USCA1 Opinion

October 22, 1992

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-1389
FEDERAL DEPOSIT INSURANCE CORPORATION,
Plaintiff, Appellee,
v.
WORLD UNIVERSITY INC., ET AL.,
Defendants, Appellees.
__________
SANTA BARBARA CENTER CORPORATION,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. Perez-Gimenez, U.S. District Judge]
___________________
____________________
Before
Selya, Cyr and Stahl,
Circuit Judges.
______________
____________________
Norberto Medina-Zurinaga
_________________________

with

whom

Carlos J. Quilichini
______________________

Quilichini, Oliver, Medina & Gorbea were on brief for appellant.

___________________________________
Jeannette
E.
Roach,
Counsel,
Federal
Deposit
Insura
______________________
Corporation, with whom Ann S. Duross, Assistant General Couns
_______________
Colleen B. Bombardier, Senior Counsel, Robert D. McGillicuddy, Dep
_____________________
______________________
Senior Counsel, Larry H. Richmond, Counsel, Federal Deposit Insura
__________________
Corporation, Frank Gotay-Barquet and Feldstein, Gelpi & Gotay were
___________________
________________________
brief for appellee.
____________________
____________________

STAHL,
STAHL,
appellant

Santa

Circuit Judge.
Circuit Judge.
_____________
Barbara

In this appeal, defendant-

Corporation

("Santa

Barbara")

challenges the district court's entry of summary judgment in

favor

of

plaintiff-appellee

Corporation ("the FDIC").

Federal

Finding

court's ruling, we affirm.

BACKGROUND

Deposit

Insurance

no error in the district

BACKGROUND
__________
On September
$90,000

Santa Barbara obtained

loan from Banco Central, a Puerto Rico bank.

Barbara used
property in

the

proceeds of

the

loan to

the municipality of Bayamon,

Bayamon property").
issued a

10, 1975,

Santa

purchase

real

Puerto Rico ("the

In exchange for the loan, Santa Barbara

note in the

with interest on

principal amount of

demand to

bearer.

The

$90,000, payable
note was

secured

with a mortgage on the Bayamon property.

Subsequently, on September 15, 1977, Santa Barbara
sold

the

Bayamon

property

Development Services, Inc.

sale reflects

to

International

("International").

that International agreed to

note and accrued interest "when due."

so

agreed, it

withheld

the value

purchase price paid to Santa Barbara.

2

Educational
The deed

of

pay the $90,000

Because International
of

the note

from

the

The
whereabouts

record of
of the Santa

this

case does

not indicate

Barbara note until

June of 1983,

when it

appears in International's possession

pending

in the Puerto Rico Superior Court.

Co.
___
6,

the

in a lawsuit

See Union Trust

___ ___________

v. World Univ., Inc., No. 83-2933 (P.R. Super. Ct. July

_________________
1983).

federally

In that

case, Union Trust

insured

bank

in

University, Inc. ("World"), a

debt.

The Puerto

against

World.

pledged

Puerto

Santa

Rico,

sued

Superior

Court entered

reveals that

to the Puerto Rico Superior

Barbara's

that Union

bearer demand

became a

judgment

International,

guarantee of payment of World's debt to Union.

also indicates

World

Puerto Rico corporation, on a

The judgment

although not a party

suit,

Rico

Company ("Union"), a

holder of

Court law
note

as

The judgment
the $90,000

note.
In December of 1983,

Union was ordered closed and

the FDIC was appointed its receiver.

Among Union's assets,

FDIC-receiver found

the facially valid Santa

Barbara note.

FDIC-receiver

sold

FDIC

corporate
Santa

then

capacity.

the

note

FDIC-corporate

to

the

in

its

commenced suit against

Barbara for payment of the note and moved for summary

judgment.

Santa Barbara responded with

a cross-motion for

summary judgment, asserting that

the note had been

paid by

International.
The district court granted
so doing, the court

the FDIC's motion.

ruled, inter alia, that the FDIC

_____ ____

In

was a

holder in due course of a facially valid bearer note and, as

such, was entitled to judgment on it as a matter of law.

We

agree.1

DISCUSSION
DISCUSSION
__________
I. Standard of Review
______________________
Summary
pleadings,

judgment

depositions,

admissions on

answers

file, together

show that there is

is

appropriate
to

where

interrogatories,

with the affidavits,

"the
and

if any,

no genuine issue as to any material fact

and

that the moving

matter of

law."

party is entitled

Fed.

