Plaintiff Federal Deposit Insurance Corporation (FDIC) filed this suit against defendant John T. Whitlock and Surety Insurance Company of California (SIC). The FDIC's suit was based on a promissory note executed by Whitlock and a financial guarantee bond executed by a person possessing a power of attorney from SIC. SIC answered the FDIC's suit and filed a cross-claim against co-defendant Whitlock. Defendant Whitlock was not served until shortly before trial. The district court therefore postponed trial of the claims against Whitlock and proceeded with the FDIC's suit against SIC. The district court granted a directed verdict in favor of the FDIC against SIC.1 The trial court proceedings then turned to the claims still pending against Whitlock, (i.e., the FDIC's claim against Whitlock and SIC's cross-claim against Whitlock). On the FDIC's claim against Whitlock, Whitlock consented to an entry of judgment against himself in favor of the FDIC. Whitlock has not appealed the FDIC's judgment against himself; consequently, the FDIC's judgment against Whitlock is not before this Court. On SIC's cross-claim against Whitlock, which was tried separately by a United States magistrate, the trial court entered an involuntary dismissal in favor of Whitlock and against SIC. SIC appeals both of the judgments against it: the judgment in favor of the FDIC against SIC and the judgment of involuntary dismissal in favor of Whitlock against SIC.

Dick and Clara Jones were the principal stockholders in Sentinel Bonding Agency, Inc., a bonding agency in Enid, Oklahoma. Defendant John Whitlock also owned Sentinel stock. As a bonding agency, Sentinel wrote bonds as agent for various companies, such as SIC. Consequently, SIC conferred a power of attorney upon Clara Jones, who also served as an officer of Sentinel.

In August 1979, Sentinel and Dick Jones owed the Fidelity Bank (the Bank) of Jackson, Mississippi, at least $250,000.00. Fidelity Bank President George Sanders informed the Joneses that the Bank could not loan either the Joneses or Sentinel any additional money since they had already borrowed beyond their limit.

Later the same month, Dick Jones met with Whitlock at Whitlock's office in Dallas, Texas, to discuss means of borrowing an additional $100,000.00 from the Fidelity Bank. Since neither Sentinel nor the Joneses could borrow directly from the Bank, Dick Jones proposed to Whitlock that Whitlock borrow the money on his signature and then transfer the money to Sentinel. Jones assured Whitlock that the note would be secured by a financial guarantee bond through SIC.

On August 20, 1979, Whitlock travelled to Jackson to close the loan. Whitlock, however, did not have the financial guarantee bond with him. Since Whitlock needed to return to Texas, a Bank officer, Edward Sims,3 informed Whitlock that he would complete the needed paperwork, but that the proceeds of the loan would be held until the collateral was received. Sims then prepared a loan application, a promissory note for $100,000.00, a cashier's check for $100,000.00, and a disbursement receipt. Whitlock signed the loan application, signed the note and the disbursement receipt, endorsed the cashier's check to the order of Sentinel, and returned to Dallas.

The next day, August 21, Dick Jones and Whitlock called Clara Jones at Sentinel's office in Oklahoma. Dick Jones told her to prepare a financial guarantee bond for $100,000.00 to be sent to Fidelity Bank. Dick Jones instructed her to mail the completed bond, along with a copy of her power of attorney from SIC, to the Bank. According to Clara Jones' testimony, which was admitted only in the first trial of this action between FDIC and SIC, Whitlock granted Clara Jones an oral power of attorney to affix his name to the financial guarantee bond. Clara Jones mailed the bond and the power of attorney to the Bank. The money was transferred to Sentinel's corporate account.

Shortly afterwards on September 28, 1979, the State Comptroller of the State of Mississippi determined that Fidelity Bank was insolvent. The FDIC was appointed receiver and later acquired certain assets of the Bank, including Whitlock's note and the SIC bond.4 At the time of the Bank's closing, the Bank's loan file consisted of the Whitlock note, Whitlock's loan application and financial statement, the disbursement receipt, and the financial guarantee bond with Clara Jones' power of attorney from SIC.

