2 N.M.I. 514 (Ferreira v. Borja)

CLERK OF COURT
SUPREME COURT. CNMI
FILED
FOR PUBLICATION
IN THE SUPREME COURT OF THE
COM..'iONWEALTH OF THE NORTIIERN MARIANA ISLANDS
DIANA C. FERREIRA,
Plaintiff/Appellant,
APPEAL NO. 90-047
CIVIL ACTION NO. 86-796
)
)
)
)
vs.
OPINION
)
ROSALIA MAFNAS BORJA, et al., )
Defendants/Appellees.
)
______)
Argued March 12, 1991
Counsel for Plaintiff/Appellant:
Carlsmith Ball Wichman
Murray Case Mukai & Ichiki
P. 0. Box 241 CHRB
Saipan, MP 96950
Counsel for Defendants/Appellees: Theodore R. Mitchell
P. o. Box 2020
Saipan, MP 96950
BEFORE:
DELA CRUZ, Chief Justice, BO�A, Justice, and KING,
Special Judge.
BORJA, Justice:
Diana C.
Ferreira
(hereafter Diana),
a
person of Northern
Mariana Island descent (hereafter NMI descent), filed a quiet title
action
against
defendants
Rosalia
Salas, and Isabel Mafnas Santos
Mafnas
Borja,
Isidora Mafnas
{hereafter Mafnas sisters).
The
Mafnas sisters were the sellers of three parcels of land to Diana.
The
lots
are
described
as
Lot
Nos.
008
B
22,
23,
and
24,
containing a total area of 21,182 square meters, more or less.
The
517
Mafnas
s i s te rs
a f f i rmat iv e l y
f i l ed
an
stat i ng
v i o l ated A rt i c l e X I I
Both
court
p a rt ie s
granted
answer
that
the
d eny i ng
ownersh i p
a c qu i s it i on
of
in
the
D i an a
l and
and
by
D i ana
The
trial
of the NMI Con s t i tut i o n .
f i l ed
summary
mot i o n s
judgment
for summary
in
favor
j udgment .
of
the
Mafnas
s i sters
ho l d i ng that the acqu i s it ion of the l a nd b y D i a na v i o l at ed Art i c l e
XII
o f the NMI Const itut i on .
We a f f i rm the d ec i s ion o f
D i an a appea l s .
the
tr i a l
court .
FACTS
The
series
of
t r a ns ac t i on s
at
i s s ue
in
th i s
case
w i th a 1980 Partnersh ip Agreement (hereafter Agreement)
Bobbi
Gri zzard
Frank F .
and D i ana c.
Ferre iras)
executed
p artnersh ip was
property
and
th i s
above
Art i c l e One .
Gr i zzards
w i fe)
Ferre i ra
(hereafter
The
"for s a l e ,
as
the
part
of
sole
l ea s e
Lot
a nd
008
James and
Gri zzards)
(hu sband and w i f e )
Agreement .
to purchas e
d e s c r ibed
Agreement ,
The
(husband
•
commenced
and
(he r e a f t e r the
purpo se
of
deve l opment
B
10
the
the
II
1
wou l d
contribute
$41,000
to
the
p a rtnersh ip .
1
The partnership
agre ement dea l s w i th
o n l y one p i ec e o f
property .
However , appel l an t ' s b r i e f , at p a g e 1 4 , acknow ledges
that the other two prop e rt i e s were acqu i red us i ng funds from the
Grizzards .
App e l l ant states a l so that D i a n a used the r e a l estate
expert i s e o f Frank in a cqu i ri ng the properti e s .
Wh i l e it may be
true that she re l ied on Frank's e xp e rt i s e i n the purcha s e o f the
propert i e s , there is noth i ng i n the record that i nd icates that
Frank's expert i s e w a s part o f the cons iderat i o n accepted by the
Maf na s s i sters in conveyi ng thei r i nterest s .
Consequ e nt l y, such a
fact
is
i rrel evant
as
to
the
i s su e
of
who
furn i shed
the
cons idera t i on for the purchase o f the prope rt i es .
518
Frank
F.
Ferreira
wou ld
contribute
"all
amounts
needed
for
survey ing , subdividing , l ega l fees , and accounting services to the
partnersh ip , such services be ing o f the approx imate amount o f N ine
Thousand Dol l ars ( $ 9 , 0 0 0. 00 ) . "
Agreement , Article Four .
In Articl e Four , a l s o , it is provided that Diana ,
as a citizen o f Northern Mariana de scent wi l l
purchase the property described
with the
$4 1 , 0 0 0 contributed by [the Grizzards).
Upon
the purchase of the described rea l property ,
[Diana) wi l l execute a l ease o f the real
property to the partnership , for the maximum
peri od o f time a l l owed by l ar;� , being forty
(4 0 ) years and to include a " change o f l aw"
provision for purchase in fee s impl e absolute
should the l aw change with the cons ideration
for thi s prov is ion be ing the $4 1 , 0 0 0 paid in
hand and the mutual promises conta ined in this
agreement .
In addit ion ,
the l ease wi l l
conta in a provis ion for the purchase o f
improvements put o n the l and b y the lessee .
.
•
.
Diana acquired fee titl e but she never granted the partnership
the short-term leases required by the Agreement .
I nstead ,
Diana
used add itional funds from James Grizzard to acquire two add itional
adjacent parce l s , taking fee title in herse l f .
The three parc e l s
were purchased f o r about one hundred thousand dol l ars ( $ 1 0 0 , 00 0 ) .
On March 25 , 1 9 8 8 , in a document entitled , " Quitc l a i m , Rel ease
of C l a ims ,
and Assignment , 11 Nansay Micron es i a ,
Inc . acquired the
Grizzards' interests in the three parce l s of land, and a l l other
rights they had under the Agreement .
The consideration paid for
al l the Grizzards' i nterests was one m i l l ion one hundred thousand
d o l l ars
ass igned
( $ 1 , 100 , 00 0 ) .
the
interests
On the same day ,
it
acquired
519
Nansay Micronesia ,
from
the
Grizzards
to
Inc .
the
Ferreiras.
Also on March 25,
1988,
Diana entered into an agreement to
lease with Nansay for fifty-five years.
The consideration for the
agreement to lease was the assignment by Nansay Micronesia, Inc. of
its interests in the three parcels of land and in the Agreement to
the Ferreiras.
Concurrently, Diana agreed to convey her fee simple
interest in the three parcels of land to Ana Little for $60 ,0 0 0 .
ISSUES PRESENTED
1.
Whether
the trial court committed reversible error
in
granting summary judgment in favor of the Mafnas sisters where the
record before it presented multiple genuine issues as to material
facts,
by
material
weighing
factual
conflicting
disputes
evidence
without
of
trial
record,
and
resolving
assessing
the
credibility of deposition evid ence without having heard testimony.
2.
Whether
concluding
that
constitutionally
the trial court committed
the
Grizzards
impermissible
and
Frank
interest
reversible error
Ferreira
in NMI
land
acquired
when
in
a
Diana
purchased the land from the Mafnas sisters.
3.
Whether,
as applied
to this case,
Article XII
of the
Constitution of the Northern Mariana Islands violates Diana ' s right
to equal protection of the laws as guar anteed her by the Fourteenth
Amendment to the constitution of the United states.
STANDARD OF REVIEW
A grant of summary judgment is reviewed de novo.
520
If there is
no genuine issue of material fact , the analysis shifts to whether
the substantive
law
was correctly
applied.
Commonwealth Ports
Authority v. Hakubotan Saipan Enterprises, Inc. , No. 90-005 (N. M. I.
Aug.
8,
1991).
If an incorrect substantive law was applied ,
appellate court should ,
result
is
correct
in its de novo review ,
under
a
different
the
determine if the
Ross
theory.
v.
Communications Satellite Corp. , 759 F.2d 355 (4th Cir. 1985); 10 c.
Wright , A. Miller ,
2d
§
2716
(1983).