R. Civ. P.

to a

judgment as a

56(c); see also

___ ____

Celotex
_______

____________________
1To further support its ruling, the district court also
relied on the protections afforded the FDIC by 12 U.S.C.
1823(e) (1989).
Because we find that the FDIC, as a holder
in due course, is entitled to recover on the note, we do not
address the applicability of 12 U.S.C.
1823(e) to this
dispute.
4

Corp. v. Catrett, 477

_____
_______
v.

U.S. 317, 323 (1986); Aponte-Santiago

_______________

Lopez-Rivera, 957 F.2d 40,

____________

burden is upon
averring `an

the moving party to

absence of

party's case.'"
(1st
burden

40-41 (1st Cir.

"put the ball

evidence to support

The

in play,

the nonmoving

Garside v. Osco Drug, Inc., 895 F.2d 46, 48

_______
_______________

Cir. 1990) (quoting Celotex,

_______
then

1992).

shifts

to

the

477 U.S. at

nonmovant

to

325).

establish

"The
the

existence of at least one fact issue which is both `genuine'

and `material.'"

Id. (citations omitted).

___

whether factual issues

light

most

reasonable inferences favorable to them."

Id.
__

plenary.

Hoffman
_______

the

record "in
and

review

to

read the

nonmovants

Our

amiable

exist, we

In determining

of

Moreover, we

district

court's reasoning.

entry of

summary judgment

Roque,
_____

judgment

ruling

all

is

v. Reali, No. 91-1703, slip op. at 9 (1st

_____

Cir. August 27, 1992).

ground made

summary

indulge

the

are not limited to the

Instead,
on any

manifest by the

we may

"affirm the

independently sufficient

record."

Quintero
________

v. Aponte_______

No. 92-1227, slip op. at 3-4 (1st Cir. September 10,

1992) (quoting United States v. One Parcel of Real Property,

_____________
___________________________
960 F.2d 200, 204 (1st Cir. 1992)).

II. Law to be Applied

______________________
5

As an initial matter, we note

some

that there has been

confusion between the parties to this appeal as to the

applicable

law.

Before

litigated primarily
law, but

on the basis of

made passing

common law.

As

the district

court, the

parties

Puerto Rico commercial

references to federal

statutory and

a result, the district court's

holding was

anchored predominantly in Puerto Rico law.

The FDIC now urges the application of federal law.
We have previously stated that federal law applies where, as
here,

the FDIC sues in its corporate capacity to collect on

obligations acquired from the receiver of an insolvent bank.

See,
___

e.g., Federal Deposit Ins. Corp. v.

____ ____________________________

Ponce, 904 F.2d

_____
Ins. Corp. v.
__________
Cir. 1987).
rule

where

parties.

740, 745 (1st

P.L.M. Int'l, Inc., 834 F.2d

___________________
Yet, we have also
the federal

248, 252

(1st

noted an exception to

this

question

ordinarily will

for

the first time on

No.

91-2337, slip

(citing

Cir. 1990); Federal Deposit

________________

is

Municipality of Ponce,
_______________________

Moreover, we

Municipality of
_______________

Clauson

op.

v. Smith,

904

raised
F.2d

not entertain

appeal.
at 9

not

See
___
(1st

823

by

at

the

745.

arguments made

Buenrostro v. Collazo,
__________
_______
Cir. August

F.2d

660, 666

26,

1992)

(1st

Cir.

_______

_____

1987)).

Here, however,
because,
same.

in each
Under

FDIC,
note.

regime, the

both

principles that

Puerto

("`Holder'

need

P.R.

Laws

Rico

law

means the payee or

tit.

addressed

essentially the
the

hornbook

inform federal

law, the

a bearer note,
Ann.

not be

analysis is

necessarily would

as possessor of
See
___

the issue

and

is a holder
19,

381(8)

indorsee of a

of that
(1989)

bill or note,

who is in possession of it, or the bearer thereof."); U.C.C.

1-201(20) (1989)
possession
to .

name.

means a

of . . . an instrument

. . bearer or

instrument

("`Holder'

in blank.").

is entitled

P.R. Laws

Ann.

person

who is

in

. . . issued or indorsed
A holder

of a negotiable

to enforce

payment in

tit. 19,

91

("The

his/her own
holder of

negotiable instrument may sue thereon in his[/her] own name.

.

. .");

U.C.C.

3-301

("The

holder of

an

instrument

whether or not [s/]he is the owner may . . . enforce payment

in his[/her] own name.").
the rights of a holder.
19,

92; U.C.C.

free from

3-302(1).

instrument free
free from

19,

due course has

See generally P.R. Laws Ann.

