Nepogodin's Estate, In re

• Decision Date: 27 June 1955
• Citation: 285 P.2d 672,134 Cal.App.2d 161
• Court: California Court of Appeals Court of Appeals
• Parties: In the Matter of the ESTATE of Avil NEPOGODIN, Deceased. Lubov I. GOVIADINOFF et al., Petitioners and Respondents, v. The ATTORNEY GENERAL of the State of California, Appellant. Civ. 16463.

Page 672

285 P.2d 672

134 Cal.App.2d 161

In the Matter of the ESTATE of Avil NEPOGODIN, Deceased.

Lubov I. GOVIADINOFF et al., Petitioners and Respondents, v. The ATTORNEY GENERAL of the State of California, Appellant.

Civ. 16463.

District Court of Appeal, First District, Division 2, California.

June 27, 1955.

Edmund G. Brown, Atty. Gen. of the State of California, Wayne D. Hudson, Deputy Atty. Gen., for appellant.

Douglas M. Moore, San Francisco, for respondent.

NOURSE, Presiding Justice.

The Attorney General of the State of California appeals from a judgment ordering the payment of the residue of the above captioned estate, which had been distributed to the State of California pursuant to Section 1027 of the Probate Code, to the attorney in fact of certain first cousins of decedent as his sole heirs and next of kin, and directing said attorney in fact to deposit said residue in a blocked account in a domestic bank to the credit of the heirs and pay out of said account certain fees, fixed by the court, to himself and to the counsel of petitioners.

Avil Nepogodin, a single man, died intestate on January 13, 1949, a resident of the City and County of San Francisco. No person entitled to succeed to his estate appeared in probate and the residue consisting of cash in the sum of $15,427.23 was distributed to the State of California as stated before. The respondents, six first cousins of decedent, by their attorney in fact Edward J. Niedens, timely petitioned for an order directing the payment of said amount to them and for the allowance of reasonable fees to said Edward J. Niedens and to their attorney for services rendered. The Attorney General opposed the petition on the ground among others that petitioners were non-resident aliens residing at Harbin, Manchuria, China, under the dominion of the Communist Government of China and that there did not exist on January 13, 1949, or thereafter reciprocal rights of inheritance between citizens of the United States and of China as required by Section 259 of the Probate Code, ¹ and on the further ground that it could not be shown that they, as heirs, would receive the money as required by Section 1354, Code of Civil Procedure. ²

At the trial before the court without a jury, petitioners with respect to these two points asked the court to take judicial notice of the 'Treaty of Friendship, Commerce and Navigation' between the United States of America and the Republic of China, dated November 4, 1946, United States Statutes at Large, Volume 63, Part 2, p. 1300, hereinafter called the Treaty, especially of Article VIII, subd. 4 thereof. ³ They likewise asked the court to take judicial notice of, and they introduced into evidence the Foreign Assets Control Regulations, 31 C.F.R. part 500, which require that distributions of property from an estate to a national of China 'shall be made by deposit in a blocked account in a domestic bank * * *' (section 500.523(c) and which regulate the possibility of transfer from such blocked account pursuant to general or special license. Finally petitioners asked the court to take judicial notice of the fact that Manchuria is within the geographical boundaries of the Republic of China.

The court found with respect to these points in substance that petitioners at the time of the filing of said petition were residents of the Republic of China; that on January 13, 1949 and ever since that date there have existed between citizens of the United States and citizens of the Republic of China pursuant to the above treaty reciprocal rights to take personal property by succession as required by Section 259, Probate Code; that the deposit in a blocked account of the distributive shares of petitioners in accordance with the above Foreign Assets Control Regulations is an actual payment of said funds to petitioners who will be able to secure the release of said funds pursuant to general licenses granted in said regulations or special licenses issued by the Department of Treasury, so that they are heirs who will receive said funds as required by Section 1354 of the Code of Civil Procedure; that the reasonable value of the services of the attorney of petitioners was $5,142.61 and of those of Edward J. Niedens $500.

