FSM Development Bank v Lighor [2019] FMSC 32; 22 FSM R. 321 (Pon. 2019) (30 September 2019)

FSM SUPREME COURT TRIAL DIVISION
CIVIL ACTION NO. 2017-054

FSM DEVELOPMENT BANK,
Plaintiff,

vs.

GUSTO LIGOHR, in his capacity as Principal
Judge of Pohnpei Court of Land Tenure,
MARYANN HAWLEY, in her capacity as
Registrar of Pohnpei Court of Land Tenure,
POHNPEI COURT OF LAND TENURE, and
POHNPEI STATE GOVERNMENT,
Defendants.
__________________________________________

ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Dennis K. Yamase
Chief Justice

Hearing: May 2, 2019
Decided: September 30, 2019

APPEARANCES:

For the Plaintiff: Nora E. Sigrah, Esq.
P.O. Box M
Kolonia, Pohnpei FM 96941

For the Defendants: Maximo A. Mida, Esq.
(Lighor, Hawley & Court) Ramp & Mida Law Firm
P.O. Box 1480
Kolonia, Pohnpei FM 96941

For the Defendant: Judah C. Johnny
(Pohnpei) Assistant Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

Civil Procedure - Summary Judgment - Grounds
A trial court, viewing facts and inferences drawn from them in the light most favorable to the nonmoving party, may grant summary judgment only if the moving party shows that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 327 (Pon. 2019).

Civil Procedure - Summary Judgment - Procedure
Once the movant presents a prima facie case of entitlement to summary judgment, the burden shifts to the non-moving party to produce some competent evidence showing that a genuine issue of material fact remains for resolution. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 327 (Pon. 2019).

Civil Procedure - Summary Judgment - Grounds
When the only issues to be decided are issues of law, summary judgment is appropriate. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 327 (Pon. 2019).

Jurisdiction - Exclusive FSM Supreme Court
The FSM Development Bank is an instrumentality of the national government and is part of the national government for the purposes of FSM Constitution article XI, § 6which gives the FSM Supremupreme Court trial division exclusive jurisdiction over cases in which the national government is a pa FSM Dev. Bank v. Lighor, 22 FSM R. 321, 328, 328-29 (Pon. 2019).

Juru>Jurisdiction - Exclusive FSM Supreme Court
It is well settled law that the FSM Supreme Court has jurisdiction over a case, regardless of the nature of the case’s causes of action, when the FSM Development Bank is a party. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 328 (Pon. 2019).

Jurisdiction - Arising Under
The FSM Supreme Court has jurisdiction over a case as one arising under the Constitution, national law, or treaties, when the plaintiff asserts that the defendants violated three different FSM Constitution provisions and also violated an FSM Code provision. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 328 (Pon. 2019).

Constitutional Law - Interpretation
Constitutional adjudication should be avoided unless necessary. The trial court should first consider any non-constitutional grounds that might resolve the issue. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 328 (Pon. 2019).

Constitutional Law - Interpretation
The court will not address the plaintiff’s claims that the defendants directly violated three FSM Constitution provisions when the only necessary constitutional inquiry is whether the national government exercised its power appropriately when it enacted a particular statute because, when the court concluded that that statute was lawfully enacted, the plaintiff’s claim that the defendants violated a national statute was sufficient to resolve the parties’ dispute. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 328-29 (Pon. 2019).

Constitutional Law - Supremacy Clause
The Constitution is the supreme law of the FSM, and an act of the government in conflict with it is invalid to the extent of conflict. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 329 (Pon. 2019).

Federalism - National/State Power
A power expressly delegated to the national government, or a power of such an indisputably national character as to be beyond the power of a state to control, is a national power, and a power not expressly delegated to the national government or prohibited to the states is a state power. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 329, 331 (Pon. 2019).

Banks and Banking; Federalism - National/State Power
The power to regulate banking is expressly delegated to Congress. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 329, 330 (Pon. 2019).

Federalism - National/State Power
The Constitution establishes a federal system of government in which the national government reigns supreme in its very limited and narrowly defined sphere of responsibility and the state governments are supreme in their much broader sphere. The powers of the national are "express powers" and those of the states, "residual." Included within the "indisputedly national" category are numerous powers, many of which are of minor significance, but which nevertheless collectively contribute to the national government’s ability to function. This includes its power to buy land. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 329 (Pon. 2019).