___ _________

and defenses to it.

97 ("A holder in

tit.

available to

See P.R.
___

due course holds the

from any defect of title

defenses

all

S/he also takes the instrument

most claims on it

Laws Ann. tit.

and

A holder in

of prior parties,

prior parties

among

themselves. . .

."); U.C.C.

3-305 ("To the

extent that a

holder is a holder in due course [s/]he takes the instrument

free from
and (2) all
whom

(1) all claims to

defenses of

the holder

has not

it on the part

any party to
dealt except

of any person;

the instrument

with

[certain delineated

"real" defenses
Finally, the

not

applicable to

maker of a negotiable

s/he will pay the

time of his/her
111; U.C.C.

the

instant

case].").

instrument engages that

instrument according to its tenor

engagement.

See P.R. Laws Ann.

___

at the

tit. 19,

3-413(1).

III. Santa Barbara's Arguments

_______________________________
In its
Barbara

effort to

counter

makes five arguments:

infirmities in the note; (2)

such authority,

(1) the FDIC

Santa

had notice of

the FDIC tacitly consented

to

recognize International, and not Santa Barbara, as liable on

the

note;

(3)

the note

unreasonable length of

was

negotiated

to

the FDIC

time after it was made;

an

(4) because

the note was not delivered to the FDIC by Santa Barbara, the
FDIC cannot enforce
note

was paid

by

it against Santa
International.
8

Barbara; and (5)

Though Santa

the

Barbara's

brief

is not entirely clear

arguments
court's

on this point,

appear directed towards

ruling that

the FDIC

while the fifth seems

the first four

challenging the district

is a

holder in

due course,

to be asserted as a defense

Barbara's obligation as

the note's maker.

to Santa

We address each

argument in turn.

A. Notice of Infirmities
________________________
Santa Barbara

is correct in asserting that notice

of defenses or infirmities
course status.

in a note defeats holder

See P.R. Laws Ann. tit. 19,

___

in due

92 ("A holder

in due course is a holder who has taken the instrument under

the

following conditions:

negotiated
infirmity

to

him[/her]

. . .
[s/]he

in the instrument or

course

without

is a

holder who

notice

of

any

title of the

3-302(1)(c) ("A holder in

takes

against or claim

person.").

Santa

been aware

of two facts

the

no

it was

the instrument

. .

notice that it is overdue or has been dishonored or

of any defense

that

had

the time

defect in the

person negotiating it."); U.C.C.

due

that at

note

simultaneously

to it on

the part of

Barbara contends that the FDIC

was

that would have

defective:

possessed

the

(1)
note and

put it
that
owned

any

must have
on notice

International
the Bayamon

property which secured

Union only intended

payment of

the note;

and (2)

to acquire a mortgage over

that

the Bayamon

property, not the note

itself, in accepting International's

pledge

World

on

behalf

of

in

1983.

Santa

Barbara's

contention fails to withstand factual and legal scrutiny.

First,
evidence in
that
the

Santa

support of

Barbara

not

its allegation

point

to

that the FDIC

any
knew

International owned the Bayamon property and possessed

note simultaneously.

The

judgment and the note do not

Moreover,

Santa Barbara

of these documents
such, Santa

Puerto Rico

assert that

the

to investigate beyond the face

when it acquired

Barbara's allegation

factual evidentiary support.

Superior Court

themselves reflect this fact.2

__________

cannot seriously

FDIC was under an obligation

As

does

the note from

of notice

Union.3

is without

Second, a

plain reading

of the 1983

Superior Court judgment undercuts Santa

Puerto Rico

Barbara's assertion

____________________
2Nowhere is it argued that the FDIC had before it a title
search or a deed to the Bayamon property, the only documents
in the record that could have indicated the property's owner
in 1983, when the FDIC purchased Santa Barbara's note.
3Any such obligation would undermine Congress's desire to
promote and facilitate purchase and assumption transactions,
wherein FDIC-corporate purchases assets from FDIC-receiver,
because these transactions must be completed in great haste.
See Federal Deposit Ins. Corp. v. 604 Columbus Ave. Realty
___ ___________________________
_________________________
Trust, 968 F.2d 1332, 1349-50 (1st Cir. 1992).
_____
10

regarding
makes

Union's intentions

clear

that

guarantee to the
holder of the
absence

of

the

at that

mortgage

time.

would

The judgment

serve

only

as

note and that Union would be the owner and

note.4

In

light of these

other evidence,

there

Barbara's

argument that the FDIC had

intending

to

acquire

only

is

facts and in
no merit

to

the
Santa

notice that Union was

a mortgage

over

the

Bayamon

property, and not the note itself.