&
M. Kane , Federal Practice and Procedure: civ�l
The evidence and inferences are viewed in a
light most favorabl e to the non-moving party .
De Castro , No. 89-018 ,
1 N. Mar. I.
102 (June 7 ,
Cabrera v. Heirs of
1990).
ANALYSI S
Summary Judgment and Article X I I
We
will
address
the
first
two
issues
jointly
since
a
discussion of one requires a discussion of the other.
Our
provision.
analysis
starts
Article X I I ,
with
the
pertinent
constitutional
as amended in 1985 , is as follows:
ARTICLE X I I
Section 1:
Alienation of Land.
The acquisition of permanent and long­
term interests in real property within the
Commonwealth shall be restricted to persons of
Northern Marianas descent.
Acquisition.
Section 2:
The term acquisition used
includes acquisition by sale ,
inheritance or other means.
Section 3:
in section 1
lease , gift ,
Permanent and Long-Term
Interests in Real Property.
521
and
long-term
term
permanent
The
interests in real property used in S ection 1
includes freehold
interests and
leasehold
interests
of
more
than
fifty-five
years
including renewal rights
•
•
•
•
Section 4:
Persons of Northern Marianas
Descent.
A person of Northern Marianas descent is
a person who is a citizen or national of the
United states and who is of at least one­
quarter Northern Marianas Chamorro or Northern
Marianas Carolinian blood or a combination
thereof or an adopted child or a person of
Northern Marianas d escent if adopted while
under the age of eighteen years. For purposes
of determining Northern Marianas d escent, a
person shall be considered to be a full ­
bl ooded Northern Marianas Chamorro or Northern
Marianas carol inian if that person was born or
domiciled in the Northern Mariana Island s by
1950 and was a citizen of the Trust Territory
of the Pacific Islands before the termination
of
the
Trusteeship
with
respect
to
the
Commonweal th.
S ection 5:
Corpor ations .
·A corporation shall be considered to be a
person of Northern Marianas descent so long as
it is incorporated in the Commonwealth, has
its principal
place
of
business
in
the
Commonwealth,
directors
one-hundred
has
percent of whom are persons of Northern
Marianas descent and has voting shares (i.e .
common or preferred) one-hundred percent of
which
are
actual l y
owned
by
persons
of
Northern
Marianas
descent
as
defined
by
Minors, as defined by applicable
S ection 4 .
laws of the Commonwealth, may not be eligible
to become directors of a corporation .
No
trusts or voting by proxy by persons not of
Northern Marianas descent may be permitted .
Beneficial title shall not be severed from
legal title .
S ection 6:
Enforcement .
Any transaction mad e in violation of
section 1 shall be void ab initio . Whenever a
corporation ceases to be qualified
under
S ection 5, a permanent or long-term interest
522
in land in the Commonwealth acquired by the
Corporation after the effective date of this
amendment
shall
be
immediately
forfeited
without right of redemption to the government
of the Commonwealth
•
Commonwealth Code, vol. 1, pp.
For
a
person
to
succeed
•
•
•
B-334 & B-335.
in
a
cause
of
action
alleging
a
violation of Article X I I , certain material facts have to be clearly
present and undisputed.
These facts are�
1.
An acquisition of NMI land;
2.
The acquisition is a permanent and long-term interest;
3.
The acquisition was made by a person who is not of NM I
descent.
To determine if the above necessary facts exist in this case,
we must answer the question of whether the long-term and permanent
interest acquired by Diana from the Mafnas sisters in Lot Nos. 008
B
22,
23,
and
24
was,
as a
matter
of law,
a
constitutionally
impermissible acquisition by the Grizzards.
The following facts appear from the record:
1.
2.
Diana is a person of NMI descent;
The partnership of the Grizzards, Frank Ferreira and Diana
is not recognized in the constitution as a person capable of owning
a permanent and long-term interest in Commonwealth real property;
3.
The Grizzards and Frank Ferreira are not persons of NMI
descent;
4.
Diana acquired in her name the properties from the Mafnas
sisters with funds provided entirely by the Grizzards; and
523
5.
The
partnership
properties
agreement
dated October 2 1 ,
The
above
were
between
acquired
the
in
Griz zards
furtherance
and
the
of
a
Ferreiras ,
1980.
facts
are
undisputed
material
facts.
These
undisputed material facts are sufficient for purposes of a summary
judgment proceeding involving a claim that Article XII of the ID1I
Constitution was violated.
The disputed genuine issues of material fact that Diana claims
with regard to "control 11 over an agent are not relevant.
The issue
of control was discussed by the trial court in its agency analysis.
As
we
discuss
dispositive.
later ,
common
l aw
principles
of
trust
are
The other disputed issue of material fact raised by
Diana deals with the claim of ownership to the properties.
as we will note later ,
Again ,
Diana cannot raise a genuine issue of fact
by refuting in her deposition what is stated in the Agreement.
As
material
we
stated
fact ,
earlier ,
where
there
is
no
genuine
issue
of
the analysis then shifts to whether the correct
substantive law was applied , bearing in mind that the evidence and
inferences are viewed in a light most favorable to the non-moving
party.
Cabrera v. Heirs of De Castro , supra.
The trial court , in its grant of summary judgment , concluded
that Diana's acquisition of Lot Nos. 008 B 22 , 23 , and 24 from the
Mafnas sisters 11violated Article XII, Section 1 of the Constitution
and is void ab initio under Section 6 thereof."
C.A.
No.
86-796 ,
"Order Re Motion and
524
Ferreira v. Borja ,
Cross-Motion for
Summary
Judgment" at 28
(Super. Ct. Sept.
13,
We initially examine
1988).
this conclusion in view of the substantive law applied by the trial
commonwealth
court.
Enterprises,
Ports
10
c.
Procedure:
§
Civil 2d
Miller,
A.
Wright,
2716
and
Frank
Diana's
is
of
not
real
&
the result is correct under a
Practice
Federal
Kane,
M.
principles of agency in
dispositive.
acquisition
NMI
law was
and
arriving at
Whether Diana is in fact an agent of the Grizzards
of
the
entirely by the Grizzards,
not
substantive
(1983).
The trial court applied
its conclusion.
Saipan
Communications Satellite Corp.,
Ross v.
different theory of law.
supra;
if
we then must determine
applied,
incorrect
the
If
supra.
Inc.,
Hakubotan
v.
Authority
descent
property.
of
The
an
is
What
dispositive
properties,
using
is
funds
whether
provided
resulted in the acquisition by persons
impermissible
issue
is
whether
interest
the
in
Commonwealth
acquisition
by
Diana
resulted in the acquisition by the Grizzards and Frank Ferreira of
an
equitable
therefore,
The
fee
interest
in
Commonwealth
real
property
and,
the transaction violates Article XII.
trial
reaching its
court
erroneously
applied
It is the
judgment.
agency
principles
in
law of trust that govern since
only through trust principles may one acting as an agent acquire a
fee
interest.
incorrect,
applying
the
But
although
judgment
principles
of
is
trust
the
substantive
correct.
is
the
The
same
result in applying principles of agency.
525
law
result
as
the
applied
we
reach
trial
was
in
court 1 s
An
judgment
or
has
court
appellate
slip
n.10
13,
at
op.
Co mmunications satellite Corp.,
Auto Ins. Co.,
u.s.
839
675 F.2d 308
if the wrong
No.
(N.M.I.
supra;
1991);
7,
Feb.
Proctor v.
(D.C. Cir. 1982),
v.
Ross
State Farm Mut.
cert. denied,
459
(1982).
In Restatement
that,
even
the
In re the Estate of Dela Cruz,
ground or reasoning was used.
90-023,
correct
a trial court is
order of
if
determine
to
obligation
an
(Second}
of Trusts
§ 440
(1959),
it is stated
nhfhere a transfer of property is made to one person and the
purchase
price
is
paid
by
another,
a
resulting
trust
arises
favor of the person by whom the purchase price is paid,
stated in §§ 441,
No. 89 -003,
442,
slip op.
and 444."
at 21
in
except as
See also Aldan-Pierce v. Mafnas,
(N.M.I. July 5,
1991).
