it. Clearly, § 1823 cuts down on the number of defenses that might operate to reduce the value of a bank's assets compared to how they appeared at earlier FDIC evaluations. Thus, defendants could not successfully argue that § 1823(e) in no way furthers the legitimate objective of helping the FDIC to accurately evaluate the banks that it insures.
Defendants' arguments focus on the analogy between § 1823(e) and the holder in due course doctrine. They state the principle that a holder in due course loses his preferred status if he takes a note with notice of a personal defense. They then argue that it is unfair if the FDIC can maintain its preferred status even if it took with notice of the personal defense.
It is true that some courts have rationalized § 1823(e) in terms of the holder in due course doctrine. See Campbell Leasing, Inc. v. FDIC, 901 F.2d 1244, 1250 (5th Cir. 1990); Chatham Ventures, Inc. v. FDIC, 651 F.2d 355, 363 (5th Cir. 1981). Nevertheless, the courts acknowledge that the analogy is not a perfect one. Chatham, 651 F.2d at 363; see also Sunbelt Sav. v. Amrecorp Realty Corp., 742 F. Supp. 370, 371 (N.D.Tex. 1990)("the FDIC need not meet any traditional requirement for holder in due course status")(emphasis in original). As shown above, Congress was attempting to ensure that the FDIC would have notice of possible defenses the first time the FDIC conducted an examination, rather than at the time that the FDIC took the note. Because defendant does not challenge the legitimacy of this objective and because the Supreme Court carefully recognized and explained this objective in Langley, this Court accepts that government objective as legitimate.
Finally, defendants attempt to challenge the rationality of the specific requirements listed in §§ 1823(e)(1)-(4). Defendants' claims, however, are based on hypothetical situations rather than on the facts in controversy in the case in bar. Therefore, it would be improper for this Court to consider those claims.
For the reasons discussed above, this Court finds that neither of the defendants' arguments has merit and that the FDIC is entitled to summary judgment as a matter of law. The defendants opposing the FDIC's motion for summary judgment (see footnote 2 above) are liable for the obligations they accepted when they signed the promissory notes. The FDIC is entitled to recover to the full extent of those obligations, as it requests in its motion for summary judgment.
An Order consistent with the foregoing has been entered this day.
ORDER - January 23, 1991, Filed
We have considered plaintiff FDIC's motion for summary judgment, defendants' opposition, and the FDIC's reply. There being no genuine issues of material fact and in accordance with the foregoing Memorandum Opinion, it is by the Court this 23rd day of January, 1991,
ORDERED that plaintiff's motion for summary judgment is granted, and it is
ORDERED that summary judgment be entered against each of the twenty defendants and in favor of plaintiff, as requested in the prayer for relief at page 5 of the Complaints as follows:
(a) each of the twenty defendants shall pay plaintiff the aggregate amount of outstanding principal and accrued interest as of September 15, 1989 under the promissory note sued upon by plaintiff;
(b) each of the twenty defendants shall pay plaintiff interest on the foregoing amount from September 16, 1989 as provided under the promissory note sued upon by plaintiff and by law until the judgment is paid in full;
(c) each of the twenty defendants shall pay plaintiff an amount equal to (1) 15% of the unpaid balance of principal and interest under the promissory note as attorney fees, and (2) costs of this suit; and
(d) each of the twenty defendants shall pay plaintiff an amount equal to 2% per annum, in excess of the interest rate, computed on the unpaid balance, and relating back to the due date of the promissory note sued upon; and it is
ORDERED that the above-captioned cases are dismissed with prejudice.