, 27 Mise. 2d 694, 210 N. Y. 8S. 2d 647;

In re Rysiakiewicz’s Wil (1952), Surrogate,

Qacens County, 114 N. Y. 8. 2d 504.

There are several reasons why the utilization of the

Treasury List violates the principles enunciated in the

Zschernig decision, supra. In the first place, Zschernig

involved a legacy to a national of East Germany. That

government is on the proscribed list of the Treasury De-

partment, a fact of which the Court was aware, since it was

a part of the record on appeal. It made no difference

as far as the decision was concerned. Nor could it, since

the decision was based upon the fact that matters of

foreign policy are for the Federal Government and not the

State.

That the inclusion of a foreign government on, or its

removal from the Treasury list is a political finding involv-

ing our foreign relations has been made clear by the

Treasury Department. The Treasury list has been

amended from time to time to exclude from its provisions

certain countries theretofore placed thereon. These include

Poland, Roumania and Bulgaria which were removed on

June 7, 1957, April 19, 1960 and August 1, 1963, respec-

tively. The Soviet Union, Lithuania, Latvia and Estonia

were removed from the list on June 28, 1968. (See Federal

RY?

16

Register, Vol. 22, No. 130 for July 4, 1968, page 9708),

Czechoslovakia was removed from the List on June 20,

1968. (See Federal Register, Vol. 33, No. 123 for June 25,

1968, Pages 9302 and 9303.) Hungary was removed from

the List on June 27, 1968. (See Federal Register Vol,

33, No. 120 for July 2, 1968, page 9317.) Each of these

1968 amendments to the Cireular No. 655 contains the state.

ment that ‘‘the amendment involves a foreign affairs fune-

tion of the United States’’.

The State Department has also said as much on frequent

occasions in letters to this firm and others. In referring to

the Treasury List it has said that ‘‘The determinations

made by the Secretary of the Treasury under 31 C. F. R.

211.3 apply solely to the Federal law and regulations and

not to questions of law or fact concerning remittances of

private funds, including inheritances,’’? and that they

‘“‘may involve considerations not relevant to remittances

of private funds or other transactions involving rights of

private parties’’ *.

Originally, in 1940, the Treasury List, which was prem-

ulgated under the powers granted to the Secretary of the

Treasury by P. L. No. 828, See. 5, 54 Stat. 1086, 31

U.S. C. A. §123 (approved Oct. 9, 1940) was an admin-

istrative measure. Its purpose was to relieve the Division

of Disbursement, Treasury Department, of the responsi-

bility for maintaining supervision over the accumulation

of checks, delivery of which had become practically impgs-

sible because of war-torn conditions in Europe. See 80th

* On June 13, 1968 nine days prior to the removal of the Soviet

Union from the Treasury List, the State Department, in a letter to this

firm state! “There are Federal prohibitions (31 C. F. R. 211.3) on the

transfer of Federal funds to payees in certain foreign countries, includ-

ing the Soviet Union. These relate to Federal funds only and involve,

in large part, considerations not relevant to remtitances of private funds

or other transactions involving the rights of private parties.”

17

; SeAd/a 7e

Cong. Sev. 12761-2; Report No. 2177 of Committee of

Finance accompanying the Bill. Thus, the countries on

the 1941 Treasury List included, among others, Belgium,

Denmark, France, Luxemburg and the Netherlands.

With the onset of the cold-war, however, the Treasury

List became transformed from an administrative to a for-

eign policy measure, no longer related to its original pur-

pose of meeting the lack of ‘‘postal, transportation, or

banking facilities in general or local conditions . . .’’ in the

countries placed on the List. See Treasury Department

Cireular No. 655, March 19, 1941.

Recently, the United States has candidly acknowledged

that the Treasury List ‘‘... involves a foreign affairs

function . . .’’ See references above, on p. 16 to state-

ments made by Treasury and State Departments.

