4 FSM Intrm 95 (App 1989)

FEDERATED STATES OF MICRONESIA
SUPREME COURT APPELLATE DIVISION

FSM APPEAL CASE NO. T2‑1988
[From United Church of Christ v. Hamo,
3 FSM Intrm. 445 (Truk 1988), Benson, J.]

UNITED CHURCH OF CHRIST
Appellant

V

ACHUO HAMO
on behalf of the Wito Clan
Appellee

BEFORE:
The Honourable Edward C. King, Chief Justice, FSM Supreme Court
The Honourable Jose Dela Cruz, Temporary Justice, FSM Supreme Court*
The Honourable Arthur Ngiraklsong, Temporary Justice, FSM Supreme Court**

*Chief Justice, Supreme Court of the Commonwealth of the Northern Mariana Islands
**Associate Justice, Republic of Palau Supreme Court

APPEARANCES: For the Appellant: R. Barrie Michelsen, Attorney at Law;
For the Appellee: Camillo Noket, Attorney at Law

OPINION: Argued: December 15, 1988 - Decided: July 10, 1989

HEADNOTES

Transition of Authority
As a matter of constitutional law, the authority to exercise executive, legislative and judicial powers came to the Federated States of Micronesia under the FSM Constitution, by operation of law, not through delegation of Trust Territory functions. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 103 (App. 1989).

Transition of Authority
The Constitution of the FSM has been the supreme law of the Federated States of Micronesia since May 10, 1979 and from that time on, nonconstitutional officials could be authorized to exercise powers assigned to the national government by the Constitution only through authorization by constitutional officials or pursuant to some other power rooted in the Constitution. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 104 (App. 1989).

Transition of Authority
In specifically authorizing the President to act pursuant to Secretarial Order 3039 in accepting executive functions from the Trust Territory, the FSM Congress implicitly adopted those provisions of Secretarial Order 3039 concerning transfer of executive functions as law of the Federated States of Micronesia. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 104 (App. 1989).

Constitutional Law ‑ Judicial Powers; Courts; Transition of Authority
The FSM Constitution provides no authority for any courts to act within the Federated States of Micronesia, other than the FSM Supreme Court, inferior courts to be established by statute, and state or local courts. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 105 (App. 1989).

Courts; Transition of Authority
The transitional actions of the FSM Congress, intended to adopt as law of the Federated States of Micronesia those portions of Secretarial Order 3039 relating to judicial functions within the FSM and permitting the Trust Territory courts to continue functioning within the FSM pending establishment of constitutional courts, were a necessary and proper exercise of Congress' power under the Constitution to provide for a smooth and orderly transition. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 105 (App. 1989).

Courts; Jurisdiction
The provisions of the FSM Constitution spelling out jurisdiction and vesting the entire judicial power of the national government in the FSM Supreme Court are self‑executing, and the judicial power of the FSM Supreme Court is not dependent upon congressional action. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 105‑06 (App. 1989).

Courts; Separation of Powers; Transition of Authority
To the extent that Secretarial Order 3039 can be read as permitting the Trust Territory High Court to continue, after the FSM Supreme Court had begun functioning, to control cases assigned by the FSM Constitution to the FSM Supreme Court, that exercise by Congress of the transitional power under the Constitution could run counter to other specific provisions of the Constitution, especially the judiciary article, and to fundamental principles of the separation of powers; any extension by the Trust Territory High Court of the powers assigned to it under Secretarial Order 3039 would violate those same constitutional provisions and principles. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 106 (App. 1989).

Civil Procedure ‑ Res Judicata
A fundamental principle of the common law, traditionally referred to in common law jurisdictions as res judicata, is that once judgment has been issued and the appeal period has expired or the decision is affirmed on appeal, the parties are precluded from challenging that judgment or from litigating any issues that were or could have been raised in that action. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 106 (App. 1989).

Civil Procedure ‑ Res Judicata; Transition of Authority
The FSM Supreme Court normally will refuse to review the correctness of an earlier Trust Territory High Court judgment, which has become final through affirmance on appeal or through lack of a timely appeal, and claims that the earlier judgment is ill‑reasoned, unfair or even beyond the jurisdiction of the High Court typically will not be sufficient to escape the doctrine of res judicata. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 107 (App. 1989).

Civil Procedure ‑ Res Judicata; Jurisdiction
The determination of jurisdiction itself normally qualifies for protection under the common law principle of res judicata, requiring a second court to presume that the court which issued the judgment did properly exercise its own jurisdiction, but plain usurpation of power by a court which wrongfully extends its jurisdiction beyond the scope of its authority, is outside of the doctrine and does not qualify for res judicata protection. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 107‑08 (App. 1989).

Civil Procedure ‑ Res Judicata; Jurisdiction; Transition of Authority
In light of the Trust Territory High Court's insistence on maintaining control over cases within the Federated States of Micronesia in disregard of Secretarial Order 3039 and to the exclusion of the new constitutional courts, its characterizations of Joint Rule No.1 as "simply a memorandum" and of the words "active trial" in Secretarial Order 3039 as merely "administrative guidance," its acceptance of appeals after it was precluded from doing so by Secretarial Order 3039, its decision of appeals after Secretarial Order 3039 was terminated and its continued remand of cases to the High Court trial division for further action even after November 3, 1986, there can be no doubt that for purposes of res judicata analysis, the High Court was a court lacking capacity to make an adequately informed determination of a question concerning its own jurisdiction United Church of Christ v. Hamo, 4 FSM Intrm. 95, 118 (App. 1989).

Civil Procedure ‑ Res Judicata; Equity ‑ Laches and Estoppel; Jurisdiction; Transition of Authority
Although final judgment in a case has been entered by the Trust Territory High Court, because any effort by a party to have the High Court consider its own jurisdiction would have been futile, it is procedurally fair to later afford the party an opportunity to question that jurisdiction. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 118‑19 (App. 1989).

Jurisdiction; Transition of Authority
Where the Trust Territory High Court improperly retained a case for four years after the FSM Supreme Court was certified, and continued to hold the case more than a year after the Truk State Court was established, issuing a judgment based upon filed papers, without there ever having been a trial, let alone an active trial, in the case, by the time judgment was issued the subject matter of the litigation was so plainly beyond the High Court's jurisdiction that its entertaining the action was a manifest abuse of authority. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 119 (App. 1989).

Civil Procedure ‑ Res Judicata; Jurisdiction; Transition of Authority
Where the Trust Territory High Court's exercise of jurisdiction was a manifest abuse of authority, allowing the judgment of the High Court to stand would undermine the decisionmaking guidelines and policies reflected in the judicial guidance clauses of the national and state constitutions and would thwart the efforts of the framers of the Constitution to reallocate court jurisdiction within the Federated States of Micronesia by giving local decisionmakers control over disputes concerning ownership of land. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 119 (App. 1989).

Civil Procedure ‑ Res Judicata; Equity ‑ Laches and Estoppel; Transition of Authority
Decisions regarding res judicata and the transitional activities of the Trust Territory High Court typically should be made on the basis of larger policy considerations rather than the equities lying with or against a particular party. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 120 (App. 1989).

Civil Procedure ‑ Res Judicata; Equity ‑ Laches and Estoppel; Jurisdiction; Transition of Authority
Actions of the Trust Territory High Court taken after the establishment of functioning constitutional courts in the Federated States of Micronesia, and without a good faith determination after a full and fair hearing as to whether the "active trial" exception permitted retention of the cases, were null and void, even though the parties failed to object, because the High Court was without jurisdiction to act and its conduct constituted usurpation of power. United Church of Christ v. Hamo, 4 FSM Intrm. 95, 122 (App. 1989).