Is Diana a trustee for the Grizzards under a resulting trust
theory?
The answer is yes.
Disregarding the exceptions for the moment,
is
a transfer of
purchase
price
three
being
parcels of
paid
by
the
land
to
what we have here
Diana
Grizzards.
with
This
resulting trust under Section 440 of the Restatement
Trusts in favor of the one paying the purchase price.
acquired the lots
from the Mafnas sisters,
title to the properties,
the entire
creates
(Second)
a
of
When Diana
Diana held bare legal
and the Grizzards held equitable title.
"The trustee of a resulting trust holds only the naked legal title
for the benefit of the person furnishing the consideration
who holds the equitable interest.11
526
Aldan-Pierce v. Mafnas, supra,
·
·
at
(Citation and footnote omitted.)
22.
In Aldan-Pierce v.
Mafnas,
we held that
supra,
If a resulting trust in real property in
the Commonwealth has arisen in favor of a
person
who
is
not
of
Northern
Marianas
descent,
it
is
subject
to
being
declared
invalid
in
a
judicial
proceeding
if
the
equitable interest held for them in trust
violates Article XII.
Id.
at 34.
The
(Footnote omitted.)
most
agreement.
crucial
evidence
against
Diana
is
the
partnership.
This document not only establishes that Diana was never
meant to be the fee simple absolute owner of the properties,
but
also dispels any exception to a resulting trust.
The undisputed facts show that the partnership among the four
was formed to buy and sell or lease property.
role.
Diana was to purchase and hold title.
provide
the
expertise.
The
purchase
money.
Frank
was
Each partner had a
The Grizzards were to
to
provide
real
estate
Each performed their respective partnership roles.
question
is
whether
Diana
possesses
both
legal
and
equitable titles to the properties, or whether she is holding title
in trust for the benefit of all the four partners.
If the latter,
did the three partners not of NMI descent acquire an equitable fee
simple interest in the_ properties?
If so,
such violates Article
XII.
The Agreement clearly shows that Diana was to hold title to
the
properties
for
the
Articles One and Four.
benefit
of
the
partnership.
Agreement,
There are three provisions in the Agreement
527
that conclusively.show that Diana was holding title for the benefit
of the partnership.
The first provision is in Article Four.
It
states that any lease agreement to the partnership must include a
"change of law" provision.
The article defines "change of law11 as
meaning that the partnership (i.e., Diana , Frank, and the Griz zards
collectively) will purchase the land in fee simple absolute should
the law change with no additional consideration.
Second, Article
Four also states that Diana, or whoever is the lessor at the end of
the lease period, must purchase the improvements placed on the land
by the partnership,
Article
Five (3)
or whoever is the lessee then.
provides
that
if
Diana
And third,
withdraws
partnership for any reason, she must convey her right,
from
the
title and
interest in the land to a person of NMI descent, to be designated
by the partnership .
These provisions establish an intent that Diana would obtain
fee simple title, but subject to the partnership restrictions.
She
must convey her fee simple interest if 1) there is a change in the
law,
or 2) she decides to withdraw from the partnership.
The
consid�ration for her interest in the event of a change in law is
the
"mutual
consideration
promises
to
be
contained
paid
for
her
in
this
interest
agreement . "
The
in
she
the
event
withdraws from the partnership "are the mutual promises contained
in this agreement and one dollar ($ 1.00) to be paid in hand."
She
is restricted in what she may do with her title to the properties.
And if none of the two conveyance possibilities arise,
528
she must
purchase the improvements placed on the premises by the.lessee at
the end of the lease term.
Diana, James Grizzard, and Frank Ferreira disputed,
depositions,
simple
that Diana was to obtain
absolute
However,
interest.
anything less than a fee
these
refutations
prohibit a court from granting summary judgment.
v.
Kasuboski,
circumvent
834
summary
F. 2d
1345
judgment
(7th
by
Cir.
later
in their
do
not
See United states
1987).
A
refuting
party
what
he
cannot
or
she
initially admitted.
This is not a situation where a party to the Agreement is
attempting to clarify or explain an
Agreement.
Agreement
What we
are
have
attempting
is
a
to
ambiguous
situation
dispute
unambiguously stated in the Agreement.
not, be allowed.
provision
where
what
parties
is
in the
to
clearly
This cannot,
the
and
and should
Otherwise, the rule for summary judgment would be
meaningless.
In Aldan-Pierce v. Mafnas, supra, at 34, n. 45, we noted that,
"a trust may be rebutted by clear evidence that the money used to
purchase
the
property
was
a
valid
gift,
discharge a debt or other obligation. "
such clear evidence.
Article
loan,
or
In this case,
payment
to
we have no
Four of the Agreement shows that
Diana was not to obtain title as a gift or loan, or to discharge a
debt or other obligation.
person of NMI descent.
will
She acquired title because she was a
She acquired title with covenants that she
relinquish her title upon the happening of certain events.
529
And
if
those
specific
events
did
not
occur,
her
title
was
encumbered with the obligation to purchase any improvements placed
on the premises by any lessee.
The exceptions to a resulting trust,
(Second) of Trusts §
the payor:
440 , do not apply.
These exceptions arise if
(1) manifests an intention that no trust should arise (§
441),
(2) purchases the property in the
other
natural
property
as cited in Restatement
object
of
to accomplish
bounty"
an
(§
illegal
name
442),
of a relative "or
or
purpose
(§
(3)
purchases
the
444).
Aldan-Pierce v. Mafnas, supra, at 23 .
There is no manifestation of an intention that no trust should
arise.
The Agreement makes it clear that a trust was contemplated.
Agreement, Articles
Four
and
Diana
Five.
is
to
purchase
the
property and then lease it to th e partnership with a provision that
if the law changes, the partnership obtains fee simple title at no
additional consideration.
there is
Finally,
no
She must purchase the improvements, if
change in the law, at
the end
of
the lease
term.
she must transfer her interest if she ever d ecides to
leave the partnership.
It is clear that Diana's co-partners (who
are not of NMI descent) h ave, through Diana's deed, acquired an
equitable
situation
interest
where
constitutionally
of
the
indeterminate
non-NMI
permissible
duration.
descent
interest.
would
If
This
be
is
not
obtaining
the NMI descent
a
a
was
purchasing land with money totally provided by a non-NMI descent
but it is clear that the intent in the transaction was that the
530
non-NMI descent would only obtain a
55
year lease, or less,
fee interest would be in the NMI descent,
prohibition would not be violated.
and the
then the constitutional
2
The Grizzards did not provide the funds for the purchase of
the properties in the name of a relative or other natural object of
Diana
bounty.
is
not
a
relative
of
the
Grizzards.
·
There
is
nothing in the record establishing that she is a natural object of
their bounty.
Aldan-Pierce v.
exception,
At
i. e.,
first
Mafnas,
supra,
at
23-24 ,
a purchase to accomplish an illegal purpose.
blush,
it
applicable in this case.
appears
that
this
exception
may
be
If the partnership agreement was entered
into to accomplish an illegal purpose,
trust under §
discussed the third
there can be no resulting
444.
However, in analyzing Article XII, this Court has concluded in
the
Aldan-Pierce
case
that
a
violation
of
Article
XII
does
not
2
This hypothetical was also not the situation in the Aldan­
We stated in Aldan-Pierce that 11the record in this
Pierce case.
case indicates that Fennell and McMahon intended to retain an
Aldan-Pierce v.
equitable interest of indeterminate duration. 11
Mafnas, supra, at 28 .
We
disagree
with
the
dissent's
interpretation
regarding
footnote 37 in Aldan-Pierce.
See, infra, pp. 22-23.
Footnote 37
was inserted under the discussion of a resulting trust being
rebutted in part.
Aldan-Pierce was arguing that, since Fennell and
McMahon disclaimed any intention to take more than a leasehold for
fifty-five years, the resulting trust is rebutted.
