Document: 484 U.S. 86 108 S.Ct. 396 98 L.Ed.2d 340 W.T. LANGLEY, et ux., Petitionersv.FEDERAL DEPOSIT INSURANCE CORPORATION. No. 86-489. Argued Oct. 14, 1987. Decided Dec. 1, Syllabus To finance the purchase of land in Louisiana, petitioners borrowed money from a bank insured by Federal Deposit Insurance Corporation (FDIC) and, consideration for loan, executed note, collateral mortgage, and personal guarantees. When failed to pay an installment due on renewal filed suit principal interest Louisiana court, which was removed diversity grounds District Court. Petitioners alleged, as defense against bank's claim, that their note had been procured misrepresentations overstating amount mineral acres tract, falsely stating there were no outstanding leases property. No references alleged representations appeared documents petitioners, records, or minutes board directors loan committee. While pending, official closed because its unsound condition appointed FDIC receiver. The ultimately acquired petitioners' substituted plaintiff this lawsuit. Court granted summary judgment FDIC, Appeals affirmed, holding word "agreement" provision Act 1950, 12 U.S.C. § 1823(e), encompassed kinds material terms warranties asserted misrepresentation 1823(e)'s requirements not met, barred. Section 1823(e) provides tending diminish defeat FDIC's "right, title interest" any asset under section shall be valid unless it have (1) writing, (2) contemporaneously with acquisition asset, (3) approved committee reflected committee, (4) continuously, time execution, record bank. Held: A payment including truth express warranty, is part attach. Because constituted such did meet statute's requirements, they cannot here. Pp. 90-96. (a) limited promise perform act future. essence made certain regarding land, performance obligation repay loan. As used commercial contract law, term often has wider meaning than promise, embraces upon performance. This common must assigned usage if fulfill intended purposes allowing federal state examiners rely records evaluating assets, ensuring mature unusual transactions senior officials, preventing fraudulent insertion new terms, collusion employees, when appears headed failure. Cf. D'Oench, Duhme & Co. v. 315 447, 62 676, L.Ed. 956. 90-93. (b) There merit argument even concerning existing fact can sometimes constitute agreement covered at least does do so knowledge note. Neither fraud inducement nor thereof relevant section's application. conceivable reading could cause cover representation warranty bona fide but exclude one fraudulent. here factum, would render void take out instead only inducement, rendered voidable void. therefore transfer title, enough "title purpose 1823(e). Even power engraft equitable exception plain equities invoke are statute regards predominant. 93-96. 792 F.2d 541 (CA5 1986), affirmed. SCALIA, J., delivered opinion unanimous William C. Shockey, Baton Rouge, La., petitioners. Richard G. Taranto, New Haven, Conn., respondent. Justice SCALIA 1 Maryanne Grimes Langley seek reversal decision United States Fifth Circuit granting claim promissory signed (1986). rejected contention facts barred section. We certiorari resolve conflict Courts Appeals. 479 1028, 107 871, 93 826 (1987). Compare Gunter Hutcheson, 674 862, 867 (CA11), cert. denied, 459 826, 103 60, 74 63 (1982); Hatmaker, 756 34, 37 (CA6 1985) (dictum). 2 * Langleys purchased Pointe Coupee Parish, 1980. purchase, $450,000 Planters Trust Savings Bank Opelousas, FDIC. In renewed several times, last being March 1982, $468,124.41. 3 October 1983, after first brought present trial court. suit, diversity, Middle where consolidated seeking more $5 million damages others. complaint own Planters' 1980 notes misrepresentations. particular, property conveyed consisted 1,628.4 acres, 1,522, included 400 contained 75, property, were.1 reference these Langleys, 4 April 1984, conducted examination during learned substance lawsuits allegations On May 18, Commissioner Financial Institutions State thereupon undertook financing assumption transaction pursuant 1823(c)(2), all deposit liabilities most assets assumed another FDIC-insured community. greatly exceeded value paid assuming $36,992,000, received, inter alia, Langleys' 1982 5 lawsuit, moved claim. motion, 615 F.Supp. 749 (WD La.1985), sustained appeal. held defenses those F.2d, 545-546. petition issue whether, action corporate capacity bars form promise. II 6 13(e), 64 Stat. 889, amended, provides: 7 "No tends right, [FDIC] section, either security person persons claiming adverse thereunder, obligor, bank, approval said been, continuously,from bank." A. 8 Petitioners' foregoing encompasses agree. 