COURT'S OPINION

EDWARD C. KING, Chief Justice:

In this case, we are required to consider whether the Court should grant an injunction to prevent enforcement of a judgment issued by the Trust Territory High Court in a case arising out of a dispute concerning ownership of land in Truk. The High Court judgment was issued on August 19, 1985, long after establishment of the Truk State Court and the Federated States of Micronesia Supreme Court pursuant to the Constitution of the Federated States of Micronesia, and therefore was in clear violation of United States Department of Interior Secretarial Order 3039,1 which was the only source of High Court authority to act on cases within the Federated States of Micronesia after constitutional courts began functioning.

The principal issue is whether the FSM Supreme Court should employ the normal presumptions in favor of judgments issued by other courts thus giving the High Court judgment res judicata effect.

I.

The Trust Territory High Court litigation involved a dispute over ownership of the site of the former Mizpah School, which had been operated by the United Church of Christ in Mwan Village on Moen Island, Truk until 1971.2

The Church traced its ownership of the land to a deed, executed on October 1, 1884 by persons who apparently were ancestors of the Wito Clan (the "Clan"). The deed recited that the land was being given to the American Board of Commissioners for Foreign Mission, Boston, Massachusetts "forever, to be used for the purposes for which said board is organized."

The Clan contended that their ancestors' grant of the land to the American Board was a limited one, effective only so long as the land continued to be used for Church purposes. The Trust Territory High Court ultimately accepted that argument, deciding that title reverted back to the Clan in 1973, when the United Church Board of World Ministries, the successor to the American Board, granted a 60‑year lease of the land to the government of the Trust Territory of the Pacific Islands, for which the Trust Territory paid the United Church Board of World Ministries some $300,060.

A.

The Mizpah litigation itself traces back to 1972, when Achuo Hamo, on behalf of the Clan, and the United Church Board of World Ministries each filed claims of ownership with the Land Commission. On December 28, 1975 the Land Commission referred the case to the Trust Territory High Court where, as civil action No. 1‑76, it proceeded in desultory fashion until a March 18, 1985 pretrial conference.3

Throughout the first eight years of the litigation the principal activities consisted of various shifts in the identities of the parties and transfer of the case from one judge to another. The Trust Territory Government, as lessee under the 60‑year lease, filed a complaint in intervention in 1978. Then, having assigned its leasehold rights to Truk State, the Trust Territory was replaced as a party by Truk State on February 19, 1982. On March 15, 1984, the United Church of Christ of Moen (the Church) was substituted as a party in the place of the United Church Board of World Ministries.

The case was also moving from judge to judge. Chief Justice Harold Burnett accepted the reference from the Land Commission on January 2, 1976 but took no other action in the case. The record indicates that control over the case passed to Justice E.F. Gianotti (Apr. 1978‑Jan. 1979), then to Acting Chief Justice Richard I. Miyamoto (June to August, 1982), and finally to Chief Justice Alex R. Munson in 1983.

When the pretrial hearing finally was held in Trust Territory civil action No. 1‑76, on March 18, 1985, the High Court trial judge on his own initiative raised the question of whether the Clan should receive a monetary damage award if it should prevail. At the request of counsel for the Church, the pretrial conference was adjourned for three days, until March 21, 1985, when it was agreed that the High Court would decide the case based upon the papers already in the court file.

On August 19, 1985, the High Court issued its judgment, declaring the Clan owner of the land and ordering the Church to pay the Clan "$300,060 plus 9% interest compounded annually, on the unpaid balance from June 29, 1973 until fully paid."4

The Church wanted to appeal but counsel failed to forward the $5.00 appeal fee with the notice of appeal. Although the Trust Territory High Court appellate division in Saipan apparently received the notice of appeal in time, it was returned because not accompanied by the $5.00 fee. When counsel sent the notice of appeal with the fee, the court rejected both as too late.5

Subsequently, the Church moved the High Court for relief from the August 19, 1985 judgment. That motion was denied by the High Court on January 20, 1987.

B.

While all this was taking place, constitutional self‑government was being established within the Federated States of Micronesia and the constitutional national and state judiciaries began functioning. The FSM Supreme Court was certified on May 5, 1981 and the Truk State Court on April 20, 1984. In anticipation of those developments, and to provide for the new nations the "maximum permissible amount of self‑government" pending termination of the Trusteeship Agreement, S.O. 3039 was adopted on April 25, 1979.6

The High Court's judgment of August 19, 1985, gave the Church one year to remove any structures from the land. In 1986, just before the one year period ended, the Church filed civil action no. 1986‑1026 with the trial division of this Court challenging enforcement of the Trust Territory judgment. In that litigation a temporary restraining order and then a preliminary injunction were issued preventing enforcement of the High Court judgment pending the outcome of this litigation. Thus, apparently no payments have been made or actions taken in reliance on the High Court judgment.

The trial division of the FSM Supreme Court held that S.O. 3039 required the Trust Territory High Court to transfer civil action no. 1‑76 to the new constitutional courts as they began functioning. United Church of Christ v. Hamo, 3 FSM Intrm. 445, 451 (Truk 1988). Specifically, the trial division held that S.O. 3039 required transfer of the case to the FSM Supreme Court when it was certified as functioning on May 5, 1981 and also to the Truk State Court on April 20, 1984.

That conclusion obviously is correct, for section 5 of S.O. 3039 says that "all cases...currently pending but not in active trial...shall be transferred" once a determination has been made that a constitutional court is functioning. The case plainly was not in "active trial" in any normal sense when this Court, and the Truk State Court, were certified. The record reveals that virtually nothing had taken place in High Court civil action no. 1‑76 before April 20, 1984. There is no indication that any Trust Territory judge had even become acquainted with the case prior to 1985. Indeed, after this court was certified the case was transferred twice, each time to an entirely new Trust Territory judge, neither of whom was even in the Federated States of Micronesia or was yet a Trust Territory judge on May 5, 1981.

In truth, there never was a trial or evidentiary hearing of any kind in the High Court litigation. The eventual High Court decision, rendered on August 19, 1985, was based upon papers filed in the case. The trial division of the FSM Supreme Court observed that, "To say that the case was in 'active trial' in those circumstances is to deprive the term of any meaning at all." 3 FSM Intrm. at 451. We agree.7

Despite concluding that High Court retention of the litigation and issuance of the judgment were beyond the transitional powers allotted to the Trust Territory High Court by S.O. 3039, the FSM Supreme Court trial division declined to enjoin enforcement of the judgment. That decision was based upon the trial division's view that: (1) the doctrine of res judicata prevents collateral attack on the judgment, and (2) the Church's failure in the High Court litigation to insist upon transfer of the case should now bar the Church's effort to set aside the judgment.

II.

The fact that the Trust Territory High Court was permitted to carry out judicial functions within the Federated States of Micronesia after inception of constitutional government is itself extraordinary, with profound constitutional implications, which must be taken into consideration in formulating a rule concerning judgments issued by the High Court after the FSM Constitution became effective. Accordingly, we shall first consider the transitional scheme created by S.O. 3039 and any responsibility of this Court to assure that S.O. 3039 is interpreted and implemented in a way that does not violate the Constitution of the Federated States of Micronesia.

A.

When constitutional self‑government began, neither the states nor the national government were sufficiently organized and developed to accept in "one gulp" all governmental functions theretofore handled by the Trust Territory Government. Manahane v. FSM, 1 FSM Intrm. 162, 168 n.3 (Pon. 1982). Instead, a "transfer and transition" approach was adopted. Id.

The key document relied upon for implementing the transition was S.O. 3039, which provided for "delegation" of executive, legislative and judicial functions of the Trust Territory of the Pacific Islands to the newly emerging constitutional governments of the Federated States of Micronesia, the Marshall Islands and Palau. S.O. 3039, § 2.8

As a matter of constitutional law of course, the authority to exercise executive, legislative and judicial powers came to Federated States of Micronesia governmental officials under the FSM Constitution, by operation of law, not through delegation of Trust Territory functions. Still, S.O. 3039 did directly govern Trust Territory officials, divesting them of certain powers they had previously exercised within the geographical area of the Federated States of Micronesia, and in that respect was a legally effective tool of transition.

What is most remarkable about S.O. 3039 however is not the superfluous "delegation" of authority or the order's practical utility for transition purposes, but the continuing role provided for Trust Territory officials after the Constitution of the Federated States of Micronesia became effective. In 1982, the trial division of this Court said:

“Although it is being displaced by the new constitutional governments, the Trust Territory Government retains critical governmental functions throughout the Trust Territory. The High Commissioner continues to play a major role in the budget, auditing and accounting, and grant‑in‑aid programs, Secretarial Order 3039, Section 3, and retains power to suspend legislation enacted by the President. Id., Section 4. As already stated, section 5(b) of Secretarial Order 3039 authorizes the Appellate Division of the High Court to entertain appeals from the courts of last resort of the constitutional governments. Thus the Trust Territory Government has the power to overrule and set aside decisions and actions of the heads of each of the three branches of the constitutional government of the Federated States of Micronesia. These awesome powers are calculated to allow the Trust Territory Government to control or override virtually every action of any constitutional government within the Trust Territory.

Lonno v. Trust Territory, 1 FSM Intrm. 53, 73 (Kos. 1982).

Yet, the fact remains that the Constitution of the FSM has been the supreme law of the Federated States of Micronesia since May 10, 1979. FSM Const. art. II, § 1. From that time on, nonconstitutional officials could be authorized to exercise powers assigned to the national government by the Constitution only through authorization by constitutional officials or pursuant to some other power rooted in the Constitution. Obviously then, adoption of S.O. 3039 by the United States Secretary of the Interior was not sufficient to permit Trust Territory officials to retain and exercise powers or hold positions specified in the FSM Constitution. Some type of action pursuant to the Constitution was essential to give legal effect to the transitional activities of these nonconstitutional officials.

The necessary constitutional imprimatur for S.O. 3039 was supplied by the FSM Congress, acting under article XV, section 5 of the Constitution, which says, "The Congress may provide for a smooth and orderly transition to government under this Constitution."

1. Executive Transition.

The Congress enacted legislation providing for the transfer of executive functions from Trust Territory officials to the executive branch of the Federated States of Micronesia national government as the latter became prepared to assume those functions. 8 F.S.M.C. 201‑06. That legislation was implemented by President Tosiwo Nakayama and other executive branch officials through a series of agreements with Trust Territory and state government officials. See generally Manahane, 1 FSM Intrm. at 167‑73. We find that in specifically authorizing the President to act "pursuant to" S.O. 3039 in accepting executive functions from the Trust Territory, 8 F.S.M.C. 202, the Congress implicitly adopted those provisions of S.O. 3039 concerning transfer of executive functions as law of the Federated States of Micronesia.

2. Judiciary Transition

The practical need for gradual transition and transfer of judicial functions was even more compelling than for executive functions. When the Constitution of the Federated States of Micronesia went into effect on May 10, 1979, the only judiciaries authorized by it to function within the Federated States of Micronesia were the FSM Supreme Court, "inferior" national courts to be established by statute, FSM Const. art. XI, § 1, and "state or local courts." Id. art. XI, §§ 7, 8, 9(d) and 10. The Constitution provides no authority for other courts to act within the Federated States of Micronesia.

Yet, there were no national, state or local courts of the type contemplated by the Constitution. In fact, no judicial officials were confirmed for any new constitutional courts until October, 1980 and no constitutional court became functional until May 5, 1981, when the FSM Supreme Court was certified pursuant to 4 F.S.M.C. 206(2) and 207.

No transition legislation comparable to that of 8 F.S.M.C. 201 et seq. was enacted for judicial functions. However, the Judiciary Act of 1979 designated the Trust Territory Chief Justice to certify when the FSM Supreme Court "is prepared to hear matters." 4 F.S.M.C. 206(2). The Trust Territory Chief Justice was also authorized to "transmit copies of his certification to the President and the Congress and to the State or District courts." 4 F.S.M.C. 207. These statutory certification procedures paralleled and built upon those of S.O. 3039. Moreover, in later codifying FSM statutory law Congress republished the Trust Territory Judiciary Act. 5 F.S.M.C. 101 to 813. Those provisions and others were republished in apparent recognition and acceptance of the fact that Trust Territory courts were to remain active pending their replacement by courts established under constitutional self‑government. In re Raitoun, 1 FSM Intrm. 561, 564 (App. 1984). See also Pub. L. No. 2‑48, reprinted at volume 1, page v of the FSM Code.

This Court finds that these transitional actions were intended by Congress to adopt, as law of the Federated States of Micronesia, those portions of S.O. 3039 relating to judicial functions within the Federated States of Micronesia. Plainly, this authorization permitting the Trust Territory courts to continue functioning within the Federated States of Micronesia pending establishment of constitutional courts was a necessary and proper exercise of Congress' power under article XV, section 5 of the Constitution to provide for a "smooth and orderly transition."

B.

A considerably more difficult question is whether article XV, section 5 gave Congress sufficient power to permit Trust Territory courts to continue to exercise jurisdiction over cases within jurisdiction of the constitutional courts after those constitutional courts had become functional.

The Constitution spells out jurisdiction, FSM Const. art. XI, §§ 6‑8, and by its own terms vests the entire judicial power of the national government in the FSM Supreme Court. FSM Const. art. XI, § 1. This provision is self‑executing and the judicial power of this Court is not dependent on congressional action.

To the extent S.O. 3039 itself can be read as permitting the Trust Territory High Court to continue, after the FSM Supreme Court had begun functioning, to control cases assigned by the Constitution to the FSM Supreme Court, that exercise by Congress of the transitional power under article XV, section 5 of the Constitution could run counter to other specific provisions of the Constitution, especially the judiciary article, and to fundamental principles of separation of powers. Similarly, any extension by the Trust Territory High Court of the powers assigned to it under S.O. 3039 would violate those same constitutional provisions and principles.

These factors in turn require this Court to exercise its own constitutional responsibilities to assure compliance with the Constitution. Suldan v. FSM (II), 1 FSM Intrm. 339, 350 (Pon. 1983); In re Iriarte (II), 1 FSM Intrm. 255, 268 (Pon. 1983).

C.

We now are asked to determine whether effect should be given to a judgment issued by the Trust Territory High Court within the Federated States of Micronesia well after the courts of constitutional self‑government had begun functioning.

This is not just a routine procedural matter involving sister courts operating within the same governmental system. The question presented touches on matters basic and critical to constitutional self‑government. This Court, the ultimate arbiter of constitutional meaning, may not defer to decisions of the Trust Territory High Court as to the amount of power available to the High Court under section 5 of S.O. 3039.

With these principles in mind, we move to the remaining questions presented by this appeal.

III.

A.

A fundamental principle of the common law is that once a judgment has been issued and the appeal period has expired or the decision is affirmed on appeal, the parties are precluded from challenging that judgment or from litigating any issues that were or could have been raised in that action. Allan v. McCurry, 449 U.S. 90, 94, 101 S. Ct. 411, 414, 66 L. Ed. 2d 308, 313 (1980). This principle is traditionally referred to in common law jurisdictions by the Latin phrase "res judicata," which, literally translated, means, "a thing judicially decided, or adjudged." H. Black, Black's Law Dictionary 1174 (5th ed. 1979). The underlying purpose is to achieve finality of litigation, a goal which this Court has recognized as desirable:

“There are several reasons why courts see this interest in preserving the final effect of judgments as important. First, the final resolution of a legal conflict should be useful in ending festering and troublesome disputes and restoring order between the disputants and those around them. Second, the final determination of rights frees the prevailing party to exercise the rights which were at issue and allows any contested resource to be used efficiently. Third, finality is intended to prevent both the parties and governmental institutions from devoting still more resources to the dispute itself.

While the paramount goal is to provide a full and fair opportunity for the parties to be heard and to reach an enlightened result understandable to all of the parties, an important subsidiary goal is to end the litigation itself and to reach a final decision.”

Jonas v. Mobil Oil Micronesia, Inc., 2 FSM Intrm. 164, 166 (App. 1986).

The reasons for the doctrine of res judicata, then, apply in this new nation. Indeed, the doctrine properly has been invoked by new constitutional courts to uphold and protect judgments of the Trust Territory High Court. Ittu v. Charley, 3 FSM Intrm. 188 (Kos. S. Ct. Tr. 1987). This Court too is fully prepared to apply the doctrine to Trust Territory High Court judgments, and to enforce those judgments, under appropriate circumstances. FSM Dev. Bank v. Rodriquez Corp., 2 FSM Intrm. 128 (Pon. 1985).

Thus, this Court normally will refuse to review the correctness of an earlier Trust Territory High Court judgment, which has become final through affirmance on appeal or through lack of timely appeal. Claims that the earlier judgment is ill‑reasoned, unfair, or even beyond the jurisdiction of the High Court typically will not be sufficient to escape the doctrine of res judicata.

1. Exceptions

As with practically all broad principles of the law however, the common law principle of res judicata admits of some exceptions. There are rare circumstances in which judgments will not be protected against attack.

Commissioner v. Sunnen, 333 U.S. 591, 597, 68 S. Ct. 715, 719, 92 L. Ed. 2d 898 (1984)("The judgment puts an end to the cause of action, which cannot again be brought into litigation between the parties upon any ground whatever, absent fraud or some other factor invalidating the judgment.") (emphasis added).

The ground relied upon by the Church for this attack on the High Court's judgment is that the High Court did not have jurisdiction over the case. The determination of jurisdiction itself normally qualifies for protection, requiring a second court to presume that the court which issued the judgment did properly exercise its own jurisdiction. American Surety Co. v. Baldwin, 287 U.S. 156, 166, 53 S. Ct. 98, 101, 77 L. Ed. 232 (1932)("[T]he principles of res judicata apply to questions of jurisdiction as well as to other issues."). Other courts therefore normally decline to review or question the first court's determination that it has jurisdiction. Stoll v. Gottlieb, 305 U.S. 165, 172, 59 S. Ct. 134, 137, 83 L. Ed. 104 (1938)("After a party has his day in court, with opportunity to present his evidence and his view of the law, a collateral attack upon the decision as to jurisdiction there rendered merely retries the issue previously determined. There is no reason to expect the second decision will be more satisfactory than the first.").

Yet, the common law rule remains that "plain usurpation of power," a judgment issued by a court which "wrongfully extends its jurisdiction beyond the scope of its authority," is outside the doctrine and does not qualify for res judicata protection. Kansas City Southern Ry. Co. v. Great Lakes Carbon Corp., 624 F.2d 823, 825 (8th Cir. 1980). See also 7 J. Moore, Moore's Federal Practice ¶ 60.25(2) (2d ed. 1985).

The task then is to distinguish "plain usurpation of power" and "total want of jurisdiction," which will render the judgment void, from "mere error" in the exercise of jurisdiction, which is insufficient to avoid application of the res judicata doctrine. Various standards have been erected to guide courts in making this distinction. The United States federal courts have said that a judgment is entitled to full faith and credit, even as to questions of jurisdiction, when the second court's inquiry discloses that the litigants in the court which rendered the original judgment had a "full and fair opportunity" to litigate those questions in the original court. Allen v. McCurry, 449 U.S. 90, 95, 101 S. Ct. 411, 415, 66 L. Ed. 2d 308, 313 (1980); see also Durfee v. Duke, 375 U.S. 106, 111, 84 S. Ct. 242, 11 L. Ed. 2d 186, 191 (1963); Underwriters Nat'l Assurance Co. v. N.C. Life & Accident, 455 U.S. 691, 706‑07. 102 S. Ct. 1357, 1367, 71 L. Ed. 2d 558, 571-72 (1982).

The compilers of the Restatement (Second) of Judgments have enunciated standards for measuring contentions that a previous judgment of another tribunal should be regarded as void because that tribunal did not have jurisdiction over the subject matter of the case:

“When a court has rendered a judgment in a contested action, the judgment precludes the parties from litigating the question of the court's subject matter jurisdiction in subsequent litigation except if:

(1) The subject matter of the action was so plainly beyond the court's jurisdiction that its entertaining the action was a manifest abuse of authority; or

(2) Allowing the judgment to stand would
substantially infringe the authority of another tribunal or agency of government; or

(3) The judgment was rendered by a court lacking capacity to make an adequately informed determination of a question concerning its own jurisdiction and as a matter of procedural fairness the party seeking to avoid the judgment should have opportunity belatedly to attack the court's subject matter jurisdiction.

Restatement (Second) of Judgments § 12 (1982).

2. Importance of the Nature of the Tribunals

Applications of the tests outlined above may differ depending on the nature of the tribunal whose judgment is at issue and of the court from which enforcement is sought. United States federal courts would "almost never" find a judgment of another federal court to be void for want of subject matter jurisdiction, Kansas City Southern Ry. Co. v. Great Lakes Carbon Corp., 624 F.2d at 825 n.5, but treat non‑federal court judgments with somewhat less deference, especially when the state judgment may impinge upon national constitutional principles. Kalb v. Feuerstein, 308 U.S. 343, 60 S. Ct. 343, 84 L. Ed. 370 (1940).

The Restatement standards explicitly require examination of the nature of the court whose judgment is at issue, to determine whether that court has "capacity to make an adequately informed determination of a question concerning its own jurisdiction." Restatement (Second) of Judgments § 12(3).

In addition, the tests referred to above are intended for use by courts within the United States in considering judgments of other domestic courts within that nation. The tests themselves are shaped by an assumption that judgments of the issuing court are constitutionally entitled to full faith and credit under the Constitution of the United States. U.S. Const. art. IV, § 1.

The judgments of courts foreign to the United States do not qualify for constitutional full faith and credit protection and traditionally have been subjected to different standards when brought before courts in the United States for enforcement. C. Peterson, Res Judicata And Foreign Court Judgments, 24 Ohio St. L.J. 291, 292 (1963)("Almost none of the states could be induced to accord to foreign judgments that same degree of conclusiveness required by the American Constitution for sister state judgments."). See also A. Vestal, Preclusion/Res Judicata Variables: Adjudicating Bodies, 54 Geo. L.J. 857, 860‑61 (1966)("When a court is faced with an assertion that there is issue preclusion, it must...consider the adjudicating bodies ‑ the one which handed down the earlier decision and the one before which the instant action is pending.")(emphasis in original).

B.

We must therefore examine the nature and actions of the Trust Territory High Court within the Federated States of Micronesia after the Constitution came into effect.

1. Not Contemplated By The Constitution

The most important consideration of course is that the Trust Territory courts were not constitutional courts.

“[T]he High Court is an anomalous entity operating on an interim basis within, or adjacent to, a constitutional framework. It does not derive its existence from the Constitution or the people of the Federated States of Micronesia. Instead, the High Court is the creation of an administrative agency, the United States Department of Interior. Personnel of the High Court are selected by the United States Department of the Interior without election, or any of the standard advice and consent procedures necessary for judges of the United States and the Federated States of Micronesia. They are selected by Interior officials unilaterally without prior consultation with government officials of the Federated States of Micronesia. Paid in amounts, and acting under the terms and conditions established for administrative officials within Interior, High Court appointees enjoy few if any of the protections normally established for judges as a matter of course pursuant to the constitutional separation of powers doctrine.”

In re Iriarte (II), 1 FSM Intrm. 255, 267 (Pon. 1983).

The United States Federal District Court for the Northern Marianas Islands made similar observations:

“[The Trust Territory High Court] is not established by the Constitution or laws of the Commonwealth of the Northern Marianas Islands. It is an Interior Department creation from which there is no federal appeal. Its justices are appointed by and removable by the Interior Secretary, and thus lack the independence and local accountability which distinguish the federal judiciary structured by the CNMI Constitution pursuant to the Covenant.”

Temengil v. Trust Territory, 1 N. Mar. I. Commw. Rptr. 426, 445, 33 FEP Cases 1027, 1037 (D. N. Mar. I. 1983). These structural realities carry with them significant implications. Based upon its review of the High Court's characteristics, the Temengil court concluded that "continued jurisdiction of the High Court in the Commonwealth of the Northern Mariana Islands after implementation of the Commonwealth form of government" was "incompatible with the permanent judicial system designed by the Covenant." Id.

For purposes of this appeal, it is enough to recognize that these High Court characteristics, "point toward the propriety and necessity of vigilance by the Supreme Court of the Federated States of Micronesia to assure that the constitutional rights of citizens of the Federated States of Micronesia are upheld." In re Iriarte (II), 1 FSM Intrm. at 267.

2. New Constitutional Policies

New Constitutions approved by the people of the Federated States of Micronesia depart fundamentally from the judicial structures, and decisionmaking methods, of Trust Territory days.

a. Local decisionmaking in land cases ‑ Under Trust Territory law, jurisdiction over land cases was exclusively in the Trust Territory High Court. 6 F.S.M.C. 203. The more local District Courts were prevented from exercising jurisdiction in land cases. 6 F.S.M.C. 301(1)(a). The founders of this new nation at the Micronesian Constitutional Convention devoted considerable attention to land matters and reached an apparent consensus that the vesting of exclusive jurisdiction over land cases in the Trust Territory High Court had not served Micronesians well. Instead, they concluded that "land matters should be dealt with fully on the district level." SCREP No. 36, II J. of Micro. Con. Con. 848. See also Tammow v. FSM, 2 FSM Intrm. 53, 59 (App. 1985). This "profound distrust of non‑local authority over land" was "evidently a response to the policies of the Trust Territory High Court." A. Burdick, The Constitution of the Federated States of Micronesia, 8 U. Haw. L. Rev. 419, 476‑77 (1986). See also N. Meller, Constitutionalism in Micronesia 240 (1985); D. Olsen, Piercing Micronesia's Colonial Veil, 15 Colum. J. Transnat'l L. 473 (1976).

A policy mandate of the Constitution is that determinations concerning ownership of land should be made by state decisionmakers. This Court's trial division has acted in numerous cases to assure state decisionmakers the opportunity to resolve land issues. See, e.g., Etpison v. Perman, 1 FSM Intrm. 405 (Pon. 1984); In re Nahnsen, 1 FSM Intrm. 97 (Pon. 1982); Ponape Transfer & Storage Inc., v. Federated Shipping Co., 4 FSM Intrm. 39 (Pon. 1989). It would be ironic indeed for us now to stay our hand, permitting violation of this constitutional policy by the tribunal whose activities prompted the policy in the first place.

b. A new approach to decisionmaking ‑ The framers also sought to assure that decisionmaking by the courts would be carried out on a "new basis." A judicial guidance clause was inserted in the Constitution to require that court decisions "be consistent with this Constitution, Micronesian customs and traditions, and the social and geographical configuration of Micronesia." FSM Const. art. XI, § 7. In proposing this provision, the Constitutional Convention's Committee on General Provisions emphasized its desire that the new constitutional courts re‑examine the possibilities rather than unthinkingly accept the approach developed by Trust Territory courts.

“The intent and purpose of this provision is that future Micronesian courts base their decisions not on what has been done in the past but on a new basis which would allow the consideration of the pertinent aspects of Micronesian society and culture.

The failure to include such a provision in the Constitution may cause the courts to follow the decisions of past Trust Territory cases or various foreign decisions which have dealt with similar interpretive or legal questions. This may be undesirable since much of the reasoning utilized in these various courts may not be relevant here in Micronesia.... [I]n the past the courts in the Trust Territory have copied to a great extent English common law which the Committee feels is not always a relevant basis for decision here in Micronesia. Therefore, the provision guarantees that future Micronesian courts will not be bound to follow previous Trust Territory or common law decisions.”

SCREP No. 34, II J. of Micro. Con. Con. 821‑22.

This affirmative desire to depart from Trust Territory precedent in order to decide cases on "a new basis" is reflected in the state constitutions as well. The Kosrae, Pohnpei and Yap constitutions all contain clauses based upon the judicial guidance clause of the FSM Constitution.9 The Yap Constitution also contains an even more pointed provision: "None of the decisional law developed by the High Court of the Trust Territory shall have the force of stare decisis in the adjudication of any case or controversy in the State Court." Yap Const. art. XV, § 2.

These constitutionally established policies of self‑government militate against acceptance of a judgment concerning ownership of land, issued by the Trust Territory High Court in clear violation of the Trust Territory High Court's limited transitional role under S.O. 3039.

3. Pattern of Conduct

Secretarial Order 3039 was carefully drawn to minimize High Court involvement within the Federated States of Micronesia after constitutional courts began functioning. Unfortunately, the High Court disregarded the limitations on its transitional role.

From the beginning, the Trust Territory High Court appeared to lack sensitivity for constitutional self‑government, engaging in activities that have been characterized as "bullying and demeaning of a constitutional government." A. Bowman, Legitimacy and Scope of Trust Territory High Court Power to Review Decisions of Federated States of Micronesia Supreme Court: The Otokichy Cases, 5 U. Haw. L. Rev. 57, 78 (1983). In June, 1982 the FSM Congress found it necessary to adopt a resolution seeking limitation of the High Court's activities within the Federated States of Micronesia. Cong. Res. 2‑87 (2d Cong., 3rd Reg. Sess.). That resolution noted, among other things, that "events of late have sadly demonstrated the apparent lack of purpose of the Trust Territory High Court to maintain the cooperation needed to effectuate the full scope of jurisdiction of and the proper transition of functions to the Federated States Supreme Court, thereby undermining the effort toward constitutional self‑rule."

a. Special Joint Rule No. 1 ‑ One example is the High Court response to Special Joint Rule No. 1, adopted on July 13, 1981 in an attempt to avoid transitional conflicts. That rule explained its own purpose.

“The Supreme Court of the Federated States of Micronesia has been certified by the Chief Justice of the Trust Territory High Court and has now begun to exercise its jurisdiction throughout the Federated States of Micronesia. The Trust Territory High Court shall remain active in the Federated States of Micronesia to hear only those cases which do not fall within the jurisdiction of the Supreme Court of the Federated States of Micronesia. It is the intent of this jointly adopted rule that both Courts shall cooperate to assure that the Supreme Court of the Federated States of Micronesia immediately shall exercise the full scope of its jurisdiction under the Constitution and laws of the Federated States of Micronesia, and that the Supreme Court shall determine the scope of its own jurisdiction. The following rule is therefore adopted jointly by the Courts to specify procedures to be followed in cases originally filed in the Trust Territory High Court or a Trust Territory District Court.”

The procedure provided to carry out this purpose was a simple one, designed to avoid potential conflicts by assuring that only this Court would address jurisdictional issues.

“Either party may, from time to time, file a motion with the Court where the case is pending, asserting that the case falls within the jurisdiction of the Federated States of Micronesia. Upon receipt of any such motion, the Trust Territory High Court or the Trust Territory District Court, as the case may be, shall promptly certify the question of jurisdiction to the Supreme Court of the Federated States of Micronesia.”

The rule was never honored by any High Court trial judge. In a case where the rule was not at issue, the Trust Territory High Court Appellate Division nonetheless went out of its way to denigrate and mischaracterize the rule:

“Somehow, there is a gross misunderstanding as to what the Special Joint Rule is. Jurisdiction is determined by statute or constitution. Rules are promulgated to assist in the procedural handling of cases and for administration of the court system. Rules, however well‑intentioned, cannot change the jurisdiction of the courts. This document was simply a memorandum adopted to express general agreements to create an atmosphere for smooth transition and cooperation. Anything specific that takes away the authority of a court or adds to that of another court without authority is simply gratuitous without any force or effect.”

