Stone Engineering Company v Petroleos Mexicanos of Mexico

CourtUnited States State Supreme Court of Pennsylvania
Date13 April 1945
Docket NumberCase No. 31
United States, Supreme Court of Pennsylvania.
Case No. 31
F. W. Stone Engineering Co.
and
Petroleos Mexicanos of Mexico, D.F.

Conclusiveness of Statements of the Executive Department — The Law of the United States.

Foreign States — Jurisdictional Immunities of — Governmental Agencies Engaged in Commercial Enterprise — Certificate of the Executive Department — The Law of the United States.

The Facts.—The plaintiff corporation, which was incorporated within the United States, entered into a contract with the defendant corporation, which was incorporated in Mexico, under the terms of which the defendants deposited with a United States bank a sum to secure payment for the purchase of materials requisite for a manufacturing plant which the defendants were erecting in Mexico under the supervision of the plaintiffs. Upon default by the defendants the plaintiffs attached the deposit, but the Court of first instance dissolved the writ of attachment on the ground that the defendant corporation had been recognized by the United States State Department as a governmental instrumentality of the Republic of Mexico. The plaintiffs appealed.

Held: that the appeal must fail. The Secretary of State had recognized the defendants as a governmental instrumentality of the Republic of Mexico entitled to sovereign immunity in the courts of the United States. Such a determination was binding upon the Courts. Per James, J., who delivered the opinion of the Court:

“… On October 2, 1944, the Mexican chargé d'affaires ad interim addressed a communication to the Honorable Cordell Hull, Secretary of State, informing him of the attachment involved in this case and requesting that the Court ‘be apprised of the immunity of Petroleos Mexicanos and its funds from suit and attachment’. As a basis for the claim of immunity, the communication set forth that Petroleos Mexicanos is ‘an instrumentality of the Mexican Government’; is wholly owned and controlled by that Government; and that it had been incorporated and organized on June 7, 1938, as a ‘public institution’ by decree of the Congress of the Mexican United States for the purpose of operating and developing oil properties in Mexico which the government of that country had expropriated a few months earlier. After 20% of the profits from the corporation's operations had been set aside as contingent reserves, 75% of the balance was to be paid to the Mexican Government and 25% to the corporation's ‘workers’. The communication and attached...

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