Footnote 37 was
inserted to show that the exception noted in Comment f of § 441 of
the
Restatement
{Second)
of
Trusts
does
not
apply
in
the
Commonwealth if the disclaimer occurs after the unconstitutional
act.
That is, a person cannot violate the constitution now, and
then later attempt to correct the violation by saying that all that
was intended was a constitutionally permissible interest.
531
occur
until
and
unless
a
violative of Article XII.
court
declares
Therefore ,
illegal purpose under Article XII.
a
transaction
to
be
there can be no automatic
A court must first declare a
transaction to be unconstitutional.
In adopting the principles set forth in I saacs v. De Hon ,
F.2d 943 (9th Cir.
11
1926) , the Aldan-Pierce Court held that
A resulting trust in real property in the
Commonwealth in favor of a person who is not
of Northern Marianas descent is valid, unless
the equitable interest held for them in trust
is declared , in a judicial proceeding , to be
If the equitable
violative of Article XII.
interest is ruled violative of Article XI I ,
the underlying transaction through which the
person who is not of Northern Marianas descent
acquired the interest becomes void ab initio.
Article X I I , § 6.
(Footnote omitted.)
exception.
an
We reaffirm such analysis and holding on this
Only a court of competent jurisdiction can determine if
acquisition
Constitution.
of
land
violates
Article
XII
of
the
NMI
Prior to such judicial determination , the resulting
trust is valid.
This exception does not apply.
Equal Protection
Diana 1 s argument on this issue must fall. 3
n.47 ,
Her brief , at 58,
correctly notes that this argument was made to the United
States Court of Appeals fo� the Ninth Circuit and was rejected.
3we disagree with the Mafnas sisters that this issue may not
be raised on appeal since it was not raised in the trial court.
This issue falls within one of the three exceptions noted in
Camacho v. Northern Marianas Retirement Fund ,
No. 90-007 ,
1
N.Mar. I. 131 (Sept. 2 1 , 1990). The exception is that
11the issue
is only one of law not relying on any factual record • • • • "
Id.
at 135-136.
532
S e e Wab o l v .
no
equa l
Vi l l acrus i s ,
908 F . 2d 411 {9th C i r .
protect i on v i o l at i on
under the NMI
1990) .
4
There i s
Cons t i tut i o n ,
o r th e
Un i ted States Constitut ion .
CONCLUS ION
Ba s ed on the above ,
the conveyanc e s from the Ma fnas s i st ers to
D i ana v i o l ated A rt i c l e X I I of the NMI Cons t i tu t ion .
The Gri zzards
acqu ired a cons t i tutiona l ly imperm i s s ib l e i nterest i n real property
in
the
Commonw e a l th
conveyance s were void
The grant o f
when
the
from the
conveyan c e s
were
made .
Such
date they were executed .
summary j udgment
i s he reby AFFIRMED.
-I�
�
Jo s e s. D e l a Cruz
Ch i e f Jus t i c e
Borj a
4
We note that we a r e agre e i ng
N i nth C i rcu i t on t h i s i s su e .
533
only w i th the
ana l y s i s
of
the
KING, S pecial Judge (Dissenting):
I can readily agree with the Court's conclusion that some of
the
rights
which James and
Barbara Grizzard
and
Frank
Ferreira
sought to obtain in the S an Roque land constituted permanent and
long
term
interests
in
land.
I
accept
also
the
majority's
conclusion that the form of arrangement under which a person not of
Northern
Marianas
descent
acquire control over,
(hereafter
a
"non-NMD")
and a beneficial interest in,
Commonwealth is not dispositive.
Thus,
attempts
to
land in the
we are also in agreement
that acquisition of any long term or permanent interest,
whether
legal, equitable or contractual, and whether held individually or
th rough ownership of some form of business enterprise such as a
partnersh ip
or
prohibition.
Grizzards,
corporation,
falls
within
the
constitutional
I therefore concur that the transaction between the
Frank
Ferreira
and
Diana
Ferreira
was
violative
of
article XII of the NMI Constitution and was void ab initio.
Despite these important agreements however,
I have serious
misgivings about the C?urt's use of th e resulting trust d octrine in
this context and I find the ultimate conclusion unnecessarily and
dangerously disruptive of economic and private property interests
in the NMI.
Because of the importance of article XII to the people
and jurisprudence of the NMI,
I.
my reasons are set out here fully.
The Resulting Trust Doctrine
The keystone of the Court's analysis in this opinion,
534
and in
the recent case of Aldan-Pierce v. Mafnas , No. 89-003 (N.M.I. July
5,
1991)
reasons ,
is
the
resulting
trust
doctrine.
For
the
following
I do not believe this doctrine is being properly applied
by the Court.
A.
Nature and Purpose of the Doctrine.
The
resulting
trust
doctrine
is
merely
an
analytic
tool
designed for the limited purpose of assisting courts to sort out
the equities and relative rights between one who has furnished
funds and one who holds the legal title as a result.
G.
Bogert ,
Trusts § 170 (6th ed. 1987) (hereafter , " Bogert , Trusts").
The court's attempt here to use the doctrine for the wholly
unfamiliar purposes
of
determining
whether
article
XII
of
the
Constitution of the NMI has been violated and for enforcing the
constitutional prohibitions against the parties who have provided
funds for the purchase of land necessarily rips the resulting trust
doctrine from its moorings.
The attempt therefore is inherently
suspect.
B.
Rey Principles
Predictably, this novel effort has forced the Court to ignore
or modify key aspects of the doctrine , and thereby to transmogrify
the resulting trust doctrine itself.
1.
A resulting trust is to be invoked for the one who pays
The resulting
trust
doctrine
creates a
trust " in
person by whom the purchase price is paid
{Second) of Trusts, § 440 (1959).
535
"
favor
of
-
the
Restatement
Bogert, Trusts§ 35 at 128.
The Mafnas si sters d id not pay the purchase pr ice , but instead
sold the ir property to D iana Ferreira and accepted payment from
To permit sellers o f land to
her .
invoke the
result ing trust
To permit them to do so aga inst the
doctrine is unprecedented .
suppo sed beneficiaries of the doctrine in order to deprive those
benef iciaries o f any
interest in the land they paid
for,
is a
perverse misapplication o f the doctrine.
2.
A
purpose
payor
-
of
resulting
trust
to be
declared
an illegal
for
I f the payment o f funds and the agreement between the
the
purchase
titleholder ,
a re
price
intended
unconst itutional purpos e ,
trust .
is not
and
the
to
accomplish
courts
person
refuse
who
becomes
the
an
illegal
or
to decla re a
resulting
Restatement (Second) o f Trusts § 444 ( 1959); Bogert, Trusts
§ § 48 and 74.
I f the Gr i z z ards and Frank Ferre ira were to have asked th is
Court to declare the existence of a result ing trust as against
Diana
Ferre ira
the ir
attempt
to
impermiss ible interest , " slip op.
been rej ected .
obta in
at 18 ,
the
" const itut ionally
necessa r ily would have
since the payors are barred ,
there is s imply no
bas i s for declarat ion o f a resulting trust .
3.
-
Some
Illegal purpose does not furnish standing to third partie s
courts
relat ionship
constitutional
persons .
have
had
between
occasion
the
proh ibit ions
law
spec i fically
of
against
trusts
land
to
and
cons ider
the
statutory
or
ownership
by
certain
The general rule i s that such a prohibi tion precludes
536
equitable as well as legal interests.
to take the legal title to land,
beneficiary of a trust of land."
"If an alien has no capacity
he has no capacity to become
Restatement (Second> of Trusts §
1 19, comment b ( 1959).
The lone exception occurs in a few states in the United States
when land acquired by aliens is subject to forfeiture to the state.
In those states ,
if the circumstances are such "that a resulting
trust .would arise if the payor were not an alien , a resulting trust
arises
in
favor
of
the
forfeiture to the State. "
alien�
and
his
interest
is
subject to
Restatement (Second} o f Trusts
§ 444,
comment f.