Otokichy v. Appellate Division of FSM Supreme Court, 8 TTR 295, 303‑04 (App. 1983) (footnote omitted).

The statement that Special Joint Rule No. 1 could not change the jurisdiction of the courts was certainly correct. However that is not what the rule aspired to do. The rule's purpose was not to change jurisdiction, but to specify procedures for deciding jurisdictional issues. Moreover, the High Court's contention that the rule is "simply a memorandum" was itself, at best, a "gross misunderstanding as to what the Special Joint Rule is." The rule was much more than just a memorandum. It was an exercise of the rulemaking power of both courts and was legally binding on both.10

b. Active trial ‑ The same Trust Territory High Court refusal to accept limitations upon its transitional role is apparent in its response to the "active trial" exception specified in S.O. 3039.

An example is the case of Swain v. Aten, Civ. 8‑84. The Swain case was filed with the Trust Territory High Court trial division in Truk on February 3, 1984, almost three years after the FSM Supreme Court began functioning. Under FSM trial division holdings, the case fell within the jurisdiction of the FSM Supreme Court trial division since the plaintiffs were citizens of Truk and of the Federated States of Micronesia and several of the defendants were foreign citizens. In re Nahnsen, 1 FSM Intrm. 97 (Pon. 1982). Thus, the High Court had no apparent authority to accept the filing of the case.

Pleadings framing the issues were still being filed in the High Court litigation after April 20, 1984 and the "initial trial" did not begin until August, 1985. See Truk v. Aten, 8 TTR 631 (App. 1988). Thus, the case plainly was not in "active trial" on April 20, 1984. Even if somehow the Trust Territory High Court believed the case to fall outside FSM Supreme Court jurisdiction, there should have been no doubt that S.O. 3039 required transfer to the Truk State Court when the court was certified on April 20, 1984.

The High Court appellate division's decision made no mention of the fact that the High Court trial division was precluded by S.O. 3039 from even accepting the case. Rather, the appellate division contented itself with upholding the trial court's failure to transfer the case pursuant to S.O. 3039, saying:

“The language "active trial" which appears in quotation marks in Secretarial Order 3039, 5(a) was not intended to be a legalistic term meaning when the first witness in a trial was sworn or when a jury had been impaneled or to refer to any other specific time in pending litigation but was intended to be a term of administrative guidance to the High Court in making its decision whether to transfer or retain jurisdiction of a case depending on the totality of the circumstances of a particular case as determined by the Judge handling the case.”

Aten v. Swain, slip op. 3, App. No. 416 (App. 1985).

c. Direct appellate division violations ‑ The failure of the Trust Territory High Court appellate division went beyond mere failure to restrict the trial division's transitional role to that contemplated by S.O. 3039. The appellate division directly violated S.O. 3039 in its own right.

Just as the Trust Territory trial division was not permitted by S.O. 3039 to accept newly filed cases after constitutional courts were established, the Trust Territory appellate division had no further authority to accept appeals from trial court decisions. After constitutional courts began functioning, the appellate division had authority to accept appeals only by writ of certiorari and only from courts of last resort. S.O. 3039, § 5(b).11

The Trust Territory High Court appellate division simply ignored this restriction, and continued to accept appeals from the High Court trial division. Appeal No. 420 in Swain, for example, was filed more than one year after all constitutional courts in the Federated States of Micronesia were functioning. The High Court heard oral argument in the case on October 10, 1986, more than five years after the FSM Supreme Court had been in existence, and two and one‑half years after the Truk State Court began functioning.

Thus, the Swain opinion, issued on November 17, 1986, failed not only to address the trial division's wrongful acceptance of a newly filed case after the constitutional court began functioning, but also avoided discussion of the appellate division's own lack of jurisdiction. It is impossible to avoid the conclusion that the failures to address such obvious and fundamental issues amounted to a manifest abuse of authority and betrayed incapacity of the High Court appellate division to make a determination of its own jurisdiction. Restatement (Second) of Judgments §§ 12(1) and (3).

d. After Presidential Proclamations ‑ On November 3, 1986 the Presidents of the Federated States of Micronesia and of the United States jointly declared that the United States and United Nations Trusteeship Agreement for the Former Japanese Mandated Islands is terminated.12 Those proclamations terminated the applicability to the Federated States of Micronesia of S.O. 3039, wiping out any remaining authority the Trust Territory courts may have had to adjudicate rights of parties in cases within the Federated States of Micronesia. See Vol. 2 of the FSM Code, page 359 (1987 Supp.).

Even that did not stop the High Court. Although it retained no apparent governmental power to act on cases within the Federated States of Micronesia, the High Court still refused to transfer any of the FSM cases pending before it. Indeed, the decision in Swain v. Aten, referred to above, was issued on November 17, 1986, two weeks after the Presidential Proclamations. Even then, the High Court appellate division remanded the case to the High Court trial division for further proceedings which apparently were held in Truk in January of 1987. The High Court appellate division issued yet another opinion in Swain on September 22, 1988. Astonishingly, that opinion remanded the case yet another time to the High Court trial division for further findings. Truk v. Aten, 8 TTR 631 (App. 1988).

4. The Mizpah Litigation

Finally, we note that the particular actions of the Trust Territory High Court trial division in civil action 1‑76 by no means represent a departure from the pattern of High Court actions just described. Section 5(a) of S.O. 3039 says that, "Determination as to whether a case is in `active trial' shall be made by the Judge before whom such case is pending."

The record of the litigation before the Trust Territory trial division is devoid of any trial judge's finding as to whether the case was in active trial. The High Court simply retained the case.

Indeed, the first time the High Court seems to have thought of the "active trial" issue was after judgment, when the Church moved for relief from judgment. In that motion, the Church questioned, apparently for the first time, whether the Trust Territory High Court had jurisdiction to enter judgment in the case.

In addressing that motion, the High Court trial judge did not maintain that he or any other judge had ever determined the case to be in "active trial." He also did not review the "totality of the circumstances" of the case as Aten v. Swain suggested. Instead, he set out to make a postjudgment determination concerning the active trial issue. To do this, he simply called the former Trust Territory Chief Justice, then retired and living in Honolulu, and asked him "what the status of this case was on the date of the certification." Order Denying Relief From Judgment” (TTHC Tr. Div., Jan. 20, 1987).13

The High Court trial judge's January 20, 1987, order went on to say:

“On December 11, 1986, I telephoned Judge Burnett wherein he told me that on or about the date of [FSM Supreme Court] certification, he made the decision that, because the Trust Territory of the Pacific Islands was a party to the lawsuit and because of the long history of the matter, he determined that the Mizpah High School case was in `active trial' pursuant to Secretarial Order 3039.”

Slip op. at 2

As the FSM Supreme Court trial division correctly noted, neither of those considerations has any bearing whatever upon whether the case was in "active trial." 3 FSM Intrm. at 451.

Moreover, the record in High Court civil action 1‑76 reveals that Chief Justice Burnett's only involvement in the Mizpah case was on January 23, 1976 when he accepted reference of the litigation from the land commission on behalf of the High Court. Thereafter, three different Trust Territory justices entered notices, orders, memoranda and notes in the trial file, but Chief Justice Burnett took no further part in the case. Plainly, Chief Justice Burnett was not the "Judge before whom such case [was] pending" at any time after May 5, 1981. He therefore had no authority under S.O. 3039, § 5(a) to determine whether the case was in active trial.

C.

For purposes of res judicata analysis, it has been necessary to consider the activities of the Trust Territory High Court within the Federated States of Micronesia after the Constitution went into effect. That review enables us to determine that insistence upon maintaining control over cases within the Federated States of Micronesia, in disregard of the limitations of S.O. 3039, and to the exclusion of the new constitutional courts, was a solidly entrenched institutional refusal, or incapacity, of the High Court to transfer cases to this and other constitutional courts.

