State v. O'Connell

• Decision Date: 14 October 1922
• Docket Number: 17285.
• Court: Washington Supreme Court
• Parties: STATE v. O'CONNELL et al.

209 P. 865

121 Wash. 542

STATE v. O'CONNELL et al.

No. 17285.

Supreme Court of Washington

October 14, 1922

Department 1.

Appeal from Superior Court, King County; Mitchell Gilliam, Judge.

Escheat proceeding by the State against E. J. O'Connell and other. From a judgment dismissing the action, the State appeals. Reversed.

Malcolm Douglas, Arthur Schramm, Jr., and Bert C. Ross, all of Seattle, for the State.

Lindsay L. Thompson, of Olympia, amicus curiae.

Pierce Lonergan, of Seattle, for respondents.

BRIDGES, J.

This case concerns the antialien land law of the state of Washington, being chapter 50 of the Laws of 1921, p. 156. It will be necessary, even at the risk of making this opinion of undue length, to set out in considerable detail the constitutional and statutory provisions governing the question, and also the declaration of trust hereinafter mentioned.

Section 33 of article 2 of our Constitution, so far as it affects this case, reads as follows:

'The ownership of lands by aliens, other than those who in good faith have declared their intention to become citizens of the United States, is prohibited in this state except where acquired by inheritance, under mortgage or in good faith in the ordinary course of justice in the collection of debts; and all conveyances of lands hereafter made to any alien directly, or in trust for such alien, shall be void. * * *'

Section 2 of chapter 50, Laws 1921, reads as follows 'An alien shall not own land or take or hold title thereto. No person shall take or hold land or title to land for an alien. Land now held by or for aliens in violation of the Constitution of the state is forfeited to and declared to be the property of the state. Land hereafter conveyed to or for the use of aliens in violation of the Constitution or of this act shall thereby be forfeited to and become the property of the state.'

By this act an 'alien' is defined as one who has not declared his intention to become a citizen of the United States. It defines 'land' as not including lands containing valuable deposits of minerals, etc., 'but does include every other kind of land and every interest therein and right to the control, possession, use, enjoyment, rents, issues or profits thereof. * * *' The word 'own' is defined to mean 'the legal or equitable title to or the right to any benefit of' land, and the word 'title' includes 'every kind of legal or equitable title.'

After the passage and going into effect of this statute, certain land was deeded to the respondents J. D. O'Connell and Pierce Lonergan, as trustees, and they made, executed acknowledged, and caused to be recorded a declaration of trust, which shows that they hold the land in question (which is residential and nonmineral property in the county of King in the state of Washington), for the benefit of the cestuis que trust upon the following terms:

'(1) In trust to convert the same into money and distribute the net proceeds thereof among the persons at the time of such conversion holding and owning beneficial interests therein, as evidenced by the receipt certificates issued by the trustees as hereinafter provided; it being, however, expressly understood and agreed that the trustees may, in their uncontrolled discretion, defer or postpone such conversion or distribution, except that the same shall not be postponed beyond the end of 20 years from July 1, 1921. During such postponement, and until such conversion, the interests of the cestui que trusts shall be considered for purposes of transmission and otherwise as personal property.

'(2) In trust, pending final conversion and distribution of the property, to manage and control the same, the trustees having for such purposes and for all purposes of sale, lease, mortgage, exchange, improvement and development, and any and all arrangements, contracts and dispositions of the trust property, or any part thereof, all and as full discretionary powers and authority as they would have if they were themselves the sole and absolute beneficial owners thereof in fee simple.

'(3) In trust to collect and receive all rents and income from the property, the trustees in this connection having full authority from time to time to use any funds on hand, whether received as capital or income, for purpose of any repair, improvement, protection or development, of the property held hereunder, or the acquisition of other property as the trustees may determine to be wise and expedient, for the protection and development of the trust property as a whole pending its conversion and distribution. The determination of the trustees made in good faith as to all questions as between 'capital' and 'income' shall be final.