FDIC brought suit against both Whitlock and SIC. In its answer, SIC alleged that Clara Jones and Whitlock had conspired illegally with George Sanders, the Bank's president, to fraudulently obtain the loan. SIC also alleged that the Bank had actual knowledge of the fraudulent nature of the loan. Evidence at trial indicated that SIC prohibited its agents from writing uncollateralized financial guarantee bonds; this limitation on Jones' authority, however, was not contained in the broad power of attorney found by the FDIC in the Bank's loan file. SIC at trial apparently intended to show that irregularities in the Bank file would have given FDIC officials notice of Clara Jones' lack of authority. SIC also asserted a cross-claim against Whitlock.

Service of process on defendant Whitlock was delayed until shortly before the time scheduled for trial. The district court therefore postponed trial of the claims against Whitlock and proceeded separately with the trial of the FDIC's claim against SIC.

After the FDIC rested, SIC moved for a directed verdict. SIC based its motion for directed verdict on the argument that the financial guarantee bond was not binding as a matter of law. The district court judge took SIC's motion under advisement and ordered SIC to go forward with its defense against FDIC's claim. After SIC had presented testimony of two witnesses, the district court judge interrupted SIC's presentation to announce that the court was granting a directed verdict in favor of the FDIC. The FDIC had no motion for judgment pending before the court.5 Although the district court judge allowed SIC to "proffer" a summary of its remaining evidence into the record, the district court's preemptory action prevented SIC from fully presenting its evidence regarding the ambiguity of the bond and the FDIC's notice of the alleged fraud through irregularities in the loan file.

From this partial judgment in favor of the FDIC against SIC, SIC attempted to appeal, but this Court dismissed the appeal for want of a final judgment. FDIC v. Whitlock, 745 F.2d 53 (5th Cir.1984) (per curiam) (unpublished opinion). While this attempted appeal was pending before this Court, SIC brought to trial its cross-claim against Whitlock. After this separate trial, the trial court granted judgment in favor of Whitlock against SIC on the basis that SIC failed to establish that Whitlock authorized Clara Jones to sign his name to the bond.

SIC appeals both of these judgments. This Court first examines SIC's appeal of the judgment in favor of the FDIC.

II. DISTRICT COURT'S GRANTING OF DIRECTED VERDICT IN FDIC'S FAVOR

The primary difficulty encountered by this Court stems from the district court's granting a directed verdict in favor of the plaintiff FDIC before the defendant SIC had rested its case. The FDIC had not moved for a directed verdict, and even if the FDIC had done so at the close of its own evidence, granting such a verdict would not have been proper here. A motion for a directed verdict is generally made only after "the close of the evidence offered by an opponent." Fed.R.Civ.P. 50(a) (emphasis added).6 Here, the district judge entered a directed verdict in favor of the plaintiff FDIC, with only a motion of defendant SIC before the court; instead, it granted the directed verdict for the plaintiff FDIC during--but before the close of--defendant SIC's evidence. However, it is generally the "defendant's motion for directed verdict [which] may be made at the end of plaintiff's opening statement, at the end of plaintiff's case, and by either or both parties at the close of the entire case." 6 Moore's Federal Practice p 56.02, at 56-43 (comparing motion for directed verdict to motion for summary judgment). Moreover, even where the motion is made at these procedural instances, granting the motion is proper only " '[i]f the facts and inferences point so strongly and overwhelmingly in favor of one party that the court believes that reasonable men could not arrive at a contrary verdict....' " Thornton v. Gulf Fleet Marine Corp., 752 F.2d 1074, 1076 (5th Cir.1985) (quoting Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir.1969) (en banc)).

Under the facts of the instant case, the district judge's action was an improper sua sponte entry of judgment in favor of the FDIC. See Panotex Pipe Line Co. v. Phillips Petroleum Co., 457 F.2d 1279, 1283 (5th Cir.), cert. denied, 409 U.S. 845, 93 S. Ct. 48, 34 L. Ed. 2d 86 (1972) (directed verdict in defendant's favor during defendant's presentation of issue not error where "there is nothing of record to support any denigration of procedural due process or the essence of a fair trial"). While "it is within the power of the trial court to direct a verdict at any point in the trial where it is apparent that there is a complete absence of any question to send to the jury," the Court has noted that this "power must nonetheless be exercised with great restraint in order to avoid the possibility that a party will be precluded from presenting facts which make out a question for the jury." United States v. Vahlco Corp., 720 F.2d 885, 889 (5th Cir.1983). While this Court has affirmed a directed verdict against a defendant at the close of plaintiff's evidence, where it was clear that a party's defenses are inadequate, this Court has sounded a note of caution in doing so. "Where there is any doubt at all as to the propriety of a directed verdict, district courts should not jump the gun but should wait until both sides have presented their evidence before ruling on motions for directed verdict." Id. Reflecting this same concern, the First Circuit has noted, "It is ... clear that neither in the rules nor in the case law is there any basis for rendering a directed verdict against a defendant before he has had a chance to present evidence." Gonzalez v. La Concorde Compagnie D'Assurances, 601 F.2d 606, 608 (1st Cir.1979). This is particularly true where a defendant attempts to introduce legally admissible evidence. See id. & n. 4.