Finally, even were the
of such facts when
not

made

any

constituted

FDIC to have had knowledge

it acquired the note, Santa

argument

notice of

that

this

knowledge

an "infirmity

in the

Barbara has
would

have

instrument or

defect in the title of the person negotiating it," P.R. Laws

Ann. tit. 19,

92(4),

or notice that

the instrument

____________________
4Specifically, the judgment provides:
In guarantee of the obligations listed
herein, [World] is bound to [Union] for
the following:
a) Second mortgage for $90,000
in principal as guarantee to a
__ ____________
Bearer note with 12% yearly
interest due on demand. . . .
To
establish by
means of
corresponding
clarification
document, that [Union] is the
______________
owner
and holder
of said
______________________________
mortgage note.
_____________
(emphasis supplied).
11

had

been "dishonored" or
claim to

was subject to

it. . . ." U.C.C.

Santa Barbara

a "defense against

3-302(1)(c).

has failed to assert,

that knowledge

of these

holder

course status.

in due

facts

Put another way,

let alone demonstrate,

would deprive
We

litigants that "issues adverted

or

the FDIC

have repeatedly

of

warned

to in a perfunctory manner,

unaccompanied by some effort at developed argumentation, are

deemed waived."
1261 (1st
F.2d

See, e.g., Elgabri v. Lekas, 964 F.2d 1255,

___ ____ _______
_____

Cir. 1992) (quoting United States v. Zannino, 895

_____________
_______

1, 17 (1st Cir.), cert. denied, 494 U.S. 1082 (1990)).

_____ ______

Accordingly,

Santa

Barbara's

"notice

of

infirmities"

argument must fail.

B. Tacit Consent
________________
Santa

Barbara

consented

to

obligation

on the note,

together

next

argues

International's

with

the

1977

and that such

cancellation

of

that

Union

assumption

tacitly
of

the

consent, when taken

the

International's alleged payment, discharged

note

through

its obligation.

We disagree.
We have
Rico

law, a

previously recognized that,

lender's

tacit

consent

to a

under Puerto
third

party's

assumption of liability on a

note and acceptance of payment

12

combine

to cancel the note and preclude the FDIC from later

recovering

thereon.

See
___

Federal Deposit Ins. Corp.

____________________________

Bracero & Rivera, Inc.,

________________________
1990).

However,

895 F.2d

the situation in

824,

826-28 (1st

v.
Cir.

Bracero & Rivera bears

_________________

little resemblance to the facts in the case before us.

Bracero & Rivera also
_________________
note, payable to bearer on
failed

bank.

accepted

from

prior to
a

Additionally, the bank issued

the

defendant

which

facially valid

demand, found in the files of

However,

payment

involved a

third

failure,
party

the

on

contained

the

following

"cancellation of [defendant's] loan 25-85-70-9."

this

cancellation

was

in

the FDIC's

bank had

the

a credit voucher in

possession

debt.5
favor of

notation:
Notice of
at

all

relevant times.

See generally id. at 825-29.

___ _________ ___

The district
judgment
ruled

in favor

that,

consent to

court in

Bracero & Rivera

_________________

of defendant.

under

Puerto

In

Rico law,

so doing,
the

entered
the court

lender's

tacit

the third party's assumption of liability on the

____________________
5The

note in Bracero & Rivera was originally secured by a

_________________
mortgage on a housing development.
The maker of the note
sold the housing development to the third party, who
retained enough money from the purchase price to pay off the
maker's note. Upon making an additional loan to the third
party, the bank retained from the loan enough money to pay
the note. Thus, the bank accepted payment on the note, and
the third party owed the bank a new debt. See id. at 825___ ___
26.
13

note
826.

and acceptance of payment discharged the note.

We

affirmed,

cancellation would

noting

that

the

FDIC's

preclude it from recovering

Id. at
___

notice

of

as a holder

in due course.

Id. at 829.
___

In the
evidence,

case at bar,

such as

the

however, there is

cancellation voucher

Rivera, indicating that

______

no record

in Bracero &
__________

Union, at the time that it acquired

the note as security for its judgment against World, tacitly

consented to

relieve Santa Barbara of its obligation on the

note and look solely to International

Santa Barbara's argument

for payment.

