Oyama v. California/Dissent Reed

by Stanley Forman Reed

Mr. Justice REED, with whom Mr. Justice BURTON joins, dissenting.

The Court's opinion assumes arguendo that the California Alien Land Laws are constitutional. As we read the opinion, it holds that the Alien Land Laws of California, as here applied, discriminate in an unconstitutional manner against an American citizen-a son born in the United States to resident parents of Japanese nationality. From this holding we dissent.

California, through an exercise of the police power, which has been repeatedly approved by us, ^[1] has prohibited ownership of land within the state by aliens ineligible for citizenship. ^[2] Recognizing that the benefits flowing from ownership can be enjoyed through subterfuges by persons not the holders of legal or equitable title, California has proscribed as to the state every 'conveyance * * * made with intent to prevent, evade or avoid escheat * * *.' ^[3] Transfers of real property made with this intent 'shall be void as to the state and the interest thereby conveyed or sought to be conveyed shall escheat to the state as of the date of such transfer * * *.' To assist in the proof of 'intent to prevent, evade or avoid escheat,' the state was given the benefit of a 'prima facie presumption that the conveyance is made with such intent * * *' where the state proves: 'The taking of the property in the name of a person other than (an alien who cannot hold land) * * * if the consideration is paid or agreed or understood to be paid by an alien (who cannot hold land) * * *.' Thus the state has made void as to it, two substantive acts: (1) ownership of land by ineligible aliens and (2) transfers made to avoid by indirection the prohibition against ownership of land by ineligible aliens. The statutory scheme recognizes that the purpose of the Alien Land Laws cannot be achieved unless attempts to avoid the basic prohibition of the law are penalized. Any law aimed at the prevention of ownership by ineligible aliens, which did not penalize both the act of owning and the act of attempting to enjoy the rights of ownership through a cloak, would be defective and readily avoided.

The trial court found that the transfers challenged by California in this case were made with an 'intent to prevent, evade or avoid escheat'; in so finding the court considered the statutory presumption together with the other evidence detailed in the Court's opinion and concluded that the defendants had not met the statutory burden of proof imposed by § 9. The Supreme Court of California affirmed.

We do not have in this review a balancing of constitutional rights; on one hand, the right of California to exclude ineligible aliens from land ownership and, on the other, the right of their citizen sons to hold land. California does not deny the right to own land in California to a citizen son of an ineligible alien. If that citizen obtains the land in any way not made void as a violation of law he may hold it. Under § 9 the land escheats because of the father's violation of law before it reaches the son. The denial to the father by California of the privilege of land ownership is not challenged. Neither is the right to protect that denial by an escheat of the land on the father's attempt to avoid the limitations of the California land law. Actually, the only problem is whether the presumption arising from the payment of money for land by the ineligible father denies equal protection of the law to the son. We understand the majority opinion to hold that presumption (a) of § 9, with its so-called ancillary inferences because of the son's minority and the father's failure to file guardianship reports or testify, as here applied, discriminates unconstitutionally against Fred Oyama. If that presumption, with the inferences, had been held constitutional, apparently the Court would have affirmed the opinion below because the issue then remaining would have been the correctness of the findings of fact by the trial judge. No one would suggest that the correctness of those findings could be challenged here; the resolution of disputed dissues of fact in non-constitutional mattes is for the state judicial system. This Court does not intimate that it disagrees with California's factual conclusion. Its ruling is based on the 'cumulative effect' of the 'statutory presumption' and 'two ancillary inferences.' On remand to the courts of California, the case may be tried again. On that retrial all of the evidence admitted at the first trial may be submitted to the triers of fact for no one says that the items of evidence, including the father's payment of consideration, introduced by the state are inadmissible. A major vice of the state's application of the law apparently was the reliance upon a presumption and inferences that this Court holds deny equal protection. If an intent to 'prevent, evade or avoid escheat' is found on the same evidence, an escheat will again take place.

