the laws of the defendant government, were denied standing before arbitral commissions, when attempting to enforce a corporate claim.

That the nationality of the corporation rather than that of the stockholders must control the jurisdiction of international tribunals in claims growing out of corporate losses appears evident from the fact that the corporation, the trustee, possesses the entire legal and equitable title to a claim as part of the assets of the corporation, whereas the stockholder possesses only an equitable right, enforceable in a court of equity, to an accounting and to compel the proper management of the company by its directors. The stockholder, therefore, having no legal title to the corporate property of a solvent corporation, can hardly be recognized by an arbitral tribunal acting under the usual form of protocol as a proper party claimant, and only under exceptional protocols, as will presently be noticed, has this been done. While it is possible for a government, therefore, to prosecute the claim of a national corporation from which foreign stockholders will indirectly derive a benefit, "the inconvenience on the one hand," as was said by the Supreme Court,1 "is completely destroyed by the overwhelming preponderance of inconvenience which would exist on the other; for, doubtless, whilst the alien corporator may be an exception, the corporator, who is both a citizen of the state and a citizen of the United States, is the rule. To follow the argument, therefore, would make the exception dominate and destroy the rule."

30. (American citizens formed a company "en comandita" under Chilean law, by which this company, although a partnership in American law, was regarded as a juristic entity with Chilean nationality; jurisdiction was therefore denied.) When this case was subsequently submitted to arbitration (Alsop and Co., U. S., v. Chile, December 1, 1909), His Britannic Majesty as Amiable Compositeur held that the terms of submission obviated an examination into the nationality of the copartnership, the claim having been submitted by both Governments as that of American citizens. U. S. Counter Case, 64-70, Award, July 5, 1911, p. 9. In the civil law, there are various kinds of associations or partnerships, recognized as juridical persons and entities distinct from the members composing them, e. g., a partnership with a collective name, a partnership with special partners, an anonymous society or stock corporation (société anonyme), a society with special partners by shares, and cooperative societies.

1 U. S. v. Northwestern Express Co., 164 U. S. 686, 690.

§ 282. Effect of Citizenship of Stockholders upon Jurisdiction of Inter

national Tribunals.

The question as to whether American corporations having foreign stockholders could be admitted as "citizens" for the full value of the claim, or only for the proportion of stock held by American citizens was exhaustively argued in several cases before the Spanish Treaty Claims Commission.1 The Government contended that only the American stockholders in American corporations could recover, and asked the Commission to penetrate the fictitious person known as the corporation and apportion the damages. The Commission declined to apportion the corporate damages, but decided

2

"that a corporation may prosecute a claim to adjudication and [the Commission] reserves the right to determine, on final consideration, in case a claim is established, whether any part of the award shall inure to the benefit of a shareholder who, as an individual, could not have prosecuted a claim to adjudication" (i. e., foreign stockholders in an American corporation). 3

It appears, in the few cases in which awards were made to American corporations, that no reduction was made because of the alien ownership of some of the shares of stock.4

In the case of Barron v. the United States, before the MexicanUnited States commission of 1868,5 Umpire Lieber held that the British successors in interest of a Mexican corporation must stand upon their own nationality as British subjects. In a peculiar dictum, admitting the possible continued existence of the corporation, he intimated that corporate organization could not cloak the real nationality of the actual British claimants.

6

In two well-reasoned opinions in the Kunhardt claim against Venezuela, it was held that the stockholders of a going corporation, not being co-owners of the corporate property, cannot prosecute a cor

1 Tuinucu Sugar Co., No. 240, Hormiguero Central Co., No. 293, Mapos Sugar Co., No. 121, Victoria Co., No. 141, Rosario Sugar Co., No. 341, Briefs, VI, 249–370. 2 Fuller's Special Report, 1907, 28-31.

Order No. 504, Feb. 3, 1904, sustaining demurrer to the government's plea in abatement.

4 Narcisa Sugar Co., No. 139, Briefs XXIV, 167 (explanatory notes).

' Barron (Mexico) v, U. S., July 4, 1868, Moore's Arb. 1520, 1523.

* Kunhardt (U. S.) v. Venezuela, Feb. 13, 1903, Ralston, 63, opinions of Bainbridge and Paul. See also Hernsheim v. U. S., No. 297, Span. Tr. Cl. Com., 4 A. J. I. L. 815.

porate claim on the part of the corporation or themselves. After dissolution of the corporation, however, they became equitable owners, in proportionate parts, of the corporate property, subject, however, to the payment of the corporate debts. Kunhardt and Co., therefore, were given a standing as the American owners of stock in a dissolved Venezuelan corporation but damages were not assessed in their favor owing to lack of evidence of the corporate liabilities.

In the Delagoa Bay arbitration and the Salvador Commercial Company case,2 a thorough examination into the question of the right of American stockholders in a foreign corporation to prosecute claims for their share of the losses of the corporation was precluded by the terms of the protocol, which made the shareholders the parties claimant. It may be said, however, that the foreign corporations in both cases were practically defunct, and the equitable interest of the stockholders could with some justice be supported, as it was, by their government. In the cases of Cerruti against Colombia and Alsop against Chile,* claimants were members of a firm established under the laws of the defendant government and by its law regarded as a juridical person and national entity. President Cleveland in the first case and his Britannic Majesty in the second considered themselves empowered, under the terms of submission, to award indemnities to the individual firm members on whose behalf the claimant government, of which they were citizens, prosecuted the claim.

