173 Misc. 545 | N.Y. Sur. Ct. | 1940
The question presented for determination here is whether upon the evidence the surrogate shall direct the transmission of the moneys payable to a distributee, or whether they shall be decreed to be paid into court pursuant to the recent amendment made to section 269 of the Surrogate’s Court Act.
The decedent died intestate and his estate was administered by the public administrator. He left a father as his sole next of kin. He resides in Odessa in the Union of Soviet Socialist Republics, formerly known as Russia. The approximate amount distributable to him is $1,500. He executed a power of attorney to Charles Recht as attorney in fact which conferred the usual authority to appear in any proceedings in this court and generally to represent the distributee in the collection of his share of the estate. Mr. Recht is the attorney at law for the Consul General of the Union of Soviet Socialist Republics and customarily represents its citizens and nationals under powers of attorney in this and other Surrogates’ Courts.
At the same session parallel amendments were made to sections 474 and 978 of the Civil Practice Act and similar explanatory notes were appended to that legislation.
These changes in the law were brought about by actual cases arising in estates where it was demonstrated that inheritances, either testate or intestate, were, after transmission, withheld or confiscated either wholly or partially by certain countries in Europe. In certain situations these seizures were motivated by religious or racial persecutions. In other cases it was found that the beneficiary was deprived of all or the greater part of the inheritance by confiscation under the guise of the imposition of excessive taxes on the right to receive the share. In other situations it was found that confiscation was disguised under the device of payment of the transmitted share to the recipient in debased coinage or paper money of the country where he resided, whereby only a very small portion of the dollar value of the share was actually paid over.
In the pending proceeding a formal hearing was had and oral and documentary evidence submitted upon the question of whether the father of the decedent would have the benefit, use or control of
At the outset of the proceeding here the attorney in fact attempted to raise a question involving the Constitution of the United States in that the documents which led to the establishment of diplomatic relations with the Union of Soviet Socialist Republics constituted a treaty. (Cf. Santovincenzo v. Egan, 284 U. S. 30.) These documents consisted of an interchange of communications between President Roosevelt and Mikhail Kalinin, the President of the All Union Central Executive Committee of Moscow, and Maxim Litvinoff, who was then Commissar for Foreign Affairs. The negotiations began apparently shortly before October 10, 1933, which was the date of the first letter as published in the official pamphlet of our Department of State. (“ Eastern European Series, No. 1, 1933.”) They were terminated on November 16, 1933, by the final exchange of communications in which the United States, through President Roosevelt, gave recognition to the Soviet Republic. It has been conclusively shown, however, that these interchanged communications, sometimes referred to as the “ Litvinoff Letters,” never rose to the status of a treaty. No such formal compact was ever made or ever confirmed by the Senate of the United States. At most the final arrangements, of November 16, 1938, afford mutual protection for the nationals of either country when residing in the other country. The Soviet Republic gave special pledges for the protection of American citizens residing within its borders and specifically agreed “ to refrain from interfering ” in our internal affairs and to refrain from agitation or propaganda for “ the bringing about by force of a change in the political or social order ” of the United States. In addition recognition brought about the establishment of diplomatic and consular representatives in both countries.
In 1937, and in subsequent years, the “ Litvinoff Letters ” were extended in a limited way by a new agreement as to commercial relations only. (Executive Agreement Series, Department of State, No. 105 of 1937, No. 132 of 1938 and No. 151 of 1939 — Commercial Relations — Agreements between the United States of America and the Union of Soviet Socialist Republics.) The contention now made by the attorney for the Soviet Consul General that any treaty exists or that his nation is entitled to invoke the “ Most Favored Nation Clause ” under any treaty between the United States and any other country is, therefore, unfounded in fact and in law. His
Upon the remaining principal question the surrogate holds that it has been proved by the evidence that the father of the decedent as his sole next of kin would not have the “ benefit or use or control ” of the moneys if they were transmitted to him.
His attorney in fact has attempted to prove here that there is a form of ownership of private property to a limited extent under the present Constitution and laws of the Soviet Republic and that there is a statutory recognition of a right to take by inheritance by a Soviet citizen from a New York decedent. It is conceded that there is no right to inherit land, since it is a primary principle of their form of government that real property is owned by the State. A New York attorney was called by the attorney in fact to testify to the Soviet Constitution and statutes. Despite his demonstrated industry and research, it is difficult to accept his opinion of these legal rights because of his relatively brief experience in his law course in Moscow and his lack of experience in the actual operation of the specific question here — the transmission and beneficial enjoyment of estate funds. Undoubtedly there is a form of ownership of certain private property to a restricted degree in the Soviet Union. It may include clothing, household goods, savings bank deposits, or even small dwelling houses or other improvements of realty, but separated from the ownership of the land itself.
