Previously, on 6 October 1936 a law had come into force in the Basque country, in which Bilbao was located, amending the constitution of all banks in the territory, and making provision for the appointments of new boards of directors.

It was recognised that Franco's government "exercised de facto administrative control" over the city and most of the Basque region at the time the appeal was heard.

Subsequently, on 22 August 1937 the Republican government passed its own decree moving the corporate seat of all banks from Bilbao to either Valencia or Barcelona.

He then affirmed that "the question of what body of directors have the legal right of representing the Banco de Bilbao ... must depend in the first place on the articles under which it is constituted.

Similarly, the court must treat the acts of the Republican government as a mere nullity in that area because they can exercise no de facto control.

The court dismissed these as they were merely statements by the notary that a person had appeared before them and asserted that a resolution had been passed granting Albisu authority.

The case has been cited with approval on numerous occasions, including by the House of Lords[6] and the Supreme Court,[7] and is generally accepted as correct as a statement of the law.