Presumption (a) of § 9 has been construed by the California Supreme Court: 'That if the consideration for the purchase of the real property is paid by an ineligible alien and the title is taken in the name of a third person, it will be presumed, in the absence of other evidence to the contrary, that it was the intent of both the alien and the grantee to 'prevent, evade or avoid' the escheat at law. * * * But the presumption is recognized as disputable and as disappearing in the face of contrary evidence of sufficient strength to meet our rule on conflict of testimony.' ^[4] We do not interpret the opinion of our Brethren to say that the presumption, if valid, is irrebuttable; or, to put the matter differently, that the effect of the presumption, if valid, is to make in inevitable that all gifts of real property by an alien-Japanese father to his child can be successfully escheated by the state. As the cases prove, an alien-Japanese father can give California lands to his son in spite of the presumption. ^[5] The effect of the presumption, if valid, is rather to place a burden, an 'onerous burden' to adopt the phrase of the majority opinion, upon all grantees who take land under those conditions set forth in § 9.

The issue in this case, therefore, is neither the validity of the California prohibition against the ownership of agricultural land by a person ineligible to become an American citizen, nor the validity of a law, § 9, that an attempt to evade that prohibition shall be penalized by escheat. The validity of both of these provisions is unchallenged by this Court's opinion. The issue here is the validity of the presumption that when an ineligible person pays the consideration for land conveyed to an eligible person, these is a prima facie presumption that the conveyance is made to avoid the prohibited ownership. The essence of the argument in the opinion is this: 'When an alien-English father purchases land from a third party and puts title in his child, acceptance by the child and delivery of the deed are presumed; however, if an alien-Japanese father engages in the same transaction, his child must meet the 'onerous burden' of the presumption; therefore, Fred Johnson and Fred Oyama are not treated equally by the laws of California and Fred Oyama is denied equal protection by those laws. These facts are accurate; the flaw is that the conclusion does not follow. California has, as against the state, made illegal a particular class of transactions: transfers made with the intent to evade escheat of lands. Anyone, no matter what his racial origin may be, who as a grantee is a party to a sale of land which the state attacks as being within the proscribed class must overcome the presumption of § 9 to establish the legality of the transfer. This presumption operae § with a mechanical impartiality. Whoever the grantee in a transfer questioned by the state is, be he Fred Johnson or Fred Oyama, he must bear the 'onerous burden'; he must bear it not because of descent or nationality but because he has been a party to a transaction which the state challenges as illegal under an admittedly valid law.

As we see the Court's argument, it focuses attention upon what it contends are two parallel situations: the gift of an English father to a citizen son and the gift of a Japanese father to a citizen son. Upon examination of the relevant state laws, it concludes that the son of the Japanese father is placed in a position less advantageous than that of the son of an English father. That is so, but for our purposes it is the reason for the result, and not the result itself, that is important. The legal positions of the two sons are different only because the situations are not parallel. The Japanese father and his citizen son are parties to an illegal transaction if the land was transferred with the 'intent to prevent, evade or avoid escheat'; as an English father is not prevented from holding real property, his gift cannot be challenged on that ground by the state. The capacities of the donors are different and it is this difference, and nothing else, which raises in one case and fails to raise in the other, the presumption complained of by Oyama. ^[6] It is not a denial of equal protection for a state to classify transactions readily leading to law evasions differently from those without such a possibility. Such classification is permissible.

Let us test the Court's reasoning by applying it to a different set of facts. For purposes of illustration, we put these cases: (1) a solvent father purchases land from a third party and puts the title in his son; and (2) an insolvent father purchases land from a third party and puts the title in his son. In example (2), the creditors of the father in an action against the son to subject the land to the satisfaction of their claims against the father, can raise a prima facie presumption that the transfer was fraudulent as to them by proving that the transaction took place during the period of the father's insolvency. ^[7] Here the son of the insolvent father bears an 'onerous burden' to which the son of a solvent father is not subjected; he bears this burden because he has been a party to a transaction which creditors challenge as voidable. The disability of the father taints the son's right and, therefore, he is placed in a position less advantageous than that of the son of a solvent father. Would itb e reasonable to say that the son of the insolvent father has been denied 'equal protection' and, consequently, the presumption is unconstitutional? No one would so contend. The inequality between the sons of eligible and ineligible landowners does not seem to us to differ.