We find it quite significant in this regard that the characterizations of Special Joint Rule No. 1 as "simply a memorandum," and of the words, "active trial," in Secretarial Order 3039, as merely "administrative guidance," were in appellate division decisions, without a single dissent.

It is instructive as well that it was not only the trial division that accepted cases for filing after the constitutional courts had been established. That the High Court appellate division itself accepted new appeals long after it was precluded from doing so by S.O. 3039, that it continued to decide appeals within the Federated States of Micronesia even after S.O. 3039 was terminated, and that even after November 3, 1986 it continued to remand cases back to the High Court trial division for further action, are all important facts.

In light of this information there can be no doubt that the High Court was "a court lacking capacity to make an adequately informed determination of a question concerning its own jurisdiction," that any effort by the Church to have the High Court consider its own jurisdiction would have been futile, and that it is procedurally fair now to afford the Church an opportunity to question that jurisdiction. Restatement (Second) of Judgments § 12(3).

That the High Court improperly retained the case for four years after the FSM Supreme Court was certified, and continued to hold the case more than a year after the Truk State Court was established, issuing a judgment based upon filed papers, without there ever having been any trial, let alone an "active trial," in the case, establishes that, by the time the judgment was issued on August 18, 1985, the subject matter of the Mizpah litigation was "so plainly beyond the court's jurisdiction that its entertaining the action was a manifest abuse of authority." Id. § 12(1).

Most important, allowing the judgment to stand would undermine the decisionmaking guidelines and policies reflected in the judicial guidance clauses of the national and state constitutions and would thwart the efforts of the framers of the Constitution to reallocate court jurisdiction within the Federated States of Micronesia by giving local decisionmakers control over disputes concerning ownership of land. Thus, allowing this judgment of a nonconstitutional court to stand would infringe upon important constitutional policies and specifically upon the authority of the Truk State Court. Accordingly, section 12(2) of the Restatement (Second) of Judgments also calls for a finding that the judgment is void.

The other common test, in addition to the standards supplied by section 12 of the Restatement (Second) of Judgments, is that employed by the United States federal courts for judgments of other federal courts. Under that approach, an erroneous determination of jurisdiction is given res judicata effect if it is the product of a good faith determination or if the party attacking the judgment had an opportunity at the trial level to raise the question of jurisdiction. As already discussed, no good faith determination was made in the High Court Mizpah litigation although S.O. 3039 explicitly requires such a determination. Moreover, the pattern of High Court conduct establishes that any effort by the Church to have raised with the High Court the question of jurisdiction would have been futile.

Thus all of the standard tests for determining whether res judicata effect should be given to a judgment issued by a court lacking jurisdiction over the subject matter lead to a conclusion that the judgment must be set aside as void.

IV. LACHES OR ESTOPPEL

The trial division of this Court, troubled by the fact that the United Church of Christ had not objected to retention of the case by the High Court prior to judgment, regarded that acquiescence as a kind of "fault" attributable to the Church, which prevented collateral attack upon the judgment.

We are persuaded otherwise. In the first place, we think it clear that any effort by the Church to question the jurisdiction of the High Court at any stage of the High Court litigation would have been futile. Thus, the Church's participation in the High Court litigation can hardly be characterized as blameworthy.

Moreover, our review of the law in general concerning res judicata, and of the facts concerning transitional activities of the High Court in particular, convinces us that decisions of this kind are, and typically should be, made on the basis of larger policy considerations, rather than the equities lying with or against a particular party. Brown v. Felsen, 442 U.S. 127, 135‑37, 99 S. Ct. 2205, 60 L. Ed. 2d 767, 774‑75 (1979) (res judicata effect denied to state court decision about dischargeability of a debt because "giving finality to those rulings would undercut Congress' intention to commit...issues to the jurisdiction of the bankruptcy court....It makes little sense...to resolve a federal dischargeability question according to whether or not the parties in state court waived their right to engage in hypothetical litigation in an inappropriate forum."); United States v. United States Fidelity Co., 309 U.S. 506, 60 S. Ct. 653, 84 L. Ed. 894 (1940) (failure to object to jurisdiction of court to award cross‑claim against claim asserted by United States in the same litigation, did not bar United States from attacking the judgment collaterally); Capital Service v. NLRB, 347 U.S. 501, 504‑05, 74 S. Ct. 699, 98 L. Ed. 887, 892 (1954) ("when Congress, acting within its constitutional authority, has vested a federal agency with exclusive jurisdiction over a subject matter and the intrusion of a state would result in conflict of function, the federal court may enjoin the state proceeding in order to preserve the federal right."); 1B J. Moore, J. Lucas, T. Currier, Moore's Federal Practice ¶ 0.405 [4.‑1] at 214‑15 (2d ed. 1983) ("[I]f taken as absolute,...[this general principle that a court has authority to determine its own jurisdiction and therefore the doctrine of res judicata extends to jurisdictional determinations] might occasionally result in a serious interference with constitutional or statutory allocations of power.
As a consequence it has been held in an occasional case that competing considerations dictate that collateral attack on jurisdictional grounds be permitted.")

Exemplary of this view is Kalb v. Feuerstein, 308 U.S. 343, 60 S. Ct. 343, 84 L. Ed. 370 (1940), which, more than any other case brought to our attention,
parallels the facts of this case. In Kalb, a mortgage foreclosure action had been initiated in a county court in Wisconsin, in the United States. While the action was pending, the defendant filed a petition in bankruptcy court. This in turn triggered the United States federal bankruptcy law, placing the defendants and all their property under the exclusive jurisdiction of the federal bankruptcy court.

Nonetheless, the county court pressed on with the foreclosure
litigation. Judgments of foreclosure were issued, the sheriff sold the property, the county court issued writs of assistance, the sheriff executed the writs, and the appellants and their families were ejected from the mortgaged farms. All this was done after the county court should have stopped acting, and without objection by the parties.

After the time for appealing from the county court judgment had expired, the appellants instituted a new case in the Wisconsin state court system seeking to set aside the county court orders. That relief was denied and the second case was dismissed. This later decision was affirmed by the Wisconsin Supreme Court, which said:

“It would seem from a consideration of section 75 as amended, 11 U.S.C.A. § 203, that the filing of the petition automatically operated to extend the period of redemption. It is possible that that state of facts if made to appear would make the order of the trial court erroneous but the order would be within the power of the court to make. No appeal having been taken, no showing having been made in the state court, an order of sale having been confirmed, and the purchaser put in possession, the plaintiff is in no position to claim that the order of the circuit court is void.”

Kalb v. Luce, 285 N.W. 431, quoted in Kalb, 308 U.S. at 438, 60 S. Ct. at 345.

The United States Supreme Court reversed the Wisconsin Supreme Court decision, concluding that the county court judgment must be set aside in order to uphold important national policies.

“The States cannot, in the exercise of control over local laws and practice, vest State courts with power to violate the supreme law of the land. The Constitution grants Congress exclusive power to regulate bankruptcy and under this power Congress can limit the jurisdiction which courts, State or Federal, can exercise over the person and property of a debtor who duly invokes the bankruptcy law. If Congress has vested in the bankruptcy courts exclusive jurisdiction over farmer‑debtors and their property, and has by its Act withdrawn from all other courts all power under any circumstances to maintain and enforce foreclosure proceedings against them, its Act is the supreme law of the land which all courts ‑ State and Federal ‑ must observe.”

308 U.S. at 439, 60 S. Ct. at 346.

The constitutional and statutory circumstances of this case are strikingly similar to those in Kalb. The Trust Territory High Court originally had full and legitimate jurisdiction over this litigation, just as did the Wisconsin county court in Kalb. However, as in Kalb, subsequent events mandated a shift in jurisdiction to a different court.

