Gonzalez v. Industrial Bank (of Cuba)

• Decision Date: 15 May 1962
• Citation: 16 A.D.2d 347,228 N.Y.S.2d 81
• Parties: Yolanda Duque De Estrada GONZALEZ, Plaintiff-Respondent, v. INDUSTRIAL BANK (OF CUBA), Defendant-Appellant, and Banco Nacional De Cuba, Intervenor-Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 81

228 N.Y.S.2d 81

16 A.D.2d 347

Yolanda Duque De Estrada GONZALEZ, Plaintiff-Respondent, v. INDUSTRIAL BANK (OF CUBA), Defendant-Appellant, and Banco

Nacional De Cuba, Intervenor-Defendant-Appellant.

Supreme Court, Appellate Division, First Department.

May 15, 1962.

Leonard B. Boudin, New York City, of counsel (Mary M. Kaufman and Henry Winestine, New York City, with him on the brief; Rabinowitz & Boudin, New York City), for appellants.

Mark F. Hughes, New York City, of counsel (Joseph M. Callahan, Kenneth J. Bialkin and Laurence G. Bodkin, Jr., New York City, with him on the brief; Willkie, Farr, Gallagher, Walton & FitzGibbon, New York City), for respondent.

Before BOTEIN, P. J., and BREITEL, RABIN, VALENTE, and BERGAN, JJ.

VALENTE, Justice

Defendant, Industrial Bank of Cuba ('Industrial'), appeals from a judgment entered against it in the sum of $153,824 after trial by the Court without a jury. The intervenor-defendant Banco Nacional de Cuba ('Nacional') appeals from the the same judgment entered against it for costs only.

Plaintiff is a Cuban national who, as the time the action was commenced, resided in Miami, Florida. Appellant Industrial was a foreign corporation organized under the laws of the Republic of Cuba and was not amenable to personal service of process in this jurisdiction. While this action was pending--jurisdiction havinb been obtained by a levy pursuant to a warrant of attachment, upon funds of Industrial in the possession of a bank in New York--Industrial was dissolved by a decree of the Republic of Cuba, and Nacional, designated as Industrial's legal successor, was permitted to intervene and defend the action.

In December, 1958, plaintiff resided with her family in Guanabacoa, Cuba. At the time, her husband had been mayor of Guanabacoa for about eighteen years. On the morning of December 30, 1958, after a family discussion, plaintiff's mother was given a check in the amount of 135,000 pesos drawn to her order by plaintiff's husband on his account in Industrial's branch in Guanabacoa, and the mother surrendered the check at the bank and received a draft drawn on the Colonial Trust Company of New York City to the order of plaintiff in the amount of $132,000. The draft, on its face, required that it be presented within three months.

On January 1, 1959, the then existing Cuban government fell and the Castro regime took over. Plaintiff's husband sought asylum in the Brazilian Embassy where he stayed until March 5, 1959 when he left for the Republic of Brazil. Plaintiff remained in Cuba for several months, during which she was confined to jail for a period of seven days. But, with the assistance of the Brazilian Embassy, she was finally able to leave Cuba and arrived in Florida on April 9, 1959. On April 10, 1959 plaintiff presented the draft for $132,000 to the Pan-American Bank office at Miami, Florida, for collection.

The Colonial Trust Company refused to honor the draft. It had received instructions from Industrial to dishonor the draft.

In May, 1959, an action was commenced herein by the issuance of a warrant of attachment against property of Industrial located in New York County. Industrial, appearing specially, moved to vacate the attachment and to set aside the service of the summons on the ground, among others, that the Court lacked jurisdiction over the person of Industrial and over the subject matter of the action. The attachment was sustained (22 Misc.2d 874, 195 N.Y.S.2d 346) and this Court affirmed (10 A.D.2d 624, 196 N.Y.S.2d 926). However, we expressly refused to adopt the grounds for decision at Special Term, and merely held that 'there is enough of an allegation at this stage of the proceedings to support the claim of an over-all agreement as distinguished from the sale of a draft to require defendant to be put to answer, at least, and also, perhaps, to its proof'. The Court of Appeals affirmed without opinion (9 N.Y.2d 623, 210 N.Y.S.2d 227).

Hence, at the threshold it is necessary to determine whether there was jurisdiction of the subject matter of the action, now that all of the proof is in.

Section 225 of the General Corporation Law provides that an action against a foreign corporation may be maintained by a nonresident only in certain cases. To sustain jurisdiction in this case, plaintiff--a nonresident--relies on subdivision 3 of Section 225 which permits suit against a foreign corporation 'where the cause of action arose within the state'.

Plaintiff alleged, and the Trial Court found, that the transaction whereby plaintiff obtained the draft was an agreement for the purchase of $132,000 in United States currency from Industrial for delivery in New York, and that the contract was breached in New York when Industrial refused to make delivery of the United States dollars at Colonial Trust Company.

We disagree with that conclusion. As we view the transaction in Cuba it was simply one of the purchase and sale of a foreign draft. When a draft is bought and paid for it becomes an executed transaction. As was said in Kerr S. S. Co. v. Chartered Bank of India, etc., 292 N.Y. 253, 260-261, 54 N.E.2d 813, 816:

'The rule is authoritatively established and universally recognized that the transfer of a draft in exchange for moneys paid for the delivery of the draft is an executed transaction characterized generally as a 'purchase and sale' of the draft'.

See also Gravenhorst v. Zimmerman, 236 N.Y. 22, 31, 139 N.E. 766, 769, 27 A.L.R. 1465; International Firearms Co. v. Kingston Trust Co., 6 N.Y.2d 406, 409, 189 N.Y.S.2d 911, 912, 160 N.E.2d 656, 657.

Under such an executed transaction, the drawer of the draft agrees that upon 'due presentment the...