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was similar to the first section, and it included a “Debt
Assumption” provision “to memorialize, affirm and set out the
oral Debt Assumption Agreement” along with another power of
attorney form with similar provisions as those detailed above.
Paragraph 5 of the power of attorney form, which differed from
the prior form, provided Mr. Hoyt with the authority to execute:
5. Any promissory notes, bills-of-sale or other
instruments required for the conduct of the Partnership
business, including a certificate of assumption of primary
liability form attached to promissory notes and held by the
lender for which the UNDERSIGNED becomes personally liable
directly to the lender for recourse debt of the Partnership
in order to pay his initial capital contribution to the
partnership.
On July 31, 1991, Mr. Van Scoten signed a document titled
“Subscription Agreement and Signature Page for Limited Partners”.
This document contained provisions similar to those in the prior
document, and it included another power of attorney form. The
document purported to evidence a financial institution’s purchase
of four “units” of the partnership Hoyt & Sons Ranch Properties,
Ltd., at a cost of $2,000, to be held in trust for the benefit of
Mr. Van Scoten. When Mr. Van Scoten signed the various
partnership documents and power of attorney forms, he believed
that petitioners would be required to repay the promissory notes
signed on their behalf by Mr. Hoyt.
Petitioners made substantial cash payments to the Hoyt
organization during the years 1991 through 1997. In a summary of
such payments prepared by petitioners, they estimate that the
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