United States v. Belmont

301 U.S. 324

Case Year: 1937

Case Ruling: 9-0, Reversed

Opinion Justice: Sutherland

FACTS

At issue in this case are executive agreements made by the U.S. president with other nations. Unlike treaties, these arrangements do not require Senate ratification. Consequently, they are often used when the president wants to avoid the time-consuming and very public ratification process. But executive agreements have their limitations: federal law requires that the president inform Congress whenever such agreements are made, and they can be nullified by acts of Congress. Moreover, executive agreements are not binding on future presidents without their consent.

In this particular dispute, the Court considered an action brought by the United States to recover a sum of money deposited, prior to 1918, by Petrograd Metal Works, a Russian corporation, with August Belmont, a U.S. citizen and private banker. In 1918 the Soviet government dissolved the corporation (together with others) and nationalized and appropriated all of its property and assets, including the deposit account with Belmont. As a result, the deposit became the property of the Soviet government--until November 16, 1933, when it released to the U.S. government money due from American nationals, including the deposit account of the corporation with Belmont. However, Belmont refused to pay the amount upon demand.

Would the Court hold that the international agreement entered into by the president as part of the recognition of the Soviet Union have the force of law within the United States?

MR. JUSTICE SUTHERLAND DELIVERED THE OPINION OF THE COURT.

The continuing and definite interest of the Soviet government in the collection of assigned claims is evident; and the case, therefore, presents a question of public concern, the determination of which well might involve the good faith of the United States in the eyes of a foreign government....

We take judicial notice of the fact that coincident with the assignment set forth in the complaint, the President recognized the Soviet government, and normal diplomatic relations were established between that government and the government of the United States, followed by an exchange of ambassadors. The effect of this was to validate, so far as this country is concerned, all acts of the Soviet government here involved from the commencement of its existence. The recognition, establishment of diplomatic relations, the assignment, and agreements with respect thereto, were all parts of one transaction, resulting in an international compact between the two governments. That the negotiations, acceptance of the assignment and agreements and understandings in respect thereof were within the competence of the President may not be doubted. Governmental power over internal affairs is distributed between the national government and the several states. Governmental power over external affairs is not distributed, but is vested exclusively in the national government. And in respect of what was done here, the Executive had authority to speak as the sole organ of that government. The assignment and the agreements in connection therewith did not, as in the case of treaties, as that term is used in the treaty making clause of the Constitution (article 2, 2), require the advice and consent of the Senate.

A treaty signifies ‘a compact made between two or more independent nations, with a view to the public welfare.’ But an international compact, as this was, is not always a treaty which requires the participation of the Senate. There are many such compacts, of which a protocol, a modus vivendi, a postal convention, and agreements like that now under consideration are illustrations. The distinction was pointed out by this court in the Altman Case, supra, which arose under section 3 of the Tariff Act of 1897 authorizing the President to conclude commercial agreements with foreign countries in certain specified matters. We held that although this might not be a treaty requiring ratification by the Senate, it was a compact negotiated and proclaimed under the authority of the President, and as such was a ‘treaty’ within the meaning of the Circuit Court of Appeals Act the construction of which might be reviewed upon direct appeal to this court.

Plainly, the external powers of the United States are to be exercised without regard to state laws or policies. The supremacy of a treaty in this respect has been recognized from the beginning.... And while this rule in respect of treaties is established by the express language of clause 2, article 6, of the Constitution, the same rule would result in the case of all international compacts and agreements from the very fact that complete power over international affairs is in the national government and is not and cannot be subject to any curtailment or interference on the part of the several states. Compare United States v. Curtiss-Wright Export Corporation. In respect of all international negotiations and compacts, and in respect of our foreign relations generally, state lines disappear.... Within the field of its powers, what ever the United States right-fully undertakes, it necessarily has warrant to consummate. And when judicial authority is invoked in aid of such consummation, State Constitutions, state laws, and state policies are irrelevant to the inquiry and decision. It is inconceivable that any of them can be interposed as an obstacle to the effective operation of a federal constitutional power....

It results that the complaint states a cause of action and that the judgment of the court below to the contrary is erroneous. In so holding, we deal only with the case as now presented and with the parties now before us. We do not consider the status of adverse claims, if there be any, of others not parties to this action. And nothing we have said is to be construed as foreclosing the assertion of any such claim to the fund involved, by intervention or other appropriate proceeding. We decide only that the complaint alleges facts sufficient to constitute a cause of action against the respondents. Judgment reversed.