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Supreme Court of the Federated States of Micronesia |
FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Marcus v. Truk Trading Co.[2002] FMSC 31; , 11 FSM Intrm. 152 (Chk. 2002)
[2002] FMSC 31; [11 FSM Intrm. 152]
MIKE MARCUS, for himself and on behalf of
the WITO CLAN in Nepukos Village,
Plaintiffs,
vs.
TRUK TRADING CORPORATION,
Defendant.
CIVIL ACTION NO. 2001-1000
FINDINGS OF FACT, CONCLUSIONS OF LAW,
AND MEMORANDUM OF DECISION
Martin G. Yinug
Associate Justice
Trial: July 15-18, 2002
Decided: September 19, 2002
APPEARANCES:
For the Plaintiffs:
Johnny Meippen, Esq.
P.O. Box 705
Weno, Chuuk FM 96941
For the Defendant:
Wesley Simina, Esq.
P.O. Box 94
Weno, Chuuk FM 96941
* * * *
HEADNOTES
Jurisdiction - Diversity
A corporation partly owned by non-FSM citizens, is a foreign citizen for diversity jurisdiction purposes because a corporation is
deemed a foreign citizen when any of its shareholders are not FSM citizens. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 155 (Chk. 2002).
Civil Procedure - Res Judicata; Jurisdiction - Diversity
If diversity of citizenship among the parties were not present and there were no other basis of jurisdiction, the FSM Supreme Court
would be without subject matter jurisdiction, and any judgment it might render would be void and without any res judicata effect
because all proceedings that had taken place would have been for naught, and the plaintiffs would have to start all over again in
state court if they still wished to pursue the matter. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 155 n.1 (Chk. 2002).
Business Organizations - Corporations - Liability; Contracts - Ratification
Even if a corporate official did not have the authority to execute a lease, his execution of the lease was ratified by the corporation’s
long acceptance of the lease’s benefits. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 158 (Chk. 2002).
Property - Certificate of Title
Courts are required to attach a presumption of correctness to a certificate of title. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 158 (Chk. 2002).
Civil Procedure - Parties; Constitutional Law - Case or Dispute - Standing
A person may act as a clan representative and be a party-plaintiff in his representative capacity when he was an acknowledged lineage
representative prior to and during the negotiations over the lineage land and was named as a lineage representative on the land’s
certificate of title. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 158-59 (Chk. 2002).
Constitutional Law - Due Process; Property - Certificate of Title
It would seem that due process would require that in any lawsuit to remove someone’s name from a certificate of title that that
person would be an indispensable party to the action. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 158 n.4 (Chk. 2002).
Custom and Tradition - Chuuk; Property
An afokur’s rights to lineage land are permissive use rights only. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 159 (Chk. 2002).
Constitutional Law - Case or Dispute - Standing
An afokur has no right to sue for himself over lineage land and will be dismissed from such a lawsuit as a party in his individual capacity,
because even if the lineage should prevail in the suit, the court could not award the afokur anything since whatever he might personally receive would be contingent on the lineage granting him permission to share in its recovery.
Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 159 (Chk. 2002).
Custom and Tradition - Chuuk; Property
The consent of all adult members of the lineage is needed to sell lineage land. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 159 (Chk. 2002).
Custom and Tradition - Chuuk; Property
It would seem that for a long-term land lease (especially one that could last two or three or more generations) the level of lineage
members’ consent needed should be equivalent to that needed for a sale. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 160 (Chk. 2002).
Business Organizations - Corporations - Liability; Custom and Tradition - Chuuk
An entity, such as a corporation, which must act through agents or representatives, can, by its conduct, ratify an unauthorized agreement.
A lineage or a clan is a similar entity 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 and recognizes the clan’s or lineage’s position under
custom and tradition in which the clan or lineage is an entity capable of owning, acquiring, and alienating land. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 160 (Chk. 2002).
Business Organizations - Corporations; Contracts - Ratification; Custom and Tradition - Chuuk
A clan or lineage in some respects functions 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 its
representatives. In this respect a corporation and a clan or lineage are analogous. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152,
161 (Chk. 2002).
Business Organizations - Corporations - Liability; Contracts - Ratification; Custom and Tradition - Chuuk
Generally, any ratification of an unauthorized agreement must be in its entirety because an entity cannot accept the benefits of an
unauthorized act, but reject its burdens. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 161 (Chk. 2002).
