Iyar v Sungiyama [1960] TTLawRp 2; 2 TTR 154 (17 November 1960)

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