Federalism - National/State Power
Determination of whether a power falls within the indisputedly national category lies initially with the national legislature and national chief executive, and if their conclusions are challenged, the final decision rests with the Supreme Court. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 329 (Pon. 2019).

Banks and Banking
In creating the FSM Development Bank, the FSM government intended to establish an independent financial institution operating under its own Board of Directors but conducting its activities within the framework of the national government’s general economic plans, policies, and priorities. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 330 (Pon. 2019).

Banks and Banking; Business Organizations - Corporations - Stockholders
Since it is the government’s intent that the FSM Development Bank have and retain the legal capacity to acquire, own title to, dispose of, and otherwise deal in FSM land and waters, no stock in the Bank may be owned by any person or entity whose partial ownership of the Bank would cause the Bank to lose such capacity under applicable law, and any transfer of Bank stock to such a person or entity will be null, void, and of no effect. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 330 (Pon. 2019).

Banks and Banking; Federalism - National/State Power; Property; Property - Mortgages
The enactment of FSM Code, Title 30 falls squarely within the Congress’s express powers as delegated by the FSM Constitution. That 30 F.S.M.C. 137 deals with the FSM Development Bank’s ability to acquire title to land places this activity squarely in the category of indisputedly national government powers. To function, the Bank must be able to deal with mortgages, as well as deeds and land titles, as land is the primary collateral possessed by most Micronesians. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 330 (Pon. 2019).

Banks and Banking; Federalism - National/State Power
Powers that are indisputedly national include the national government’s power to buy land, and, as an instrumentality of the national government, the FSM Development Bank has the authority to act in that capacity according to laws enacted by the Congress under its express and implied powers under the Constitution. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 330 (Pon. 2019).

Banks and Banking; Federalism - National/State Power
Since the FSM Congress specified in 30 F.S.M.C. 137 that the FSM Development Bank must have and retain the legal capacity to acquire, own title to, dispose of, and otherwise deal in land and waters in the FSM, restrictions imposed by Pohnpei must fail as applied to the Bank’s ability to acquire title to Pohnpei land. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 330 (Pon. 2019).

Banks and Banking; Federalism - National/State Power
If the FSM Development Bank’s right to acquire, own title to, dispose of, and otherwise deal in FSM land and waters could be impaired in different ways by each of the four states, based on the states’ Constitutions or statutes, it would eviscerate the national government’s power to regulate the Bank under the express powers granted to it under the FSM Constitution. If each state could deny the Bank the right to acquire land, its essential functions would be impaired, and it would be unable to achieve the stated purpose of operating as an independent financial institution within the framework of the national government’s general economic plans, policies, and priorities. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 330-31 (Pon. 2019).

Banks and Banking
The FSM Development Bank’s ability to hold title to land enables it to be flexible when negotiating with borrowers who are behind or in default on collateralized loans. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 331 (Pon. 2019).

Constitutional Law - Interpretation; Constitutional Law - Judicial Guidance Clause
In rendering a decision, the court must first consult and apply FSM legal sources. In resolving a Constitutional question, first the court must look at the plain meaning of the Constitution’s words. If the Constitution is not clear as to a particular provision, the court should ascertain the drafters’ intent by examining the Constitutional Convention’s records and the reasons expressed for including that particular Constitutional provision. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 331 (Pon. 2019).

Domestic Relations; Federalism - National/State Power; Property
The states generally have power over land law and other local issues including personal property law, inheritance law, and domestic law including marriage, divorce, and adoption. However, where the national government concurrently has the power to acquire title to land within the FSM under powers expressly delegated to it, and state law purports to restrict it, the state law must fail as applied to the national government. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 331-32 (Pon. 2019).

Federalism - National/State Power
Pohnpei may not, by Constitution or statute, restrict the national government in the exercise of its expressly delegated powers under the FSM Constitution. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 332 (Pon. 2019).

Banks and Banking
That the FSM Development Bank has an alternative means to collect debts without holding title to land in Pohnpei is not relevant when the Bank seeks to acquire fee simple title to land, which it is entitled to do under 30 F.S.M.C. 137. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 332 (Pon. 2019).

Property; Transition of Authority
Neither Secretarial Order No. 2969 nor Secretarial Order No. 3039 relates to privately held land, nor do they dictate how the FSM as a nation should structure its government to deal with issues related to private lands and their title, transfer, and ownership. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 332 (Pon. 2019).

