This case involves the liability of a multinational New York bank for deposits in a foreign branch expropriated by the country in which the branch was located, when the expectation of the parties was that the certificates of deposit were guaranteed by the bank as a whole and would be paid in dollars at any branch of the bank anywhere in the world. In the circumstances of this case, we hold that New York law applies and that the district court erred in granting the bank's motion to dismiss.

The plaintiffs in this case originally lived in Cuba. In December 1958, on the eve of Fidel Castro's final military victory over Fulgencio Batista, the plaintiffs, concerned about the revolution's threat to their property, expressed their fears to the officials of a Cuban branch bank of Chase Manhattan. They purchased from branch banks of Chase Manhattan Bank in Cuba ten "fixed term" bearer certificates of deposit amounting to 250,000 Cuban pesos, the equivalent of $250,000. Eight certificates were payable on "demand" (the plaintiffs' translation) or on "presentation" (the defendants' translation) on June 29, 1959 and two certificates on June 30, 1959. According to the plaintiffs, officers of the bank pointed out that Chase was an American bank with its head office in New York and assured them that the certificates were "like American money", constituted a "guaranteed investment" of their funds, and that United States dollars would be paid to them upon demand and surrender of the certificates to any branch of Chase throughout the world. Allegedly, Chase guaranteed its operations in Cuba with the "capital of the whole bank" and used logos including the map of the United States and the globe. Chase's officers made similar representations to other wealthy Cubans.1

Chase Manhattan now sings a different tune: the certificates are not "like American money". Indeed, Chase says, the certificates are not even certificates of deposit as we know them in the United States. Chase moved for judgment on the pleadings on the ground that the claim had prescribed. The district court decided that under the "dominant contacts" doctrine Cuban law was applicable.2 It then agreed with Chase that under Cuban law, as under Puerto Rican law, the certificates were "a variant of a promissory note", subject to prescription of 15 years3 from their "maturity"; that is, June 29/30, 1959. Because we conclude that the certificates are governed by New York law and are certificates of deposit as defined in the Uniform Commercial Code, we reverse the judgment of the district court and remand the case for further proceedings consistent with this opinion.

Ana Maria Edelmann and her husband, Joseph Saif, bought a total of ten certificates, eight from Chase's main branch in Havana, and two from a smaller branch in Marianao. They paid for the certificates in Cuban pesos. The peso was then pegged to the dollar, interchangeable with the dollar, and the certificates were redeemable, as Chase officials promised, in U.S. dollars at the parent bank in New York or at any Chase branch in the world.4 At some point Edelmann and Saif lost one of their ten certificates.

The language on the face of the nine existing certificates is identical, except that the "fixed term" is June 29, 1959, on seven of the certificates and June 30, 1959, on the two others.5 The parties disagree about how best to translate certain language in the certificates,6 but the following assertions are indisputably made on each certificate:

1) that the certificate is a certificate of deposit;

2) that a deposit of $25,000 has been made with Chase to be held in favor of the bearer of the certificate;

3) that the certificate is issued under authority given to Chase by Cuban law;

4) that Chase will pay $25,000 to the bearer of the certificate, with interest at 3-1/2 percent on June 29/30, 1959, upon presentation of the certificate; and

5) that the deposit represented by the certificate can be transferred by transfer of the certificate itself.

The certificates, as we read them, obligate the bank to pay interest only until the due date ("fixed term") June 29 or 30, 1959.7

Edelmann and Saif did not present their certificates to Chase for payment on June 29 and 30, 1959. Early in September of that year, they fled from Cuba, taking their certificates with them. On September 17, 1960, the Castro regime, through the National Bank of Cuba, expropriated all the deposits and assets of Chase's branch banks in Cuba.8

On April 3, 1985, the plaintiffs presented the certificates to a Chase branch bank in Santurce, Puerto Rico, and demanded repayment of their principal plus accrued interest.9 Chase refused to honor the certificates. Edelmann and Saif then brought this suit in the federal district court in Puerto Rico in May 1985. At this point, it is worth noting that title to a deposit covered by a certificate of deposit passes to the bank and the funds are commingled with the bank's other funds.10 Speaking generally, but here by explicit agreement, the bearer's presentation and surrender of the bearer certificate to the bank is an express condition to the bank's obligation to pay the principal and accrued interest due on the certificate.11