As we understand petitioners' argument in briefs and before this Court, the petitioners in their discussion of the denial of equal protection to the citizen son depended solely upon the invalidity of the presumption arising from the payment of the money by the father. This Court's opinion recognizes that petitioners' argument includes discrimination, amounting to a lack of equal protection, arising (1) from the requirement of § 9 that the son must take the burden of proving affirmatively the bona fides of the gift from the father; (2) because the gift to the infant son of a Japanese is presumed invalid while the gift to an infant son of an aligible alien is presumed valid; (3) because the Court took into consideration the father's omission to file guardian reports after the transfer. Normally, the Court says, a guardian's subsequent improper conduct would not affect the validity of a gift to a child. Because of what is deemed additional burdens thus placed upon the son, the Court concludes that:

'The cumulative effect, we believe, was clearly to discriminate against Fred Oyama. * * * 'The only basis for this discrimination against an American citizen, moreover, was the fact that his father was Japanese and not American, Russian, Chinese, or English.'

These discriminations, if such they are, seem to us mere elaborations of the central theory that the challenged presumption of § 9 is unconstitutional as a denial of equal protection. It is of course true that the son of a citizen of Japan cannot receive a gift from an ineligible father as readily as a son of an alien entitled to naturalization but again such a classification is entirely reasonable when we once assume that the State of California has a right to prohibit the ownership of California land directly or indirectly by a Japanese.

Discrimination in the sense of placing more burdens upon some than upon others is not in itself unconstitutional. If all types of discrimination were unconstitutional, our society would be incapable of legislation upon many important and vital questions. All reasonable classification puts its subjects into different categories where they may have advantages or disadvantages that flow from their positions. ^[8] The grouping of all those who take land as grantees, in a transaction in which an ineligible alien pays the consideration, in a class subject to the statutory presumption of § 9 and other inferences which are reasonably related to the transfer, should not be struck down as unconstitutional. Unless the California Land Laws are to be held unconstitutional, we think the presumption and its resulting effects must be accepted as legal.

Notes

1  See footnote 12 of the majority opinion.

2  Sec. 1: 'All aliens eligible to citizenship under the laws of the United States may acquire, possess, enjoy, use, cultivate, occupy, transfer, transmit and inherit real property, or any interest therein, in this state, and have in whole or in part the beneficial use thereof, in the same manner and to the same extent as citizens of the United States, except as otherwise provided by the laws of this state.'

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. 7: 'Any real property hereafter acquired in fee in violation of the provisions of this act by any alien mentioned in Section 2 of this act, or by any company, association or corporation mentioned in Section 3 of this act, shall escheat as of the date of such acquiring, to, and become and remain the property of the State of California. * * *'

3  Sec. 9: 'Every transfer of real property, or of an interest therein, though colorable in form, shall be void as to the State and the interest thereby conveyed or sought to be conveyed shall escheat to the State as of the date of such transfer, if the property interest involved is of suc a character that an alien mentioned in Section 2 hereof is inhibited from acquiring, possessing, enjoying, using, cultivating, occupying, transferring, transmitting or inheriting it, and if the conveyance is made with intent to prevent, evade or avoid escheat as provided for herein.

'A prima facie presumption that the conveyance is made with such intent shall arise upon proof of any of the following group of facts:

'(a) The taking of the property in the name of a person other than the persons mentioned in Section 2 hereof if the consideration is paid or agreed or understood to be paid by an alien mentioned in Section 2 hereof;

'(b) The taking of the property in the name of a company, association or corporation if the memberships or shares of stock therein held by aliens mentioned in Section 2 hereof, together with the memberships or shares of stock held by others but paid for or agreed or understood to be paid for by such aliens, would amount to a majority of the membership or issued capital stock of such company, association or corporation;

'(c) The execution of a mortgage in favor of an alien mentioned in Section 2 hereof if such mortgagee is given possession, control or management of the property.

'In each of the foregoing instances the burden of proof shall be upon the defendant to show that the conveyance was not made with intent to prevent, evade or avoid escheat.

'The enumeration in this section of certain presumptions shall not be so construed as to preclude other presumptions or inferences that reasonably may be made as to the existence of intent to prevent, evade or avoid escheat as provided for herein.'