It is also difficult for one who has studied and observed the processes of our own American law of inheritance to reconcile the privileges granted by the Constitution and laws of the Soviet Union with their actual operation or the existence of the rights of its citizens in its totalitarian form of government. While it is not important here, the right of inheritance by its citizens from, a deceased citizen seems to be confined to descendants or a surviving spouse or to those actually receiving support from the deceased for not less than one year before death. (Soviet Law, an Introduction by John N. Hazard, 36 Col. Law Review, Í236.) In all other cases escheat to the government occurs.
Testimony was also given by those who urge a transmission of the moneys, as to the economic conditions in the Soviet Union and the alleged beneficial use which recipients of funds would enjoy. This testimony, however, has been entirely overcome by the docu
Dr. David H. Dubrowsky testified convincingly as to the true conditions of transmission and receipt of funds, based upon his experience over a period of nineteen years. In 1921, at a time when there were no diplomatic relations between the United States and Soviet Russia, he was appointed by the latter government as the official head of the Russian Red Cross Society in the United States. In that capacity he functioned from 1921 to 1935 in the supervision of the collection and transmission of veterans’ benefits and war risk insurance moneys granted by the United States government. He is a naturalized citizen of the United States. He had exclusive control in the entire United States of transmissions from American estates to Russian distributees until the year 1932. Thereafter, Mr. Recht, the attorney in fact here, assumed that duty. Special opportunity and experience in observing these processes were available to Dr. Dubrowsky. In the intervening years and up to the present time he appears to have continued his general familiarity and contact with these subjects. In the earlier period immediately after the World war no transmissions of government moneys were countenanced by our Veterans’ Administration Bureau. When transmissions to the Soviet Union were authorized, it was only on specific pledges and assurances given by Soviet officials that the transmitted funds would be honestly paid to the beneficiaries. Even then in the succeeding years constant complaints of confiscation or of payments made in depreciated currency were presented to our government.
It is Dr. Dubrowsky’s testimony that under present conditions in the Soviet Union the beneficiary of this estate, instead of receiving the equivalent of $1,500, which is the amount of his distributive share, would be paid in depreciated rubles the equivalent of thirty dollars of our money and the balance of $1,470 would be confiscated by the Soviet Union. There is opposing testimony in the record that under the present alleged rate of exchange, the beneficiary would receive at most twenty per cent of his share in dollars. Even under the most favorable circumstances, therefore, he would get the maximum equivalent of $300 in rubles and there would be confiscated by the Soviet government the balance of $1,200. We thus have a minimum beneficial use of the equivalent of thirty dollars or a maximum of $300. Moreover, even this situation is complicated
It was also testified to by Dr. Dubrowsky that the moneys of American estates were purposely held in America to support the credit of the Soviet government here. With these and other proofs it has been shown conclusively that the amount which the beneficiary here will actually receive is inconsequential when compared with the value of his share in dollars.
The system of inheritance of our State contemplates that a beneficiary wherever situated shall be paid in full and without expropriation by a foreign country. The individual legatee or next of kin is made under our law the recipient of the inheritance. It is not intended that a foreign government, of which the beneficiary is a national, should be the object of the testator’s bounty, nor that the right to succeed to the property of a New York decedent should be diverted from the statutory next of kin to a foreign power. From a selfish consideration, the State of New York might, under its inherent constitutional power, have enacted a statute which would escheat the moneys in such situations to its own government -under its recognized right to regulate or even withhold the privilege of inheritance. To the contrary, the amendment to section 269 of the Surrogate’s Court Act made in 1939 was extremely beneficial in its purpose. It contemplated no forfeiture to our State of the legacy or distributive share of the foreign beneficiary. It was intended to safeguard his rights by permitting the moneys to be held until the time when it might be shown that the beneficiary, and he alone, would receive the funds. “ This statute, far from constituting an impairment of his rights, was designed to be, and is, in fact, a valuable protection thereof.” (Matter of Landau, 172 Misc. 651.) In the latter case, Surrogate Wingate discussed the effect of the amended form of section 269 in its relation to a Soviet distributee of a New York resident and reached a similar conclusion to that here.
Submit decree on notice settling the account and directing distribution accordingly.