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7 N.Y.U. L. Q. Rev. 190 (1929-1930)
Notes

handle is hein.journals/nylr7 and id is 204 raw text is: NOTES EXTRATERRITORIAL EFFECT OF AcTs OF UNRECOGNIZED GOVERNMENTS.-Tie recent decisions in the case of Sokoloff v. National City Bank of New Yorkl have gone far in announcing the New York rule of cognizance of the acts of unrecog- nized governments. In that case one Sokoloff, a Russian citizen, gave to the National City Bank in New York some $3o,ooo with which to open an account for him, in rubles, in Petrograd where a branch of the bank was situated. This agreement was carried out by the bank and a pass book given to the plaintiff. In the ordinary course of business Sokoloff drew on his account and then requested that additional funds be transferred to the credit of the Kharkoff Mutual Aid Society. The defendant's Petrograd branch attempted to do this by means of a book-keeping system prevailing in Russian banks at the time, but was unsuccessful because of turbulent conditions in Kharkoff. However, a debit was entered to plaintiff's account and a subsequent demand for the funds refused, because of such entry. When the bank finally learned that no credit had been received at Kharkoff, no further payment was ever completed in that the Russian Soviet Government, in purporting to nationalize all banks, had taken over defendant's Petrograd branch and confiscated all of its funds. When sued in New York for money had and received the bank set up as a defense the act of the Soviet Govern- ment in seizing the bank and hence making performance impossible. The motion to strike out the defense was granted and the defense denied. In its decision the court by way of dictum declared that the acts of an un- recognized government might be given recognition and effect by the court, if justice and public policy so demanded, but that this ca;e warranted no such exception. It is to be noted that the dictum here was unnecessary to the actual decision. As was pointed out by the court, the obligation of the defendant bank to reim- burse the plaintiff, existed whether the confiscation of the Petrograd bank wag by a recognized de jure or de facto government or one by no government at all. The relation which existed between Sokoloff and the National City Bank wag that of creditor and debtor. The obligation of the defendant was to pay plaintiff in rubles, on demand. Under the arrangement Sokoloff obtained a chose in action and the situs of the debt was with the defendant and when Sokoloff could not enforce his chose in action in Petrograd he had a right to enforce it in New York.3 Nevertheless, the court went on to establish this doctrine and an analysis of the effect of 'acts of governments will show that not only is the thought new but that it is a step forward from the strict doctrines established in other cases. It is never the concern of courts as to whether or not a government is to be accorded recognition. That is a matter for the political branch of the govern- ment to decide and whatever may be the decision of such branch of the govern- 1239 N. Y. 158, 145 N. E. 917 (1924); 250 N. Y. 69, 164 N. E. 745 (1928). MORSE, BANKS AND BANKING (6th ed. 1928) §289. Matter of Houdayer, 150 N. Y. 37, 44 N. E. 718 (1896). Imaged with the Permission of N.Y.U. Law Review

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