CHUUK STATE SUPREME COURT APPELLATE DIVISION

Cite as Nakamura v. Moen Municipality, 15 FSM Intrm. 213 (Chk. S. Ct. App. 2007)

ECHEN NAKAMURA and her MASANO
LINEAGE OF IRAS,
Appellants,

vs.

MOEN [WENO] MUNICIPALITY,
Appellee.

CIVIL APPEAL NO. 03-1996

OPINION

Resubmitted: June 14, 2007
Decided: August 27, 2007

BEFORE:

Hon. Dennis K. Yamase, Temporary Justice, Presiding*
Hon. Aliksa B. Aliksa, Temporary Justice**
Hon. Benjamin Rodriguez, Temporary Justice***

*Associate Justice, FSM Supreme Court, Chuuk
**Chief Justice, Kosrae State Court, Tofol, Kosrae
***Associate Justice, Pohnpei Supreme Court, Kolonia, Pohnpei

[15 FSM Intrm 221]

APPEARANCES:

For the Appellant:
Charles Greenfield, Esq.
Micronesian Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei FM 96941

Frank Casiano (reh’g)
Micronesian Legal Services Corporation
P.O. Box D
Weno, Chuuk FM 96942

For the Appellee:
Kachuo Eko (brief)
Julius Sapelalut, Esq. (reh’g)
Office of the Chuuk Attorney General
P.O. Box 1050
Weno, Chuuk FM 96942

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HEADNOTES

Appellate Review - Rehearing
When the appellants timely filed a petition for rehearing asserting that the panel overlooked or misapprehended points of law or fact, but by the next appellate session, one appellate panel member had become employed by the corporation representing the appellants and another had become the Chuuk Attorney General and was representing the state in a related appeal, in which some of the same issues were raised and whose office also represented the appellee in this appeal and then the original presiding justice passed away, it necessitated the appointment of a completely new appellate panel to consider the rehearing petition. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 216 (Chk. S. Ct. App. 2007).

Appellate Review - Rehearing
Once the appellate court has granted a petition for rehearing, it may make a final disposition of the cause without reargument, or it may restore it to the calendar for reargument or resubmission. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 216 (Chk. S. Ct. App. 2007).

Administrative Law - Judicial Review; Property - Land Commission
The proper standard for judicial review of agency (including Land Commission) decisions is that the reviewing court shall declare unlawful and set aside agency action, findings and conclusions found to be unsupported by substantial evidence. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 (Chk. S. Ct. App. 2007).

Administrative Law - Judicial Review; Appellate Review - Standard of Review - Civil Cases
The clearly erroneous standard is met either when the factual finding was not supported by substantial evidence in the record, or when the factual finding was the result of an erroneous conception of the applicable law, or when after a consideration of the entire record the appellate court is left with a definite and firm conviction that a mistake has been made. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 (Chk. S. Ct. App. 2007).

Evidence - Burden of Proof
Substantial evidence is evidence which a reasoning mind would accept as sufficient to support a conclusion. It consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 n.1 (Chk. S. Ct. App. 2007).

[15 FSM Intrm 222]

Administrative Law - Judicial Review; Property - Land Commission
Since the trial court stated that it was using a "clearly erroneous" standard of review on the Land Commission’s findings, it would have had to examine, as one of the three possible ways to satisfy the clearly erroneous standard, whether the Land Commission decision was supported by substantial evidence in the record, the standard that the statute requires. Thus, although it may not have correctly named the standard, the trial court did use the proper standard of review as part of its review. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 (Chk. S. Ct. App. 2007).

Contracts - Necessity of Writing
There is no statute of frauds in Chuuk, that is, no legal requirement that there be a writing for there to be an enforceable contract. Under Chuukese customary law, no writing is needed to effect any contractual transaction, including the transfer of an interest in land. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 (Chk. S. Ct. App. 2007).

Property - Deeds
Since under Chuukese customary law, any contract may be oral, that the deed was an inadequate writing to convey land is irrelevant. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 (Chk. S. Ct. App. 2007).

Custom and Tradition - Chuuk; Property
It is generally recognized that in order to sell lineage land in Chuuk, lineage heads need the lineage members’ consent. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 218 (Chk. S. Ct. App. 2007).

Judgments; Transition of Authority
Trust Territory judicial decisions are not stare decisis, that is, they are not binding precedent on FSM courts. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 218 (Chk. S. Ct. App. 2007).