Property - Public Lands
The Pohnpei Public Lands Authority is a legal entity that receives, holds, and disposes of Pohnpei public lands, but does not relate to the national government’s ability to hold title to private land through the FSM Development Bank. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 332 (Pon. 2019).

Property - Public Lands; Transition of Authority
The FSM Constitution, art. XV, § 3, states tharoperty interenterest held by the Trust Territory government is transferred to the FSM for retention or distribution in accordanth the Constitution. Other FSM Constitution provisions govern land ownership and use, and and FSM law allows for national government eminent domain and real property acquisition. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 333 (Pon. 2019).

Civil Procedure - Injunctions - Mandatory
Injunctions can be mandatory in nature. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 333 (Pon. 2019).

Civil Procedure - Injunctions - Mandatory
A mandatory injunction is one which: 1) commands the defendant to do some positive act or particular thing; 2) prohibits him from refusing (or persisting in a refusal) to do or permit some act to which the plaintiff has a legal right; or 3) restrains the defendant from permitting his previous wrongful act to continue to be operative, thus virtually compelling him to undo it. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 333 (Pon. 2019).

Civil Procedure - Injunctions - Mandatory
Courts rarely grant mandatory injunctions because courts are ill-equipped to involve themselves in day-to-day administration and because of the difficulty of enforcing them. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 333 (Pon. 2019).

Civil Procedure - Injunctions - Mandatory
A case is appropriate for a mandatory injunction when it requires a one-time action by the defendants and does not involve the court in any "day-to-day administration" or present any enforcement difficulties. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 333 (Pon. 2019).

Civil Procedure - Injunctions - Mandatory
Since the FSM Development Bank is not subject to restrictions imposed by Pohnpei on its ability to acquire title to land, it is appropriate that the Pohnpei Court of Land Tenure be restrained from permitting its previous wrongful act (its earlier denial of the Bank’s application for title) to continue to be operative. FSM Dev. Bank v. Lighor, 22 FSM R. 321, 333 (Pon. 2019).

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COURT’S OPINION

DENNIS K. YAMASE, Chief Justice:

This matter came before the court on May 2, 2019 for hearing on plaintiff FSM Development Bank (FSMDB)’s Motion for Summary Judgment and defendants Gusto Ligohr,^[1] Maryann Hawley and Pohnpei Court of Land Tenure’s Motion for Summary Judgment.^[2] Norah Sigrah, Esq. appeared for plaintiff FSMDB and Maximo Mida, Esq. appeared for defendants Gusto Ligohr, Maryann Hawley, and the Pohnpei Court of Land Tenure. Assistant Attorney General Judah Johnny appeared for Pohnpei State but did not participate in the hearing on the pending Summary Judgment Motions.

I. FSMDB’S MOTION FOR SUMMARY JUDGMENT

Plaintiff seeks Summary Judgment on each of its claims filed against defendants:

1. Defendants violated FSM Constitution Article XIII, § 4 ("A nonen, or a corporatioration not wholly owned by citizens, may not acquire title to land or waters in Micronesia");

2. ndants violated FSM Constitution Article IV, § 3 (Equal Proon-Discriminatiinationation);

3. Defendants violated FSM Constitution Article IV, § 3 (Deprivation of Property>;

4. Defendants violated 30 F.S.M.C. 137 ("Fo ownership. It is intendedended that the [FSM Development] Bank shall have and retain the legal capacity to acquire, own title to, de of, and otherwise deal inal in land and waters in the Federated States of Micronesia.");

5. Defendants interfered with plaintiff’s prospective business relations; and

6. Defendants Pohnpei Court of Land Tenure and Pohnpei State are liable for all of the actions of Gusto Ligohr and Maryann Hawley (in their capacities as employees of the Pohnpei Court of Land Tenure and Pohnpei State) under Respondeat Superior.

II. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Defendants seek Summary Judgment against FSMDB on the following grounds:

1. FSM Constitution Article XIII, § 2 supporfendants’ con; contention that regulation of land is a state matter;

2. Pohnpei Constitution Article 12, § 2 explicitly prohibits plaintiff from holding title to land in Pohnpei;
3. 41 Pohnpei Code § 4-101 explicitly prohiblainplaintiff from holding title to land in Pohnpei;

4. 41 Pohnpei Code §;6-135 provides plaintiff wiff with an alternative means to collect debts without holding title to land in Pohnpei; and

5. FSM Constitution Article XI, § 6 does not allow this cou h to hear this case (Lack of Subject Matter Jurisdiction).

III. SUMMARY JUDGMENT

A trial court may grant summary judgment, viewing facts and inferencesn from them in the light moht most favorable to the nonmoving party, only if the moving party shows that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Once the moving party presents a prima facie case of entitlement to summary judgment, the burden shifts to the non-moving party to produce some competent evidence showing that a genuine issue of material fact remains for resolution. Adams Bros. Corp. v. SS Thorfinn, 19 FSM R. 1, 8 (Pon. 2013). When the only issues to be decided are issues of law, summary judgment is appropriate. Ting Hong Oceanic Enterprises v. Ehsa, 10 FSM R. 24, 31 (Pon. 2001).

IV. UNDISPUTED MATERIAL FACTS

In this case all of the material facts are undisputed.

On May 12, 2017, grantor Peterson Sam executed a deed of conveyance for parcel 045-E-26, Lohd-Powe Section, Madolenihmw Municipality, Pohnpei, in favor of grantee FSMDB. The parcel had never been mortgaged to FSMDB, but Peterson Sam agreed to give it to FSMDB in settlement of an outstanding money judgment entered more than four years earlier in Civil Action 2011-008 (Pon.). The conveyance resolved FSMDB’s mortgage foreclosure claims on five other parcels of land owned and mortgaged to FSMDB by the late Catalino Sam, late Walerino Sam, and Etler Joseph. FSMDB says it relied on the Pohnpei Court of Land Tenure’s longstanding practice of issuing titles to land to FSMDB when it negotiated the settlement with Peterson Sam.

On May 17, 2017 the FSMDB delivered to Maryann Hawley (the Registrar of the Pohnpei Court of Land Tenure) the original and a copy of the deed of conveyance, the owner’s duplicate certificate of title, and a letter requesting the Registrar to register the deed and issue a new certificate of title in the name of FSMDB. On May 22, 2017 Registrar Hawley notified FSMDB by letter that she would not register the deed or issue title in the name of FSMDB on the grounds that the Pohnpei Constitution limits land acquisition to "Pohnpeian citizens who are also pwilidak of Pohnpei." The Pohnpei Court of Land Tenure, supported by Pohnpei State, maintains that position in this litigation and still refuses to issue title to this parcel to FSMDB.

The FSM Development Bank is an instrumentality of the National Government. Foreign ownership of FSMDB shares is prohibited by 30 F.S.M.C. 137, and its shares are currently held by the FSM National Government (98.8%), Chuuk State Government (0.9%) and Kosrae State Government (0.3%).

FSMDB had an outstanding loan portfolio of approximately $38 million at the end of 2018, with $20.7 million of that, or 54.5%, in Pohnpei.^[3] Of this $20.7 million outstanding loans in Pohnpei, business term loans, lines of credit and residential loans total about $18.2 million and these loans are usually secured by real property collateral. Id.

FSMDB has regularly registered deeds conveying fee simple interest in land and obtained title to land in its name in all of the states of the FSM. Plaintiff’s Ex. H (Pohnpei), Ex. N (Yap), Ex. O (Chuuk) and Ex. P (Kosrae).

V. SUBJECT MATTER JURISDICTION

The court first addresses this issue raised by defendants because it could be dispositive of all of the claims.

FSM Development Bank is an instrumentality of the National Government and part of the National Government for the purposes of FSM Constitution article XI, § 6(a), giving the trial ion sion of the Supreme Court exclusive jurisdiction over cases in which the National Government is a party. Ehsa v FSM Dev. Bank, 20 FSM R. 498, 515 (App. 2016); FSM Dev. Bank v. E of Nanpei, 2 FSM R. 21R. 217, 221 (Pon. 1986). Setik v. Perman, 22 FSM R. 105 (App. 2018) (mandate entered Dec. 17, 2018), stated that:

It is well settled law that the FSM Supreme Court has jurisdiction over a case, regardless of the nature of the case’s causes of action, when the FSM Development Bank is a party. Ehsa v. FSM Dev. Bank, 20 FSM R. 498, 518 (App 2016); FSM Dev. Bank v. Estate of Edmond, 19 FSM R. 425, 432-33, 435-36 (App 2014); Helgenberger v. FSM Dev. Bank, 18 FSM R 498, 500 (App 2013).