1 McMurdo (U. S.) v. Portugal, June 13, 1891, Moore's Arb. 1865 et seq., For. Rel., 1900, 903.

2 Salvador Commercial Co. (U. S.) v. Salvador, Dec. 19, 1901, For. Rel., 1902, 857, 862-873.

3 Cerruti (Italy) v. Colombia, Aug. 18, 1894, For. Rel., 1898, 245. The Government of Colombia protested against the award of President Cleveland, as arbitrator, so far as the debts of the firm of Cerruti and Co. were concerned, and in fact refused to execute that part of the award. Long and acrimonious negotiations ensued, although Colombia finally executed the award. The Cerruti claim is discussed by Bureau in his work Le conflit italo-colombien (affaire Cerruti), Paris, 1899, by Darras in 6 R. G. D. I. P. (1899), 533-552 and by Pierantoni in 30 R. D. I. (1898), 445-462. Controversies growing out of the execution of the award led to another arbitration between Italy and Colombia under a protocol of Oct. 28, 1909. See Award of July 6, 1911 in 6 A. J. I. L. (1912), 1018-1029, and Francis Hagerup's Report in 19 R. G. D. I. P. (1912), 268–274.

4 Alsop and Co. (U. S.) v. Chile, Dec. 1, 1909, 5 A. J. I. L. (1911), 1079.

CHAPTER V

SUCCESSORS IN INTEREST AND BENEFICIAL OWNERS

§ 283. Effect of Citizenship of Derivative Claimants.

The rules of municipal law authorizing successors in interest of original claimants to invoke the rights and pursue the remedies of their predecessors are tempered in the prosecution of international claims by such questions as the national status of the successors and their rights under international conventions to represent the original claimants. The rules of the Department of State also require that a person who claims in the right of another shall show "whether such other was a citizen when the claim had its origin." Among successors in interest, special consideration will be given (a) to heirs, (b) to executors and administrators, including personal representatives, and (c) to assignees and receivers. The rights of beneficial owners, including creditors, mortgagees and insurers, will be considered separately.

HEIRS

§ 284. Citizenship of Decedent and Heir Usually Required.

Some consideration has already been given, under the head of widows and children,1 to the right of heirs to institute international claims in their own behalf. No uniform rule in the matter can be invoked, but general practice sanctions the requirement that the heir prove both his own and the decedent's citizenship as a necessary condition. to diplomatic interposition in his behalf. The failure of proof under either head will usually deprive the claim of diplomatic cognizance, although cases have been cited in which widows have, regardless of their own citizenship, obtained diplomatic relief for injuries inflicted upon their deceased husbands.2 As a general rule, however, to justify

1 Supra, § 268.

2 Ibid.

the presentation of a claim, the heirs must be of the same nationality as the ancestor, the original claimant.

In case the claimant dies in the course of diplomatic negotiations. for redress, the prosecution of the claim will not usually cease, provided the right of action is deemed to survive. This is so, on principle, regardless of proof of heirs, because the claim had already assumed a national character. In the Shields case against Chile, in which the death, some years after the claim was first instituted, of a British. seaman who had served on an American vessel, may be considered to have divested the United States of all interest in the claim, a protocol of agreement to settle the claim was concluded between the United States and Chile on behalf of the heirs of Shields.1

§ 285. Decisions of International Tribunals of Arbitration.

In determining the right of heirs to appear as claimants before international commissions, it is essential to examine the jurisdictional clause of the protocol or treaty under which the commission acts. For example, the fact that article 2 of the treaty of 1880 between France and the United States provided for the examination of claims "presented to [the Commission] by the citizens of [France]" was held to justify the rejection of the claim of Wiltz, public administrator of the estate of a French citizen, in the absence of proof of the French. citizenship of the real and beneficial claimants who through him actually presented the claim.2 In fact, under the general form of protocol for the adjudication of the claims of the citizens of one country against the other, international tribunals have generally held that not only the deceased but the actual beneficiary must come within the jurisdiction of the commission in the matter of citizenship. Heirs, therefore, have been required to establish their jurisdictional citizenship independently of their ancestor, failing which their claims have been rejected. When the claim was national in origin, but passed into the 1 May 24, 1897, Malloy's Treaties, I, 190; $3,500 was paid to the U. S. For. Rel., 1900, 67.

3

2 Wiltz (France) v. U. S., Jan. 15, 1880, Moore's Arb. 2243, 2246; Mrs. Grayson, Adm. (Gt. Brit.), v. U. S., Feb. 8, 1871, Hale's Rep. 19 (only British-owned portion of claim allowed, claim on part of widow, American citizen, being disallowed).

3 Lizardi (U. S.) v. Mexico, July 4, 1868, Moore's Arb. 1353; Maxan's Heirs (U. S.)