A striking illustration of the consequence of foreign

policy intervention by the New York Courts in the appli-

eation of SCPA 2218 is the history of the decisions in Matter

of Tybus and Matter of Kina, infra,

In 1961, the Surrogate of Kings County ordered that

estate funds belonging to Polish nationals be remitted

_to them. However, he did so only after making a personal

visit to Poland ‘*. . . for an on-the-spot investigation of

the situation. In connection therewith, the Surrogate con-

ferred with the Ambassador of the United States to

Poland in Warsaw, the Secretary to the Embassy and the

American Consul; the members of the Association des

Juristes Polanaise; members of the Bar Association of

Warsaw, the Director-General of the Ministry of Finance

and their counsel; Chiefs of Divisions of the Ministry of

Foreign Affairs; Chairman, Officers and Members of the

Board of Directors of Bank Polska Kasa Opieki and their

General-Counsel and others.’’ Matter of Tybus, 28 Mise.

2d 278, 217 N. Y. S. 2d 913 at 915 (1961).

The point, of course, is that even in applying SCPA

2218 so as to permit the remittance of funds, the Judge

was acting like a surrogate of the Secretary of State. The

result of the Court’s acting in this manner is demonstrated

by the fact that five years later (the Surrogate who de.

cided Matter of Tybus having died), another Surrogate of

Kings County promptly decided in another case involving

a Polish national that estate funds should no longer be

transmitted to Polish nationals, stating, among other

reasons, that ‘‘the Court disagrees that the economic con-

ditions arising out of the social and political character of

the Government of Poland are not relevant.’’ Matter of

Kina, 49 Mise. 2d 598, 268 N. Y. S. 2d 1381, Kir ’d. 29 A. D.

2d 563, 286 N. Y. S. 2d 773, aff’d. 23 N. Y. 2d 720.

In Matter of Kina, supra, the Court of Appeals affirmed

the Appellate Division’s reversal of the Surrogate and its

Gnding that the Polish claimant would have the benefit,

use and control of his funds but it refused to reach the

constitutional question of the lower court’s intrusion into

foreign affairs although that issue was presented to it

and fully briefed. And this was subsequent to Zschernig

and its own decision in Leikind, supra,

The result is that the New York courts continue to

apply SCPA 2218 in a manner proscribed by Zschernig.

See the following cases which are not officially reported:

19

Estate County Index No. Trial Date

Theodore Haab Suffolk 176A/60 5/16/68

Antony Daria Suffolk 1034/50 4/16/68

Mary Polubatko Monroe 1199/58 3/37/68

Maria Zaggers Nassau 104409 12/11/68

Ignatz Malehun Richmond A 177/63 —11/ 5/68

Anton Matisz Suffolk S414 /47 3/18/69

Jacob Petarsky Saratoga 10/25/68

Mike Kuzmicz Cattaraugus 4/29/69

Bruno Seemel Queens 2282/62 6/23/69

Vlades Kurklietis Queens 7571/66 6/23/69

Edgar Vitsut (Jueens 6263/58 6/23/69

In the oral argument before the three-judge court in

Bjarsch vy. DiFalco, supra, the Attorney-General of New

York took the position that in post-Zschernig hearings

cited above, the Surrogates engaged in conduct proscribed

by Zschernig only because more evidence was introduced

by the alien legatees than was required under the stand-

ards enunciated by the Court of Appeals in Leikind and

that the Attorney-General in opposing transmission of the

claimants’ legacies did no more than cross-examine the

claimants’ expert witnesses on foreign law matters testi-

fied to on direct testimony.