Setik, 22 FSM R. at 115-16.

Also, for purposes of FSM Constitution article XI, § 6(b), this court has jurisdiction over this case as it is one "arising under this Constitution; national law or treaties." Plaintiff asserts that defendants violated three different provisions of the FSM Constitution aso violated the FSM Code whde when they refused to issue a title for parcel 045-E-26 to the FSMDB.

Accordingly, this case is properly before this court and the court finds against defendants on this basis for summary judgment.

VI. VIOLATION OF 30 F.S.M.C. 137

Constitutional adjudication should be avoided unless necessary, Kosrae v. Langu, 9 FSM R. 243, 251 (App. 1999); Jonah v. FSM, 5 FSM R. 308, 314 (App. 1992). The trial court should first consider any non-constitutional grounds that might resolve the issue. Pohnpei v. AHPW Inc., 14 FSM R. 1, 25 (App. 2006).

In this case, plaintiff asserts in three of its claims direct violations of the FSM Constitution by defendants. We will not address these claims because we find that plaintiff’s claim that defendants violated a national statute, 30 F.S.M.C. 137, is sufficient to resolve the dispute between these parties. The only necessary Constitutional inquiry is whether the national government exercised its power appropriately when it enacted 30 F.S.M.C. 137, and whether that statute actually confers on FSMDB the right to acquire title to land throughout the Federated States of Micronesia. The court finds that 30 F.S.M.C. 137 was lawfully enacted and that it does confer on FSMDB the statutory authority to hold fee simple title to land in the FSM.

This includes the land at issue in this case, and the court finds that defendants violated 30 F.S.M.C. 137 when they refused to issue title to FSMDB.

Under FSM Constitution article II, § 1: "This itution is the exhe expression of the sovereignty of the people and is the supreme law of the Federated States of Micronesia. An act of the Government in conflith this Constitution is invalid to the extent of conflict.lict."

FSM Constitution article VIII, § 1 states tha power expresslressly delegated to the national government, or a power of such an indisputably national character as to be beyon power of a state to control, is a national power."

§ 2 states that: hat: "A pnoer not expressly delegated to the national government or prohibited to the states is a state power."

Under FSM Const. art. IX, § 2(g): follopowers are expr expressly delegated to Congress .&#160 . . regubanking, fo>, foreign and interstate commerceurance, the issuance and use of commercial paper and securities, bankruptcy and insolvency,ency, and patents and copyrights;" (emphasded).

Accordingrding to t to the Standing Committee Report ("SCREP") No. 33, II J. of Micro. Con. Con., prepared by the General Provisions Committee:

Your Committee . . . prs theblishmlishment of t of a union of autonomous states with state rule constitutionally guaranteed, in which the collective government of all the states is responsible for external affairs ar thetion of national onal problproblems, and the individual state governments are responsible for all other affairs of government.
. . . .

The paopostabestablishes a federal system of government in which the national government reigns supreme in its very limited and narrowly defined sphere of responsibility and the state governments are supreme in their much broader sphere. The powers of the national are "express powers" and those of the states, "residual."

SCREP No. 33, II J. of Micro. Con. Con. 813

Included within the "indisputedly national" category are numerous powers, many of which are of minor significance, but which nevertheless collectively contribute to the ability of the national government to function. Determination as to whether a power falls within this category would lie initially with the national legislature and national chief executive, and if their conclusions were challenged, the final decision would rest with the Supreme Court. This power might be held to include such matters as the power to:
. . .

Id. at 815 (emphasis added).
The national legislature has spoken directly in regard to the FSMDB and its ability deal in land in Micronesia:

itle S.M.C. 102. Purp Purpose. ose. It is the intent of the Government of the Federated States of Micronesia to establish an independent financial institution operating under its own Board of Directors but conducting its activities within the framework of the National Government’s general economic plans, policies and priorities.