Both parties to this appeal acknowledge, as they must, that a limitations term, prescription in the civil law, begins to run from the time the cause of action has been established.12 The central question here is: When did Edelmann and Saif first acquire a cause of action against Chase for recovery of their deposits? Chase answers that it was June 29/30, 1959, the first day that Edelmann and Saif could have collected their money under the terms of the certificates. Edelmann and Saif insist that they had no cause of action against Chase until April 3, 1985, the day they presented the certificates for payment to the branch bank in Santurce and were denied payment.

There are several approaches to the resolution of this case. The approach we take in resolving this dispute depends on the law that governs the interpretation of the certificates. There are three possibilities that merit discussion: Cuban law, Puerto Rican law, and New York law.13 In making our choice, we are guided by conflict of law principles that are themselves a matter of federal common law. This is so, as the district court correctly determined, because our jurisdiction in this case is based on the presence of a federal question.14

The district court stated that to establish which law is to be applied in a 12 U.S.C. sec. 632 case "we need to consider the (a) nature of the transaction; (b) intention of the parties to the contract as to whether any particular law is to be applied; (c) place where the contract was entered into, and (d) place where it may reasonably be expected to be performed. The court must weigh all the criteria to determine the forum that has the dominant contacts with the transaction."15 This is a fair formulation of most of the pertinent considerations in determining the law to be applied in this case. Unfortunately, the court did not consider criteria (b) and (d). Instead, the district court, after referring to the fact that at the time the certificates were issued the Edelmanns resided in Cuba, concluded, without more, that the law of the state with "most contacts with the contract governs"; that the "law closest to the dominant contacts of the transaction was Cuban law". We disagree.

(a) The nature of the transaction depends on what law applies. Under New York law, or American law generally, the instrument was a negotiable certificate of deposit. The language of the instrument is that of an American certificate of deposit, not that of a promissory note. Conceivably, for purposes of giving effect to the contract in a civil law jurisdiction, the transaction could be treated as an obligation of the bank, perhaps resembling in some respects a promissory note, to pay the amount evidenced by the certificates on their surrender by the bearer.

(b) The intention of the parties is clear. The certificates were to be presented at any branch of Chase in any part of the world except Cuba. As the Bank's manager told the plaintiff, the certificates were like American dollars presumably subject to American law.

(c) The residence of the plaintiffs in Cuba, where the contract was entered into, loses significance when the purpose of the agreement is to have the most crucial provision, payment, performed in another country by the promissor or debtor headquartered in New York. The plaintiffs unquestionably intended to leave Cuba, and they did, shortly after converting part of their wealth into what appeared to be the equivalent of United States dollars.

(d) The place where the contract may reasonably be expected to be performed was a branch bank not in Cuba. Because a branch bank, unlike a subsidiary corporation, is an agent of its principal, the ultimate place of performance was, in all likelihood, in Chase's main office in New York.16

For a refinement of the choice of law analysis, we turn to the Restatement (Second) of Conflict of Laws. According to the Restatement, in the absence of guidance from Congress, the factors we must consider in choosing the applicable rule of law in this case include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.17

The first factor in the Restatement focuses our attention on "the needs of ... international systems". Ideally the approach should further "harmonious relations between states".18

A choice of law analysis that turned solely on the residence or corporate headquarters of the party issuing a negotiable instrument would no doubt do a disservice to our international financial system.19 In this case, the presence of Chase's headquarters in New York is only one of several factors that support the application of New York law. Moreover, our concern with "harmonious relations" is necessarily reduced by the fact that United States banks have long been barred from doing business in Cuba. Our decision in this case is unlikely to affect the relationship, such as it is, that now exists between the United States and Cuba.20

Puerto Rico is the place where the plaintiffs eventually chose to seek payment from Chase, but it could have been at a Chase branch anywhere in the world. Edelmann and Saif brought their case in federal court; they impose no direct burden on the Commonwealth of Puerto Rico.

