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126 (1938)

• On July 15, 1916, the Imperial Russian Government opened a bank account with petitioner,
the Guaranty Trust Company, a New York banking corporation.

• On March 16, 1917, the Imperial Government was overthrown and was succeeded by the
Provisional Government of Russia which was recognized by the United States on March 22,

• On July 5, 1917, Mr. Boris Bakhmeteff was officially recognized by the President as the
Ambassador of Russia. On July 12, 1917, the account being overdrawn, $5M was deposited
in the account by Mr. Serge Ughet, Financial Attache of the Russian Embassy in the United

• On Nov. 7, 1917, the Provisional Government was overthrown and was succeeded by the
government of the Union of Soviet Socialist Republics. At that time there remained on
deposit in the account the sum of approximately $5M. • On Nov. 28, 1917, the USSR
dismissed Bakhmeteff as Ambassador and Ughet as Financial Attache . But the United States
continued to recognize Bakhmeteff as Ambassador until June 30, 1922. Thereafter, until
November 16, 1933, it continued to recognize the Financial Attache, and after the retirement
of Bakhmeteff as Ambassador it recognized the former as custodian of Russian property in
the United States.

On November 16, 1933, the United States recognized the USSR, and on that date took from
it an assignment of all “amounts admitted to be due that may be found to be due it, as the
successor of prior Governments of Russia, or otherwise, from American nationals, including
corporations. ...” After making demand upon the petitioner for payment of the balance of the
account the United States, on September 21, 1934, brought the present suit in the District
Court for Southern New York to recover the deposit.

• Petitioner then moved to dismiss the complaint on the ground that the recovery was
barred by the New York 6- year statute of limitations.

• Respondent argues that the USSR is not subject to the local statute of limitations both
because a foreign, like a domestic sovereign, is not subject to statutes of limitations, and its
immunity constitutes an implied exception to that statute and to the Conformity Act;

• Since no suit to recover the deposit could have been maintained in New York by the USSR
prior to its recognition by the United States and, since it does not run during the period
when suit cannot be brought, the present suit is not barred.

• It is insisted further that even though the USSR is bound by the local statute of limitations
the United States is not so bound.

• Finally, the government assails the finding of fact of the District Court that petitioner
repudiated the liability upon the deposit account, and contends that notice of the
repudiation given by petitioner to representatives of the Provisional Government was
ineffective to set the statute running against the USSR and in favor of petitioner.

1) Whether, in a suit at law brought in a federal District Court to recover the deposit of a
foreign government with a New York bank, such government is subject to the local statute of
limitations as are private litigants;

2) If so, whether the assignment of Nov. 16, 1933, by the USSR to the United States of the
right of the former to the bank account restricts or overrides the operation of the statute of

3) Whether in the circumstances of the case the running of the statute of limitations, if
otherwise applicable, was affected by the non- recognition of the USSR during the interval of
approximately 16 years between recognition of the Provisional Government of Russia and
recognition of its successor.

1. That such notice of repudiation, given to the then duly recognized diplomatic
representatives, was notice to the Russian State.

2. That the later recognition of the Soviet Government left unaffected those legal
consequences of the previous recognition of the Provisional Government and its
representatives, which attached to action taken here prior to the later recognition.

3. That, if the statutory period has run against the claim of the Russian Government, the
claim of the United States, as assignee, is likewise barred since:
a) Proof that the statutory period had run before the assignment offends against no
policy of protecting the domestic sovereign. It deprives the United States of no right, for the
proof demonstrates that the United States never acquired a right free of a preexisting
infirmity, the running of limitations against its assignor, which public policy does not forbid.

b) Assuming that the respective rights of the bank and the Soviet Government could
have been altered, and the bank's right to plead the statute of limitations curtailed, by force
of an executive agreement between the President and the Soviet Government, there is
nothing in the agreement and assignment of November 16, 1933, purporting to enlarge the
assigned rights in the hands of the United States, or to free it from the consequences of the
failure of the Russian government to prosecute its claim within the statutory period.

4. Even the language of a treaty will be construed, wherever reasonably possible, so as not
to override state laws or to impair rights arising under them


372, 138 N.E. 24 (1923)

FACTS: This was an action against the RSFR for the wrongful conversion of personal property.
The action was based on the seizure in Russia of certain furs belonging to plaintiff.

The RSFR is the existing de facto government of Russia. This is admitted by the plaintiff.
Otherwise there is no proper party defendant before the court. It is claimed by the
defendant. The Appellate Division states that it is a matter of common knowledge. It has not
been recognized by the government of the United States.

Issue: “The result we reach depends upon more basic considerations than recognition or
non-recognition by the United States. Whether or not a government exists, clothed with the
power to enforce its authority within its own territory, obeyed by the people over whom it
rules, capable of performing the duties and fulfilling the obligations of an independent
power, able to enforce its claims by military force is a fact, not a theory.”

For its recognition does not create the state, although it may be desirable. So only are
diplomatic relations permitted. Treaties made with the government which it succeeds may
again come into effect. It is a testimony of friendly intentions. Also in the country granting
the recognition that act is conclusive as to the existence of the government recognized.
Again, recognition may become important where the actual existence of a government
created by rebellion or otherwise becomes a political question affecting our neutrality laws,
the recognition of the decrees of prize courts, and similar questions. But, except in such
instances, the fact of the existence of such a government whenever it becomes material
may probably be proved in other ways.

