dissenting.
I must dissent with the Court’s main holding in this case. The question is whether the D’Oench, Duhme doctrine1 and it’s so-called codified counter-part,2 12 *1530U.S.C. § 1823(e),3 estop ab defenses to the repayment of loans of failed banks which the FDIC has assumed in receivership. Is the doctrine so powerful and all encompassing that nothing can stand in its way, including federal statutes protecting investors? In my judgment, the answer has to be no. There is a limit to the protection needed by the FDIC.
I.
I do concur with the Court on several points. It is well established that when the D’Oench, Duhme doctrine applies, 1) the debtor will not be allowed to frame his defenses as an affirmative cause of action, and 2) bridge banks will be afforded the same protection as the FDIC.4 I also agree that the evidence must be looked at in the light most favorable to the non-movants (investors) and assume, as does the Court for purposes of summary judgment, that they have stated a question of fact about the securities fraud against the promoters and FRB.
The FDIC asserts that the D’Oench, Duhme doctrine estops the appellants-investors from using an affirmative claim of fraud in the sale of securities to negate the obligation on certain notes and guarantees. The fraud claim is based on the Securities Exchange Act of 1934, § 29.5 The appellants claim that FRB violated the Securities Act in several ways. 1) Although the bank knew that Riddles and Suttles were millions of dollars in debt they continued to promote the sale of stock; 2) the bank failed to disclose the actual precarious financial position of TNB when they promoted the sale of stock; and 3) the bank did not reveal the nature of the voting stock.6
The implication of the FDIC’s position is an unacceptable expansion of both the common law and § 1823(e).
Until today, this Circuit has not ruled on whether D’Oench, Duhme should preclude fraud defenses based on federal securities *1531law. However, the 11th Circuit dealt with the issue in Gunter v. Hutcheson, 674 F.2d 862 (11th Cir.1982), cert. denied, 459 U.S. 826, 103 S.Ct. 60, 74 L.Ed.2d 63 (1982). “We are less confident that these Federal policies behind the FDIC act [D’Oench, Duhme doctrine] outweigh the strong policies of investor protection embodied in securities law.” Gunter, 674 F.2d at 874.
In light of the current savings and loans’ crisis which may cost taxpayers up to $500 billion, President Franklin Roosevelt’s letter to the 73rd Congress, urging the passage of the Securities Act of 19337 continues to reflect strong congressional policy: “What we seek is the return to a clearer understanding of the ancient truth that those who manage banks, corporations, and other agencies handling or using other people’s money are trustees acting for others.” 8 The policy of fiduciary responsibility and good faith securities dealing should not be summarily overridden by the policy of assuring full information to bank regulators as reflected in the D’Oench, Duhme doctrine.
The Securities Exchange Act is different from state and common law fraud claims for several reasons: 1) Unlike state and common law fraud claims, the Act makes the transaction void, not merely voidable; 2) the necessity for uniform adjudication of a peculiarly federal problem is satisfied because the Act is a federal statute; and 3) the statute also provides the FDIC protection from most actions under the Securities Act since actual participation or knowledge of the fraudulent transaction on the part of the FDIC is required.9
(c) Nothing in this chapter shall be construed (1) to affect the validity of a loan or extension of credit ... unless at the time of making the loan or extension of credit ... the person making such loan or extension of credit ... or acquiring such lien shall have actual knowledge of facts by reason of which the making of such a loan or extension of credit ... or the acquisition of such lien is a violation of the provisions of this chapter or any rule or regulation thereunder, or (2) to afford a defense to the collection of any debt or obligation or the enforcement of any lien by any person who shall have acquired such debt, obligation, or lien in good faith for val-' ue and without actual knowledge of the violation of any provision of this chapter or any rule or regulation thereunder affecting the legality of such debt, obligation, or lien. 15 U.S.C. § 78cc(c) (underline added).
In Langley v. FDIC, 484 U.S. 86, 108 S.Ct. 396, 98 L.Ed.2d 340 (1987), the Supreme Court held that fraud in the inducement by the lending bank was precluded by D’Oench, Duhme and § 1823(e). However, the Court pointed out that the doctrine will not always apply: “The presence of fraud could be relevant, however, to another requirement of § 1823(e), namely the requirement that the agreement in question ‘tend ... to diminish or defeat the right, title or interest’ of the FDIC.” Langley, 484 U.S. at 93, 108 S.Ct. at 402, 98 L.Ed.2d at 348. Olney Sav. & Loan Ass’n v. Trinity Banc Sav. Ass’n, 885 F.2d 266, 275 (5th Cir.1989).
Fraud under the Securities Act is significant since it renders the entire instrument void. If void, the FDIC never acquired an interest in the theoretically non-existent “note” in the first place. The Court specifically allows the defense of fraud in the factum. Because of its language, § 29 also fits into this narrow exception: “Every contract made in violation ... shall be void.” 15 U.S.C. § 78cc(b).