The next two Restatement factors consider the relevant policies of the forum and other interested states. By basing jurisdiction on 12 U.S.C. Sec. 632, of course, the plaintiffs have chosen a federal forum. The legislative history of the Edge Act does not suggest explicitly a relevant federal policy, but there can be little doubt that Congress passed the Act to promote uniformity in the rules governing the international operations of United States banks.21 We conclude that this policy is best served by applying New York law and the Uniform Commercial Code to these Chase Manhattan certificates of deposit.

The other states involved here do not have compelling interests at stake. Puerto Rico's connection with the matter is fortuitous. It is inconceivable that Puerto Rico's banking and contract laws were framed to define rights created by a certificate issued in Cuba to Cuban citizens cashable anywhere by a branch of a New York bank.22 Cuba's policies, of course, have changed considerably since 1959. Although international banking may be sensitive to the issue presented in this case, we find no Cuban interest in this case that can fairly be characterized as "relevant". Current Cuban law is hostile to United States banks and to Cuban emigrants.23 Cuba is unquestionably indifferent to the plaintiffs' claim against Chase.24

New York is an international banking center with a legitimate interest in Chase's foreign operations. The issue presented in this case is a matter of concern to New York. New York has an interest in preserving and extending the American banking custom "that demand [on "a New York banking entity"] will be made [on a certificate of deposit] before any ... liability is incurred by the bank".25 As the plaintiffs point out, this custom generally serves to protect banks from multiple liability and unnecessary litigation.

Our next factor, the protection of justified expectations, deserves particular weight on the facts of this case. According to the complaint, Edelmann and Saif went to Chase to protect some of their wealth from risks they associated with the coming Castro revolution. Chase described the certificates of deposit as a way to escape from impending changes in the Cuban legal order. Chase encouraged Edelmann and Saif by telling them that the certificates were "like American money".26 As we have emphasized before, if there is one source of law the parties did not want to govern their relationship it was Cuban law.27

The basic facts in this case distinguish it from the early cases that grew out of the Communist expropriation of deposits in Russia. The deposits were made in rubles in foreign branches of U.S. banks in Russia under Russian law before and after the revolution. There was no contractual liability or expectation of payment from the parent bank.28 Or the deposit was payable in rubles in Russia.29 Or the bank was relieved of liability by the defense of force majeure and by involuntary novation.30

Edelmann's and Saif's allegations receive indirect support from the relatively low interest rate that Chase offered on the certificates. In 1959 short-term United States government certificates of indebtedness paid an average of 4.11 percent.³¹ The certificates at issue here earned only 3.5 percent. This rate suggests that the certificates were payable in dollars in New York. In war-torn Vietnam, shortly before the fall of Saigon, certificates of deposit carried 19 percent interest.32 Edelmann and Saif gave up cash for credit. Had the certificates been payable only in Cuba, we would expect them to carry an interest rate high enough to reflect the "risk premium". They do not.

The record contains nothing to suggest that the parties contemplated repayment in Puerto Rico. Indeed, it is not clear from the record that Chase had a branch in Puerto Rico in 1959. The plaintiffs do allege, however, as we have emphasized, that Chase's officers told them "that Chase was an American bank with offices in New York"; that the certificates would be payable in dollars, and payable in the United States. We conclude that we can best satisfy the parties' justified expectations by applying New York law to these certificates.

We consider the next two factors together. Certainty, predictibility, and uniformity, are, as the Restatement acknowledges, important values in all areas of the law.33 They are especially desirable in cases involving negotiable instruments. This militates in favor of a simple rule such as the one set forth in section 214 of the Restatement. Section 214 directs courts to apply the law of the place of payment if it is specified in the instrument; otherwise, courts should apply the law of the place where the instrument was issued. There was no place of payment specified in the certificates here.

As the official comments state, however, certainty and predictability can be "purchased at too great a price".34 In this case, the section 214 approach would require us to apply the law of Cuba. But to apply Cuban law would be to defeat the plaintiffs' legitimate expectations in going to Chase in the first place. Furthermore, because of the special difficulties involved in determining the Cuban law that governs certificates of deposit,35 we conclude that the bright line approach of section 214 would promote confusion in this case, rather than certainty.

