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OLMECA, S.A. v. MANUFACTURERS HANOVER TRUST CO.

July 15, 1986

OLMECA, S.A., Plaintiff,
v.
MANUFACTURERS HANOVER TRUST COMPANY, Defendant and Third-Party Plaintiff; MANUFACTURERS HANOVER TRUST COMPANY, Defendant and Third-Party Plaintiff, v. PIERRE GAZANIOL, LOUIS EDMUND GAZANIOL and PHILIPPE GAZANIOL, Third-Party Defendants



The opinion of the court was delivered by: SWEET

SWEET, D.J.

Defendant Manufacturers Hanover Trust Company ("MHT") and plaintiff Olmeca, S.A. ("Olmeca") have jointly moved for a hearing pursuant to Fed.F.Civ.P. 44.1 to determine the validity of a power of attorney (the "Escritura") under the applicable law of the Republic of Panama. Familiarity with this court's prior opinion of December 24, 1985, denying MHTs prior motion for summary judgment and Olmeca's motion to set aside certain of MHT's defenses, is assumed, and the prior opinion sets forth the need for the hearing. The hearing took place on March 26-28, 1986, and by agreement of the parties the submission of post-hearing memoranda was completed on May 15, 1986.

Olmeca contends that MHT could not properly rely on the Escritura to transfer funds from the Olmeca account, as the minutes granting such power of attorney remain invalid despite subsequent authentication and protocolization, and that MHT bore the risk of forgery because it relied on the Escritura despite the fact that it was not entered in the Panamanian Public Registry. MHT contends that the consular authentication in Morocco entitles the Escritura to a presumption of validity under Panamanian law regardless of its registration, that the protocolization by Olmeca's resident agent is binding on Olmeca, and that the Escritura's appearance of regularity and the course of dealing between Olmeca and MHT estops Olmeca from challenging MHT's reliance. As set forth more fully below, under Panamanian law, the power of attorney at issue here was authenticated in such fashion as to deprive it of presumptive regularity, and alternatively, even if properly authenticated, the power of attorney created only a rebuttable presumption of regularity.

 The stipulation of facts, the sections of the Commercial, Civil, Judicial, and Fiscal Codes, the decrees and laws of Panama together with the expert testimony certainly stretch the capacities of a court trained to understand and implement a different legal system. Despite the longing by the court for a clear precedent resolving a similar situation, namely, the rights of the parties under a forged power of attorney, the issue turns upon the interpretation of code sections and divergent expert testimony of lawyers, professors and bankers. It is indeed daunting to strive to become an instant civil code jurist. The parties and their counsel, however, have done their utmost to assist in this undertaking within the framework of our adjudicatory system and practice.

 In order to permit a resolution of these issues the parties have stipulated to certain facts for the purpose of the hearing alone. They are:

 a. On November 10, 1977, Banque Pariente ("Pariente") of Geneva, Switzerland, one of MHT's correspondent banks requested that MHT open an account in the name of Loaned, S.A. ("Loaned"), a Panamanian corporation incorporated in 1959, of which Andre Gazaniol was the president.

 b. In September, 1979, Pariente requested MHT, on the authority of a letter from Andre Gazaniol in his capacity as Chairman of Loaned, to open an account in the name of plaintiff Olmeca, a Panamanian corporation incorporated in 1979, of which Andre Gazaniol was (and is) also president, and to transfer all but $50,000 of the funds in the Loaned account into the Olmeca account. MHT subsequently made this transfer.

 c. On or about January 15, 1981 Maria Teresa Gauthey, Panamanian Consul to Morocco at Casablanca certified as authentic the purported signatures of Andre Gazaniol and Claude Renisio on the minutes (in Spanish) of a purported meeting of the board of directors of Olmeca dated January 15, 1981, (the "Minutes"). Those Minutes purportedly granted Pierre Gazaniol, Andre Gazaniol's nephew, and Leontine Gazaniol, Andre Gazaniol's mother, power of attorney over Olmeca's accounts.