We believe that the Attorney-General’s contention is

disproved by the records in these cases. ‘However, it

should be pointed out that because under Section 3 of

SCPA 2218 the burden of proof is upon the alien legatee,

he can never be sure what quantum of testimony will

20

satisfy the Surrogate. And, even when an effort has been

made to limit the testimony, the Attorney-General, over

objection, has been allowed on cross-examination to go

far beyond the direct testimony, upon the theory that what

he was doing was testing the expert witness’ knowledge

of the foreign law. Under the cloak of this theory the

Court has permitted testimony regarding the nature and

character of the foreign government involved and the

integrity gf its laws and institutions.*

In an elfort to stop repetitive hearings, which in each

case consist of the same testimony, we suggested to the

Attorney-General, by letter dated September 30, 1968

‘*that the administration of justice would best be served

if your office will now adopt a policy of discontinuing the

necessity for further hearings on the issue of benefit, use

and control insofar as they involve Soviet citizens and

residents who are beneficiaries of New York estates.’’ We

pointed out that the result of these unnecessary proceed-

ings ‘thas been that the beneficiaries, the attorneys for the

parties and the people of the State of New York have

suffered monetary loss and the expenditure of time and

man power without justification.’? Almost four months

later, on April 18, 1969, the Attorney-General informed us

that he would continue to insist upon hearings ‘‘in view

of the fact that there are presently several pending litiga-

tions in Federal Courts involving the same or like ques-

OO 6 as”

* The Surrogates of New York County, having found that the nationals

of Czechoslovakia and the Soviet Union do receive the benefit, use and

control of their estate funds, nevertheless so apply S. C. P. A. 2218, as

to limit the amount of the initial transmission to $5,000 in cases involv-

ing Czechoslovak legatees and $10,000 in cases involving Soviet legates.

See Estates of Chounouzides, De Lowe, Halajko, Kaganoff, New York

Law Journal, July 18, 1967, p. 10 and Estate of Szekac, New York Law

Journal, June 27, 1966, p. 4. This policy is still in effect.

21

Finally, on this point, we call the Court’s attention to

the fact that the New Jersey Supreme Court has found

unconstitutional as applied that state’s benefit, use and

control statute. Estate of Kish, 52 N. J. 454, 246 Atl.

2d 1.

The New Jersey statute is patterned after SCPA 2218,

except that the latter imposes the burden of proof upon

the alien legatee.

In finding the New Jersey benefit, use and control

statute unconstitutional as applied, the New Jersey

Supreme Court stated as follows:

‘‘Fiduciaries and the courts, which have author-

ity over them and to which they are accountable,

are under an obligation to carry out the direction

of the testator or settlor, or the legal direction in

the case of intestacy. Implicit in that obligation

is the duty to deliver monies belonging to such per-

son in foreign countries, and at the same time to be

reasonably sure that the amount, less costs of trans-

mission and exchange into foreign currency, can

be transmitted to them through regular interna-

tional banking channels, consular offices or some

other legal and effective means. Although this aspect

was not mentioned in Zschernig, we think a valid

reading of our statute thus also permits withhold-

ing and payment into court where there is no

present physical means of transmitting the payment

to a beneficiary in a particular country.’’ (emphasis

in original)

We respectfully suggest that the criteria adopted in

Kish are more consistent with the principles of Zschernig

than those used by the New York Courts.

I A pe ee ee ae 2) oe ee

POINT II

SCPA 2218 as it has been applied by the Courts of

New York violates the due process and equal protection

clauses of the Fourteenth Amendment.

For more than a quarter of a century SCPA 2218 has

been applied solely to alien legatees who are residents of

the ‘‘Communist’’ countries. And, since 1960, when the

statute was amended so as to impose upon alien legatees

the burden of proving that they will have the benefit, use

and control of their funds, this burden has been imposed

solely upon the residents of these same countries.

The notes of decisions in McKinney’s Laws of New York,

Annotated, under SCPA 2218 and its predecessor, Section

269a of the Surrogate’s Court Act, confirm that the re-

ported cases in the Surrogates’ Courts; Appellate Divisions

and the Court of Appeals all involve residents of the Soviet

Union, Poland, Czechoslovakia, Bulgaria, Hungary, Rou-

mania, Albania, The German Democratic Republic and

The Chinese People’s Republic.

The reason given by the New York Courts for so apply-

ing SCPA 2218 is the fact that the alien legatees involved

are residents of governments having a particular political

character and that this of and by itself justifies the appli-

cation of the statute. See cases cited under Point I.