This limited right of the government to bring atout forfeiture
of an alien's claim through declaration of a resulting trust has
not been extended to private parties.
268 n. 10 , citing Kyodo Nishi
1057 ( 1937).
See also People
See Bogert,
Trusts § 74 at
Downung , 2 1 Cal. App.2d 1 , 67 P.2a
v.
v.
Fujita,
2 15 Cal.
166 , 8 P.2d 1011
( 1932).
Refusal to permit private parties to inv.oke a resulting trust
to the detriment of the beneficiary of such a trust i s based upon
sound and long standing principles of equity.
Equity will never raise a resulting trust in favor of a n
alien
T o raise the trust, thereby forfeit the
estate, would be to commit the offense , and make the
alien bear the penalty
[E]quity will never raise
a mere resulting trust for an alien , that it may be
forfeited
. it will not profess to benefit , when it
designs to destroy.
•
•
•
•
•
•
•
•
•
•
537
Hubbard v. Goodwin,
Isaac
v.
Dehon,
plaintiffs
are
3 Leigh (30 Va.) 492,
11
F.2d
aliens,
943,
944
(9th
appellant
is
512
Cir.
in
no
(1887).
See also
1926)
("If
•
position
to
the
take
No one but the sovereign has any
advantage of this circumstance.
right to complain of a trust in real estate in favor of an alien
disqualified.to hold title. 11)
4.
Intention of parties must be considered - The resulting
trust doctrine is an "intent enforcing11 doctrine designed to uphold
the actual intent of the parties.
also Restatement (Second)
Bogert, Trusts §
74 at 2�9.
441 (1959);
of Trust §
Id.,
See
comment f;
cf. Isaac v. Dahan, 11 F.2d 943.
Yet,
the
Court
in
Aldan-Pierce,
slip
op.
at
29�
n.37,
suggested that the resulting trust doctrine would apply in the NMI
solely on the basis of the payment of the purchase price by non- .
NMDs,
regardless of the intentions of the parties.
s.
Limited reach
-
Since trust rights and obligations arise
out of the relationships among the settlor,
beneficiaries,
the
rights
of
third
parties
normally are unaffected by the trust.
165.
this
See also Restatement
case,
the
Court
(Second}
uses
the
the trustees and the
outside
Bogert,
Trusts § §
of Trusts §
resulting
287
trust
conjunction with the constitutional prohibition.
the
interests
of
subsequent
bona
fide
acquired the land from or through Diana Ferreira.
538
trust
154 and
(1959).
In
doctrine
in
This combination
expands dramatically the impact of a resulting trust,
. reaching
the
apparently
purchasers
who
B.
Logic and Analysis.
Inevitab ly, this e ffort t o employ resul t ing trust analysis to
determine the
scope o f art icle X I I
of
the
Constitu t i on
and
to
enforce the prohib it ions has lured the Court into errors o f l ogic
and
analysis,
including
adoption o f l egal
circul ar
reasoning 1
and
unj ust i f ied
fictions , 2 i n addition to mere misuse o f the
resulting trust doctrine itsel f .
The Court in Aldan-Pierce , sl ip op . at 29, n. 37 , s a i d it would
app ly the doctrine without regard to the intentions of the part i es .
Th is would transform the constituti onal prohib ition ,
peril
any
j o int
venture
furnished by non-NMDs .
in
which
l and
is
p l acing in
acquired
by
funds
A broad array o f pos s ib l e short term and
temporary arrangements wou ld be barred wh i l e other transactions
ident ical in substance but d i f ferent in form would be permitted .
Such fixation on the form rather than substance o f t ransacti ons
would
be ,
I
submit,
entirely
art i f icial
and
woul d
bear
no
1
For examp l e, the court in Aldan-Pierce ostens ibly was
empl oy ing resulting trust analys is to determine whether the
Constituti on had been viol ated .
Yet the basic princip l e that a
resulting trust nay be l imited by agreement o f the parties was
swept as ide on grounds of constitutiona l necess ity.
" Regard less,
if this commo n l aw princip l e app l ied in the NMI , Arti c l e X I I would
ef fectively b e nul l i fied . We cannot presume that Art icle XII i s a
va i n e f fort, or a nul l ity• and must interpret it to g ive it e f fect
There fore, thi s p rincipal does not apply in the NMI . "
Sl ip op . at 28-29 , n . 37 .
2
" (A] v i o lation o f Articl e X I I does not occur unt i l and
unless a court decl ares a transaction to be v i o l at ive o f Ari:: i cle
XII .
Therefore, there can be no automatic i l l egal purpose under
Article XII .
A court must f irst decl are a transacti on to be
U:nconstitutiona l . 11 S l ip op . at 16.
539
relationship to the constitutional restrictions upon alienation or
to their underlying purposes.
The
majority
opinion
in
this
case
indicates
intentions of the parties will be considered.
15 n.2.
that
the
Slip op. at 14 and
This is a step in the right direction.
Still,
to the
extent we do consider intention, the value of the resulting trust
doctrine as a tool of analysis in article XII cases is diminished.
Calling the rights of non-NMDs equitable interests by virtue of a
resulting
rights,
trust,
rather
than
simply
does not advance analysis.
labeling
them
contractual
We are still faced with the
difficult and exacting tasks of examining transactions on a case by
case basis, defining with precision the scope of the article XII
prohibitions,
and determining whether the interests acquired by
non-NMDs, be they legal or equitable title or be they contractual
rights,
are
prohibited
permanent
or
long
term
interests
in
Commonwealth land.3
Properly applied, the resulting trust doctrine also is not an
apt tool for article XII issues because it may easily be evaded.
Parties may avoid the doctrine simply by agreeing expressly that no
3
Article XII, section 2 of the Constitution provides as
follows:
"The term acquisition used in section 1 includes
acquisition by sale, lease, gift, inheritance or other means."
(Emphasis added).
Thus, the form of the acquisition and of the interest itself
is not dispositive.
This Court has noted that the term embraces
acquisition of equitable interests through trusts. Aldan-Pierce,
The term also presumably includes contractual
slip op. at 17.
rights whereby a party acquires control over the use or disposition
of land.
540
result ing trust will arise from their transact ion or relationship
or by casting the advance of funds for purchase of the land as a
loan .
Restatement (Second} of Trusts § 441 .
I n essence the result ing t rust doctrine as used here i s a "red
herring ,-" which has diverted the Court's attent ion from the real
A p rimary i ssue in thi s cas e
issues and perti nent sources of law.
i s whether the particular transact ion involving the Gr i z z ards and
the
Ferre iras
violates
article
XII
of
the
NMI
Constitution.
·
Resolution o f this issue should turn upon the language o f a rticle
X I I , the underlying const ituti onal policies , and the unde rstanding
of the parties.
I nstead
of
focus ing
established by the
people
upon
of
the
the
s ources
of
Commonwealth
legal
of
guidance
the Northern
Mariana Islands however , and ca refully cons idering the agreements
among the part i e s ,
the Court has looked
far back to an obscure
doctrine of the law of trusts which emerged
from the mists
of
medieval England .
F inally , perhaps the most damning criticism o f the use o f the
result ing trust doctrine in th is case is that it has caused the
Court to d i s regard completely another critical issue .
The Court
has si mply assumed , based upon its finding of a result i ng trus t ,
that the sale o f land by the Mafnas s isters t o Diana Fen:e.ira i s
part o f the t ra nsaction t o b e declared void .
greater length
infra ,
pages 37
to
46 ,
the
As di scussed at
meaning o f the term
" transaction" in a rt icle X I I , s ect ion 6 o f the Const itut ion is o f
541
far too great importance to const itut i o n a l j ur isprudence in the NMI
to be
resolved w i thout d i rect conside r a t i on .
Article XII of the constitution of the NMI
II.
Any governmenta l a t t empt,
e nt e rp r i se
in a
form of econom i c system,
free soc i ety emp l oy ing a
free
to prevent cert a i n c a t egor i e s
o f persons from acqu i r i ng sp e c i f ied inte rests i n l and is i nherent ly
d e l i cate
and
issu e s .
It
inev itably
would b e
will
present
fut i l e here
to
the
courts
attempt
rt�ith
to provide
c omp l e x
a
sing l e
so l u t i on wh ich woul d purport to solve a l l of the probl ems that may
a r ise .
However, there are c e rt a i n key p r i n c ipl es which sho u l d be kept
in m i nd as the Court addresses a rt i c l e X I I .
A.
Key Principles
1.
recog n ize
Full
that
enforcement
required
restrict i ons
on
-
the
Fi rst,
it
a l i enat ion
u n i formly been rega rded as cruc i a l to the
is
important
of
l and
to
have
" cu l ture and t rad i t i ons
of the peop l e of the Northern Mari ana I s l ands , " to th e i r p rot ect i on
" aga i nst e xp l o i tat i o n " a nd
and se l f-su f f i c iency . "
S ec t i on 805(a)
a l i enat i on
property
so
of
as to
§ 805 .
Covenant
o f the Covenant for twenty-f ive years m andates,
and thereafter author i zes,
the
" to promote the i r e conomic advancement
the government o f the NMI to
p e rmanent
restrict
and
the
l ong-term
a c qu i s i t i o n
of
pe rsons of Northern M ar i an a I s l ands descent . 11
542
i n terest s
such
" regu l ate
in
real
intere sts to
The d e l egates to the North ern Mar i an a
convent i o n ,
Isl ands Const i tu t i o n a l
in i mp l emen t ing sect i o n 805 o f t h e . Covenant , m a d e c l e a r
the i r own v iew that they regard e d the rest r i c t i o ns as n e c essary
to protect the culture and trad i ti o n s of the p e op l e o f
the Northern Mar i ana I s lands , to promote the p o l i t i c a l
growth
n eeded
in
the
f i rst
critical
years
of
the
Commonwea l th , to a ccompl ish the po l it i ca l u n i on w i th the
Uni t ed States with a m i n imum of cul tura l and e c o nom i c
d isloc a t ion ,
a n d to provide the stabi l i ty needed to
surv ive in the fam i l y of n a t i ons .
Ana l ysis of the Const i tut ion
of
Ma r i ana Isl ands approved by the
the
Commonwea l th
Del egates to
the Northern
the Northern Ma r i a n a
I s l ands Constitut ional Convent i on on December 6,
Thu s ,
of
1976,
th is Court qu i t e prop e r l y f e e l s an obl igat ion to
at
164-65.
acc ept and
enforce the sp i r i t o f the consti tut ional proh i b i t ion aga i nst nonNHD
acqu i s i t i on
Commonwea l th
sl i p op .
2.
permanent
l and .
" troubl esome "
d i sregard
of
As
d i f f icul t ies
the mandate
of
oth e r
may
has
a r i se
Art i c l e
Reconciliation necessary
XII
is
reconc i l ed with
NMI .
Court
l o ng-t erm
i nt e rests
sa i d ,
does
the
" not
fact
p e rm it
A ldan-P i erce
X I I . 11
in
that
us
to
Ma f n a s ,
v.
at 36.
of a rt i c l e X I I howeve r ,
art i c l e
the
and
Nowhere
part
suggest ion
but
th e
is
of
that
it
the
-
As we recogn ize t h e importance
i t i s equally cruc i a l to bear
one
of
numerous
other prov is i ons ,
w r i tten
that
Const i tut i o n .
a rt i c l e
XII ,
prov i s i o ns ,
in
a rt i c l e
XII
the
and
must
Const itut ion
Certa i n l y
rest r i c t ing
543
the
in m ind that
is
to
be
of
the
over r i d e
any
there
righ t s
can
of
be
NMDs
no
to
alienate land , should be read as overriding article I, the personal
rights article of the Constitution.
Thus , when we are presented with a claim
that
a
particular
transaction violates the restrictions on alienation and therefore
is void ab initio , we must also remember that " no person shall be
deprived of
art .
I,
§
•
5,
.
.
NMI Const.
property without due process of law , "
and that " no person shall be denied the enjoyment of
civil rights or be discriminated against in the exercise thereof on
account of race ,
art. I,
(or] ancestry .
11
NHI Const .
§ 6.
Obviously ,
right
. .
color,
of
a
there is a tension among these provisions.
landowner
to
alienate
his
or
her
land ,
landowner ' s right to control the use of that land ,
and
The
the
are normally
thought of as core rights of ownership protected under language
such as that employed in the due process
similarly ,
the rights to acquire,
clause of article
I. 4
possess and alienate land have
4
The Supreme Court of the United States has long recogni zed
that owners of land are free to control , use , and alienate their
interests.
In Sexton v. Wheaton , 21 u.s. 229 , 239 , 5 L.Ed. 603 ,
607 (18 23) Chief Justice Marshall said that "[i]t would seem to be
a consequence of that absolute power which a man possesses over his
own property , that he may make any disposition of it which does not
interfere with the existing rights of others , and such disposition ,
if it be firm and real , will be valid." That the right to alienate
property is one of the rights an owner inherently possesses over
property was again recognized in Bean v. Patterson , 122 u . s . 496 ,
30 L.Ed. 1 126 , 1 s. ct . 1298 (1887) .
More recently, the Eleventh Circuit Court of Appeals found
that "the right to transfer possession of property is an important
attribute of ownership" which is protected by the due process
clause of the fifth and fourteenth amendments.
Peterman v .
Coleman , 764 F.2d 1416 , 1419 (11th Cir. 1985).
544
also been numbered among those basic rights which historically have
been
considered
fundamental
civil
rights
qualifying
for
equal
protection. 5
our task of course must be to reconcile,
both sets of
provision.
In doing so,
and give effect to,
we must recognize
that
the
article XII restrictions on alienation inherently impinge upon the
article
protections
I
purchase,
lease,
article XII
sell,
of
due
process
and
equal
hold and convey property.
restrictions are expanded,
protection
to
To the extent the
the rights available under
article I are commensurately reduced.
In
light
of
this
inherent
careful
reconciliation,
applied
with
article I
J.
5
precision
article
so
as
tension
XII
to
and
must
be
minimize
the
read
the
nec essity
for
cautiously
and
encroachment
upon
rights.
Least restrictive means
In Cornfield v.
Coryell,
of enforcement
Fed.
cas.
No.
-
3,230
In
most
(Cir. Ct.
free
E.D.
quoted in G.
Stone, L.
Seidmen,
C. Sunstein and M.
Pa.
1823),
Tushnet, Constitutional Law 334 (1989), Justice Bushrod Washington,
discussing the privileges and immunities clause of article IV of
the United states Constitution, said that clause protects interests
which are "fundamental; which belong, of right, to the citizens of
all free government."
These,
he said, may all be comprehended
"Protection by the government,
under the following general heads:
the enjoyment of life and liberty, with the right to acquire and
possess property of every kind,
and to pursue and obtain happiness
and
safety,
subject
nevertheless
to
such
restraints
as
the
Long­
government may prescribe for the general good of the whole. 11
standing civil rights legislation in the United States also singles
out the rights to buy and sell real property as core civil rights.
"All citizens (shall]
have the same right,
in every state and
Territory, as is enjoyed by white citizens thereof, to inherit,
purchase,
lease,
sell,
hold,
and
convey
real
and
personal
property.11
42 U.S.C. § 1982.
545
count r i e s
pr ivate
c it i zens
land
and
-:.ake
to
use
form of use does not
for
granted
that
land
the
r i ghts
a s they
imp i ng e upon the
to
choose
rights
buy
so
and
long
of ne ighbors
sell
as
the
or the
Va lid reasons underlie a r t icle X I I r e st r i c t i ons
general communi t y .
However,
o f these r ights in the NMI .
i t should be und erstood that
the rest r i ct i ons themselves, prec i se and n a rrowly drawn, r e flect no
broader o r deeper constitut i o nal i n t ent to render ev i l,
susp ect or
improp e r, e f forts to exerc i se whatever r i ghts d o rema in outs i d e the
prohi b i t i ons .