Predictability would not be furthered by any analysis that leads to Puerto Rican law. Predictability, of course, must be measured at a time when the parties are still free to modify their relationship. Unlike New York, Puerto Rico had no connection with this case at the time the certificates were issued. New York is where the bank drafted the world-wide uniform certificates, and the record supports the view that the parties contemplated performance in the United States and probably in New York. Puerto Rico is merely the current residence of the plaintiffs, and the place where they happened to seek performance. If this case were governed by the laws of Puerto Rico, the holders of similar certificates of deposit could choose to be governed by the laws of any country in the world where the issuing bank maintained a branch office. This could lead to unfettered forum shopping, to unpredictability and, in many cases, unfairness as well.36

The final factor in the Restatement approach considers "ease in the determination and application of the law to be applied". Although this factor is usually of secondary importance, in this case it completely disqualifies Cuban law. To begin with, we find no precedent to support the district court's application of Cuban law as it stood in 1959.37 The district court took "judicial notice that the Cuban government has repealed all laws that recognize private property and private commercial dealings ...". Accepting this statement as correct for the sake of discussion, we disagree with the court's conclusion that "[s]uch uncivilized doing has no bearing here ...". If this dispute is governed by Cuban law, it is governed by current Cuban law. If we cannot take judicial notice, we can make an educated guess; it is likely that Cuba has chosen not to give retroactive effect to post-revolutionary developments in its commercial law, but we have uncovered no authority to support or to deny this proposition.

Even if pre-Castro Cuban law governed the interpretation of the certificates, we would still be faced with some irreducible uncertainty. Cuba authorized the issuance of certificates of deposit in 1948.38 If we apply the fifteen year prescriptive period urged by Chase,39 it is arithmetically apparent that no certificates of deposit prescribed in Cuba before Castro's accession to power in 1959. Thus it is not surprising that neither Chase nor the district court refers us to any Cuban authority that is directly on point.

Chase justly describes Spain as the fountainhead of Cuban law.40 With respect to the legal attributes of a certificate of deposit in 1959, however, Spanish law does not specifically give us an answer. Certificates of deposit were not authorized in Spain until 1969.41 Indeed, guidelines issued at the end of the nineteenth century strictly prohibited Spanish banks from issuing negotiable "receipts of deposits".42 In short, any analysis of the problem in this case under Cuban or Spanish law must proceed by drawing an analogy between certificates of deposit and various civilian substitutes.

Chase suggests that Cuban law would treat its certificates of deposit as promissory notes are treated.43 This assertion is speculative, at best. The certificates themselves purport to represent deposits, not loans. Although bank deposits differ in several respects from the "regular" deposits described in the Spanish Civil Code,44 most post-civil war Spanish commentators have concluded that bank deposits are "irregular" deposits--and not loans.45 Under Spanish law "the cause of action of the depositor is created at the moment that the depositary denies return of the thing deposited, and not before".46 If the certificates in this case are treated as "deposits", Edelmann and Saif's cause of action did not begin to prescribe until they presented their certificates to Chase's branch bank in 1985.47

The distinction in Spanish commercial law between deposits and loans has been described as an "ancient and serious controversy".48 One respected commentator has pointed out that the word "deposit" derives from the latin verb "ponere", which suggests the placing of one's trust in another, while the Spanish legal term for a loan is related to the verb "mutare", which suggests a change in ownership.49 With the certificates at issue in this case, however, one finds both an entrusting and a transfer of legal ownership.

Other commentators state that "courts will resolve the [deposit vs. loan] question according to the circumstances, especially by the intentions of the parties".50 In this analysis, a "deposit" is made to achieve security and liquidity while a "loan" is made as a "productive investment".51 Though hardly a bright line test, this represents our best estimate of pre-Castro Cuban law.

There can be little doubt that Edelmann and Saif went to Chase for financial security at a time when Castro was about to take over the government of Cuba.52 It is arguable, however, that they sacrificed liquidity by accepting a six-month term. Several Spanish commentators have asserted that a term deposit should usually be treated as a loan.53 But the certificates in this case were readily negotiable. More importantly, they permitted early withdrawal with a penalty. If Edelmann and Saif had continuous access to the value of their certificates, it is difficult to see why, for prescriptive purposes, their contract with Chase should not be treated as an "irregular" deposit.