The FDIC argues that void should be read as voidable and cites Gunter. The Court also states that because the fraud is merely fraud in the inducement, the contract is merely voidable. However, the 11th Circuit in Gunter said that “void” could be read only as “voidable” “to assure that the party who has violated the securities laws cannot escape liability ... no countervailing reasons exist to limit the express protection afforded innocent purchasers of debt securities by § 29.” Gunter, 674 F.2d at 876. The 5th Circuit also dealt with the construction of § 29. In Regional Properties v. Financial Real Es*1532tate Consulting Co., 678 F.2d 552 (5th Cir.1982) this Court pronounced that its earlier position that § 29 made the contract “void ab initio” 10 should be changed to the extent that violators of the act could not use the “void” language to rescind a contract to the detriment of an innocent party.11 Because there is, in this case, no reason to read “void” as “voidable” to protect the innocent purchaser the Court is left with the statute as written.
Section 1823(e) protects FDIC from “agreements which tend to diminish or defeat the interest of the Corporation in any asset acquired by it_” 12 This will protect the FDIC in the majority of cases. It will not be successful when 1) the debtor is able to meet the four requirements of § 1823(e), or 2) there is no actual agreement at all.
Naturally I accept the Supreme Court’s broad definition of agreement. “As used in commercial and contract law, the term 'agreement' often has 'a wider meaning than promise ... and embraces such a condition on performance.’ ” Langley, 484 U.S. at 91, 108 S.Ct. at 401, 98 L.Ed.2d at 346. The conditions precedent to the performance are also part of the agreement. FDIC contends that the statutory requirement that the FRB not act fraudulently in the sale of stock is a condition to repayment. Because the investors did not write down that FRB was not to defraud them, the investors cannot rescind the fraudulent contracts. This is stretching the intent of the doctrine beyond reasonable limits.
The Court sees no difference between the situation in Langley and the facts in the present case. In Langley, the misrepresentation made by the lending bank was the amount of land and mineral rights actually involved in the transaction. Although one might seriously doubt that a bank would record permanently that it made such misrepresentations, theoretically at least, the borrowers could have made the bank document the actual amounts of land and mineral rights in the bank records or in the minutes of bank officer meetings. However, the fact that FRB, Riddles, and Suttles were defrauding the innocent investors (borrowers) was not a thing likely to be recorded in the bank's permanent records as “smoking gun” proof of its fraudulent intent.
The issue is not that the worth of the stocks was not recorded. Investors do not base their claim on an oral agreement as to the worth of the stocks. Rather, their claim is that the sale of stock was fraudulent. When FRB failed to disclose what it knew about the precarious financial situation of TNB and still encouraged and financed the stock sales, it was an active participant in defrauding the investors.
To require the defrauded investors to somehow show in the bank records — which are normally highly confidential records, available to no outsiders — that they had been defrauded would be to require unlikely conduct .that would add the burden of “let the borrower beware” to “let the buyer beware” unless the borrower could make the bank record its fault for all — including the bank examiners — to see.
President Roosevelt, in the same letter to Congress previously mentioned, said: “This proposal [Securities Act of 1933] adds to the ancient rule of ‘caveat emptor' the further doctrine ‘let the seller beware.’ It puts the burden of telling the whole truth on the seller. It should give some impetus to honest dealing in securities and thereby *1533bring back public confidence.”13 If the investors are forced to show in the bank records that the bank intended to defraud them, the burden is unfairly shifted to the innocent party when it should be the seller-lender who bears the burden of fair dealing.
If the issue was the unrecorded representation that the stock was worth more than it actually was, there would be no problem in the application of D’Oench, Duhme. As the Court correctly points out, “No authority suggests a right to be compensated by the federal government because one’s investments fail.” However, investors have the right to expect the protection of federal statutes when the failure comes about dqe to the actions of the lending bank in connection with the sale of stock.
There were no secret agreements exchanged which excused the payment of the notes. What excuses payment is the conduct of the lending bank in violation of the Securities Act. Nothing in D’Oench, Duhme would require the statutorily defrauded borrower-victim to attempt to comply with the recording requirements. D’Oench, Duhme ought not to apply because the investors are not trying to enforce a secret or an unwritten agreement but rather are seeking to enforce a statutory right to fair dealing.
II.
The reason that the federal common law would estop state and common law fraud defenses is simply because there is an overriding public policy consideration for a uniform federal rule when dealing with the FDIC.14 In the leading 5th Circuit case, Beighley v. FDIC, 868 F.2d 776 (5th Cir.1989), the court held that a plaintiff cannot assert fraud claims based on state or common law.
The FDIC says, that there is no reason why this should not be extended to federal law fraud claims. They forget the principal reasons why these claims are barred in the first place, namely for the sake of uniformity and the necessity of the FDIC’s reliance on the bank records. There is no reason why a fraud claim based on violations of the Securities Act should be barred. The need for uniformity is fulfilled by the fact that this is a federal statute, subject only to the vagaries of thirteen Federal Courts of Appeals with the ever present Moderators at the top.
The FDIC will still be able to rely on the bank records which would be available on the supposition that the lending bank is not required to make and keep the records of its own fraudulent conduct. The Holder in Due Course language in § 29 of the Securities Exchange Act protects the FDIC.15 If the FDIC has actual knowledge of the federal security violation, it would not have to rely on those particular debts of the bank until a court decides if they are in fact valid.