Const itut i onal
enforcement
i tself .
role
h i story
to
the
con f i rm s
restr ict i on s
that
we
stated
are
in
to
the
l im i t
our
Const itut ion
The Analysis adopted by the Const i tu t i onal Convent ion i n
1976 expla i ns a n d emphasi zes the
th i nking
land in the NMI prov ides for the people
of
the Convent i o n
of the NMI
that
" un i que soc ial
and economi c b e n e f i ts," wh ich would be lost " i f the land p a sses out
of
the
hands
at
Analys i s 1
of
to
off
of
the
the
N o rthern
Conven t i o n
on a wide-rang i n g sea rch
uphold
the
makes
cle a r
Analysis
people
However 1
165.
Courts to set
ways
the
underlying
that
the
Mariana
did
not
Islands .
i nv i t e
for the b e st
purpose.
To
the
Convent i on
saw
the
11
the
spec i f ic
contrary 1
importa nce
the
of
accompli sh i ng i t s goals in the least restri ct ive manner possible .
The Convent ion was at pa ins to ident i fy the spec i f i c rest r i ct i ons
in a rt i cle X I I :
e f fort
to
purpose."
f ind
" (T]he Convent ion spent a g reat deal o f t im e and
the
least
restri ct ive
means
of
accompli sh ing
its
Analysis o f the Const i tu t i on of the Commonwealth of the
546
Northern Mar i ana I s l ands,
We
are
supra,
const itut iona l l y
a t 166.
bound,
I
submit,
imp o rtanc e p l aced by the Convent ion upon
out the " le a s t restrict ive means "
to
respect
the
its own work in s p e l l i ng
to ca rry out the const itutional
purp o s e of p revent ing the l and from p a s s ing out o f the hands o f the
peop l e
of
temptation
means"
to
Northern
other words,
a cquiring
years,
not
wh i l e
interests
exe rcis e
in
thes e
must
" l east
prohi b i t s
ext ending
avo i d
the
restr ictive
non-NM D persons
more
than
f i fty - f ive
a lease precisely
While the a rt ic l e proh i b i t s
l ong term
conveying
al mos t
XII
or even f rown upon,
and
C ommonwe a l th
broad,
Commonwe a l th
from
beyond
rights
in l ength.
restrict NMDs
XII
art i c l e
it do es not proh i b i t,
acquiring permanent
We
I s l ands.
framers.
l ea s eho l d
fifty - f ive y e a r s
from
Mari ana
expand artic l e
ident i f ied by the
In
from
the
l and
to
intere s t s
non-NMDs
or
from
comp l ete
l and it does
l e ss e r,
permit t ing
control
for shorter periods of
in
over
non-NMDs
non freeho l d
non-NMDs
l and
in
to
the
time.
Moreover, nothing in the Const i tu t i on or in the cons t i tutional
history suggests that th i s
pun i sh
attempts
by
Court
non-NMDs
and
is designated to
NMDs
to
enter
ferret
i nto
out and
transactions
wh ich we may perce ive s omehow a s contrary to the s p i r i t of art i c l e
XII
even
though
not
actu a l l y
proh ib it e d
by
the
l anguage
of
the
art ic l e.
Speci fica l l y,
con s t i tut i onal
noth ing
d i rective
in
that
these
we
547
sources
shoul d
of
expand
law
or
h ints
mod i fy
of
a
other
concepts ,
such a s the resulting trust doctrine ,
and supe rimpose
these altered doctrines over the a rt icle XII restrictions in order
to outlaw a rrangements which are not d irectly proh ibited by article
X I I but which we believe should have been proh ib ited .
F inally , a l though the United States Court o f Appeals for the
Ninth C ircu it has characteriz ed the land alienati on restrictions a s
a
ttpaternal ist ic"
attempt
t o prevent NMDs
" from
selling
the ir
cultural anchor for short-term economic gain , 116 there i s nothing
to suggest that th is Court is authorized to extend the reach of
art icle XII to protect NMDs by sett ing as ide transact ions on the
grounds that this Court sees no reason why a reasonable NMD who was
not m i s l ed by a non-NMD would have entered into the agreement .
Various common law doctrines protecting against undue i nfluence ,
fraud
or
misrepresentat ion ,
unconscionable contracts ,
and
against
enforcement
of
are the proper tools for that kind o f
work .
B.
A Proposed Mode of Enforc eme nt for Article XII
Thus , our mandate is a narrow one .
We are t o declare void ab
initio those transactions whereby a non-NMD acqu i res a permanent or
long-term
interest
attempting
prohib it ion .
to
in
divine
real property .
the
"sp irit"
We
may
of
not
the
do
this
by
const itut ional
Article XII is what it i s and we must enforce it as
it i s .
The
6
apparent
way
for
the
Court
to
do
th is
would
be
to
Wabol v . Villacrusis , 908 F . 2d 41 1, 423 ( 9th Cir . 1 990) .
548
scrutinize carefully any t ransaction entered
person
to
determine
whether
the
transact i on
into by a non-NMD
would
result
acquis ition o f a long term interest by a non-NMD person,
in
or in
hav ing the land pass out o f the hands o f the people o f the NMI .
The obv ious way to begin considering whether a transaction
between NMDs and non-NMDs violates article X I I is to examine any
writ ten agreements between the parties .
I f the agreement
is a
lease , for example , it seems clear that the term o f the lea se would
be the primary , probably even the only , determinant.
Normally , i f
the term o f the lease i s 55 years o r le ss , the leas ehold could not
be v iola t ive o f a rt icle X I I .
Of course , i t may o ften be necessary to extend analysi s beyond
the stated term of the lease .
I f, for example, the lease conta ins
an opt ion to renew or extend the lea se beyond 55 years, or i f it is
agreed that title will vest in the lessee or pass out o f th e hands
of NMDs in the event of some future cont ingency which is not within
the control o f the NMD ,
then presumably the agreement would be
unconstitutional .
" secre t "
Any
agreements ,
whether
oral
or
written, should be brought to light and included in the analysi s o f
the transaction . 7
Because I agree with the majority that article X I I , section 2
7
Legislative adoption o f d i s closure requi rements, mandating
that any acquisition o f an interest in land by a non-NMD be in
writ ing and registered in public records , could be of immense
a s s i stance to the enforcement ef fort .
Establi shment o f a public
enforcement agency to investigate and challenge quest ionable
t ransact ions could also be useful .
549
of the NMI Constitution means that the form of the interest i s not
dispositive,
including
interest,
I interpret 11 permanent and
the
acquisition
in whatever form,
successor or agent,
years .
of
any
l ong-term
contractual
whereby a non-NMD,
interestsn
or
other
as
l egal
or the non-NMD 1 s
may control use of the land beyond fifty-five
S imilarly , any agreement whereby a non-NHD could extend the
non-NHD ' s rights beyond fifty-five years,
or pursuant to which an
NMD would be stripped of the NMD ' s interest i n the l and ,
upon the
occurrence of conditions subsequent which are outside the control
of the NMD, or with out independ ent assent by the NMD, would render
the transaction violative of articl e XII .
Although I am persuaded, for the reasons already stated , that
the resulting trust doctrine itself may not be used against th e
intended
beneficiary
of
th at
doctrine
as
a
means
of
enforcing
article XII against that person, the Court may of course consider
any aspect of the transaction,
including the source of funds used
to acquire the l and in question .
Certainl y
the
fact th at
a
non-NMD
provided
funds
for
the
purch ase of land in the Commonweal th, titl e to which is pl aced in
an NMD, is significant, although not concl usive, evid ence th at the
non-NMD has attempted to acquire an inter est in that l and .
non-NMD
is
shown
purchase price,
that
the
to have
supplied
all ,
or
nearly
all,
If the
of
the
this might even justify a rebuttabl e presumption
non-NMD
through
this
transaction
with
the
NMD
has
attempted to acquire a permanent or long term interest in the land
550
s o purchased .
