Opinion ID: 593291
Heading Depth: 2
Heading Rank: 2

Heading: Law to be Applied

Text: 9 As an initial matter, we note that there has been some confusion between the parties to this appeal as to the applicable law. Before the district court, the parties litigated primarily on the basis of Puerto Rico commercial law, but made passing references to federal statutory and common law. As a result, the district court's holding was anchored predominantly in Puerto Rico law. 10 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. Municipality of Ponce, 904 F.2d 740, 745 (1st Cir.1990); Federal Deposit Ins. Corp. v. P.L.M. Int'l, Inc., 834 F.2d 248, 252 (1st Cir.1987). Yet, we have also noted an exception to this rule where the federal question is not raised by the parties. Municipality of Ponce, 904 F.2d at 745. Moreover, we ordinarily will not entertain arguments made for the first time on appeal. See Buenrostro v. Collazo, 973 F.2d 39, 44 (1st Cir.1992) (citing Clauson v. Smith, 823 F.2d 660, 666 (1st Cir.1987)). 11 Here, however, the issue need not be addressed because, in each regime, the analysis is essentially the same. Under both Puerto Rico law and the hornbook principles that necessarily would inform federal law, the FDIC, as possessor of a bearer note, is a holder of that note. See P.R. Laws Ann. tit. 19, § 381(8) (1989) ( 'Holder' means the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof.); U.C.C. § 1-201(20) (1989) ( 'Holder' means a person who is in possession of ... an instrument ... issued or indorsed to ... bearer or in blank.). A holder of a negotiable instrument is entitled to enforce payment in his/her own name. P.R. Laws Ann. tit. 19, § 91 (The holder of a 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.). A holder in due course has all the rights of a holder. See generally P.R. Laws Ann. tit. 19, § 92; U.C.C. § 3-302(1). S/he also takes the instrument free from most claims on it and defenses to it. See P.R. Laws Ann. tit. 19, § 97 (A holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses available to 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 (1) all claims to it on the part of any person; and (2) all defenses of any party to the instrument with whom the holder has not dealt except [certain delineated real defenses not applicable to the instant case].). Finally, the maker of a negotiable instrument engages that s/he will pay the instrument according to its tenor at the time of his/her engagement. See P.R. Laws Ann. tit. 19, § 111; U.C.C. § 3-413(1).