Title 30 F.S.M.C. 137. Foreign ownership. It is intended that the Bank shall have and retain the legal capacity to acquire, own title to, dispose of, and otherwise deal in land and waters in the Federated States of Micronesia. Therefore no stock in the Bank may be owned by any person or entity whose partial ownership of the Bank would cause the Bank to lose such capacity under applicable law. Any transfer of stock in the Bank to such a person or entity shall be null, void, and of no effect.

Defendants acted contrary to FSM national law when they refused to issue a certificate of title to the FSMDB. Defendants relied on Pohnpei law to do so, including Article 12, section 2 of the Pohnpei Constitution which limits "[t]he acquisition of permanent interest in real property . . .onapetizens whns who are aare also pwilidak of Pohnpei." See FSM Dev. Bank v. Ehsa, 20 FSM R. 608 (Pon. 2016).

nactment of Title 30 of the FSM Code falls squarely within the express powers of s of the nthe national legislature as delegated by the FSM Constitution. The fact that 30 F.S.M.C. 137 deals with the FSMDB’s ability to acquire title to land places this activity squarely in the category government powers that are indisputedly national. In order to function, the FSMDB must be able to deal with mortgages, as well as deeds and titles to land, as land is the primary collateral possessed by most Micronesians.

The FSM Congress has the express power to regulate banking in the FSM, and as SCREP No. 33 above sets out, there are powers that are "indisputedly national." One example provided was that the national government may buy land. As an instrumentality of the national government, the FSMDB has the authority to act in that capacity according to laws promulgated by the FSM Congress under its express and implied powers under the Constitution. SCREP No. 33 set forth that the determination of whether a power is indisputedly national would initially lie with the national legislature and national chief executive. Since the FSM Congress has specified in Title 30 F.S.M.C. 137 that the Bank (FSMDB) "shall have and retain the legal capacity to acquire, own title to, dispose of, and otherwise deal in land and waters in the Federated States of Micronesia," the restrictions imposed by Pohnpei State must fail as applied to the FSMDB and its ability to acquire title to land in Pohnpei.

Defendants argue that 30 F.S.M.C. 137 relates only to the legal capacity of FSMDB to acquire and own title to land, not to its right to do so. FSMDB would be prohibited from holding title to land if it had foreign ownership, but according to defendants its right to hold title to land is still based on "applicable law," including restrictions found in the Pohnpei Constitution and statutes. If the right of the FSMDB to acquire, own title to, dispose of, and otherwise deal in land and waters in the Federated States of Micronesia could be impaired in different ways by each of the four states, based on the states’ Constitutions or statutes, it would eviscerate the power of the national government to regulate the FSMDB under the express powers granted to it under the FSM Constitution. If each state could justify denying FSMDB the right to acquire land, its essential functions would be impaired, and it would be unable to achieve the stated purpose of operating as an independent financial institution within the framework of the national government’s general economic plans, policies and priorities.^[4]

Furthermore, as a practical matter, the FSMDB points out that its ability to hold title to land enables it to be flexible when negotiating with borrowers who are behind or in default on collateralized loans. It is clear that Peterson Sam relinquished the parcel of land at issue here voluntarily, in order to settle with FSMDB and prevent them from foreclosing on five other properties that were mortgaged and subject to foreclosure due to a judgment in FSMDB’s favor. It is also clear from the settlement agreement entered into between Peterson Sam and the FSMDB that the five mortgages held by FSMDB will not be released until FSMDB acquires title to parcel 045-E-26. While defendants argue that their interest is in protecting Pohnpei land and Pohnpeian land ownership, the effect that their stance has is to disregard the wishes of Peterson Sam to exchange title to parcel 045-E-26 for the mortgages he wishes to extinguish. According to plaintiff at oral argument, families currently are living on the five mortgaged properties, and FSMDB’s only available alternative remedy would involve foreclosing on and selling these occupied parcels of land. This result would be detrimental to Peterson Sam and the families occupying these five parcels.

VII. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Having determined above that this court has subject matter jurisdiction over this case, the remainder of defendants’ Cross-Motion for Summary Judgment is based upon (1) FSM Constitution article VIII, § 2 as supportingndants’#8217; contention that regulation of land is a state matter; and, (2) Pohnpei State laws that prohibit FSMDB from owning title to land in Pohnpei and provide FSMDB with alternatives to collect on its loans.

