## Facts

- In 1958, Rosa M. Manas y Pineiro purchased five nonnegotiable certificates of deposit (CDs) totaling about $227,336.47 from Chase’s Marianao, Cuba branch by depositing Cuban pesos.
- The CDs bore 3% interest, matured in 1959, and did not specify a place of payment.
- Manas allegedly sought safety amid political uncertainty and was told by a Chase employee the CDs could be redeemed at any Chase office, including in the United States.
- In September 1959, the Cuban government issued a decree confiscating Manas’s accounts and ordered Chase’s Cuban branch to close her accounts and pay the proceeds to the government.
- Chase complied and paid over the funds in Cuba; it later ceased operations in Cuba in 1960.
- In 1974, Manas presented the CDs for payment in New York; Chase refused, asserting the debt had been satisfied in Cuba under the confiscation order.
- Manas sued in New York; after her death, Esther G. M. Perez, as administratrix, continued the action.
- A jury found the parties intended the CDs to be presentable at any Chase branch (including in Cuba) and that Cuba confiscated the account.

## Issues

1. Whether Cuba’s confiscation and compelled payment by Chase’s Cuban branch extinguished Chase’s obligation on the CDs.
2. Whether the act of state doctrine barred a New York court from examining the validity or effect of the Cuban confiscation on the debt.
3. How the situs of an intangible bank debt is determined for act of state purposes when a foreign sovereign acts against a local branch.

## Decision

- The Court of Appeals reversed the Appellate Division and reinstated judgment for Chase.
- The Court held the Cuban government had power to enforce and collect the debt in Cuba because the CDs were payable there and Chase was present there at the time.
- The Court applied the act of state doctrine to preclude inquiry into the propriety of Cuba’s confiscation directed at Manas’s Cuban assets.
- Treating Chase’s compelled surrender of funds as a valid satisfaction of the local obligation, the Court held Chase was discharged and could not be required to pay again in New York.
- Chase’s later cessation of operations in Cuba did not revive an obligation already discharged.

## Legal Principles

- Under the act of state doctrine, New York courts will not sit in judgment on a foreign sovereign’s public acts performed within its own territory, including confiscations affecting obligations enforceable there.
- For an intangible bank debt, the relevant situs for act of state purposes is the place where the debtor can be compelled to pay, including the jurisdiction of the branch carrying or obligated on the account when payment is enforceable there.
- When a bank is compelled by a foreign sovereign with authority over the debt’s situs to pay the obligation to the sovereign, the bank’s obligation to the depositor is discharged, and the depositor cannot obtain a second satisfaction elsewhere.

## Conclusion

The Court of Appeals held that Cuba’s confiscation, enforced against Chase while it operated in Cuba where the CDs were payable, was an act of state that New York courts could not question; Chase’s compelled payment in Cuba discharged the debt and barred recovery on the same CDs in New York.


Perez v. Chase Manhattan Bank, N.A., 61 N.Y.2d 460 (N.Y. 1984)