Furthermore, the Attorney-General of New York, either

on his own or by order of the Surrogate, appears as a

party in these cases for the purpose of opposing transmis-

sion of the legacies to residents of the above-named

countries. He does not appear for that purpose in

cases involving residents of any other countries,

The application of SCPA 2218 in this manner is an arbi-

trary and invidious discrimination against the residents

of these countries.

Prior to 1960, SCPA 2218 (then known as Section 269

of the Surrogate’s Court Act) did not, on its face, discrim-

inate between citizens and aliens. In 1960, however, the

statute was amended so as to impose upon alien legatees

the burden of proving that they would have the benefit,

use and control of their funds. Section 269-a of the Sur-

rogate’s Court Act, Added by L. 1960.

It may well be that we have reached the point in our

constitutional development where an arbitrary distinction

between citizens and aliens in the right to inherit is viola-

tive of the Fourteenth Amendment. In this connection,

we note that in Clark v. Allen, supra, the Court observed

that issues under the Fourteenth Amendment were not

raised in that case.

But, even assuming, arguendo, that there is a substan-

tial reason for discriminating against aliens in the right

to inherit, once a State has determined, as has New York,

that this right shall be the same for aliens as for citizens,

it cannot, without violating their rights under the Four-

teenth Amendment, impose unequal burdens upon aliens

in the securing of these rights. The burden of proof

imposed upon aliens by SCPA 2218 is such an unfair and

illegal burden. See Oyama v. State of California, 332

U.S. 633, 68 S. Ct. 269 (1948).

Furthermore, SCPA 2218 has been applied so as to dis-

crminate exclusively against one group of aliens as

against all other aliens solely upon the ground that the

aliens discriminated against are residents of ‘‘Commu-

nist’? countries. And this is so whether or not the

a4

alien’s government is on the Treasury List. Discrimina.

tion based solely upon the political character of the gov-

ernment of which the alien is a resident is akin to the sort

of discrimination struck down by this Court which Was

based solely upon a person’s country oF origin. Oyama

v. State of California, supra, Torao Takahashi y. Fish

and Game Commission, 334 U. S. 410, 68 S. Ct. 1138

(1948). For a statutory classification to satisfy the re.

quirements of the Equal Protection Clause, it must be

related to some proper governmental purpose, Truax y,

Raich, 239 U. S. 33, 36 S. Ct. 7; Schnieder vy. Rusk, 377

U. S. 163, 84 S. Ct. 1187 (1964). Discrimination of the

character here involved against aliens qua aliens cannot

be a proper state governmental purpose. See Hines y,

Davidowitz, 312 U. 8. 52, 61 S. Ct. 399 (1941).

That non-resident aliens are entitled to due process was

established by this Court in Russian Volunteer Fleet y,

U’. S., 282 U. S. 481, 51 S. Ct. 229 (1939) and U. §. y,

Pink, 315 U.S. 203, 62 S. Ct. 552.

We believe that for the same reasons. non-resident

aliens are entitled to equal protection under the Four-

teenth Amendment, particularly in a situation in which

the alien is seeking to enforce his rights to property

within one of the-states of the United States. Yickwo vy.

Hopkins, 118 U. S. 356, 6 S. Ct., 1064. See Sardino vy.

Federal Reserve Bank of New York, 361 F. 2d 106, 111

(1966). U.S. C. A. 2d, in which that Court said:

“The government’s second answer that the Con-

stitution of the United States confers no rights on

non-resident aliens is so patently erroneous ina

case involving property in the United States that

we are surprised it was made. Throughout our

history, the guarantees of the constitution have

been considered applicable to all actions of the

government within our borders—and even to some

without...”

In any event, the Fourteenth Amendment like the Fifth

Amendment forbids the discrimination that is so unjust

as to be a violation of due process. Schnieder v. Rusk, 377

U. 8. 163, 84 S. Ct. 1187.

As this Court said in Bolling v. Sharpe, 347 U. S. 497

74.8. Ct. 693:

‘‘But the concepts of equal protection and due

process, both stemming from our American ideal

of fairness, are not mutually exclusive. The ‘equal

protection of the laws’ is a more explicit safeguard

of prohibited unfairness than ‘due process of law,’

and therefore, we do not imply that the two are

always interchangeable phrases. But, as this Court

has recognized, discrimination may be so unjustifi-

able as to be violative of due process.’’