Appellant attacks said findings and the decision on the following grounds. 1) The Treaty does not extend to residents of Manchuria and even if it did, it would not prove that a citizen of the United States actually has an enforceable right to receive Manchurian property by succession, the burden of proof of which fact appellant contends is on the claimants under Section 259.1 of the Probate Code. 2) The blocking provisions of the Foreign Assets Control Regulations prevent the petitioners from actually receiving their distributive shares, as required, according to appellants, by Section 1354, Code of Civil Procedure, supra, and the licensing provisions of these regulations cannot provide such actual possession. 3) The award of attorney's fees is beyond the jurisdiction of the court, because the compensation of attorneys is left to the agreement of the parties except when specifically provided for by statute, § 1021 of the Code of Civil Procedure, and no such specific provision is applicable to the present situation. We have concluded that said grievances are without merit.

It must be noted from the outset that the provision of the Treaty on which the claimants rely, relates only to nationals of the contracting parties. There is no evidence or contention that claimants were at any time nationals of China, only that they were residents. Therefore the claimants can derive no rights from the Treaty and the rule that such Treaty, as the supreme law of the land, supersedes the provisions of Section 259 of the Probate Code which are inconsistent with it, Clark v. Allen, 331 U.S. 503, 508, 67 S.Ct. 1431, 91 L.Ed. 1633; In re Estate of Meyer, 107 Cal.App.2d 799, 804, 238 P.2d 597, is not applicable to this case. The only function of the Treaty in this case is that of evidence of the existence of the reciprocity required by Section 259, supra, for the right of succession of the claimants.

As to the existence of the right of succession the date of the death of decedent is controlling. On the ground that under our law, the property of a decedent on his death vests at once by inheritance in his heirs it was held in Re Estate of Giordano, 85 Cal.App.2d 588, 594, 193 P.2d 771, that changes in the substantive law of succession to which Sections 259 and 259.1, Probate Code, belong, enacted after the date of death cannot devest it. The same reasoning supports the decisiveness of that date as to the existence of reciprocity and accordingly the reciprocity was decided as of that date in the California cases. See for instance In re Estate of Arbulich, 41 Cal.2d 86, 88, 257 P.2d 433. Although there is no finding to that effect it is undisputed that on the date of death of decedent respondents were residents of Harbin, Manchuria. The first point to be decided is therefore whether the provisions of the Treaty at that time (January 13, 1949) extended to Manchuria, as part of the territory of China. The facts regarding the geographical division and the political history of the world, of which our courts take judicial notice, Section 1875, subd. 8, Code of Civil Procedure; Ocean Industries, Inc., v. Superior Court, 200 Cal. 235, 241, 252 P. 722, support the implied finding of the trial court that they did.

During the rule of the dynasty of the Manchus in China (1644-1911) Manchuria formed part of their territory. In the late 19th and early 20th centuries Russia and Japan extended their influence into Manchuria acquiring seaside territories and developing railways. The Russo-Japanese war (1904-1905) was partly fought in Manchuria and over the influence there. In the Treaty of Portsmouth (1905) which ended said war both states agreed to restore Manchuria to China, but nevertheless both retained influence there. The influence of Russia was mainly limited to an interest in the quasi-private Chinese Eastern Railway whereas Japan held another railway and the seaside territories and embarked on the economic penetration of Southern Manchuria. During the Chinese revolution and civil war (since 1911) Japan obtained the controlling influence in Southern Manchuria. At the Peace Conference of Paris in 1919 at the end of the First World War Japan obtained the enlargement of its Manchurian holdings with the former German holdings in Shantung and China therefore refused to sign the Versaille peace treaty with Germany. Although it continued its penetration of Manchuria, Japan, in 1922, was a party to the Washington Nine Power Treaty which provided for the respecting of the sovereignty and territorial integrity of China and for the abstaining from the supporting of individual spheres of interest. The Communist Government of Soviet Russia, which in 1919 had renounced all special privileges acquired by the Tsarist Government, in 1924 insisted on retaining a share in the administration of the Chinese Eastern Railway in Manchuria. In 1927 a conflict between the Soviet Union and China with respect to these privileges led to an invasion of Manchuria by Soviet troops but in December 1929 in negotiations between the Soviet Union and China the status quo ante was restored.

In 1931 Japanese troops forcibly occupied Manchuria and the Chinese rule there collapsed. China appealed to the League of Nations, but without practical success: when a report on this matter was unfavorable to Japan, it withdrew from the League. In 1932 it declared Manchuria an independent state under the name Manchoukuo. In 1934 it placed Pu Yi, the last Manchu emperor of China, who as a child had abdicated in 1912, on the throne of Manchoukuo. This puppet government was only recognized by Japan and its Axis partners (and San Salvador). This condition continued during the undeclared Japanese-Chinese war...