Like most banking law questions in civilian jurisdictions, the availability of early withdrawal on a certificate of deposit is governed by statutes and regulations rather than codal provisions. The Mexican bono de ahorro and the French bon de caisse a echeance fixe can always be sold back to the bank of issuance; not so the Italian buono fruttifero.54 Unfortunately the Cuban law on this point is unclear. The certificates themselves refer to regulations issued by the National Bank of Cuba, but we have been unable to find these regulations and they may not exist.55

In short, a proper analysis of this case under Cuban law would require us to grapple with post-revolutionary legislation that neither party has seen fit to compile, describe, cite, or even mention. In addition, if we seek to apply general civil law principles to the dispute we find that the commencement of prescription depends on whether a negotiable fixed-term deposit would be classified as an "irregular deposit" or a loan. But this depends on the characteristics of a "certificado de deposito" under Cuban banking practices and Cuban banking regulations that cannot be determined and cannot be borrowed from other civil law jurisdictions.

Puerto Rico is governed by the Uniform Negotiable Instruments Law, a forerunner of the U.C.C. Unfortunately the N.I.L. does not address the issue in this case with any precision.56 The next step would be to apply pre-N.I.L. Anglo-American principles.57 Chase contends that the N.I.L. itself directs us to Puerto Rico's civil and commercial codes.58 The most relevant Puerto Rican authorities are, as counsel for the plaintiffs conceded in oral argument, "somewhat schizophrenic".

In a strict civil law analysis, the case of Treasurer v. Banco Comercial suggests that Puerto Rico treats a certificate of deposit as a loan--at least for bankruptcy purposes.59 On the other hand, Banco Comercial and other cases that have been cited to us resort freely to "modern American jurisprudence".60 Professor Santiago's respected treatise on negotiable instruments uses a Massachusetts case to establish the holder in due course rule for certificates of deposit in Puerto Rico.61 As we point out, "modern American jurisprudence" favors the plaintiffs.

Puerto Rican law is more accessible than Cuban law, but it does not offer an easily determinable rule for deciding this case. New York, by contrast, has adopted law that is directly on point.62 Under the final factor in the Restatement test, this strengthens the other arguments for applying New York law.

We hasten to observe that a clear legal rule that is squarely on point represents more than a convenient short cut for judges. The final Restatement factor reinforces values that lie at the heart of choice of law doctrine.63 Mere simplicity does not replace the need for relevant contacts between the dispute and the state whose law is to be applied. But when these contacts exist, as they do in the present case, we find that the determinacy and applicability of the substantive laws at issue are legitimate factors in the overall choice of law analysis.

We conclude that the accrual of the plaintiffs' right to sue Chase on its certificates of deposit must be determined under New York law, the law controlling the parent bank--the ultimate obligor.

Under New York law, a certificate of deposit must be in writing and must include "an acknowledgment by a bank of receipt of money with an engagement to repay it".64 The certificates at issue here satisfy this definition. Because they provide a definite date for repayment, they are "time certificates of deposit".

In New York, as in 49 other states, "[a] cause of action against the obligor of a demand or a time certificate of deposit accrues upon demand ...".65 Edelmann and Saif demanded payment from Chase on April 3, 1985.66 A month later they filed this suit. Under New York's six year statute of limitations for breach of contract actions,67 Mrs. Edelmann and her husband are not barred from suing Chase on the certificates.

Considering the position of United States in international banking, our relationship to countries in the throes of revolution or coming out of revolution and attempting to provide a stabilized or stabilizing government, we are strongly pulled not to penalize an international bank. Giving full weight to this inescapable factor in the totality of circumstances incident to this case, we consider that on the facts, in this particular case, bearing in mind Chase Manhattan's representations, here and abroad, a fair reading of the certificates of deposits, especially as represented by the branch officers, requires that the expectations of the parties control the decision. Perhaps the plaintiffs did not make any demand earlier than they did because they thought that the value of their certificates of deposit had evaporated with all else that they lost to Castro. The hard truth is that they put in the hands of Chase Manhattan of New York $250,000, prodded into doing so by representations that they would be protected, against whatever Castro did. As the court said in Garcia:

Chase's debt to Dominguez and Garcia was not extinguished merely because it was forced to pay an equivalent sum of its own money to a third party.... Chase would not argue that its debt was extinguished if an armed gunman had entered its Vedado branch and demanded payment of a sum equal to the amount of its debt to Dominguez and Garcia.68

Here, Castro's Cuba armed with its powers of expropriation, entered Chase's Cuban branches and demanded payment of a sum equal to the amount of the deposit owed to Edelmann and Saif.