Commenting upon the right to due process enjoyed by

non-resident aliens, the United States Court of Appeals for

the Second Circuit in Sardino vy. Federal Reserve Bank,

supra, made an observation which is peculiarly applicable

to the situation which has faced alien legatees who have

been adversely affected by the application against them of

SCPA 2218.

‘*. . . The due process clause speaks in terms not

of taking but of deprivation; we find it hard to say

there is no deprivation when a man is prevented both

from obtaining his property and from realizing

any benefit from it for a period of indefinite dura-

tion which may outrun his life. Compare Pennsy]l-

vania Coal Co. v. Mahon, 260 U. S. 393, 415, 43 S. Ct.

man)

108, 67 L, Ed. 322 (1922); Goldblatt v. Town of

Hempstead, 369 U. S. 590, 952-954, 82 S. Ct. 987,

8 L. Ed. 2d 130 (1962); ALI, Restatements of

Foreign Relations Law 6197 (Proposed Official

Draft 1962). [Sardino v. Federal Reserve Bank

of New York, 361, F. 2d 106 (1966) at p. 111)”

POINT III

SCPA 2218 is unconstitutional on its face because it

intrudes illegally into the area of foreign relations,

Whether SCPA 2218 is constitutional on its face must

be determined from a reading of the purpose of the

statute as enunciated by the Legislature of New York.

At the time Section 269 of the Surrogate’s Court Act (the

predecessor of SCPA 2218) was enacted, there was in-

cluded in the New York legislative bill, an explanatory

note which reads as follows:

“This amendment is proposed by the Executive

Committee of the Surrogate’s Association of the

State of New York. The purpose of the amendment

is to authorize the deposit of monies or property

in the Surrogate’s Court in cases where transmis-

mission of payment to a beneficiary, legatee, or

other person resident in a foreign country might

be circumvented by compensation in whole or in

part. The amendment authorizes the impounding

of the fund by the Surrogate to await the time

when payment can be made to the beneficiary for

his own benefit, use and control.”’ Cited in Matter

of Braier, supra.

We suggest that the very genesis of SCPA 2218 is proof

of its unconstitutionality and that it cannot be applied

ee |

without involving the New York courts ‘‘in an evaluation,

either expressed or implied, of the administration of for-

eign law, the eredibility of foreign diplomatic agents and

the policies of foreign governments’’. See the concurring

opinion in Zschernig of Mr. Justice Stewart with whom

Mr. Justice Brennan joined.

This is particularly true since in 1960, the statute was

amended to include a requirement imposing upon alien

legatees the burden of proving that they will receive the

benefit, use or control of the benefits due them. See See-

tion 3 of SCPA 2218, supra. We understand that to be

the thrust of that part of the decision of the New Jersey

Supreme Court in Matter of Kish, supra, which, in deal-

ing with the subject of burden of proof, said:

‘‘We are further of the opinion, in view of the

rationale of Zschernig as well as the essentially

negative language of our statute, that the burden

should rest on the party seeking the withholding

of distribution . . .’’? (emphasis supplied).

Twenty-five years of experience, including the past 19

years during which the burden of proof has been statutor-

ily imposed upon alien legatees, indicates that a statute

like SCPA 2218 cannot be applied without intervening in

foreign affairs. As we have pointed out, the nature of

the hearings before Surrogates since the Zschernig deci-

sion are not substantially different than those which were

conducted prior to Zschernig. What quantum of proof

is an alien legatee claimant required to produce to meet

the burden of proof? If his expert witness testifies

that there are no laws in his country which prohibit

receipt of his legacy, the Attorney-General or the Public

Administrator will either ask about ‘‘seeret laws’’ or

raise questions about the distinction between ownership

rights under a social system different than ours, or he

will, under the guise of testing the expert witness’ knowl.

edge, raise the most fundamental questions about the

credibility of the laws and institutions of the aliey

legatee’s government.