In Kalb, the change was required by the United States Bankruptcy Act and the United States Supreme Court set aside the county court judgment as issued in violation of national policies set by the United States Congress. In this case S.O. 3039 requires transfer of the case and the High Court's issuance of a judgment in violation of the transfer requirement was contrary to important constitutional policies and to constitutional self‑government itself. In Kalb, the court held that the bankruptcy act provision calling for exclusive jurisdiction in the federal court was "self‑executing" and did not require action by the defendant in the state court proceedings. 308 U.S. at 443, 60 S. Ct. at 348. That being so the court said, "considerations as to whether the issue of jurisdiction was actually contested in the County Court, or whether it could have been contested, are not applicable where the plenary power of Congress over bankruptcy has been exercised as in this Act." 308 U.S. at 444, 60 S. Ct. at 348.

Here, the jurisdiction of the FSM Supreme Court under article XI, section 1 of the Constitution is itself self‑executing. Moreover, the transition procedure set out in Secretarial Order 3039 does not require a motion or any kind of affirmative action by the parties to the litigation. Consistent with constitutional requirements and "to provide the maximum permissible amount of self‑government," S.O. 3039, § 1, the order requires that "all cases...shall be transferred to the functioning courts." S.O. 3039, § 5(a).

The actions of the High Court taken after establishment of functioning constitutional courts, and without a good faith determination after a full and fair hearing as to whether the "active trial" exception permitted retention of the cases, were without authority of law and were void. The failure of the Church to object does not alter the fact that the High Court was without jurisdiction to act and that its conduct constituted usurpation of power. Enforcement of the judgment must be enjoined not because the United Church of Christ was without fault, but because the judgment is void.

As already noted, once the High Court judgment was issued and the opportunity to appeal denied, the Church has pursued this matter with vigor, and apparently no payments have been made or actions taken in reliance on the High Court judgment. Therefore, this is not an occasion for considering whether post-judgment inaction by the party seeking to set the judgment aside could give rise to a claim of estoppel or laches, justifying court refusal to enjoin enforcement of the judgment.

V. CONCLUSION

The underlying dispute in this case involves ownership of land. Under our constitutional system, the case apparently falls within the jurisdiction of the Truk State Court and that court should have an opportunity to decide it. The Trust Territory High Court judgment, issued in violation of S.O. 3039 and in disregard of policies and jurisdictional allocations prescribed by the Constitution of the Federated States of Micronesia, must be set aside to give the Truk State Court the opportunity to decide the case. The decision of the trial division of this Court is reversed and the case is remanded to the trial division for issuance of injunctive relief consistent with this opinion.

So ordered the 10th day of July, 1989.

ENDNOTES:

1Secretarial Order 3039, which was issued by the United States Secretary of the Interior on April 25, 1979, is reprinted in volume 2 of the FSM Code, pages 950‑56. Throughout this opinion the order will be referred to as S.O. 3039.
2Hamo v. United Church Board of World Ministries, Trust Territory High Court trial division, Civ. No. 1‑76.
3Pretrial conferences were scheduled for August 30, 1978; October 16, 1978; May 27, 1983; February 6, 1984; and December 7, 1984. Trial was at one time set for January 19, 1979. For reasons not fully explained in the record, none of these actually took place. Prior to March 18, 1985, the only hearings actually held seem to have been a pre‑trial hearing on September 28, 1978 and a calendar call on June 1, 1982.
4The Church, before the trial division of the FSM Supreme Court, challenged the monetary damages award as unconstitutional for lack of notice, contending also that: the $300,060 had been paid by the Trust Territory Government to the American Board, not to the United Church of Christ of Moen, which was ordered to "repay" the money; that the lease specifically provided that the lease money was to be returned to the government upon any determination that the Church did not have title to the land; and that there had been no request by any party to the case for an award of damages. The FSM (cont. on page 101)
 4(cont. from page 100) Supreme Court trial division concluded that there was "no basis" for the award of monetary damages, 3 FSM Intrm. at 453 n.2, but rejected the Church's claim that the procedures followed by the High Court were violative of due process. Those conclusions are not challenged, and are not before us on this appeal.
5The Church obtained new counsel after this unsuccessful effort to appeal. The Church's present counsel was not involved in the litigation before the Trust Territory High Court, until after the judgment in question here had been entered. Present counsel then filed the motion for relief from judgment which was denied by the High Court on January 20, 1987.
6Section 1 of S.O. 3039 says:
 "Purpose: The purpose of this Order is to provide the maximum permissible amount of self‑government, consistent with the responsibilities of the Secretary under Executive Order 11021, for the Federated States of Micronesia, the Marshall Islands, and Palau, pursuant to their respective constitutions as and when framed, adopted, and ratified, pending termination of the 1947 Trusteeship Agreement under which the United States of America undertook to act as Administering Authority for the Trust Territory of the Pacific Islands.
7Section 5 of S.O. 3039 also excepts from the transfer requirement suits against the Trust Territory. That exception in not at issue on this appeal however. The FSM Supreme Court trial division held that the Trust Territory litigation was not a "suit against the Trust Territory" since the case had been referred to the High Court by the Land Commission and the Trust Territory had voluntarily intervened in the litigation. No party contests now that conclusion of the trial division.
8Section 2 of S.O. 3039 provides as follows:
 "Delegation of Authority. Until the termination of the Trusteeship Agreement and subject to the limitations contained in this Order and in existing treaties, laws, and regulations of the United States generally applicable in the Trust Territory of the Pacific Islands, executive, legislative, and judicial functions of the Government of the Trust Territory of the Pacific Islands are, except as otherwise provided herein, hereby delegated to the three political subdivisions of the Trust Territory known as the Federated States of Micronesia, the Marshall Islands, and Palau."
9The Kosrae Constitution provides as follows: "Court decisions shall be consistent with this Constitution, State traditions and customs, and the social and geographical configurations of the State." Kos. Const. art. VI, § 9. The Yap provision is almost identical. Yap Const. art. VII, § 7.
 The Pohnpei Constitution says: "The decisions of all courts and adjudicatory bodies shall be consistent with this Constitution and the concepts of justice of the people of Pohnpei." Pon. Const. art. 10, § 11.
 As of now, the Truk Charter established before self‑government remains in effect and there is no constitution for the State of Truk.
10The Trust Territory Chief Justice had rulemaking authority under 5 TTC 202 (1980), now 5 F.S.M.C. 512; the Constitution of the Federated States of Micronesia places rulemaking power in the Federated States of Micronesia Chief Justice. FSM Const. art. XI, § 9.
11Section 5(b) of S.O. 3039 says:
 "Appellate Functions. As the functions of the Community Courts, the District Courts, and the Trial Division of the High Court have been phased out and transferred to the local courts pursuant to the provisions of Section 5a of this Order, the Appellate Division of the High Court shall retain jurisdiction by writ of certiorari to entertain appeals from the courts of last resort of the respective jurisdictions of the Federated States of Micronesia, the Marshall Islands, and Palau.
 The ruling of the High Court of the Trust Territory of the Pacific Islands upon all appeals shall be final, binding, and enforceable in accordance with their terms. All appeals now pending or taken before the determination has been made pursuant to Section 5a of this Order that functioning courts exist in a jurisdiction shall be retained by and disposed of by the High Court."
12See Presidential Proclamation of FSM President Tosiwo Nakayama, Nov. 3, 1986; U.S. Presidential Proclamation No. 5564, Nov. 3, 1986, 3 C.F.R. 146 (1986), excerpted in 81 Am. J. Int'l L. 405 (1987). The joint declarations also triggered implementation of the Compact of Free Association. See Vol. 2 of the FSM Code, Editor's Note page 318 (1987 Supp.); United States Pub. L. No. 99‑239, 99 Stat. 1771 (1986).
13The High Court trial judge in his order also recited that he and the Truk State Court Chief Justice had met at some unspecified date after April 20, 1984, and "we agreed that the High Court would retain jurisdiction." Slip op. 3. Of course no such agreement is permissible under the Constitution or under S.O. 3039. See Suldan v. FSM (I), 1 FSM Intrm. 201, 205 (Pon. 1982) ("Judiciary members may not simply decide among themselves to reassign the decisionmaking responsibilities set forth in the statute.")