Perez v. Chase Manhattan Bank, N.A.

In 1958, Rosa Manas (plaintiff) purchased certificates of deposit (CDs) from a Cuban branch of the Chase Manhattan Bank, N.A. (Chase) (defendant). Manas purchased the CDs because she was concerned about Cuba’s political situation. Chase told Manas that the CDs were redeemable wherever Chase had a branch, including the United States. However, the CDs did not specify any payment location. In September 1959, the new Cuban government ordered Chase, which operated in Cuba until 1960, to close Manas’s accounts and pay the proceeds to the government. Chase complied with this order. In 1974, Manas presented the CDs to Chase’s New York office for payment, but Chase refused to pay. Manas then sued Chase. Esther Perez (plaintiff), the administratrix of Manas’s estate, took over Manas’s case upon Manas’s death. At trial, the jury found that the parties intended for the CDs to be presentable at any Chase branch, including in Cuba, and that the Cuban government had confiscated Manas’s account. Based on these findings, the trial court entered judgment for Chase, ruling that the act-of-state doctrine prevented the court from questioning Cuba’s seizure because the CDs were presentable in Cuba, where Chase operated at the time. The appellate division reversed based on its views that (1) the act-of-state doctrine applied to intangible property only if the property was exclusively located in a foreign country, (2) the doctrine did not apply to extinguish the obligation of a United States bank to pay a branch’s obligation to a depositor, and (3) Chase’s cessation of Cuban operations in 1960 did not excuse Chase from paying Manas. Chase appealed.