9 matter contractual analysis, truthfulness See Corbin, Contracts p. 31 (1963) ("[T]ruth [of warranty] precedent duty other party"); accord, S. Williston, 673, pp. 168-171 (3d ed. 1961); J. Murray, 136, 275-276 (2d rev. 1974). "a . promise," Restatement (Second) 3, Comment (1981), Uniform Commercial Code, example, defines "the bargain parties found language implication circumstances. ." U.C.C. 1-201(3), U.L.A. 44 (1976). Quite obviously, parties' without conditions performance, two elements contracts constructed. E. Farnsworth, 8.2, 537 (1982) ("[P]romises, impose duties, conditions, make duties conditional, main components agreements"). It seems us purposes. 10 One allow worth assets. Such evaluations necessary examined fiscal soundness authorities, see §§ 1817(a)(2), 1820(b), deciding whether liquidate 1821(d), provide (and liabilities) (c)(4)(A). kind evaluation, "with great speed, usually overnight, order preserve going concern avoid interruption banking services." 865. authorities able reliable seemingly unqualified subject undisclosed conditions. 11 second implicit requirement merely file examination, also become "contemporaneously" making officially recorded These latter ensure prevent adequately fulfilled element fundamental excluded "agreement." That covers promises acts future confirmed leading case area prior enactment 1950. 956 (1942), transaction. maker failure (that is, acondition maker's performance), based between called payment. "secret agreement" tend deceive authorities. Id., 460, S.Ct., 681. stated "lent himself scheme arrangement whereby authority likely misled," basis Ibid. (emphasis added). safely assume Congress mean interpreted much narrowly permissible disserve principle applying FDIC-acquired notes. Certainly, who signs facially unwritten unrecorded repayment lent mislead consists counterpromise (as ) warranted fact. B 13 fallback position conclude, however, neither 14 effectively acknowledge concede nature lose status "agreement". supra, 89, n. 1. presence relevant, namely, question "ten[d] asset. 15 Respondent conceded oral real factum—that sort procures party's signature instrument true contents, 3-305(2)(c), 7, 241 (1977)—would entirely void, 163 Comments a, c; Farnsworth 4.10, 235, thus leaving "diminish[ed] defeat[ed]." Tr. Oral Arg. 24-25, 27-30. never contended, successfully, about acreage interests factum. clear renders 3-201(1), 127; 163, 235-236. conclusion textually compelled, produces result accord statute. If "interest" wide range voidable, mistakes innocent 152-153, 164. 16 Finally, applies. Nothing text support suggestion is: An knows it; transferable transferee voidability. 11.8, 780-781; cf. 127. really urging we so, borrower relied erroneous some consideration, harmed his protect assuring accordance Harm solvency fund) avoided acquiring insurer liable depositors' losses decides acquire 1821(f). harm caused occurs later conducts unable detect prompt invocation available protective measures, termination insurance. 1818 (1982 Supp. IV). Thus, insofar recording concerned, what crucial. But discussed earlier, 401, meant just ability acquisition. statutory assure prudent before made, collusive reconstruction officials borrowers (whose may well coincide fail). Knowledge substitute protection existed very moment concluded, former assurance all. 17 short opted certainty set forth meets them prevails know fails knew. rewriting hold otherwise. categorical course unusual. Under Article U.C.C., filing secured creditor over he aware. See, e.g., Rockwell Int'l Credit Corp. Valley Bank, 109 Idaho 406, 408-409, 707 P.2d 517, 519-520 (Ct.App.1985); Bloom Hilty, 427 Pa. 463, 471, 234 A.2d 860, 863-864 (1967); R. Anderson, Code 9-312:74, 298 1985); White Summers, 25-4, 1037 1980). 18 19 approval, statute, 20 Affirmed. Planters, liability notes, purchaser soon sale closed, payments until resold. nature. Brief 12.

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