The same sort of hearing will take place if the alien

legatee’s expert witness testifies as to the existence of

laws in the alien’s country guaranteeing the right to in-

herit and own property.

In Philadelphia, the Orphan’s Court en bance struck

down Pennsylvania’s benefit, use and control statute as

unconstitutional on the basis of this Court’s decision in

Zschernig. Estate of Struchmanczuk, 44 D. C. 2d 155. No

appeal from the decision of that six-judge court was

taken by the Attorney-General of Pennsylvania.

POINT IV

SCPA 2218 is unconstitutional on its face because it

violates the due process and equal protection clauses of

the Fourteenth Amendment.

The language of section 269 of the Surrogate’s Court

Act, the original predecessor statute of SCPA 2218, con-

tained no reference to ‘‘alien’’ legatees.*

However, in 1960, the statute was amended by the addi-

tion of a section which imposed upon ‘‘alien’’ legatees the

burden of proving that they would have the benefit, use

and control of their legacies in the circumstances described

by the statute. Section 269-a of the Surrogate’s Court

Act. Added by L. 1960, ch. 975. The burden of proof

requirement is now Section 3 of SCPA 2218.

* But the legislative note included in the proposed bill stated that its

purpose was to authorize the deposit of monies belonging “to a bene-

ficiary, legatee or other person resident in a foreign country” when the

transmission “might be circumvented by confiscation in whole or in

part.” Supra, at p. 26.

29

Such discrimination against aligns qua aliens violates

the due process and equal protection provision of the

Fourteenth Amendment. See 4 merican Commuters Assn.

y, Levitt, 279 Fed. Supp. 40; Robertson v. Ott, 284 Fed.

Supp. 735. Even the Anti-Alien Land Law decisions of

this Court upholding the right of a state to discriminate

against aliens with respect to their right to own land,

dealt with statutes which discriminated against certain

kinds of aliens such as those not eligible for citizenship

or who had not declared their intention to become citi-

weus.* And, surely, these decisions have lost much, if not

all, of their vitiality. See Oyama v. State of California

and Torao Takahashi v. Fish and Game Commission, supra.

At the least, the Oyama case would seem to stand for the

proposition that when an unequal burden of proof is im-

posed upon an alien to enforce a property right which the

state has given to all persons regardless of citizenship or

alienage, the requirement violates the alien’s Fourteenth

Amendment rights. The State of New York does not dis-

criminate between aliens and citizens with respect to the

right to inherit. Having granted this right equally, it

cannot place obstacles in the way of the alien’s ability to

enforce these rights which it does not place in the way of

citizens.

It may not be too much to suggest that we have reached

the point where no discrimination should be countenanced

against aliens and in the right to inherit except insofar

as the Federal government may feel it is necessary as

part of the conduct of foreign relations, e.g. Trading

with the Enemy Act, 50 App. USCA §5. See Hines v.

Davidowitz, supra.

* Terrace v. Thompson, 263 U. S. 197, 44 S. Ct. 15; Porterfield v.

Webb, 263 U. S. 225, 44S. Ct. 21; Webb v. O’Brien, 263 U.S. 313, 44

S. Ct. 112: Frick v. Webb, 263 U. S. 326, 44 S. Ct. 115; Cockrill v.

California, 268 U. S. 258, 45 S. Ct. 490.

sf

30

CONCLUSION

For the reasons stated above, we respectfully contend

that SCPA 2218 is unconstitutional on its face and as jt

has been applied by the State of New York.

Respectfully submitted,

Wor Porprer Ross Woir & Jones

Amicus Curiae

Martin Popper

Of Counsel

31

APPENDIX I

Section 2218 of the Surrogate’s Court Procedure Act of

New York

‘Section 2218. Deposit in Court for Benefit of legatec,

distributee or beneficiary.

“1, (a) Where it shall appear that an alien legatee,

distributee or beneficiary is domiciled or resident within a

country to which checks or warrants drawn against funds

of the United States may not be transmitted by reason of

any executive order, regulation or similar determination

of the United States government or any department or

agency thereof, the court shall direct that the money or

property to which such alien would otherwise be entitled

shall be paid into court for the benefit of said alien or the

person or persons who thereafter may appear to be en-

titled thereto. The money or property so paid into court

shall be paid out only upon order of the surrogate or

pursuant to the order or judgment of a court of competent

jurisdiction.

‘‘(b) Any assignment of a fund which is required to be

deposited pursuant to the provisions of paragraph one (a)

of this section shall not be effective to confer upon the

assignee any greater right to the delivery of the fund than

the assignor would otherwise enjoy.

‘2, Where it shall appear that a beneficiary would not

have the benefit or use or control of the money or other

property due him or where other special circumstances

make it desirable that such payment should be withheld

the decree may direct that such money or property be paid

into court for the benefit of the beneficiary or the person

ashe Cs Sees a BG eRe» — — ee — = ;

Pace NE tS ‘ tt ga ee ROR An Sire rere lll

7

or persons who may thereafter appear entitled thereto,

The money or property so paid into court shall be paid

out only upon order of the court or pursuant to the order

or judgment of a court of competent jurisdiction.

‘*3. In any such proceeding where it is uncertain that

an alien beneficiary or fiduciary not residing within the

United States, the District of Columbia, the Commonwealth

of Puerto Rico or a territory or possession of the United

States would have the benefit or use or control of the

money or property due him the burden of proving that the

alien beneficiary will receive the benefit or use or control

of the money or property due him shall be upon him or the

person claiming from, through or under him.”’

--

-e

~~

APPENDIX II

Treasury List—As Amended June 28, 1968

Federal Register, Vol. 33, No. 130—Thursday,

July 4, 1968

Title 31—Money and Finance: Treasury

Chapter II—Fiscal Service, Department of the Treasury

Subchapter A—Bureau of Accounts

[Dept. Circular No. 655, 4th Amdt.]

Part 211—Delivery of Checks and Warrants to Addresses

Outside the United States, Its Territories and Posses-

sions

Withholding of Delivery of Checks

On the basis of information available to the Secretary

of the Treasury, including advice received from the De-

partment of State, the Secretary has determined that

postal, transportation and banking facilities in general, and

loc: conditions in Estonia, Latvia, Lithuania, and the

Union of Soviet Socialist Republics are such that there is a

reasonable assurance that the payee of a check or warrant

drawn against funds of the United States, or any agency

or instrumentality thereof, will actually receive such a

check or warrant and be able to negotiate it for full value.

The Treasury Department therefore finds it necessary

to amend its regulations at 31 CFR Part 211 (Treasury

Department Circular No. 655, as amended) so as to delete

those countries from the list of restricted areas in

§211.2(a) to which such a check or warrant may not be

sent from the United States for delivery. The Depart-

ment also finds, in accord with 5 U. S. C. 553, that notice

and public procedure thereon are not necessary since the

amendment involves a foreign affairs function of the

United States.

SNORE ET NE PR SOR SPSL IED ad Nin Pi RNS ID oe |

Accordingly, §211.2(a), Subchapter A, Chapter II of

Title 31 of the Code of Federal Regulations is amended to

read as follows:

§211.2 Withholding of delivery of checks.

(a) It is is hereby determined that postal, transportation,

or banking facilities in general or local conditions jy

Albania, Communist-controlled China, Cuba, North Korea,

North Viet-Nam, the Russian Zone of Occupation of Ger.

many, and the Russian Section of Occupation of Berlin,

Germany, are such that there is not a reasonable assur-

ance that a payee in those areas will actually receive

checks or warrants drawn against funds of the United

States, or agencies or instrumentalities thereof, and be

able to negotiate the same for full value.

* * s e

(See. 5, 54 Stat. 1087; 31 U. S. C. 127)

Effective date. This amendment shall become effective

upon signature.

Dated: June 28, 1968.

| SEAL]

Joun K. Canrvock,

Fiscal Assistant Secretary.

[F.R. Doc. 68-7994; Filed July 3, 1968; 8:50 a.m.]

ANGHEL

a/k

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