Civil Procedure - Parties; Custom and Tradition - Chuuk
A lineage is an entity similar to a corporation in that it is recognized by courts in Chuuk as a personable entity - a entity capable of suing and being sued and of entering into contracts. This parallels the lineage’s position under Chuukese custom and tradition in which a lineage is an entity capable of owning, acquiring, and alienating land. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 219 (Chk. S. Ct. App. 2007).

Contracts - Ratification; Custom and Tradition - Chuuk
It is possible for an agreement not authorized by all lineage members to be ratified by the later conduct of those who did not authorize it. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 219 (Chk. S. Ct. App. 2007).

Contracts - Ratification; Custom and Tradition - Chuuk; Property
Lineage members’ consent or acquiesce to the sale of lineage land can be shown by affirmative assent, or an acquiescence, or by ratification of the act. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 219 (Chk. S. Ct. App. 2007).

[15 FSM Intrm 223]

Administrative Law - Judicial Review; Property - Land Commission
When the matter is remanded to the trial court for it to rule on whether the lineage members consented or acquiesced to the sale of the land in question and if the trial court is unable to determine whether the requisite consent or acquiescence was shown in the Land Commission proceeding or determines that the record is inadequate to make that determination, the trial court shall then remand the matter to the Land Commission for it to make further findings of fact on whether such consent or acquiescence or ratification was made. The Land Commission may rely on the record and transcript and may take further evidence if it is necessary to make the inquiry. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 219 (Chk. S. Ct. App. 2007).

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COURT’S OPINION

DENNIS K. YAMASE, Temporary Justice, Presiding:

This came before the appellate panel on the appellants’ petition for rehearing. The petition was granted and the previous appellate opinion is hereby modified. The case is remanded to the trial division with directions. Our reasons follow.

I. Procedural Background

On May 21, 1998, an appellate division opinion in this appeal, Nakamura v. Moen Municipality, 8 FSM Intrm. 552 (Chk. S. Ct. App. 1998), affirmed the trial court’s January 24, 1996 decision, Nakamura v. Moen Municipality, 7 FSM Intrm. 375 (Chk. S. Ct. Tr. 1996), which affirmed a Land Commission determination. On June 3, 1998, the appellants timely filed a Petition for Rehearing asserting that the panel overlooked or misapprehended points of law or fact. By the next appellate session, one appellate panel member was employed by the Kosrae office of Micronesian Legal Services Corporation (and that corporation represents the appellants herein) and another had become the Chuuk Attorney General and was representing the State in a case, Nakamura v. Chuuk, Civ. App. No. 04-1999, related to this appeal, in which some of the same issues were raised, and whose office also represented the appellee in this case. Since then, the original presiding justice has passed away; thus necessitating appointment of a completely new appellate panel to consider the rehearing petition.
Upon reviewing the petition, we ordered the appellee, Moen [Weno] Municipality, to make any answer to the rehearing petition by May 31, 2007, which it did. On June 4, 2007, we granted the petition for rehearing. Once we grant a petition for rehearing, we "may make a final disposition of the cause without reargument," or we may "restore it to the calendar for reargument or resubmission." Chk. App. R. 40(a). Since it seemed helpful to have oral argument on this appeal at the same time as the related appeal, Civil Appeal No. 04-1999, reargument was set. On June 14, 2007, after argument on the related appeal, this appeal was resubmitted.

II. The Petition

The rehearing petition asserted that the May 21, 1998 appellate decision overlooked or misapprehended three of the appellants’ legal arguments when it held that there was "only one issue for consideration by this court for the disposition of this appeal: 1. Whether the evidence was sufficient to support the proper standard of review?" Nakamura, 8 FSM Intrm. at 554. The appellants contend that the appellate panel overlooked their legal arguments that the consent of all adult lineage members was needed before lineage land could be sold and that the panel misapprehended their legal arguments that the alleged deed was legally insufficient to convey land and that the trial court used the wrong standard of review when it reviewed the Land Commission record.

III. Analysis

[15 FSM Intrm 224]

A. Standard of Review Used by Trial Court

The appellants contend that when the trial court reviewed the Land Commission decision, it should have used the "unsupported by substantial evidence" standard of review found in Chuuk State Law No. 190-08, § 17(2)(b)(5), but that it erroneously used a "clearly erroneous" standard instead. They also contend that the appellate opinion compounded the error by misapprehending the appellants’ arguments and assuming that the appellants were complaining that the trial court should have used the clearly-erroneous standard but had used the unsupported-by-substantial-evidence standard.