Despite

to the contrary, we simply

do not

see how Union's acceptance of the note with knowledge of the

1977 deed agreement between International and Santa Barbara,
if Union
intent

had such knowledge,6

on

Union's

International
Union

did

part

liable on

so

intend,

the

tacitly
note.

the record

indicating that the FDIC

the doctrine of tacit

to

implies the existence

consent

of an

to

hold

Furthermore, even
is

devoid

of evidence

had notice of this intent.

consent, if applicable to

if

Thus,

this case,

would not deprive the FDIC of holder in due course status.

____________________
6The record does
knowledge.

not indicate that Union

14

actually had this

C. Unreasonable Time
____________________
Relying on
Barbara next argues
holder in

that neither

due course because the

to Union and the

its

P.R. Laws

issuance.7

first time in

Ann. tit. 19,

93,

Union nor the

Santa

FDIC is

instrument was negotiated

FDIC an unreasonable length of

Santa Barbara raised

time after

this argument for the

its motion requesting that the district court

alter or amend its judgment.

Rule 59(e) motions
not initial consideration."

See Fed. R. Civ. P. 59(e).

___
are "aimed at reconsideration,
__
Harley-Davidson Motor Co., Inc.
_______________________________

v. Bank of New England, 897

____________________

F.2d 611, 616

(1st Cir. 1990)

(citing White v. New Hampshire Dept. of Employment Sec., 455

_____
______________________________________
U.S. 445, 451 (1982)) (emphasis in original).
should not
should,

use them

have

been

to "raise
made

before

Thus, parties

arguments which
judgment

could, and

issued."

Id.
___

(quoting Federal Deposit Ins. Corp. v. Meyer, 781 F.2d 1260,

__________________________
_____
1268 (7th Cir. 1986)).

Motions under Rule 59(e) must either

clearly establish

a manifest error

of law or

must present

____________________
7P.R. Laws Ann. tit. 19,

93 states:

Where an instrument payable on demand is

negotiated an unreasonable length of
time after its issue, the holder is not
deemed a holder in due course.
15

newly discovered evidence.

Meyer, 781 F.2d at 1268.

_____

may not be used to argue a new legal theory.

Here, there was no
not have

made its

district

court

neither

district

Id.
___

reason why Santa Barbara could

"unreasonable time" argument

entered judgment.

reveals a manifest error of

discovered evidence.

As a

court's refusal

based on this argument.

They

Moreover,

before the
the argument

law nor presents newly

result, we find no error in

to

amend or

alter its

the

judgment

D. Improper Delivery
____________________
Santa Barbara's improper delivery argument suffers
a similar fate.

To the extent that Santa Barbara

made this

argument at all before the district court, it did so only in

a

most

perfunctory

arguments

made in

waived

on appeal.

manner.
a

It

is

perfunctory manner
See,
___

well

settled

below are

e.g., Buenrostro,
____ __________

slip op.

that
deemed
at 9

(citing McCoy v. Massachusetts Inst. of Technology, 950 F.2d

_____
_________________________________
13, 22 (1st Cir.
Ct. 1939 (1992)).

1991), cert. denied, ___ U.S.

_____ ______
We see

___, 112 S.

no reason to depart from ordinary

practice under the present circumstances, and accordingly we

treat the argument as waived.

16

E. Payment
___________
Having rejected Santa Barbara's challenges
district

court's finding that the

course, we

need not

payment in an
party has paid
note

from

FDIC is a

holder in due

address Santa Barbara's

allegation of

extended manner.
a previous

The defense

holder in order

is a personal defense.

97 ("A

See
___

that a

third

to discharge

P.R. Laws Ann. tit. 19,

holder in due course holds the instrument . . . free

any

defenses

themselves, and

available

may enforce

the full amount thereof

to

prior

(defenses

personal defenses).

not

assertion

of

instrument for

S. Summers,

listed in

3-305.

As

payment cannot

See
___
a

Handbook of the
_______________
14-9,

U.C.C.

Personal defenses may

against holders in due course.

97; U.C.C.

among

against all parties thereon."); see

___

Law Under the Uniform Commercial Code,

_______________________________________
1980)

parties

payment of the

also James J. White and Robert

____

ed.

to the

at 573 (2d

3-305(2)

are

not be asserted

P.R. Laws Ann. tit. 19,

result,

defeat

the

Santa

Barbara's

FDIC's right

to

recover on the note.8

CONCLUSION
CONCLUSION
__________
____________________
8While evidence of payment would not change our analysis, we

note that there was no

record before us.

direct evidence of

payment in

the

17

Because

we find each of Santa Barbara's arguments

meritless, we affirm the judgment of the district court.

Affirmed.
________

18