Presumption (a) has not been challenged on due process grounds. Such an attack would be futile as there is a 'rational connection between the fact(s), proved and the ultimate fact presumed.' Tot v. United States, 319 U.S. 463, 467, 63 S.Ct. 1241, 1245, 87 L.Ed. 1519. In Cockrill v. California, 268 U.S. 258, 45 S.Ct. 490, 69 L.Ed. 944, this Court held that presumption (a) did not violate due process.

4  People v. Fujita, 215 Cal. 166, 170, 171, 8 P.2d 1011, 1012; see Takeuchi v. Schmuck, 206 Cal. 782, 276 P. 345. Indeed, a holding that this presumption was conclusive might open it to a serious attack based upon due process grounds. See Heiner v. Donnan, 285 U.S. 312, 52 S.Ct. 358, 76 L.Ed. 772.

5  People v. Fujita, 215 Cal. 166, 8 P.2d 1011; see Estate of Yano, 188 Cal. 645, 206 P. 995.

6  Mobile, J. & K.C.R. Co. v. Turnipseed, 219 U.S. 35, 42, 43, 31 S.Ct. 136, 137, 55 L.Ed. 78, 32 L.R.A.,N.S., 226, Ann.Cas.1912A, 463:

'Legislation providing that proof of one fact shall constitute prima facie evidence of the main fact in issue is but to enact a rule of evidence, and quite within the general power of government. Statutes, national and state, dealing with such methods of proof in both civil and criminal cases, abound, and the decisions upholding the are numerous. * * *

'That a legislative presumption of one fact from evidence of another may not constitute a denial of due process of law or a denial of the equal protection of the law, it is only essential that there shall be some rational connection between the fact proved and the ultimate fact presumed, and that the inference of one fact from proof of another shall not be so unreasonable as to be a purely arbitrary mandate. So, also, it must not, under guise of regulating the presentation of evidence, operate to preclude the party from the right to present his defense to the main fact thus presumed.'

Seaboard Air Line R. Co. v. Watson, 287 U.S. 86, 90, 53 S.Ct. 32, 34, 77 L.Ed. 180, 86 A.L.R. 174; Bandini Petroleum Co. v. Superior Court, 284 U.S. 8, 18, 19, 53 S.Ct. 103, 107, 76 L.Ed. 136, 78 A.L.R. 826; United States ex rel. St. Louis S.R. Co. v. I.C.C., 264 U.S. 64, 77, 44 S.Ct. 294, 295, 68 L.Ed. 565.

7  Bailey v. Blackmon, 4 Cir., 3 F.2d 252, 253, affirmed on rehearing, 4 Cir., 14 F.2d 16; Hedrick v. Hockfield, D.C., 283 F. 574, 576, 577; Ryan v. Wohl, South & Co., 241 Ala. 123, 124, 125, 1 So.2d 292; Judson v. Lyford, 84 Cal. 505, 509, 24 P. 286; Swartz v. Hazlett, 8 Cal. 118, 128; Chrisman v. Greer, 239 Ky. 378, 380, 39 S.W.2d 678; Pruyn v. Young, 51 La.Ann. 320, 322, 25 So. 125; Lusk v. Riggs, 65 Neb. 258, 261, 91 N.W. 243; Grambling, Spalding & Co. v. Dickey, 118 N.C. 986, 988, 24 S.E. 671; Willamette Grocery Co. v. Skiff, 118 Or. 685, 689, 248 P. 143.

This analogy is exact because in most jurisdictions the fact of a blood relationship alone raises no presumption of fraud. Gottlieb v. Thatcher, 151 U.S. 271, 279, 14 S.Ct. 319, 322, 38 L.Ed. 157; Gray v. Galpin, 98 Cal. 633, 635, 33 P. 725. See cases collected in 27 C.J. 827, note 99; 37 C.J.S., Fraudulent Conveyances, § 251, note 9.

8  Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 79, 31 S.Ct. 337, 340, 55 L.Ed. 369, Ann.Cas.1912C, 160:

'The rules by which this contention mustb e tested, as is shown by repeated decisions of this court, are these: 1. The equal-protection clause of the 14th Amendment does not take from the state the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis, and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety, or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.'

Finley v. California, 222 U.S. 28, 32 S.Ct. 13, 56 L.Ed. 75.