 d. Maria Teresa Gauthey forwarded the Minutes as certified by her to the law firm of Fabrega Lopez y Pedreschi in Panama City, Panama, Olmeca's resident agent in Panama during the period 1980-81.

 e. Dr. Carlos Bolivar Pedreschi, a member of Fabrega Lopez y Pedreschi, took the Minutes to the office of Gustavo Escobar Pereira, Fourth Notary Public of the Circuit of Panama, for protocolization.

 f. In the presence of Dr. Pedreschi and two witnesses, the Fourth Notary protocolized the document on February 12, 1981. The Minutes were retyped in their entirety (including typed, instead of written, "signatures of Andre Gazaniol and Claude Renisio), and these retyped minutes, together with certain prefatory language preceding the minutes and certain signature certifications at the end of the minutes, created a new document, Escritura No. 1515 of February 12, 1981 (4th Notary) ("Escritura No. 1515"). The original of the Minutes was filed in the Fourth Notary's office in Panama City. Subsequently, duplicate exemplars, all known as Escritura No. 1515, were prepared by the Fourth Notary. Escritura No. 1515 was not registered in the Public Register prior to presentation of it to MHT.

 g. In mid-March, 1981, Pierre Gazaniol, Andre Gazaniol's nephew, and Louis Edmund Gazaniol, Andre Gazaniol's son, came to MHT's offices in New York and informed MHT that Pierre Gazaniol had received a power of attorney with respect to Olmeca's accounts.

 h. During that visit Pierre Gazaniol presented a duplicate exemplar of Escritura No. 1515 which purported to grant Pierre Gazaniol and Leontine Gazaniol powers of attorney with respect to Olmeca's bank accounts.

 i. On the authority of Escritura No. 1515 and pursuant to instructions contained in letters from Pierre Gazaniol to MHT dated April 3, 1981 and May 21, 1981, MHT transferred $890,000 on April 14, 1981 from Olmecas account at MHT in New York to account "863 Helene" at MHT's Zurich branch, and $805,000 on June 3, 1981 to Olmeca's account at Pariente. The $890,000 transferred to account 863 Helene, which was in the names of Pierre, Philippe and Louis Edmund Gazaniol at MHT's Zurich branch, was subsequently withdrawn and the account was closed.

 j. Olmeca caused Escritura No. 14,303 of December 31, 1981 (4th Notary) ("Escritura No. 14,303") and Escritura No. 144 of January 6, 1983 (4th Notary) ("Escritura No. 144") to be protocolized and placed on the Public Registry. In these Escrituras, Olmeca registered Escritura No. 1515 and revoked and disavowed it. The signatures of Andre Gazaniol and Claude Penisio on the Minutes are not genuine.

 Certain exhibits and portions of the law of Panama were stipulated by the parties and admitted:

 a. The Minutes of the meeting of the board of directors of Olmeca of January 15, 1981.

 b. Escritura No. 1515 as presented to MHT.

 c. Minutes of the meeting of the board of directors of Olmeca of April 25, 1979.

 d. Escritura No. 4338 of May 7, 1979 (4th Notary), a protocolization of the minutes of a meeting of the board of directors of Olmeca of April 25, 1979.

 e. Minutes of the meeting of the board of directors of Olmeca of February 19, 1979.

 f. Escritura No. 1808 of February 19, 1979, a protocolization of the minutes of a meeting of the board of directors of Olmeca of February 19, 1979.

 g. Minutes of the meeting of the board of directors of Olmeca of November 23, 1981, at which the power of attorney to Pierre Gazaniol and Leontine Gazaniol was revoked.

 h. Escritura No. 14,303 of December 31, 1981, a protocolization of the revocation of the grant of a power of attorney to Piere Gazaniol and Leontine Gazaniol.

 i. Escritura No. 144 of January 6, 1983, a protocolization of the revocation of the grant of a power of attorney to Pierre Gazaniol and Leontine Gazaniol.

 j. Commercial Code Arts. 1-11, 55-70, 194-248.

 k. Civil Code Arts. 1-13, 1132-40, ...


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