We have been unable to find a case directly on point on the question of prescription. There are cases, however, that deal with the liability of the parent bank for branch bank deposits expropriated by a foreign government. Most of these cases turn on the act of state doctrine. Although that doctrine is an affirmative defense, which may be associated at the trial, the cases are significant here because they deal with the expectation of the parties and the relationship between a parent bank and its branches located abroad.

In its answer to the complaint Chase mentions the act of state doctrine as one of its affirmative defenses, but Chase did not discuss the relevant cases in the district court or in our Court. The reason for this may have been the adverse decision of the Court of Appeals for the Second Circuit in Garcia v. Chase Manhattan Bank.69 The basic facts in Garcia are similar to the facts in the instant case.

Garcia v. Chase Manhattan involved two certificates of deposit amounting to $760,383.30, that a Cuban branch bank had issued in March and September 1958. As in the instant case, the bank officials had stated to the depositors that "Chase's main office in New York would guarantee the certificate and that they could be repaid [in dollars] by presenting the certificate at any Chase branch world wide".70 A divided Court held that the bank was liable for repayment in New York despite the expropriation by the Cuban government. That decision was based upon the factual finding of a jury that the deposit agreement was varied by the oral representations made by officers of the Cuban branch identical with the representations allegedly made to the plaintiffs here. Chase raised the issue that the Puerto Rican statute of limitation should be applied and barred recovery. The Court of Appeals looked to the law of New York.71 Under that law, the "cause of action on a certificate of deposit accrues upon demand. N.Y.U.C.C. Sec. 3-122(2). Demand occurs upon presentment and refusal to pay. Id; N.Y.U.C.C. Sec. 3-504. Garcia 's formal demand in this case occurred with the filing of her complaint"72 in 1976. That holding sustains the position of the plaintiffs in this case. With that issue out of the way, the Garcia Court held that the act of state doctrine did not bar recovery; the Cuban government action was not implicated; this was a private dispute between Garcia and Chase. "Where, as here, the debtor-creditor relationship was created primarily to ensure the safety of the creditors' funds, a debtor's payment to a third party of a sum equal to that owed the creditors does not extinguish the original debt. Thus, the actions of the Cuban government did not accomplish the cancellation of Chase's obligation to ensure the safety of Garcia's funds."73

In Garcia the jury made the factual finding that the oral representations made by officers of the Cuban branch bound the parent bank. These are the identical representations Edelmann and Saif alleged in their complaint. Their appeal is from a judgment dismissing the complaint; their alleged facts are accepted as true.

The case cited in the Garcia opinion, Vishipco Line v. Chase Manhattan Bank,74 involved certificates of deposit the plaintiffs purchased from a branch bank in Saigon. Chase closed the bank shortly before the North Vietnamese occupied Saigon and confiscated all commercial establishments including banks. When sued in New York, Chase contended, among other contentions, that it no longer owned the deposits and that the act of state doctrine barred any challenge to the validity of the governmental seizure. The Court of Appeals upheld the depositor's claim, quoting from one commentator:

[I]f the branch is closed, [in that case before nationalization] ... the depositor has a claim against the home office; thus, the situs of the debt represented by the deposit would spring back and cling to the home office.75

The Court also quoted Justice (then Judge) Cardozo's language from Sokoloff v. National City:

[W]hen considered with relation to the parent bank, [foreign branches] are not independent agencies; they are, what their name imports, merely branches, and are subject to the supervision and control of the parent bank, and are instrumentalities whereby the parent bank carries on its business....76

Sokoloff is distinguishable on the facts from the instant case, but its underlying premise is apposite here. When a branch is closed, the depositor has a claim against the parent bank; the situs of the debt represented by the deposit "springs back" to the home office. Ultimate liability for the debt of a branch rests upon the parent bank.

