Allcorn, J.c.c. (temporarily assigned).
This action has been brought seeking to recover the proceeds of a policy of life insurance, issued by defendant on the life of Salomon Present.
It would appear (and the court finds) that defendant The United States Life Insurance Company in the City of New York, a corporation of the State of New York, qualified and was authorized to engage in the business of life insurance in and by the Republic of Cuba in 1940. In May 1943 the insured, who was then a citizen of Cuba, resident in Havana, made written application to defendant through its Havana branch office for the issuance of a policy of insurance on his life. At or about the same time he was examined in Cuba by a physician designated for that purpose by defendant. The written application and the report of the medical examination were thereafter forwarded to defendant's home office in New York City where, after processing, the application was approved and a policy of insurance was issued and sent to the Havana branch office. The application, report of the medical examination and the policy all were written in Spanish.
When the policy was received in defendant's Havana branch office, it was, in accordance with the requirements of Cuban law, authenticated by defendant's attorney in fact in Cuba (the branch manager) by an endorsement on the face of the policy declaring that "the signatures of the foregoing officers [who executed the policy contract on behalf of the defendant] are authentic and that they are in the full exercise of their duties"; and the signature of the attorney in fact was, in turn, certified on the face of the policy by a notary public of Cuba as "authentic, same having been affixed in my presence." The policy was registered in the policy register and revenue stamps were affixed to it, also as required by Cuban law, after which it then was delivered to the insured. The initial premium was paid sometime during the first week of July 1943. At this juncture it might be well to note that all premiums required by the policy to be paid were in fact paid, and there is little question that all premium payments were made to defendant's representative in Cuba, in Cuban pesos.
The policy was a 23-year endowment. It bore the issue date of June 11, 1943 and insured the life of Salomon Present in the face amount of 5,000 pesos, which sum was payable to the insured if living on June 10, 1966, or to beneficiaries designated by the insured upon due proof of his death prior to June 10, 1966. The beneficiaries designated by the insured were the plaintiffs in this action, consisting of his wife Eva Present, and his two sons Isaac and David Present.
By the terms of the policy the proceeds were payable by defendant "at its office in Havana, Capital of the Republic of Cuba, or in the city of New York, United States of America." The policy provided further that all amounts payable thereunder "shall be paid in the national currency of the Republic of Cuba; [and] Moreover, wherever the words pesos and centavos or the respective symbols appear * * * they shall be construed as referring to the national currency of the Republic of Cuba, the currency in which this policy
was issued." All beneficiary changes were required to be endorsed on the policy "by the company at its office in Havana * * * or in New York City."
The death of the insured occurred on December 14, 1960, while he was still a citizen and resident of Cuba. He was survived by the three named beneficiaries. At the time of his death all of the beneficiaries were citizens and residents of Cuba.
Earlier, and culminating on January 1, 1959, the Castro group succeeded in completing its seizure of control of the government of Cuba. Recognition of the revolutionary group as the official government of Cuba was formally given by the United States of America on January 5, 1959. Although diplomatic relations between the two governments were severed early in 1961, recognition of the Castro government has never since been withdrawn by the United States Government.
In 1943, at the time of the application for and the issuance and delivery of the policy, both Cuban pesos and United States dollars were legal tender in Cuba. In 1948, however, Cuba created the National Bank of Cuba by its Law No. 13 of December 23, 1948. Pursuant to the authority contained in that Law No. 13, the President of Cuba on April 9, 1951, promulgated Decree No. 1384 which directed, in effect, that commencing July 1, 1951 the currency of the United States of America should cease to be legal tender in Cuba -- although it thereafter continued to circulate freely within Cuba for some time, apparently to the middle or latter part of 1959.
By Law-Decree No. 569, promulgated by the President of Cuba under date of December 1, 1952, the Currency Stabilization Fund was vested with authority, among other things, to "regulate the import and export of currencies and securities" (Article 1 (c)); all natural and corporate persons transferring funds "to foreign points by means of checks, transfers" and other similar type orders for payment (except in purely commercial transactions) were required
to file certificates that the funds being remitted were not "directly or indirectly destined to countries * * * subject to special exchange regulations" (Article 4), and excepting generally all "international banking or trade operations whatever their nature" (Article 3). Following the coming to power and recognition of the Castro government, the Council of Ministers on September 23, 1959 adopted Law No. 568, whereby the various acts prohibited by Law-Decree No. 569 of December 1, 1952, as well as other acts in addition thereto, were expressly made "felonies of monetary contraband" (Article 1).
Ultimately, relations between the governments of Cuba and the United States of America became something less than amicable. And when, on July 6, 1960, the United States Congress enacted legislation authorizing a reduction of the quota of sugar that might be purchased from Cuba (74 Stat. 330; 7 U.S.C.A. § 1158), Cuba retaliated with the adoption on July 6, 1960 of its Law No. 851 by its Council of Ministers. After a prefatory recital of Cuba's grievance against the United States concerning the reduction of the sugar quota, "which forces the Revolutionary Government to adopt all and whatever measures it may deem appropriate or desirable" for the protection of Cuba's interests, and a further recital that "Article 24 of the Fundamental Law of the Republic authorizes the forced expropriation of property," Law No. 851 provided in Article 1 thereof as follows:
"Full authority is hereby conferred upon the President and the Prime Minister of the Republic in order that, acting jointly through appropriate resolutions whenever they shall deem it advisable or desirable for the protection of the national interests, they may proceed to nationalize, through forced expropriations, the properties or enterprises owned by physical and corporate persons who are nationals of the United States of North America, or of the enterprises in which such physical and corporate persons have an interest, even though they be organized under the Cuban laws."
Under date of October 24, 1960 the President and the Prime Minister promulgated Resolution No. 3, which decreed in pertinent part:
"FIRST: The nationalization is provided, through forced expropriation, and therefore, adjudication is made in favor of the Cuban Government, in fee simple, of all properties and enterprises located in the national territory and the rights and actions derived from the operation thereof, which are owned by the natural or juridical persons who are natives of the United States of America, or operators of enterprises in which the natives of said country have a predominant interest, which are listed below:
Group XX -- Insurance Companies.
3. United States Life Insurance Co.
SECOND: Therefore, the Cuban Government is declared subrogated in the place and stead of the natural or juridical persons listed in the foregoing section in respect to the properties, rights and actions mentioned, as well as to the assets and liabilities constituting the capital of said enterprises.
FOURTH: Pursuant to the provisions of Article 3 of Law No. 851 of July 6, 1960, the following agencies and organizations are designated for the administration of the properties or enterprises ...