The FDIC asserts that any procedural error was harmless and that entry of judgment in its favor was proper since it was entitled to judgment under its federal statutory protections, see 12 U.S.C. Sec. 1823(e),7 or its federal common law protections. See, e.g., D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S. Ct. 676, 86 L. Ed. 956 (1942). Given the limited record on this appeal, however, this Court does not have a sufficient record to determine whether section 1823(e) should be extended to preclude SIC's defense that Clara Jones was not authorized to sign the bond in question. Cf. FDIC v. Blue Rock Shopping Center, 766 F.2d 744, 754 (3d Cir.1985) (holding that section 1823(e) directed at side agreements between bank and obligor). Further, SIC's proffered evidence would have been at least relevant in showing that the FDIC took the Whitlock note with notice of SIC's defense.8 Nor can we say that SIC waived any opportunity to present such evidence since this Court's careful reading of the trial court record inevitably leads to the conclusion that SIC was not given a fair opportunity to do so. See Panotex Pipe Line Co., 457 F.2d at 1283. This Court does not wish to encourage the extension of useless trials. However, the district court judge's summary disposition was improper here. The district court's allowance of "proffered" summaries of the evidence inhabits this Court's review of whether a directed verdict was proper. Given this error, the judgment in this respect must be vacated and remanded to the district court.

The Court emphasizes that no opinion as to the merits of this cause is stated. The Court does not decide the applicability of 12 U.S.C. Sec. 1823(e) to the facts presented here, nor does the Court decide the creation or application of principles of federal common law. These questions are reserved to the trial court in the first instance.9

As noted, the district court judge determined to have SIC's cross-claim against Whitlock tried separately since Whitlock had been served only shortly before the action was set for trial. See Fed.R.Civ.P. 42(b). During the first phase of the proceedings regarding FDIC's claim against SIC, Clara Jones appeared at trial and testified that she had been given the oral authority to sign Whitlock's name to the bond.10 During the second phase of the proceedings, tried separately before a United States magistrate, counsel for SIC sought to introduce this testimony against defendant Whitlock. Counsel for Whitlock objected on the basis that Whitlock had not been present during the first phase of the proceedings and had no adequate opportunity to cross-examine Clara Jones. The magistrate sustained the objection and granted Whitlock's motion for a dismissal after SIC rested on the basis that SIC failed to establish that Whitlock signed the bond or authorized anyone to affix his signature.

On appeal, SIC argues that the district court erred in treating the two separate phases of the trial as separate causes of action and that the magistrate's "severance" violated Fed.R.Civ.P. 21 (case may be served "on such terms as are just"). Counsel's argument is misdirected. The magistrate's Findings of Fact and Conclusions of Law unequivocally reveal that the magistrate did not treat the two actions as "severed."11 Rather, the trial court was appropriately concerned that Jones' testimony could only be admitted if Whitlock had been afforded the opportunity of cross-examination. See Fed.R.Evid. 804(b)(1).12 SIC asserts no error in this determination and this Court finds none. See id., Baylor v. Jefferson County Board of Education, 733 F.2d 1527, 1534 (11th Cir.1984); Castileja v. Southern Pacific Co., 445 F.2d 183, 185-86 (5th Cir.1971).

Accordingly, the judgment of the district court in favor of the FDIC against SIC is VACATED and REMANDED for further proceedings; the judgment of the district court on SIC's cross-claim against Whitlock is AFFIRMED.

AFFIRMED IN PART;

VACATED IN PART AND REMANDED.