Transpacific Lines, Inc, Re [1975] TTLawRp 3; 7 TTR 179 (25 February 1975)

7 TTR 179

In re TRANSPACIFIC LINES, INC., Formerly styled:
In re DAVID M. SABLAN, Receiver of TRANSPACIFIC LINES, INC., Petitioner.

Civil Action No. 11-74

Trial Division of the High Court

Mariana Islands District

February 25, 1975

Motions attacking receivership. The Trial Division of the High Court, Brown, Associate Justice, held that the government had power to grant corporation exclusive franchise and contract for sea transportation in the territory and could terminate the franchise upon failure of the corporation to follow the contract.

1. Trust Territory—Administering Authority—Vital Products and Services

Where company granted exclusive sea transportation contract and franchise for the Trust Territory by the government had deteriorated to the point where shipping and passenger service were practically nonexistent and its financial position was extremely poor, the High Commissioner had the right and the duty to take action to preserve adequate shipping and passenger service for the territory.

2. Trust Territory—Administering Authority—Vital Products and Services

Where United States, as administering authority for the Trust Territory, through its Secretary of the Interior, reserved for the High Commissioner the power and authority to contract for the maintenance and operation of surface vessels in the territory, and company granted exclusive contract and franchise for sea transportation in the territory had deteriorated to the point where services where almost nonexistent and its financial position was very poor, High Commissioner had the power and authority to place the company in administrative receivership.

3. Constitutional Law—Due Process—Hearing

That court changed administrative receivership into judicial one and appointed a receiver without notice and hearing in open court was not fatal denial of due process, and court would not vacate the order establishing the receivership, where motion to vacate receivership and hearing on the motion were had immediately after establishment of receivership and there was no prejudice.

4. Constitutional Law—Due Process—Hearing

Due process generally requires both notice and an opportunity to be heard whenever any significant property interest may be substantially affected.

5. Constitutional Law—Due Process

"Due process" means the same thing in the Trust Territory as it does in the United States.

6. Receivership—Power To Appoint Receiver

Generally, an equity court may appoint a receiver only when the appointment is ancillary to a pending action, but where a corporation expressly consents to the appointment or admits its insolvency, the receivership need not be ancillary to a main action.

7. Receivership—Priority of Claims—Receivership Expenses