I must emphasize that allowing the Securities Act as a defense to the repayment of loans acquired by the FDIC is a very narrow exception to the D’Oench, Duhme doctrine and § 1823(e). In the vast majority of cases, the act will not be available. And even when Securities Act fraud is involved, the actual knowledge requirement will be a tough hurdle to overcome. The Court’s concern about excessive litigation is well taken, but in this case, unfounded.
Two policies collide — the policy assuring full knowledge of bank regulators, and the policy of assuring fair dealing in the sale of securities. Until Congress expressly makes the choice, I would hold that violation of the Securities Act is a defense (or *1534basis for affirmative relief) which neither D’Oench, Duhme nor § 1823(e) cuts off.
To the Court’s failure to so hold, I respectfully dissent.
. D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942).
. The often recited statement that § 1823(e) is a codification of D’Oench, Duhme does not bear analysis. The specific requirements of § 1823(e) are in no way provided, or even mentioned, in D’Oench, Duhme.
*1530The requirement that the agreement of non-liability be in writing and approved by the bank board of directors and contained in the permanent records (see items 1-4 of § 1823(e)) are not the .work of the Supreme Court as reflected in this much cited opinion. These are exclusively the work of Congress.
The distinction is more than rhetorical. The test established in D’Oench, Duhme is "whether the note was designed to deceive the creditors or the public authority, or would tend to have that effect.” D’Oench, Duhme, 315 U.S. at 460, 62 S.Ct. at 681, 86 L.Ed. at 963.
If § 1823(e) does not apply (see Majority Opinion, supra note 4), a failure to comply specifically with the requirements of § 1823(e) will not be prima facie evidence of the applicability of D’Oench, Duhme.
.12 U.S.C. § 1823(e):
No agreement which tends to diminish or defeat the right, title or interest of the Corporation in any asset acquired by it under this action, either as security for a loan or by purchase, shall be valid against the corporation unless such an agreement
(1) shall be in writing,
(2) shall have been executed by the bank and the person or persons claiming an adverse interest thereunder, including the ob-ligor, contemporaneously with the acquisition of the asset by the bank,
(3) shall have been approved by the board of directors of the bank or its loan committee, which approval shall be reflected in the minutes of said board or committee, and
(4)shall have been, continuously, from the time of it’s execution, an official record of the bank.
. Bell & Murphy & Assocs. v. Interfirst Bank Gateway, 894 F.2d 750, 754-55 (5th Cir.1990); Porras v. Petroplex Savings Assoc., 903 F.2d 379 (5th Cir.1990).
. § 29 as codified by 15 U.S.C. § 78cc:
(b) Every contract made in violation of any provision of this chapter or any rule or regulation thereunder, and every contract (including any contract for listing a security on an exchange) heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of any provision of this chapter or any rule or regulation thereunder, shall be void (1) as regards the rights of any person who, in violation of any such provision, rule, or regulation, shall have made or engaged in the performance of any such contract and (2) as regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision, rule or regulation: 15 U.S.C. § 78cc (underline added).
. In their original complaint, the plaintiffs alleged that FRB violated 15 U.S.C. § 78j(b), 17 C.F.R. § 240.10b-5, and 15 U.S.C. § 78t.
. The Securities Act of 1933 preceded the Securities Exchange Act of 1934. The 1934 Act was a continuation of the policies which were enacted in 1933.
. H.R. Report No. 85, 73rd Cong. 1st sess.,-(1933).
. The pertinent section provides:
. Eastside Church of Christ v. National Plan, Inc., 391 F.2d 357, 363 (5th Cir.), cert. denied, 393 U.S. 913, 89 S.Ct. 234, 240, 21 L.Ed.2d 198 (1968).
. The Supreme Court also dealt with this issue in Mills v. Electric Auto-Lite, 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1969). The Court also said that "void” should be read as "voidable” to protect the rights of the innocent party. However, they point out that because the statute uses the "void” language it “establishes that the guilty party is precluded from enforcing the contract against the unwilling innocent party.” Mills, 396 U.S. at 386, 90 S.Ct. at 622, 24 L.Ed.2d at 603. The concern of the Court is to protect the innocent party. In this case, the innocent, unwilling, party is better served by reading the language as “void”.
.12 U.S.C. § 1823(e).
. H.R. Report No. 85, 73rd Cong. 1st sess.,-(1933) (underline added).-
. "The Federal policy of uniformity of decision for cases arising under federal law would be obviated by a great diversity in results if identical transactions were subject to the vagaries of the laws of several states. Where such inconsistency in decisions would occur, state law is not an appropriate selection to aid in fashioning federal common law." Clearfield Trust Co. v. United States, 318 U.S. 363, 367, 63 S.Ct. 573, 575, 87 L.Ed. 838 (1943), quoted from, Norcross, The Bank Insolvency Game: FDIC Superpowers, The D’Oench Doctrine, and Federal Common Law, 103 Banking L.J. 316, 343 (1986).
.See supra note 8.