The previous appellate panel, although it misapprehended the appellants’ argument, correctly held that the proper standard for judicial review of agency (including Land Commission) decisions was contained in Section 17(2) of the Judiciary Act of 1990: "The reviewing court shall: . . . (b) declare unlawful and set aside agency action, findings and conclusions found to be: . . . (5) unsupported by substantial evidence . . . ." Chk. S.L. No. 190-08, § 17(2). The appellants also contend that this is the correct standard but that the trial court instead used, in their view, a higher standard - the clearly erroneous standard.

We have earlier defined the clearly erroneous standard as being met either when the factual finding was not supported by substantial evidence in the record, or when the factual finding was the result of an erroneous conception of the applicable law, or when after a consideration of the entire record the appellate court is left with a definite and firm conviction that a mistake has been made. Emilios v. Setile, 6 FSM Intrm. 558, 560, 1 CSR 17, 19 (Chk. S. Ct. App. 1994); Cheni v. Ngusun, 6 FSM Intrm. 544, 547, 1 CSR 35, 39-40 (Chk. S. Ct. App. 1994). Since the trial court stated that it was using a "clearly erroneous" standard of review, Nakamura, 7 FSM Intrm. at 378, on the Land Commission’s findings, it would have had to examine, as one of the three possible ways to satisfy the clearly erroneous standard, whether the Land Commission decision was supported by substantial evidence in the record, the standard that the statute requires. Since, although it may not have correctly named the standard, the trial court did use the proper standard of review, as part of its review, we cannot say that the trial court erred in its standard of review.

B. The Deed

The appellants contend that the deed, signed by Echen Nakamura, was legally insufficient to transfer title to land because it was signed by someone other than the named grantor [Efou Killion, the lineage head]; because the description of the land to be conveyed was "inadequate"; because the deed was attested to, not by disinterested witnesses, but by Moen municipal employees; and because the deed’s printed form section for the District Land Title Officer’s certification was blank. The appellants assert that because of this the Land Commission decision should be set aside as contrary to law.

This contention must be rejected as irrelevant. With the possible exception of land that has already been registered, see 67 TTC 119, there is no statute of frauds in Chuuk, that is, no legal requirement that there be a writing for there to be an enforceable contract. Under Chuukese customary law, no writing is needed to effect any contractual transaction, including the transfer of an interest in land. Marcus v. Truk Trading Corp., 10 FSM Intrm. 387, 389 (Chk. 2001). Any contract may be oral. Thus, that the deed was an inadequate writing to convey land is irrelevant.

[15 FSM Intrm 225]

Furthermore, the trial court did not hold that the deed was effective to convey title; it held only that the deed was evidence of the parties’ intent to transfer title. Nakamura, 7 FSM Intrm. at 378-79.

C. Consent of All Adult Lineage Members

The appellants contend that the appellate panel overlooked their contention that the consent of all adult lineage members was needed before lineage land could be sold and that record did not reflect that the lineage had given its consent to the sale of the land in question. The appellee contends that the proper Chuukese custom to apply to lineage land is the one that provides that when the lineage head speaks the other lineage members remain silent and so the consent of all lineage members was not needed because the lineage had consented when the lineage head "spoke."

It is generally recognized that in order to sell lineage land in Chuuk, lineage heads need the lineage members’ consent. Some authorities state that the consent of all adult male lineage members is needed to alienate lineage land. See, e.g., Lukas v. Stanley, 10 FSM Intrm. 365, 366 (Chk. S. Ct. Tr. 2001); Lus v. Totou, 1 TTR 552, 554 (Truk 1958). Many other authorities state that the consent of all adult lineage members is needed. See, e.g., Truk Trading Co. v. Paul, 8 TTR 515, 518 (App. 1986); Mesaita v. Fupi, 5 TTR 631, 632-33 (Truk 1972); Peretiu v. Karimina, 3 TTR 533, 535 (Truk 1968); Narruhn v. Sale, 3 TTR 514, 517 (Truk 1968); Nitoka v. Nesepuer, 2 TTR 12, 14 (Truk 1959); see also Resenam v. Nopuo, 5 TTR 248, 251 (Truk 1970) (consent of children needed to transfer "family land," which is not lineage land); Yoichi v. Amas, 4 TTR 59, 60 (Truk 1968) (oral will disposing of lineage land consented to by adult lineage members); Fred v. Airinios, 3 TTR 274, 276 (Truk 1967) (sale or gift of lineage land in Mortlocks requires unanimous consent of all adult members); Irons v. Rudo, 2 TTR 296, 300 (Truk 1961) (noted in dicta that only adults’ consent needed, minors’ lack of consent cannot prevent transfer of lineage land); Kinara v. Tipa, 2 TTR 8, 11 (Truk 1959) (transfer of lineage land to child of member must be consented to by all adult members of lineage or generally acquiesced in by them). And a few authorities just state that the lineage’s consent is needed without elaborating as to who in the lineage would manifest that consent. Titer v. Teifis, 4 TTR 283, 285 (Truk 1969) ("consent of the lineage" needed); Nitoka v. Nesepuer, 2 TTR 12, 14 (Truk 1959) ("consent of the lineage" needed to validate lineage head’s gift of lineage property); Nusia v. Sak, 1 TTR 446, 447 (Truk 1958) (transfer of lineage land is by "positive agreement by the lineage as a whole or clear acquiescence").