'(4) This trust is declared in favor and for the benefit of E. J. O'Connell and D. P. O'Connell, a minor, each having a one-half beneficial interest as shown by certificates of interest which shall be issued to each of them by the undersigned trustees; which certificates and all others which may be hereafter issued in exchange or substitution therefor shall be deemed parts hereof and conclusive evidence of the ownership of respective interests in this trust; and the trustees shall from time to time on request (on surrender of the old) issue such new certificates as may be proper or necessary to evidence any new or subdivided interests.

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'(6) The trustees may employ all such agents and attorneys as they may think proper and find expedient, and prescribe their powers and duties.

'(7) The trustees shall at all times keep full and proper books of account and records of their proceedings and doings, and shall, at least annually, render account of the trust to any beneficiary requesting the same, but no trustee serving hereunder shall be obliged to give any bond, nor shall any trustee have any liability except for the results of his own gross negligence or bad faith.

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'(9) The trustees shall be entitled to receive reasonable compensation for service not exceeding a total of 1 per cent. reckoned upon the gross income received by them as such, unless at any time a majority in interests of the cestuis que trust consent in writing to some larger compensation for any past service; but in no event are they to receive less than $50 per year each. The trustees shall also be entitled to reimbursement and indemnification from the trust property for all their proper expenses and liabilities, and shall be entitled at all times to the advice of counsel; and traveling expenses shall be considered proper expenses.

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'(11) The terms and provisions of this trust may be modified at any time or times by instruments in writing, signed, sealed and acknowledged by the then trustees, assented to in writing by the cestuis que trust and attached to the original of this instrument.

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'(14) At the end of twenty years from and after July 1, 1921 (unless this trust shall heretofore have been otherwise lawfully terminated), all the property of every kind then held hereunder shall be sold by the trustees and equitable distribution made of the net proceeds among the persons then entitled.'

The state of Washington instituted suit for the purpose of escheating to itself an undivided one-half interest in the property. The complaint alleged the execution and set out the terms of the trust declaration, and further alleged that all of the transactions took place subsequently to the going into effect of the above-mentioned 1921 law, and that E. J. O'Connell, one of the cestuis que trust mentioned in the trust declaration, was and is an alien, and has not declared his intention to become a citizen of the United States, and was and is a subject of the British Empire. The trial court sustained a demurrer to the complaint, and the state has appealed from a judgment dismissing the action.

The sole question before us is: Does the trust arrangement above set out violate our anti-alien land act.

It has become the settled law of this country that, in the absence of a treaty to the contrary, a state may lawfully prohibit aliens from owning or acquiring any lands, or any interest therein, within its borders. Orr v. Hodgson, 4 Wheat. 453, 4 L.Ed. 613; Hauenstein v. Lynham, 100 U.S. 483, 25 L.Ed. 628; U.S. v. de Repentigny, 72 U.S. (6 Wall.) 211, 18 L.Ed. 627; De Vaughn v. Hutchinson, 165 U.S. 566, 17 S.Ct. 461, 41 L.Ed. 827; Blythe v. Hinckley, 180 U.S. 333, 21 S.Ct. 390, 45 L.Ed. 557; Clarke v. Clarke, 178 U.S. 186, 20 S.Ct. 873, 44 L.Ed. 1028; Jones v. Jones, 234 U.S. 615, 34 S.Ct. 937, 58 L.Ed. 1500; Sullivan v. Kidd, 254 U.S. 433, 41 S.Ct. 158, 65 L.Ed. 344. Judge Cushman in the recent case of Terrace at al. v. Thompson, Attorney General (D. C.) 274 F. 841, discussing another feature of this same statute, forcefully wrote concerning its purposes as follows:

'If one incapable of citizenship may lease or own real estate, it is within the realm of possibility that every foot of land within the state might pass to the ownership or possession of noncitizens. Such a result would leave the foundation of the state but a pale shadow, and the structure erected thereon but a tower of Babel, from which the tenants in possession might, when the shock of war came, bow themselves out, because they were not bound as citizens to defend the house in which they lodged.'

Our Constitution provides that 'the ownership of lands by aliens * * * is prohibited in this state, * * *' It was entirely within the province of the state Legislature to determine by legislation what are lands and when one becomes an owner thereof within the meaning of the constitutional provision. In so doing, it has declared that 'land' 'does not include lands containing valuable mineral deposits,' etc., but does include every other...