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Reports of the Trust Territory of the Pacific Islands |
TRIAL DIVISION OF THE HIGH COURT
PALAU DISTRICT
Civil Action No. 151
MERS IYAR
Plaintiff
v
ROSANG SUNGIYAMA and SINTAU WONG
Defendants
November 17, 1960
Action to determine rights in land in Koror Municipality, in which mortgagor gave use rights of portion of land to plaintiff and his family as gift, and also mortgaged unspecified portion of same land to another to secure a debt. Upon default of payment of debt, mortgagee claimed certain portion of land, including portion given to plaintiff. The Trial Division of the High Court, Chief Justice E. P. Furber, held that mortgages of land in Palau District may be foreclosed only·through court action and therefore mortgagee has no present right to possession of land other than that to which mortgagor expressly consents, subject to her right of redemption.
1. Mortgages-Recording
Where mortgage is recorded after default in payment of secured debt, unrecorded gift of use rights in mortgaged land is subordinate to' mortgage so far as areas covered may overlap, provided mortgagee: had no notice of gift at time mortgage contract was entered into. (T.T.C., Sec. 1023 (b) )
2. Mortgages-Foreclosure-Palau
Japanese law regarding foreclosure of mortgages of land in Palau District remains in full force and effect except as changed by express written enactment of Trust Territory. (T.T.C., Sec. 24)
3. Mortgages-Foreclosure-Palau
Unless and until some other method or methods of foreclosure are provided by express written enactment, mortgages of land in Palau District may be foreclosed only through court action
4. Mortgages-Foreclosure-Palau
Under present Trust Territory law, court action regarding foreclosure of mortgages in Palau District would have to be brought in the High Court. (T.T.C., Sec. 123)
5. Mortgages-Foreclosure
Voluntary agreement of all parties involved in mortgage transaction will obtain substantially same result as foreclosure of mortgage through court action, provided agreement is entered into understandingly after default has occurred.
6. Mortgages-Foreclosure
Court action for foreclosure of mortgages prevents injustice which may be caused if land is allowed to pass automatically to mortgagee upon default in payment, regardless of how much more land may be worth than amount due on mortgage.
7. Mortgages-Generally
As matter of public policy and to promote justice and fair dealing, courts look beyond terms of mortgage document to real nature of transaction as one of security and not of purchase.
8. Mortgages-Foreclosure
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