Contracts - Ratification; Custom and Tradition - Chuuk; Property
When a lineage as a whole has accepted all of the benefits of a lease - all of the payments that the lessee was required to make -
up to the present and even beyond, it cannot now reject the burden of the lessee exercising its options to renew. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 161 (Chk. 2002).
Custom and Tradition - Chuuk
Distribution of benefits within a lineage is an internal lineage matter. Courts generally will not involve themselves in a lineage’s
internal affairs. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 161 (Chk. 2002).
Custom and Tradition - Chuuk; Property
Community censure is the sanction imposed on one who controls and manages the land of a group who does not fairly and according to
custom concern himself with the rights of other members or another member of the group. That is not a sanction that a court can order
or relief that a court could grant. Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 161 (Chk. 2002).
* * * *
COURT’S OPINION
MARTIN G. YINUG, Associate Justice:
This case concerns whether the defendant corporation, Truk Trading Corporation (TTC), currently has a valid lease to a parcel of land known as Nekou, located in Nepukos on Weno island. Nekou is lineage land owned by the Wito Clan in Nepukos Village. The plaintiffs seek a declaratory judgment that TTC’s use of Nekou after August 31, 2000 constitutes trespass for which they are entitled to monetary damages. Although at one point the court had granted the plaintiffs leave to file and serve an amended complaint, no amended complaint was ever filed and served. The parties acknowledge this. Trial was thus on the basis of the complaint filed on January 11, 2001. By the parties’ consent, the trial was only on the issue of TTC’s liability for trespass with the issue of damages to be addressed later should the plaintiffs prevail.
I. Jurisdiction
Subject matter jurisdiction in this case was initially premised on diversity jurisdiction under Article XI, section 6(b) of the Constitution based on the Complaint’s allegation that the named plaintiff, Mike Marcus, was a naturalized United States citizen and upon its belief that the defendant corporation, TTC, was partly owned by non-FSM citizens. At trial, Marcus testified that he was a United States resident and an FSM citizen and that the allegation in the complaint that he was a United States citizen was his counsel’s error.
The Complaint’s allegation that TTC was partly owned by non-FSM citizens was, however,
admitted by the defendant in its Answer. Since the defendant corporation is partly owned by non-FSM citizens, it is a foreign citizen for diversity jurisdiction purposes. A corporation is deemed a foreign citizen when any of its shareholders are not FSM citizens. Luzama v. Ponape Enterprises Co., [1995] FMSC 11; 7 FSM Intrm. 40, 44 (App. 1995). Diversity of citizenship therefore exists between the Chuukese citizen plaintiffs and the foreign corporation defendant. This court may therefore exercise jurisdiction over this matter based on the parties’ diversity of citizenship.[1] FSM Const. art. XI, § 6(b).
II. Background Facts
Nekou is lineage land owned by the Wito Clan in Nepukos. The lineage’s progenitors were two sisters, Esecho and Reta. Esecho had two sons our daughters. Reta had foud four sons, Chipuelong, Samon, Eniap, and Marcus Satak, but no daughters. Among Reta’s sons was Marcus, Mike Marcus’s father. Since lineage descent in Chuuk is matrilineal, Mike Marcus’s father was a member of the Wito Clan lineage, but Mike Marcus is not. He is a member of the Pwereka clan. Mike Marcus is thus only an afokur to the Wito Clan lineage. He may use, and share in the benefits of, lineage land only with the lineage’s permission, which is usually, but not necessarily, given.
Esecho’s daughters were Nenikar, Naimis, Neruk, and Sisipen. Her sons were Robert and Amoi. Nenikar, the oldest daughter had three children, Nisinmak (the only daughter, now deceased), Pito, and Takas. Naimis’s children were Takauo Paul, Sirom Paul, Kachuo Paul, Rokuro Paul, and Koro Paul (the "Paul brothers"). She had no daughters. Sisipen had no children of her own, but adopted children (Nisinmak and Koro Paul) from her sisters. Neruk had three daughters, Sichiko, Atanaita, and Fina. The children of Nisinmak Ewar, the eldest daughter of Nenikar (who was the eldest daughter of Esecho) were Simion (the oldest son), Risten (the oldest daughter), Idea (second oldest son), Aimen (third oldest son), Sophie (second oldest daughter), Rema (youngest daughter), and Sawaichy (youngest son).
In 1948, TTC first entered and began to use the land Nekou. This was with the lineage’s consent. Truk Trading Co. v. Paul, 8 TTR 515, 517 (App. 1986) (lineage meeting with all adult members of lineage in attendance gave consent). In 1951, TTC bought Nekou from Robert, then chief of the Wito Clan of Nepukos. Id. In 1975, TTC filed an application to register Nekou as its property. Id. at 516. The Land Commission found in its favor. This was appealed to the Trust Territory High Court trial division, which, in 1983, found in the Wito Clan’s favor. TTC appealed. On January 2, 1986, the Trust Territory High Court appellate division affirmed the trial court and held that there had been no valid sale of Nekou because when Robert purported to sell Nekou he had not received consent from others in the lineage to act on its behalf. Id. at 519. On June 2, 1986, based on the court judgment, the Truk Land Commission issued a Certificate of Title which stated that the fee simple owners of Parcel Number 040-A-23 (Nekou) were "Koro Paul and Mike Marcus representing the lineage members of Wito Clan in Nepukos Village, Moen Island, now headed by Takauo Paul."
On January 7, 1987, TTC, through its attorney George Butler, submitted its "final offer" covering all claims for the past use of Nekou ($100,000) and for $10,000 annual rent for a fifteen-year lease of Nekou with an option to renew the lease for five additional fifteen-year periods with a 50% increase in the rent at each renewal. On October 12, 1987, Maketo Robert, acting as the lineage’s co-counsel, submitted the lineage’s proposal in a letter to George Butler (with copies to Takauo Paul and Mike
Marcus). The lineage proposed that it be paid $200,000 for past use of Nekou ($150,000 cash and $50,000 worth of TTC stock), $75,000 rent for five years rated at $15,000 per annum, but payable in full on execution of the lease; $100,000 (rated at $20,000 per annum) for a second five years, payable in full at the start of the second period; and $125,000 (rated at $25,000 per annum) for a third five year period, payable in full at the start of the period; and the lease to be renegotiated after fifteen years.
In late November, or very early in December, 1987, Tosiwo Irons (TTC’s President), Arthur Irons, and Rokuro Mori, all representing TTC, attended a meeting at Happy Landing at which Takauo Paul, Koro Paul, Kachuo Paul, Sirom Paul, Rokuro Paul, and Mike Marcus were present. At that meeting, Irons told the lineage representatives that TTC did not agree to the lineage’s proposal. The lineage representatives did not accept TTC’s offer. Afterward (according to Marcus’s testimony), the Paul brothers sent him to a lineage members’ gathering to report on the Happy Landing meeting’s results. Marcus testified that the sense of the lineage members’ meeting was disappointment and that the lineage should look for another buyer. Shortly thereafter, Marcus left for the United States to spend Christmas with his family.
Sometime early in December 1987, according to Tosiwo Irons’s testimony, the Paul brothers came to him at his office at TTC. They asked to continue to negotiate, this time without each side’s attorneys. The Paul brothers were willing to accept TTC’s terms. They came to an agreement. Irons said they had to get the agreement drafted and the Paul brothers replied that they had discharged their attorneys and so asked if they could use TTC’s. Irons told the Paul brothers he would have George Butler draft the agreement. Butler sent a draft from Guam and Irons had the draft translated into Chuukese by Micronesian Legal Services Corporation. The Paul brothers were given copies of the draft. A few days later, on December 17, 1987, Takauo, Kachuo, and Sirom Paul met with Irons and told him that they accepted the draft. Rokuro Paul did not appear because he said it was all right for the lineage head (Takauo Paul) to sign. Irons called Koro, who was at home sick, and he also agreed. Then Takauo, Kachuo, and Sirom Paul and Irons proceeded to the Chuuk State Supreme Court, where seven copies of the Chuukese version and seven copies of the English version of the lease were signed by all four and notarized by the court clerk. The court clerk kept one copy in each language, TTC kept one copy in each language and the rest were given to the three Paul brothers.
The signed lease’s terms differed somewhat from TTC’s earlier offer. Under the lease’s terms for the first fifteen year lease period, to start September 1, 1985, TTC was to pay $50,000 cash upon execution of the lease, $50,000 for purchases of any item in TTC’s stores at the prevailing prices, and starting September 1, 1995, $10,000 cash per year, payable on or before September 1st. The lease permitted TTC the option to renew the lease for five consecutive fifteen year periods. For the first renewal period (starting September 1, 2000), the annual rent is $15,000; for the second renewal period, the annual rent becomes $22,500; for the third renewal period, the annual rent becomes $33,750; for the fourth renewal, the annual rent will be $50,625; and for the fifth renewal, the annual rent is to be $75,937. The lease gives TTC the right to assign the lease or to sublet any of the leased land. Under other lease provisions, the lineage reserved the right to negotiate or bring legal action for compensation for TTC’s past use of Nekou,[2] and TTC reserved the right to bring legal action to challenge the lineage’s ownership or possession of any portion of Lot 040-A-23, and to seek compensation from the lineage for its alleged unlawful interference with TTC’s business on the premises.
The $50,000 initial cash payment was made (by check) the same day. The money was then distributed among the lineage. Exactly who received how much is unclear, but (according to Fina’s testimony) Takauo Paul shared some of the cash with Mike Marcus. The $50,000 in store credit was shared among lineage members as well. Fina testified the she (and also each of her two sisters) received a P.O. (purchase order) for store credit, which she used to buy food, cookware and clothing. A TTC list, admitted into evidence, of lineage persons who received P.O.’s because of the lease shows that only four Paul brothers received P.O.’s by the end of 1987, but shows that an additional 69 lineage persons used P.O.’s before the end of the year 2000.[3]
On July 7, 1989, Tammy Chipuelong, Mike Marcus, and other afokurs filed suit in the Chuuk State Supreme Court against the state and Takauo Paul and other members of the Wito Clan lineage over the lineage’s sale to other persons of a different piece of property that was being leased by the state. Chipuelong v. Chuuk, [1993] FMCSC 3; 6 FSM Intrm. 188 (Chk. S. Ct. Tr. 1993). After a one week trial in 1992, the court, in 1993, ruled that the afokur had no right to object to the sale and that only the lineage was entitled to the lease payments made by the state. Id. at 198.
The cash payments resumed, as per the lease, on September 1, 1995. Some cash payments were made, but when lineage members wanted payments in advance, TTC told them that they could take advances only as P.O.’s, and not in the form of cash. According to Irons’s testimony and TTC’s financial records admitted at trial, these advance payments have to date exceeded the amounts TTC was required to pay under the lease by $82,880.24. In other words, TTC’s lease payments are paid up through September 1, 2006 and somewhat beyond.
At some point, according to Tosiwo Irons’s testimony, the Paul brothers told him that when all of the Paul brothers had died, TTC would then have to deal with Simion Ewar and Risten Reuney as the [male and female] lineage heads. By the time this case was tried, all of the Paul brothers had died.
TTC’s operations in Chuuk are on two pieces of property. TTC’s warehouse is located on Nekou. Its retail store (built in the 1970’s) was located on an adjoining parcel, nearer the road and the harbor. That parcel was public land, owned by the state. TTC’s lease on that land runs only until about 2008. Sometime in the 1990’s, the state quitclaimed that parcel to the Roby family, and in 1999, the Roby family asked to start negotiation for renewal of lease of that land. Since that lease would expire before the renewal periods on the Nekou lease, TTC decided to build its new, larger (80’ x 275’) store on Nekou and use the old store as a warehouse until its lease expires. As of the trial date, TTC had spent $1,075,000 on building its new store. It has been under construction for 2½ years and with a projected opening date of August 14, 2002. By the time it is finished, TTC expects to have spent $1.7 million on building and stocking its new store.
Sometime in late 2000, some lineage members demonstrated and tried to blockade TTC’s warehouse on Nekou, demanding to know why TTC was still there.
On September 21, 2001, several lineage members including Rokuro Paul, having learned that Mike Marcus’s name was on the certificate of title to Nekou, filed suit against the Land Commission to have his name removed on the ground that Marcus was not a lineage member. That case is still pending.
III. Discussion
The above facts were essentially undisputed. This left two factual issues for the court to resolve - whether the Paul brothers had the lineage’s consent when they concluded the TTC lease, and, if they did not, whether that lease was ratified by the lineage members’ later actions. The issue is whether the lease is valid - whether persons that concluded the lease on the lineage’s behalf had the authority and capacity to do so. It is undisputed that Irons had the authority and capacity to conclude the lease on TTC’s behalf. Even if he did not, his execution of the lease has long since been ratified by the corporation’s acceptance of the lease’s benefits. Asher v. Kosrae, [1998] FMKSC 3; 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 attempt to escape its consequences on the ground that the transaction was not authorized). It is also undisputed that TTC has not breached the lease’s terms.
The plaintiffs assert that they never gave their consent to the lease, that they believed that their P.O.’s were for TTC’s past use of Nekou, and that when in the 1990’s they learned that there was a lease, they were under the impression that it was only for fifteen years and so acquiesced to TTC’s remaining on Nekou until 2000. (Marcus testified that in 1999 he asked TTC twice for a copy of the lease agreement but was not able to get one until a lineage member gave him a copy.)
Although this case presents itself as an action by a lineage to recover the use of or to be compensated for lineage land that was allegedly unlawfully removed from its control, this case also exhibits the unpretty picture of a lineage divided against itself. The rift, initially appears to have been between the Paul brothers (perhaps because of Mike Marcus’s suit against them) and the daughters of Neruk, who were on good terms with the afokur Mike Marcus. Currently, the rift appears to be between the children of Nisinmak, who, in the person of Simion Ewar, claim to include the current lineage head because he is the senior male (being the eldest son of the eldest daughter of the eldest daughter) and who appear to side with TTC in this suit, and the daughters of Neruk, who are of the same generation as Nisinmak (and also the same generation as the afokur Mike Marcus), and who claim there is currently no lineage head because they have not decided on one, and who are aligned with Mike Marcus. (Marcus also makes the unlikely claim that they could choose anyone as the lineage leader and that even he could be chosen as lineage head even though he is only afokur.)
A. Mike Marcus’s Standing to Sue
Before turning to the issues of consent and ratification, the court must first address one other issue that was left for resolution at trial - whether the named plaintiff, Mike Marcus, had the standing to be a party in this action. Marcus v. Truk Trading Corp., [2001] FMSC 33; 10 FSM Intrm. 387, 390 (Chk. 2001).
Marcus was an acknowledged lineage representative prior to and during the negotiations with TTC over Nekou and was named as a lineage representative on Nekou’s certificate of title. Of the persons named on the certificate as lineage representatives (including the lineage head), Mike Marcus is the only one remaining alive. Courts are required to attach a presumption of correctness to a certificate of title. Etscheit v. Nahnken of Nett, [1996] FMSC 43; 7 FSM Intrm. 390, 394 (Pon. 1996); Stephen v. Chuuk, 11 FSM Intrm. 36, 41 (Chk. S. Ct. Tr. 2002); Sigrah v. Kosrae State Land Comm’n[1999] FMKSC 4; , 9 FSM Intrm. 89, 93 (Kos. S. Ct. Tr. 1999). The court is aware that the inclusion of Marcus’s name on the certificate has been challenged in a suit in another court,[4] but unless and until a new certificate is validly issued
as a result of that or some other proceeding, this court must presume that the existing certificate is correct. The court concludes that Marcus may act as a representative of the clan and be a party-plaintiff in this action in this representative capacity.
Marcus is also afokur to the lineage, and, in that capacity, he sues for himself. An afokur’s rights to lineage land are permissive use rights only. Chipuelong v. Chuuk, [1993] FMCSC 3; 6 FSM Intrm. 188, 196 (Chk. S. Ct. Tr. 1993). These rights are thus contingent rights - they are contingent on the lineage granting the afokur permission to exercise them. In this case, the lineage in the past appears to have granted Marcus some of the benefits of Nekou - he has shared in the payments. In some unusual cases, an afokur maybe a proper party to a suit. See Phillip v. Moses, [2002] FMCSC 3; 10 FSM Intrm. 540, 545 (Chk. S. Ct. App. 2002) (afokurs were proper parties because it was their actions the plaintiffs sought to enjoin). But in this case, even if the lineage should prevail in this suit, the court could not award Marcus anything and anything he might personally receive would be contingent on the lineage granting him permission to share in its recovery. The court has not been shown any basis on which it could order a lineage to share its resources with an afokur. Thus, afokur Mike Marcus has no right to sue for himself and is therefore dismissed, in his individual capacity only, as a party to this action.
B. Lineage Members’ Consent
In order to sell lineage land in Chuuk, lineage heads need the lineage members’ consent. Mike Marcus’s absence from the final lease negotiations and his lack of consent to the lease could not, by itself, affect the lease’s validity since Marcus was only an afokur to the lineage and not a lineage member. His consent was not needed. It is the lineage members’ consent that would be needed.
Some authorities state that the consent of all adult male lineage members is needed to sell (or otherwise alienate) lineage land. See, e.g., Lukas v. Stanley, [2001] FMCSC 4; 10 FSM Intrm. 365, 366 (Chk. S. Ct. Tr. 2001); Lus v. Totou, 1 TTR 552, 554 (Truk 1958). This appears to be the position taken by TTC’s witnesses. 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); Nusia v. Sak, 1 TTR 446, 447 (Truk 1958) (transfer of lineage land is by "agreement by the lineage as a whole").
While there may be a split in authority whether the consent of all adult members, or just all adult male members, is needed to sell
lineage land, the better choice, at least in this case, is that all adult members must consent. Two reasons favor this: the Trust
Territory High Court appellate division case involving the same land and the same lineage held that the consent of all adult members
was needed, Paul, 8 TTR at 518, and the constitutional preference disfavoring sex discrimination, FSM Const. art. IV, § 4.
But at issue in t in this case is the lease, not the sale, of land. No evidence or authority was
[11 FSM . 160]
introduced on whether, under Chuukese customary law, a lesser degreeegree of lineage members’ consent is needed to lease land for a term of years, rather than to alienate it permanently. The parties have proceeded, and the court has assumed, that the same level of consent that is needed to sell lineage land is needed to execute a long term lease of lineage land. Although it is conceivable that just the consent of the lineage’s head or its leadership might suffice for a short term or transient land lease, it would seem that for a long-term land lease (especially one that could last two or three or more generations) the level of lineage members’ consent needed should be equivalent to that needed for a sale.
Whether the Paul brothers actually sought other "buyers," as the lineage had suggested, before returning to TTC a short time thereafter to resume the negotiations, is unknown. Also unclear is whether the Paul brothers had the lineage members’ consent when they agreed to and signed the TTC lease, although, according to Irons, the Paul brothers said they did. TTC notes that members now contesting the lease were present on Weno but never indicated (until the 2000 demonstrations) that they had not agreed to the lease, and many of them had, not long after the lease was executed, bought items through the use of P.O.’s (as provided for in the lease).
It appears likely, but not certain, that the Paul brothers did not have the consent of all of the adult lineage members when they agreed to the TTC lease. This raises the difficult question of how anyone negotiating for the lease or sale of lineage land could determine that those negotiating had the lineage members’ authority to agree or, if they did not, that after the agreement was made all the lineage members consented to it. This difficulty is highlighted by the fact that TTC’s negotiator, Tosiwo Irons, who is himself Chuukese and familiar with the customary legal requirement that all adult lineage members should agree (particularly since in the High Court case that was the point on which the action for title to Nekou turned) felt that he could rely on the Paul brothers’ representations that they had the authority.
This subject is ripe for action by the Chuuk Legislature. The court is not suggesting that the Legislature change the customary legal requirement that all adult members agree in order before lineage land can be alienated, although it may be in its power to do so. The court suggests that appropriate legislation is needed to regulate land leases and to delineate what steps a buyer or a lessee must take to be reasonably assured that all adult members of the lineage have consented to the transaction. This may take the form that, if certain steps are taken, a legal presumption arises that all adult members have consented. This need is particularly apparent now that large numbers of Chuukese are absent from the state for long stretches of time. Many are, for instance, working or studying in Pohnpei, Guam, Saipan, or the United States, or serving in the U.S. military, before returning to Chuuk.
The court, however, does not need to decide now whether all adult lineage members consented (or whether all adult members must consent when the land is leased instead of sold), if, by their actions, they ratified the agreement afterwards.
C. Ratification of the Lease
An entity, such as a corporation, which must act through agents or representatives, can, by its conduct, ratify an unauthorized agreement. Asher, 8 FSM Intrm. at 453. A lineage or a clan is a similar entity 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 and recognizes the clan’s or lineage’s position under custom and tradition in which the clan or lineage is an entity capable of owning, acquiring, and alienating land. In In re Estate of Hartman[1994] FMSC 38; , 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. The court’s use of the nomenclature "corporation" does not imply that corporate law in general applies to Chuukese clans
and lineages. It is used only to show that a clan or lineage in some respects functions 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 its representatives. In this respect a corporation and a clan or lineage are analogous.
The plaintiffs contend that they were unaware of the lease’s existence until sometime in the mid to late 1990’s when they learned of it and were under the impression that it was only a 15-year lease that would end in 2000 so they gave TTC their permission to use it until then. They contend that they were unaware of the renewal clauses and did not consent to the lease’s renewal and that TTC’s failure to vacate Nekou was the cause of their demonstration in September, 2000. But they do concede that TTC had their permission to stay for that 15-year period - the complaint alleges that the trespass started September 1, 2000.
Generally, any ratification of an unauthorized agreement must be in its entirety because an entity cannot accept the benefits of an unauthorized act, but reject its burdens. Asher, 8 FSM Intrm. at 453. The lineage as a whole has accepted all of the benefits of the lease - all of the payments that the lease required TTC to make - up to the present and even beyond, to at least September, 2006. Even the lineage members aligned with the named plaintiff in this suit received some of the benefits from the initial payments under the lease. Furthermore, according to Fina Isotoro’s testimony, when those members learned of the lease’s existence, they consented to TTC’s presence on Nekou until September, 2000. The lineage cannot now reject the burden (if that is what it is) of TTC exercising its options to renew.
The court therefore concludes that the lineage’s conduct has ratified the execution of the lease even if the lineage’s representatives, the Paul brothers, were not authorized to enter into it. This ratification extends to the lease in its entirety. To do otherwise would be inequitable. If the court were to enforce only the first term and not give effect to any of the renewal provisions, TTC would then have a claim against the lineage not only for the rental payments it has advanced, but which are not yet due, but also for the costs of the improvements (new store) that it has made on Nekou in reliance on its ability to exercise its renewal options in the lease.
In many ways, this is a dispute within the lineage between those currently receiving the benefits of the lease and those who are not receiving their fair share, or receiving a share at all. Distribution of benefits within the lineage is an internal lineage matter. Courts generally will not involve themselves in a lineage’s internal affairs. The Estate of Hartman court found that "[t]he sanction imposed on one who controls and manages the land of a group who does not fairly and according to custom concern himself with the rights of other members or another member of the group is the censure of the community." In re Estate of Hartman, 6 FSM Intrm. at 328. That is not a sanction that a court can order or relief that a court could grant. The court urges the lineage members to resolve this matter among themselves so that all of the lineage’s members benefit.
IV. Conclusion
Based on his prior representation and his inclusion on the certificate of title for Nekou, Mike Marcus has standing to sue as a representative of the Wito Clan of Nepukos lineage, but his status as afokur does not give him standing to sue for himself. The issue of whether all adult lineage members had consented (and whether all their consent was needed) to the lease with TTC need not be resolved because even if there had not been full consent by adult lineage members, the lease was ratified by the lineage’s conduct. The lineage’s conduct in accepting all the benefits of the lease constituted the lineage’s ratification of the lease even if the lease had not been properly authorized. Accordingly, the plaintiffs’ action is dismissed on the merits. Let judgment be entered.
[1] If diversity of citizenship among the parties were not present in this case (no other basis of subject matter jurisdiction was apparent
or alleged), the FSM Supreme Court would be without subject matter jurisdiction, and any judgment the court rendered would be void
and without any res judicata effect. All proceedings that had taken place to date would have been for naught. The plaintiffs would
then have had to start this suit all over again in state court if they still wished to pursue the matter.
[2] By now, because of the statute of limitations, these reservations to bring legal action should have become valueless.
[3] That column’s heading reads "1999-2000" but apparently should read "1988-2000" as it includes a P.O. for Fina in the amount
of $654.46 and she testified that the P.O. she received in the 1980’s was for that same amount and because it includes people
who had died by 1999. No other column lists payments for the years 1988-98.
[4] That lawsuit, Rokuro Paul, Simion Ewar, Aieta Ewar, Risten Reuney, et al. v. Chuuk State Land Commission, CSSC CA No. 195-2001, does not name Marcus as a party. It would seem that due process would require that in any lawsuit to remove
someone’s name from a certificate of title that that person would be an indispensable party to the action.
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