## Facts

- Two Oregon residents, Joe Stoich and Muharem Zekich, died intestate in Oregon in December 1953, leaving personal property in Oregon.
- Their only relatives eligible under ordinary state descent rules were brothers, sisters, nieces, and nephews who were residents and nationals of Yugoslavia.
- Oregon law restricted nonresident aliens’ ability to take property by succession and provided for escheat to the State when only ineligible alien kin existed.
- Oregon initiated escheat proceedings, alleging no next of kin were eligible to inherit under the statute.
- The Yugoslav relatives and the Yugoslav Consul General contested escheat, asserting reciprocity and treaty-based inheritance rights.
- The trial court found the statute’s reciprocity conditions satisfied, including Americans’ ability to receive payments within the United States from Yugoslav estates.
- The Oregon Supreme Court reversed, concluding the heirs failed to prove an “unqualified and enforceable” right for Americans to receive inheritances from Yugoslavia because Yugoslav exchange controls could restrict payment.

## Issues

1. Whether an 1881 treaty between the United States and Serbia (applicable to Yugoslavia), including a most-favored-nation clause, guaranteed Yugoslav nationals the right to inherit personal property in Oregon notwithstanding Oregon’s alien inheritance and escheat statute.
2. Whether a state may rely on Yugoslav foreign exchange controls and potential payment restrictions to deny treaty-protected inheritance rights or to find reciprocity lacking.

## Decision

- The U.S. Supreme Court unanimously reversed the Oregon Supreme Court.
- The Court held the 1881 treaty entitled Yugoslav residents and citizens to inherit personal property located in Oregon on the same basis as American next of kin.
- The Court held those treaty rights were not taken away or impaired by Yugoslavia’s monetary policies where such policies operated within later international agreements involving the United States (including the IMF Agreement and a 1948 bilateral agreement).
- The case was remanded for further proceedings consistent with recognizing the heirs’ entitlement to inherit.

## Legal Principles

- Under the Supremacy Clause, valid U.S. treaties are supreme law and preempt conflicting state inheritance restrictions and escheat provisions.
- A most-favored-nation clause in a treaty can require equal inheritance treatment for foreign nationals relative to the most favorably treated nationals (effectively parity with U.S. citizens for the covered subject).
- States may not impose extra conditions that narrow treaty-conferred inheritance rights, including state-law “reciprocity” standards that defeat the treaty’s promised equality.
- Where the federal government has addressed foreign exchange controls through international agreements while maintaining the treaty in force, a state may not treat those controls as a basis to negate treaty rights.
- Determinations affecting treaty operation and foreign-relations consequences belong to the federal government; state-by-state variation cannot be used to diminish national treaty commitments.

## Conclusion

The Court held that the 1881 treaty guaranteed Yugoslav heirs the right to inherit Oregon personal property on the same basis as American relatives, and Oregon could not use its alien inheritance and escheat statute—nor Yugoslav exchange controls—to defeat those treaty-based rights.


Kolovrat v. Oregon, 366 U.S. 187 (1961)