In rendering a decision, the court must first consult and apply legal sources of the FSM. In resolving a Constitutional question, first the court must look at the plain meaning of words of the Constitution. If the Constitution is not clear as to a particular provision, the court should ascertain the intent of the drafters by examining the records of the Constitutional Convention and the reasons expressed for including a particular provision in the Constitution. Suldan v. FSM (II), 1 FSM R. 339 (Pon. 1983); Alaphanso v. FSM, 1 FSM R. 209 (App. 1982).

As discussed above, Article VIII, Sections 1 and 2 of the FSM Constitution provide that the national government has national power over expressly delegated powers and those of an indisputedly national character. The powers not expressly delegated to the national government or prohibited to the states are state powers.

Defendants are correct that the states generally have power over land law and other local issues including personal property law, inheritance law, and domestic law including marriage, divorce and adoption. See SCREP No. 33, II J. of Micro. Con. Con. at 814. However, where the national government concurrently has the power to acquire title to land within the Federated States of Micronesia under powers expressly delegated to it, and state law purports to restrict it, the state law must fail as applied to the national government.

Under this rationale, each of defendants’ remaining grounds for summary judgment must also fail. Pohnpei State may not, by Constitution or statute, restrict the national government in the exercise of its expressly delegated powers under the FSM Constitution. See Gimnang v. Yap, 5 FSM R. 13 (App. 1991) (Yap state law provision attempting to place "original and exclusive jurisdiction" in the Yap State Court of cannot divest the national court of responsibilities placed upon it by the national Constitution, which is the "supreme law of the Federated States of Micronesia." FSM Const. art. II.). Defendants argue that Pohnpei State Constitution Article 12, § 2 1 Pohnpei Code § 4-101icitly prohibit Plaintlaintiff from holding title to land in Pohnpei. With respect to these two arguments, the court finds only that they cannot be applied to restrict FSMDB’s ownershipand.

Defendantsdants also argue that plaintiff has an alternative means to collect debts without holding title to land in Pohnpei under 41 Pohnpei Code § 6-135. The court finat thit this statute is not relevant to this case, where plaintiff seeks to acquire fee simple title to land, which it is entitled to do under 30 F.S.M.C. 137.

VIII.NPEI STATE’S RESPONSEPONSE TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

On May 2, 2019, the court issued an order accepting Pohnpei State’s late Response provided that it file and serve on the parties copies of all of its legal authorities by May 13, 2019. The court also gave the plaintiff and the other defendants ten days from the date of Pohnpei State’s filing to respond. Pohnpei State filed copies of the authorities it cited on May 3, 2019 and plaintiff and defendants both filed responses on May 13, 2019.

Pohnpei State did not challenge any of the facts asserted by plaintiff in its Motion for Summary Judgment, but relied solely on other legal authorities and arguments related to the transfer of land, and authority over land, from the Trust Territory to the FSM and Pohnpei State.

The court finds that the both of the U.S. Department of Interior Secretarial Orders submitted by Pohnpei State are inapposite to this case. Secretarial Order No. 2969 (effective December 28, 1974, and amended effective December 20, 1978) relates specifically to the "Transfer of Trust Territory Public Lands to District Control." Secretarial Order No. 3039, published in 1978, relates to transfer of a number of different authorities, property (including personal property and land), and functions from the Trust Territory to the Federated States of Micronesia "and its respective States." However, neither of these Orders relates to privately held land, nor do they dictate how the FSM as a nation should structure its government to deal with issues related to private lands and their title, transfer, and ownership.

Subsequent to the effective date of Secretarial Order No. 2969, Pohnpei State enacted Ponape District Law No. 4L-69-76, effective December 13, 1976. It created the Public Lands Authority as a legal entity to receive, hold and dispose of public lands in the Ponape District. This has been superseded by the Public Lands Act of 1987 and codified in the Pohnpei Code, Title 41, Chapter 1. It is not clear why Pohnpei State relies upon this statute, as this provision of the Pohnpei Code deals only with public lands and does not relate to the national government’s ability to hold title to private land through the FSMDB. Pohnpei State goes on to assert that "[n]o law has been enacted by the National Government of the Federated States of Micronesia creating ownership of land or to control landholding."