Although these are mostly Trust Territory cases and Trust Territory judicial decisions are not stare decisis, that is, they are not binding precedent on FSM courts, see Etscheit v. Nahnken of Nett, 7 FSM Intrm. 390, 396 (Pon. 1996) (although FSM courts are not bound to accept the Trust Territory courts’ rulings, they may consider their rationale and elect to adopt their reasoning), the weight of this authority is persuasive. We conclude that the consent of lineage members is needed for a valid sale of lineage land.

[15 FSM Intrm 226]

Neither the previous appellate panel opinion, nor the trial court opinion, nor the Land Commission opinion specifically addressed whether the lineage members had consented or acquiesced to the land sale. This should, for the reasons above, be part of any inquiry into whether the land has been sold. We cannot determine whether the Land Commission made any finding about the lineage members’ consent to the sale before, at, or after the sale or whether it considered the point when it made its finding that a valid sale took place.

A lineage is an entity similar to a corporation in that it is recognized by courts in Chuuk as a personable entity - a entity capable of suing and being sued and of entering into contracts. See Black’s Law Dictionary 1029 (5th ed. 1979). This parallels the lineage’s position under Chuukese custom and tradition in which a lineage is an entity capable of owning, acquiring, and alienating land. In In re Estate of Hartman, 6 FSM Intrm. 326, 329 (Chk. 1994) the court referred to the land-owning group established under custom as a "corporation," adopting the nomenclature used in a learned treatise. That court’s use of the "corporation" nomenclature did not imply that corporate law in general applies to Chuukese lineages. It was used only to show that a lineage functions in some respects as a corporation - it is, or can be, composed of many members, but is considered a single legal entity, capable of owning land, suing and being sued, and performing other acts, and which must necessarily act through representatives. In this respect a corporation and a lineage are analogous.

The appellants contend that all adult members had to consent to the sale before it was made. Normally a buyer, for the buyer’s own protection, would want to assure itself that the requisite approvals had been made and the sale authorized. However, a legal entity (such as a corporation), which must act through agents or representatives, can, by its conduct, ratify an unauthorized agreement. Asher v. Kosrae, 8 FSM Intrm. 443, 452-53 (Kos. S. Ct. Tr. 1998) (corporation must promptly rescind or revoke unauthorized agreement; it cannot accept a transaction’s benefit and at the same time try to escape its consequences on the ground that the transaction was not authorized). It is therefore possible for an agreement not authorized by all lineage members to be ratified by the later conduct of those who did not authorize it. See Marcus v. Truk Trading Corp., 11 FSM Intrm. 152, 159-60 (Chk. 2002) (court does not need to decide whether all adult lineage members consented if, by their actions, they ratified the agreement afterwards).

IV. On Remand

This matter is remanded to the trial court for it to rule on whether the lineage members consented or acquiesced to the sale of the land in question. Consent or acquiesce can be shown by affirmative assent, or an acquiescence, or by ratification of the act. If the trial court is unable to determine whether the requisite consent or acquiescence was shown in the Land Commission proceeding or determines that the record is inadequate to make that determination, the trial court shall then remand the matter to the Land Commission for it to make further findings of fact on whether such consent or acquiescence or ratification was made. The Land Commission may rely on the record and transcript and may take further evidence if it is necessary to make the inquiry.

[15 FSM Intrm 227]
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Footnotes: