TASHIRO v.
JORDAN
K. TASHIRO, M.D., et al., Petitioners
v.
FRANK C. JORDAN, Secretary of State, et al., Respondents.
Docket No. S.F. 12346.
Supreme Court of California.In
Bank.
May 20, 1927. *237237
APPLICATION
for a Writ of Mandate to compel the Secretary of State to file certain articles
of incorporation. Writ granted. *238238
The facts are stated in the opinion
of the court.
J. Marion
Wright for Petitioners.
U.S. Webb,
Attorney-General, and Robert W. Harrison, Chief Deputy Attorney-General, for
Respondents.
CURTIS, J.
This is an application for a writ of
mandate to compel the respondents, as Secretary of State and Deputy Secretary
of State, respectively, to file certain articles of incorporation prepared and
executed by petitioners and presented by them to respondents as such officers,
for the purpose of filing in the office of Secretary of State. The application
also asks that the respondents be compelled to issue a certificate of incorporation
and to certify and deliver to petitioners three copies of said articles of
incorporation. It appears from said application that petitioners are residents
of the state of California and county of Los Angeles, and are all Japanese
subjects ineligible to become citizens of the United States or state of
California; that they have voluntarily associated themselves together for the
purpose of forming a corporation under the laws of the state of California to
be known as the Japanese Hospital of Los Angeles; and that among the purposes
for which this corporation is sought to be organized are those of maintaining a
general hospital, to purchase the necessary equipment for the same and to lease
land upon which the buildings necessary for the maintenance of said hospital
may be erected. Respondents refuse to file these articles of incorporation or
to take any official action thereon for the reason, as contended by them, that
the treaty between this government and the Japanese government confers no right
upon Japanese subjects residing in this country to form a corporation under the
laws of this or of any other state of this country. Without this right is given
to petitioners by the terms of said treaty., the respondents contend,
petitioners are prohibited by the laws of this state, and particularly by the
provisions of the Alien Land Law, from forming any corporation, one of the
purposes of which is to possess, use, or occupy real property situated in this
state. *239239
Section 1 of the Alien Land Law, as
adopted by the electors of this state in 1920 and thereafter amended by the act
of the legislature approved June 20, 1923 (Stats. 1923, p. 1020), deals with
the rights of aliens eligible to citizenship and in no way relates to any
matter involved in the present proceeding. Sections 2 and 3 of this act are as
follows:
"Sec.
2. All aliens other than those
mentioned in section one of this act may acquire, possess, enjoy, use,
cultivate, occupy and transfer real property, or any interest therein, in this
state, and have in whole or in part the beneficial use thereof, in the manner
and to the extent, and for the purposes prescribed by any treaty now existing
between the government of the United States and the nation or country of which
such alien is a citizen or subject, and not otherwise.
"Sec.
3. Any company, association or
corporation organized under the laws of this or any other state or nation, of
which a majority of the members are aliens other than those specified in section
one of this act, or in which a majority of the issued capital stock is owned by
such aliens, may acquire, possess, enjoy, use, cultivate, occupy and transfer
real property, or any interest therein, in this state, and have in whole or in
part the beneficial use thereof, in the manner and to the extent and for the
purposes prescribed by any treaty now existing between the government of the
United States and the nation or country of which such members or stockholders
are citizens or subjects, and not otherwise. Hereafter all aliens other than
those specified in section one hereof may become members of or acquire shares
of stock in any company, association or corporation that is or may be
authorized to acquire, possess, enjoy, use, cultivate, occupy and transfer real
property, or any interest therein, in this state, in the manner and to the
extent and for the purposes prescribed by any treaty now existing between the
government of the United States and the nation or country of which such alien
is a citizen or subject, and not otherwise."
[1] It will be observed from a reading of the foregoing
sections of the Alien Land Law that by the provisions of section 2 thereof the
rights of aliens ineligible to citizenship to possess, use, or occupy real
property in this state *240240 are limited to such rights as are prescribed by
the treaty between the country of which said aliens are subjects and this
country. By section 3 of said act the rights of any corporation organized in
this or any other state, of which a majority of the members thereof are aliens
ineligible to citizenship, to possess, use, or occupy real property situated in
this state are likewise limited and governed by the terms of the treaty
existing between this government and the government of which such aliens are
citizens or subjects. In other words, it was undoubtedly the object and purpose
of the Alien Land Law of this state to accord to aliens ineligible to
citizenship, either individually or as members of a corporation, in which a
majority of the members thereof are ineligible to citizenship, the right to
acquire and possess real property in this state "in the manner and to the
extent and for the purposes prescribed by any treaty," and to deny to such
aliens any and all other rights or privileges in or to the real property of
this state. It is apparent, therefore, that the measure of petitioners' rights
as asserted in this proceeding is to be determined by the terms and provisions
of the treaty or treaties now in force between this government and the empire
of Japan. Article I of the Treaty of Commerce and Navigation between this
government and the empire of Japan, proclaimed April 5, 1911 (37 U.S. Stats. at
Large, p. 1504), in so far as it is material to any question arising herein,
provides that:
"The citizens or subjects of
each of the High Contracting Parties shall have liberty to enter, travel and
reside in the territories of the other to carry on trade, wholesale and retail,
to own or lease and occupy houses, manufactories, warehouses and shops, to
employ agents of their choice, to lease land for residential and commercial
purposes, and generally to do anything incident to or necessary for trade upon
the same terms as native citizens or subjects, submitting themselves to the
laws and regulations there established."
[2] It will be observed that by the terms of this article of
said treaty, subjects of Japan are accorded the right, among others, to carry
on trade, to lease land for commercial purposes, and "generally to do
anything incident to or necessary for trade upon the same terms as native
citizens" *241241 of this country or state. In the case of State of
California v. Tagami, 195 Cal. 522
[234 P. 102],
it was held that a lease of land to a subject of Japan, for the purpose of
using and occupying the same as a health resort or sanatorium is for a
"commercial purpose" within the terms of said treaty. It is not
seriously contended by respondents that the use of land for the purpose of
erecting and maintaining thereon a hospital is not a use for commercial
purposes as the term is used in said treaty, nor is it contended that a subject
of Japan or any number of them, either in their capacity as individuals or as
members of a partnership, cannot under the terms of said treaty lease real
property in this state for the purpose of maintaining thereon a hospital. The
sole claim of respondents is that the treaty does not expressly or by
reasonable inference confer upon Japanese subjects residing in this state the
right to form a corporation, if one of the purposes thereof is to lease for
commercial purposes real property situated in this state.
In the case of California v. Tagami, supra, this court quoted with
approval from the following language from the case of De Geofroy
v. Riggs, 133 U.S.
258 [33 L.Ed. 642, 10 Sup. Ct. Rep. 295, see, also, Rose's U.S. Notes]: "It is a general
principle of construction, with respect to treaties, that they shall be
liberally construed, so as to carry out the apparent intention of the parties
to secure equality and reciprocity between them. As they are contracts between
independent nations, in their construction, words are to be taken in their
ordinary meaning, as understood in the public law of nations, and not in any
artificial or special sense impressed upon them by local law, unless such
restricted sense is clearly intended. And it has been held by this court that
where a treaty admits of two constructions, one restrictive of rights that may
be claimed under it, and the other favorable to them, the latter is to be
preferred." The principle thus enunciated appears to be accepted by the
courts generally, and in 38 Ency. of Law and Procedure (Cyc.),
970, it is stated as follows: "Treaties should ordinarily be construed
liberally, and so where the treaty admits of two constructions, one restrictive
as to the rights that may be claimed under it and the other liberal, the latter
is to be preferred." In *242242 support of this text the following
authorities are cited: In re Wyman, 191 Mass. 276 [114 Am.
St. Rep. 601, 77 N.E.
379], In re Stixrud's Estate,
58 Wn. 339 [Ann. Cas.
1912A, 850, 33 L.R.A. (N.S.) 632, 109 P. 343], Disconto
Gesellschaft v. Umbreit,
208 U.S.
570 [52
L.Ed. 625, 28 Sup. Ct. Rep. 337, see, also,
Rose's U.S. Notes], Scharpf v. Schmidt,
172 Ill. 255 [50 N.E. 182], Adams v. Akerlund,
168 Ill. 632 [48 N.E. 454], and De Geofroy
v. Riggs, 133 U.S.
258 [33 L.Ed. 642, 10 Sup. Ct.
Rep. 295].
As we have already seen, section 1
of the Treaty of 1911 provides that subjects of Japan residing in this state
shall have the right to carry on trade, wholesale and retail, to lease land for
commercial purposes and generally do anything incident to or necessary for
trade upon the same terms as native citizens or subjects. It is apparent from the
reading of this section of the treaty that it was the intention of the high
contracting parties thereto to give to the subjects of either country residing
in the territory of the other the right to carry on trade therein upon the same
terms as native subjects or citizens of the latter country. Yet this right to
carry on trade is limited to such subjects and purposes as are enumerated in
the treaty itself. Subjects of Japan residing in this country and subjects of
our own country residing in Japan have only such rights in the country of their
domicile as are expressly or by reasonable implication given to them by the
treaty. The right to possess real property for agricultural purposes is not
mentioned or referred to in the treaty. In fact, the treaty is silent upon this
subject. Accordingly, it has been held that no right to possess real property
for agricultural purposes is given to subjects of Japan residing in this
country and, therefore, a statute prohibiting Japanese subjects residing in
this state from possessing real property for agricultural purposes is valid and
constitutional ( Porterfield v. Webb, 195 Cal. 71 [231 P. 554]; Porterfield
v. Webb, 263
U.S. 225 [68 L.Ed. 278, 44 Sup. Ct. Rep. 21]; Webb v. O'Brien,
263 U.S. 313 [68 L.Ed.
318, 44 Sup. Ct. Rep. 112]). It was further held
that the right "to carry on trade" given by the treaty does not give
to Japanese subjects residing in this state the privilege of acquiring stock in
a corporation owning farm or agricultural land situated in this state ( Frick
v. Webb, 263 U.S. 326
[68 L.Ed.
323, 44 Sup. Ct. Rep. 115]). In this case the
*243243 court said: "The provisions of the act (Alien Land Law of
California) were framed and intended for general application and to limit the
privileges of all ineligible aliens in respect of agricultural lands to those
prescribed by treaty between the United States and the nation or country of
which such alien is a citizen or subject. The State has power, and the act
evidences its purposes, to deny to ineligible aliens permission to own, lease,
use or have the benefit of lands within its borders for agricultural purposes.
. . . It may forbid indirect as well as direct ownership and control of
agricultural land by ineligible aliens. The right `to carry on trade' given by
the treaty does not give the privilege to acquire the stock above described. To
read the treaty to permit ineligible aliens to acquire such stock would be
inconsistent with the intention and purpose of the parties."
[3] But the right "to carry on trade" in the specific
lines of business mentioned in the treaty, such as conducting manufactories,
warehouses, and shops and leasing land for commercial purposes, is from the
very terms of said treaty as extensive and complete as that employed by native
citizens or subjects. It would be difficult to frame language much more
comprehensive than that found in the following provision of article I of the
treaty — "and generally to do anything incident to or necessary for trade
upon the same terms as native citizens or subjects." This language follows
the provision enumerating the different classes of trade or business in which
resident aliens are authorized to engage and must be read in connection with
such provision, and as so read it gives to such aliens an equal standing with
native citizens or subjects in the conduct of those enumerated classes of
business which may be carried on by such aliens. [4] If, then, Japanese
subjects residing in this state are authorized to engage in certain lines of
business, including that of leasing real property for commercial purposes, and
under the terms of the treaty they are further authorized to do anything
incident or necessary in the conduct of such business upon the same terms as
native citizens or subjects, are they thereby empowered to form a corporation
as one of the necessary incidents of transacting such business? The statutes of
this state provide the terms under which native citizens of this country may
enter into corporate *244244 relations, and it is not questioned by respondents
that petitioners have complied with the requirements of all such statutes,
provided they are eligible to form a corporation under the terms of the treaty.
It is hardly necessary to call attention to the extent to which corporations
are formed and used by the citizens of this state, as well as by those of all
other civilized countries, in the transaction of the various lines of trade
carried on therein. There is scarcely a class of business of any consequence
carried on in this state in which corporate interests do not play, if not a
leading, at least an important part in its transaction. The extensive and
widespread use of this means of carrying on trade or transacting business is
convincing proof of the advantages to be derived therefrom.
Why, then, should this method of carrying on trade as to the classes of
business enumerated in the treaty be denied subjects of Japan residing in this
state in the face of the plain provisions of the treaty conferring upon them as
to such classes of business the right to do anything incident to such business
upon the same terms as native citizens? A corporation, or the members thereof,
in conducting any certain business do not thereby exercise any more extensive
or different right or control over the property of said business than they
would exercise over said property if they carried on the business as
individuals. Should the petitioners as individuals decide to lease land and
erect thereon and equip a hospital and maintain and operate the same, they
could do so in the same manner and to the same extent as a corporation
organized by them might do the same identical acts. As a corporation they would
not be authorized to exercise any right over property which they do not now
possess as individuals nor to transact any business nor engage in any line of
trade which they could not transact or engage in as individuals. The
corporation is simply the instrumentality through which the members thereof
engage to carry on the business in which they have a common interest. It is simply
incidental to the business just as an agreement of copartnership
would be if a partnership were formed to perform the same acts. In view of
these considerations, and mindful of the rule already referred to, requiring
courts to give to treaties a liberal construction, we are of the opinion that
the right of Japanese subjects residing in this state to form *245245 a
corporation for the purpose of leasing real property upon which to operate and
maintain a hospital is within the reasonable intendment of the Treaty of 1911.
Such right is therefore not within the prohibitions contained in the Alien Land
Law of this state, but is expressly recognized by the terms thereof.
[5] Respondents have directed our attention to the provisions
of article VII of the Treaty of 1911, which was designed to confer certain
rights upon corporations (therein referred to as limited-liability companies or
associations) "organized in accordance with the laws of either High
Contracting Party and domiciled in the territories of such Party."
Following the granting of such rights said section of the treaty provides that:
"The foregoing stipulation has no bearing upon the question whether a
company or association organized in one of the two countries will or will not
be permitted to transact its business or industry in the other, this permission
remaining always subject to the laws and regulations enacted or established in
the respective countries or in any part thereof." It is insisted by
respondents that this provision argues most strongly against petitioners'
contention in that it evinces no desire on the part of either party to the
treaty of securing freedom of action in the territories of the other for
corporations of its own creation. Therefore, say respondents, "How much less
must it have been concerned in the creation by that other of corporations which
were to act in this country of their creation?" We are not able to
perceive the force of respondents' argument. The parties to the treaty
evidently were not prepared to definitely bind themselves as to the rights of a
corporation organized in one country and domiciled therein to transact and
carry on business in the other. Hence, they left the question unaffected by the
treaty and subject to be regulated by the respective countries. They were,
however, prepared to definitely fix and determine the rights of citizens and
subjects of one country domiciled in the other, and to this end they set forth
these rights distinctly and comprehensively in article I of the Treaty, the
terms of which we have already considered and attempted to construe. Article XI
of the Treaty also refers to corporations, but clearly this reference has no
bearing upon the question to be considered in this proceeding. *246246 [6]
Finally, respondents contend that the words "native citizens" as used
in the treaty in article I thereof, whereby it is sought to confer upon
subjects of one country residing within the territory of the other the right
"generally to do anything incident to or necessary for trade upon the same
terms as native citizens," are employed in a restrictive sense, and that
this provision of the treaty deals only with native citizens and subjects of
the United States and their privileges and immunities as such and not with the
privileges and immunities of the citizens and subjects of the several states.
That there is a citizenship of the United States and a citizenship of a state,
and the privileges and immunities of one are not the same as the other is well
established by the decisions of the courts of this country. The leading cases
upon the subjects are those decided by the supreme court of the United States
and reported in 16 Wall. 36, and known as the Slaughter-House
cases. However, to adopt the construction of the words "native
citizens," as contended for by respondents, would be contrary not only to
the spirit but to the express language of the rule applicable to the
interpretation of treaties which we have already considered. We refer to the
rule quoted with approval by this court in State of California v. Tagami, supra, and particularly to the
following portion thereof: "words (of a treaty) are to be taken in their
ordinary meaning, as understood in the public law of nations, and not in any
artificial or special sense impressed upon them by local law, unless such
restricted sense is clearly intended." There is nothing in the language of
the treaty to indicate that the words "native citizens" used therein
were employed in any restricted sense. On the other hand, we think it is plainly
obvious from the terms of the treaty that the intent of the parties thereto in
conferring upon the subjects of one country residing in the other the right to
exercise certain privileges "upon the same terms as native citizens"
was to extend to such foreign subjects all the rights that the native citizen
enjoyed irrespective of the source of such rights.
It may be that the right to form a
corporation such as that which petitioners desire to organize is governed by
the local laws of each particular state, and that such right may not be
conferred upon alien residents in this state, or, for that matter, upon any
class of persons whatsoever, by treaty *247247 or by any other act of the
federal government. If this is so, then the state might disregard the treaty or
any statute enacted by Congress which would infringe upon its exclusive
jurisdiction in this particular and enact such laws in that regard as may meet
the approval of the legislature or of the people of the state, irrespective of
any treaty or federal statute. But in the enactment of the Alien Land Law the
state of California has not attempted to run counter to the Treaty of 1911, or to any other treaty between this country and a
foreign country. On the other hand, the provisions thereof relative to the
right of aliens ineligible to citizenship to acquire and possess real property
in this state expressly recognize such acquisition and possession "in the
manner and to the extent and for the purpose prescribed by any treaty now
existing between the government of the United States and the nation or country
of which such alien is a citizen or subject." The provision found in
section 3 of said act relative to corporations, a majority of whom are aliens
not eligible to citizenship, acquiring or possessing real property in this
state, contains a like reference to and recognition of the terms of any treaty
between this government and any foreign nation. The fact, therefore, that the
right to provide for and control the organization of corporations in this state
may be within the exclusive jurisdiction of the state and not the national
government is not decisive of any question arising in this proceeding for the
reason that the action taken by the state in reference to such matters by the
enactment of the Alien Land Law expressly limits the terms and provisions of
said law to such rights as are not prescribed by any treaty.
Let the writ issue as prayed for.
Langdon, J., Richards, J., Seawell, J., Preston, J., and Waste, C.J., concurred.