Here, however, we need no proof. The fact is conceded. We have an existing government,
sovereign within its own territories. There necessarily its jurisdiction is exclusive and
absolute. It is susceptible of no limitation not imposed by itself. This is the result of its
independence. It may be conceded that its actions should accord with natural justice and
equity. If they do not, however, our courts are not competent to review them. They may not
bring a foreign sovereign before our bar, not because of comity, but because he has not
submitted himself to our laws. Without his consent he is not subject to them. But, whether
recognized or not, the evil of such an attempt would be the same. ‘To cite a foreign
potentate into a municipal court for any complaint against him in his public capacity is
contrary to the law of nations, and an insult which he is entitled to resent.’ In either case, to
do so would ‘vex the peace of nations.’ In either case the hands of the state department
would be tied. Unwillingly it would find itself involved in disputes it might think unwise. Such
is not the proper method of redress, if a citizen of the United States is wronged. The
question is a political one, not confided to the courts, but to another department of
government. Whenever an act done by a sovereign in his sovereign character is questioned,
it becomes a matter of negotiation, or of reprisals, or of war.

139 N.E. 259 (1923)

Facts: The Russian Soviet Government, through the Cinematographic Committee of its
Commissariat of Public Instruction, entered into a contract with the defendant for the
purchase of moving-picture machines and supplies and delivered $1M to the U.S.
commercial attaché at Petrograd to be deposited in a bank in the U.S. subject to draft
according to the contract’s terms. The attaché deposited the money in the National City
Bank of New York. Thereafter the Soviet Government brought an action in N.Y. to compel the
defendant to account for money alleged to have been fraudulently obtained under the
contract. From an order granting an injunction and appointing a receiver, the defendant
appealed to the N.Y. Supreme Court.

In Wulfsohn v. Russian Federated Soviet Republic, we held that our courts would not
entertain jurisdiction of an action brought without its consent against an existing foreign
government, in control of the political and military power within its own territory, whether or
not such government had been recognized by the United States. We have now to determine
whether such a government may itself become a plaintiff here.

If recognized, undoubtedly it may. Conceivably this right may depend on treaty. But if
no treaty to that effect exists the privilege rests upon the theory of international comity. This
is so with regard to all foreign corporations. Their power to sue may be regulated as is done
by section 15 of our General Corporation Law. And except as limited by constitutional
provisions the same thing is true of those not citizens of our state. Much more true is it that
the right of a foreign government to sue is likewise based upon the same consideration.
Neither a natural person nor a corporation, ordinarily we would not recognize it as a proper
party plaintiff. It represents, however, the general interests of the nation over which it has
authority. We permit it to appear and protect those interests as a body analogous to one
possessing corporate rights, but solely because of comity.

Comity may be defined as that reciprocal courtesy which one member of the family
of nations owes to the others. It presupposes friendship. It assumes the prevalence of equity
and justice. Experience points to the expediency of recognizing the legislative, executive,
and judicial acts of other powers. We do justice that justice may be done in return.

‘What is termed the comity of nations is the formal expression and ultimate result of
that mutual respect accorded throughout the civilized world by the representatives of each
sovereign power to those of every other, in considering the effects of their official acts. Its
source is a sentiment of reciprocal regard, founded on identity of position and similarity of

As defined by Webster, comity ‘is in general terms that there are between nations at
peace with one another rights both national and individual resulting from the comity or
courtesy due from one friendly nation to another. Among these is the right to sue in their
courts respectively.’ It may, however, not be demanded as a right. It is yielded as a favor.
Not an arbitrary favor; nor is it the favor of the courts. Does any rule of comity, then, require
us to permit a suit by an unrecognized power? In view of the attitude of our government,
should we permit an action to be brought by the Soviet government?

 To both queries we must give a negative answer. We may state at the outset
that we find no precedent that a power not recognized by the United States
may seek relief in our courts. Such intimations as exist are to the contrary.
Statements are that ‘a recognized government may be a plaintiff.’

What, then, is the meaning and effect of recognition in its relation to comity?
A foreign power brings an action in our courts not as a matter of right. Its power to do so is
the creature of comity. Until such government is recognized by the United States no such
comity exists. The plaintiff concededly has not been so recognized. There is, therefore, no
proper party before us.

Recognition, and, consequently, the existence of comity, is purely a matter for the
determination of the legislative or executive departments of the government.

Who is the sovereign of a territory is a political question. In any case where that question is
in dispute the courts are bound by the decision reached by those departments. It is not for
the courts to say whether the present governments of Russia or Mexico or Great Britain
should or should not be recognized. They are or they are not. That is as far as we may
inquire. Nor is anything here decided inconsistent with Wulfsohn v. RSFR. Upon the facts in
that case, if the defendant was not an existing government it might not be sued. There was
no party before the court. If it were, as was alleged and admitted, the same result followed,
not because of comity, but because an independent government is not answerable for its
acts to our courts.

We are the more ready to reach this conclusion because to hold otherwise might tend to
nullify the rule that public policy must always prevail over comity.