To the contrary, the FSM Constitution and Code both speak to ownership and control of land. Article XV, Section 3 of the FSM Constitution states that "[a]n interest in property held by the Government of the Trust Territory is transferred to the Federated States of Micronesia for retention or distribution in accordance with this Constitution." In addition, other provisions of the FSM Constitution govern ownership and use of land, including Article XIII, Sections 2, 4, 5 and 6. FSM law also allows for eminent domain and real property acquisition by the national government. See 56 F.S.M.C. 101 et seq.

Pohnpei State’s argument also ignores the specific national statutes related to the FSMDB, as discussed above. The court finds that none of Pohnpei State’s legal authorities or arguments in their Response affect the award of summary judgment in favor of plaintiff.

IX. RELIEF

As to Count 4 of its complaint, Plaintiff requests a declaratory judgment that defendants violated 30 F.S.M.C. 137 and that FSMDB is entitled to acquire fee simple title to land located within Pohnpei State. Plaintiff also seeks an injunction requiring defendants to register the May 12, 2017 deed of conveyance for parcel 045-E-26 from Peterson Sam to FSMDB, and to issue a new title to FSMDB.

The injunctive relief sought by plaintiff is essentially a request for a mandatory injunction.

Injunctions can be mandatory in nature. See Berman v. FSM Nat’l Police, 19 FSM R. 118, 124-5 (App. 2013). A mandatory injunction is one which: (1) commands the defendant to do some positive act or particular thing; (2) prohibits him from refusing (or persisting in a refusal) to do or permit some act to which plaintiff has a legal right; or (3) restrains the defendant from permitting his previous wrongful act to continue to be operative, thus virtually compelling him to undo it. BLACK’S LAW DICTIONARY 784 (6th ed. 1990). While courts rarely grant mandatory injunctions because they are ill-equipped to involve themselves in day-to-day administration and because of the difficulty of enforcing them, Udot Municipality v. FSM, 10 FSM R. 354, 360 (Chk. 2001), this case is appropriate for a mandatory injunction because it requires a one-time action by defendants and does not involve the court in any "day-to-day administration" or present any enforcement difficulties. The court will require the Pohnpei Court of Land Tenure to register the May 12, 2017 deed of conveyance for parcel 045-E-26 from Peterson Sam to FSMDB, and to issue a new title to FSMDB. The court holds that FSMDB is not subject to restrictions imposed by Pohnpei State on its ability to acquire title to land, and thus it is appropriate that the Pohnpei Court of Land Tenure be restrained from permitting its previous wrongful act (its May 22, 2017 denial of FSMDB’s application for title) to continue to be operative.

Accordingly, it is HEREBY ORDERED that plaintiff’s Motion for Summary Judgment is HEREBY GRANTED as to Count 4 of its Complaint, and that judgment be entered in favor of plaintiff and against defendants as to Count 4, that defendants violated 30 F.S.M.C. 137. The court will not reach plaintiff’s other grounds for Summary Judgment. Defendants’ Motion for Summary Judgment is HEREBY DENIED.

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^[1] Gusto Ligohr is a defendant only in his capacity as the Principal Judge of the Pohnpei Court of Land Tenure and Maryann Hawley is a defendant only in her capacity as Registrar of the Pohnpei Court of Land Tenure.

^[2] Pohnpei State did not file any motions until it filed a Response to Plaintiff’s Motion for Summary Judgment 15 minutes before the hearing. The court did not hear from Pohnpei State at the hearing. Hereafter in this Order "defendants" will refer collectively to defendants Ligohr, Hawley, and the Pohnpei Court of Land Tenure; Pohnpei State’s argument from its Response and the other parties’ Replies to the Response are addressed separately within this order.

^[3] Aff. of Anna Mendiola. Defendants objected to her affidavit without offering any competent evidence to controvert any of the facts she offers based on her own personal knowledge as President/CEO of FSMDB.
^[4] It should be noted that Kosrae and Yap also have Constitutional provisions that, were the court to find in favor of defendants, could also be invoked to frustrate the essential functions of the FSMDB:

Section 7. Only a person who is a citizen of the Federated States of Micronesia and Kosraean by descent, including by adoption, or a corporation which is wholly owned by such persons, may acquire title to land in the State. Acquisition of title by persons whose status as Kosraeans by descent is based solely on adoption shall be within limits set by law. Acquisition or utilization of interests in real property may be restricted or regulated by law.

Kos. Const. art. XI, § 7. "Title to land may buircquired only in a manner consistent with traditions and customs." Yap Const. art. XIII, § 3.