More recently, on July 8, 1988, in Trinh v. Citibank,77 involving a deposit in a savings account in the Saigon branch of Citibank, the Court of Appeals for the Sixth Circuit "placed the risk of loss arising from a political revolution [again in Vietnam] on the domestic home office of the American bank rather than on the individual depositors".78 The case for the depositor is not as strong as the case for Edelmann and Saif or for Garcia in at least two respects. (1) The Court of Appeals agreed with the district court that the law of Vietnam applied. Article 701 of the Vietnamese Code provided: "The debtor does not have to pay damages if his violation or nonperformance of contractual obligations is due to a fortuitous cause or a case of force majeure ".79 (2) Moreover, the deposit agreement itself provided that "Citibank does not accept responsibility for any loss or damage suffered by or incurred by any depositor resulting from government orders, laws or ... from any other cause beyond its control" and that payment would be made only in Vietnam in piasters.80 Interest was fixed at 19 percent. CitingSokoloff (see n. 76) and Heininger (see n. 75) the Court said, "it is a general banking principle that the home office is ultimately liable on a deposit placed in its foreign branch if, as here, the branch closes or otherwise wrongfully refuses to return a deposit".81 The situs of the deposit was no longer Vietnam at the time the appropriation took place but had "sprung back" to the head office of Citibank in New York.82 "[A]s recognized by the Court inVishipco [branch banking enabled] those deposits in foreign banking to gain more protection than they would have received had their money been deposited in locally incorporated subsidiaries of foreign banks".83 Again citing Vishipco, the Court said: "By operating a branch office in Vietnam, Citibank indicated to its foreign depositors that it accepted the risk that, in at least some circumstances, it would be liable elsewhere for obligations incurred by its branch, Vishipco, 660 F.2d at 863."84 In so doing, it "reasure[d] [those] depositors that their deposits [would] be safer with them than they would be in a locally incorporated bank".85 "[T]hese depositors expected that Citibank, with its worldwide assets and international reputation would be 'good' for the deposits if, for whatever reason ... Citibank Saigon could not return them".86 (Emphasis in the original) In the instant case there were not just "indications" and inferences to support the bank's liability; as in Garcia, there were allegedly explicit representations to the depositor that the certificates of deposit were good worldwide on demand.

The same year the court in Garcia held that the act of state doctrine did not release Chase of its obligation to depositors, the Court of Appeals of New York, on virtually identical facts, held that the act of state doctrine did relieve Chase of its obligation to branch depositors. Perez v. Chase Manhattan Bank.87 There is now pending on appeal, Wells Fargo Asia Ltd. v. City of Krink,88 in which the district court held that under the general corporate law of the Phillipines, obligations incurred at a branch are obligations of the bank as a whole.

In Perez, the court qualified its holding by stating: "Only when a debt or other obligation is not payable at all in the confiscating state would the act of state doctrine be inapplicable."89 In Garcia, as pointed out, a jury rendered a verdict favorable to the Cuban depositors; there was "a contractual undertaking to ensure the safety" of the depositors.90 Here, we do not say that the plaintiffs' certificates could not be cashed in Cuba or that the holder of the certificates may collect the amount of the deposit simply because the certificates permitted collection at any Chase branch anywhere in the world.

We conclude from our review of the decisions and the commentaries that the act of state doctrine has its limitations. Indeed, when the officers of a branch bank in a foreign country represent that a bearer certificate is guaranteed by the parent bank and will be paid at any branch in the world, and when it is evident to the bank officials that the bearer intends presenting it for payment outside of the foreign country where the branch is located, the bank's actions may amount to a separate guarantee that the deposit will be paid despite government expropriation of the deposit. See Garcia. The facts relating to the purchase of the certificates will, of course, be determined at trial. Here we hold that the statute of limitations on the parent bank's indebtedness begins to run from the date of demand.

The judgment of the district court is REVERSED and the case is REMANDED for further proceedings consistent with this opinion.

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