Opinion ID: 538506
Heading Depth: 3
Heading Rank: 1

Heading: Validity of the powers of attorney.

Text: 18 We must first determine whether the statute and the D'Oench doctrine bar our consideration of the mandates. 7 We conclude that they pass muster for they specifically are referred to in the collateral mortgage, and Landry signed both notes in his representative capacity, thus satisfying D'Oench concerns. See Templin v. Weisgram, 867 F.2d 240 (5th Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 63, 107 L.Ed.2d 31 (1989). Accordingly, we address the merits of River Villa's challenge to the validity of the powers of attorney. 19 River Villa vigorously asserts that it incurred no obligation to Sun Belt on the $1,585,000 promissory note, and its accompanying collateral mortgage, because the completed transaction bore no resemblance to the program contemplated by the individual partners when they signed the mandate authorizing Landry to act on their behalf. In attempting to invalidate its obligation, however, River Villa throws a wide loop, capturing a diverse cast of characters and circumstances well beyond those relevant to the issue at bar. It first contends that Landry incurred a debt for the partnership of over $3,000,000, nearly double the loan authorization in the powers of attorney. It arrives at this sum by adding to the $1,585,000 note given to Sun Belt a total of $1,432,000 in first mortgages held by others on some of the properties received by River Villa in the exchange. 8 That some of the properties received in the exchange were burdened with mortgages might be relevant to the validity of the exchange, but such does not affect the validity of the $1,585,000 promissory note Landry gave Sun Belt on behalf of River Villa to evidence its loan. 20 The relevant inquiry relates to the River Villa/Sun Belt transaction. Focusing on that we address River Villa's challenge to the transaction's essential validity because the $1,585,000 note exceeded by $35,000 the maximum authorized in the mandate. Is this variance of just over two percent de minimus? Was it subsequently ratified by the partnership as provided by La.Civil Code art. 3010? We pretermit the former and accept the finding and/or conclusion by the district court that the additional $35,000 was ratified when the partnership made payments on the note without protest or reservation. To the extent that this was a finding of fact by the district court it is protected by the clearly erroneous shield of Fed.R.Civ.P. 52(a). To the extent it was a conclusion of law, we perceive no reason to vary from the rule that we customarily defer to the district judge in a diversity case involving interpretation of the law of the state in which the judge sits. USX v. Tanenbaum, 868 F.2d 1455, 1457 (5th Cir.1989). 9 21 River Villa next asserts that Landry exceeded his authority by binding the partners jointly and solidarily on the promissory note despite the absence of specific authorizing language in the powers of attorney. River Villa correctly observes that the obligation of solidary liability may not be presumed but must be expressly undertaken. La.Civ.Code art. 1796. The solidary obligations undertaken on behalf of all parties-signatory in the Sun Belt promissory note is indeed express. River Villa contends, however, that the language of the mandate must be equally express. Civil Code article 2996 provides that [i]f it be necessary to alienate or give a mortgage, or do any other act of ownership, the power must be express. Article 2997 continues by listing the specific acts for which the granted power must be express, including, inter alia, the authority: 22 To sell or buy. 23 To incumber or hypothecate. 24 . . . . . 25 To contract a loan or acknowledge a debt. 26 To draw or indorse bills of exchange or promissory notes. 27 . . . . . 28 This listing is exclusive. See Hawthorne v. Kinder Corp., 513 So.2d 509 (La.App.1987). 29 The power of attorney specifically authorized Landry to borrow $1,550,000 from Sun Belt on such terms and conditions as he deems fit and proper in his sole discretion, and to secure that loan by mortgage on [the Gonzales properties]. We hold that the execution of the promissory note and collateral mortgage was consistent with the powers of attorney and Louisiana law. 30 River Villa's final challenge based on the disbursement of the loan proceeds is barred by the D'Oench doctrine. The mandates do not address disbursement. River Villa therefore may not urge disbursement as a defense to the claim by FSLIC. 31