It would then be incumbent upon the non-NMD to show
that th is transaction is not violative o f articl e X I I .
c.
Th e Proposed Me thod Applied to Thi s Transac tion .
Appl ying these princ iples to the
factors ident if ied in the
maj ority op inion as showing " that Diana was t� hold t i t l e to the
propert ies for the bene f it of the partnersh i p , " sl ip op . at 1 1 , I
have no d i f f icul ty in .finding the trans action viol ative of article
XII .
1.
The
" ch a nge o f
lawn provis ion
-
Art i c le four ( 1 )
o f the
1 9 8 0 par�nership agreement provides as fol l ows :
Upon the purchase o f the described rea l p roperty , partner
Diana C. Ferre i ra w i l l execute a l ease of the real
property to the partnership , for the max imum period of
time a l l owed by l aw , be ing forty ( 40 ) years and to
include a 11 change of l aw11 prov i s ion for purchase in fee
simp le
absolute
should
the
l aw
change with
the
cons ideration for this provis ion be ing the $ 41 , 0 0 0 paid
in hand ar.d the mutua l promises contained i n th is
agreement .
This change o f l aw provis ion
is an attempt by the non-NMD
partnership presently to acquire the contractual r ight to receive
a permanent freehold interest i n the l and , and to require the l and
to pass out of NMD hands , cont ingent only upon the happening o f a
future event wh ich is outs ide o f the control o f the NMD .
I would
hold such a prov i s ion t o be unconstitutiona l .
2.
Purchase of improvements
- The maj ority a l s o points to the
article IV requi rement that Diana , or whoever is the lessor at the
end o f the l ease period , must purchase the improvements p l aced on
551
the l and by
such
the partnership,
I
am
unab l e
to
a
requ i rement.
or whoever i s the l essee then .
perceive
any
Indeed,
s ince
cons t i tutional
the NMD would
t h e l and a t t h e e n d o f the forty years,
owne r of the
prov i s ion
d i f fi c u l t y
ret a i n
ent i rely
con s i stent
title to
and would a l s o b ecome the
improvements on the l and a t that t ime,
as
with
w i th
the
I
regard t h i s
purpos e s
of
the
by
the
Con s t i tut ional Convent ion in dra f t ing of art ic l e X I I .
Wi thdrawal
3.
maj or i ty,
a rt icl e
-
f ive
The
th i rd
(3),
s ay s
p rovi s ion
that,
" In
po inted
the
event
Ferr e i ra des i res t o w i thdraw f rom the p a rtnersh ip
she
hereby
agrees to a s s ign
the real property to a
all
her
r i ght,
to
D iana
for any
t it l e and
c.
reason,
i nt e r e s t
to
[ NMD ] who w i l l b e des ignated by the partners
and s e l ected a s a new partner. "
Although
th i s
is
a
c l o s er
ques t i on,
prov i s i on t o b e uncon stituti o n a l .
her
only
intere s t
i f she
is
itself
"des i re s , 11
the partnersh ip.
l imited to
i. e.
Moreover,
rema i n in NMD hands.
I
do
not
consider
T h e NMD ' s p rom i s e
f o rty years
and
vol unt a r i l y decides,
is
th i s
t o t ra ns fe r
enforc e a b l e
to w ithdraw from
even a ft e r the trans fer the t i t l e woul d
There fore,
I s ee no const itut ional v i o l a t ion
i n th i s requ i rement .
4.
The quitc laim requi rement
unment i oned
in
unconst i tut i onal.
the
maj or i ty
-
There
op in ion,
i s one more p r ov i s i o n ,
wh ich
I
see
as
In art ic l e f i v e (3) of the agreement the part i e s
agree a s · f o l l ows :
I n the event the sale,
l ea s e o r devel opment o f the f i rs t
552
two lots is sufficient to generate enough income to pay
all partners the amount of their initial capital
investment the remaining three lots will be disposed of
as follow : "J & B " will quitclaim all of their right title
and interest in one lot to partners "F& D " .
" F & D " will
quitclaim all their right , title and interest in one lot
to "J & B11
•
•
•
•
This requires Diana ,
land ,
the NMD and sole titleholder of this
to quitclaim her entire interest in the lot to "J & B " •11ho
are non-NMDs .
A quitclaim deed executed by an NMD who is the sole
titleholder of the land would effectively vest t itle in the non-N11D
as against the entire world and would cau se the land to pass out o f
the
hands
challenge
of
all
the
NMDs.
Nobody 1
non-NMD ' s
claim
requirement is an immediate ,
condition
which
is
not
including
of
the
ownership.
fixed obligation ,
under
the
grantor ,
control
The
could
quitclaim
�ubject only to a
of
the
NMD .
This
provision is there fore violative of article X I I both because it is
an attempt by non-NMDs to acquire a permanent interest in land and
because it is an attempt to require the land to pass out of NMD
hands ,
subject only to the happening of a future event which is
outside the control of the NMD titleholder .
Thus , I agree with the majority that the agreement between the
Griz zards and the Ferreiras is unconstitutional.
III .
The Transaction To Be Voided
The majority suggests that the conclusion that the partnership
agreement
violates
article
XI I
requires
a
conveyances from the Mafnas sisters to Diana .
553
holding
that
"the
were void from
the
date
they
executed . 11
were
S l ip
op .
at
A lthough
17.
th i s
important aspect o f the d ec i s ion i s not d i s cu s s ed i n the maj o r i ty
op i n i o n ,
the
a s sump t i on ,
is
the
Court ' s h o l d i ng pre sumabl y
i s b a s e d upo n
a v i ew ,
or
that the s a l e o f l and from the Mafnas s i st e r s to Diana
transact ion ,
dec l ared vo id ab
or
part
of
the
tran s a c t ion ,
initio pursuant to art i c l e X I I ,
that
mu s t
be
sect i on 6 o f the
Const i tut ion .
I nterp r e ta t i o n o f
the
word
" tran s a ct i o n "
grave importance t o th e impl ement a t i on and
Th i s
cruc i a l
ident i f i ca t i on
i ssue
should
not
of
options
ava i l abl e
the
be
in
sect i on
th i s
Court
acknowl edged that
is of
imp a c t o f a rt i c l e X I I .
d e c ided
and
wi thout
c a r e fu l
c o n s ider a t i on
e f fects l ike l y to f l ow from the i nt e rpretat i o n s e l ected .
.
P ierce ,
6
d ec i s i on s under
of
the
In A l d a n ­
a rt i c l e
XI I
coul d have a d isrupt ive e ffect on l an d and bus i ne s s matters .
We are
concerned w ith the pos s i b i l ity that a
d e c i s ion i n favor o f Ma fnas may " un le a sh cha o s i n t o the
Northern
Mar i an a s
l a nd
title
system
and
e conomy . "
App e l l ee ' s br i e f at 4 3 .
We note that our rul i ng m ight
p o s e probl ems for l and t i t l e r e s e a rchers , who must now
a s certa i n whether a conveyance o f the
s ort we rul e
inval id i n th i s c a s e has occurred i n the cha i n o f t i tl e
o f tracts o f Commonwea l th r e a l property .
An i n f i rm i ty
may not be immedi at e l y apparent i n l and record s .
We a l s o
note
a m i cu s '
concern
that
our
dec i s i o n
may
cr eat e
d i f f i cu l t i e s w i th r es p ect to
l oans
s ecured b y
real
property , t i t l e to whi ch m a y be const itut i o na l l y t a i nt e d .
•
Id .
such
at 3 5-3 6 .
In Aldan-Pierce ,
d i f f ic u l t i e s
art i c l e XII . "
Id .
11 do
the Court corr ect l y c o n c luded that
not p e rm i t
us
to
d i s regard
the
mand a t e
of
at 3 6 .
The p l a i nt i f f i n Aldan-Pierc e w a s s e ek i ng specif i c enforcement
554
o f an opt ion agreement requ i r ing an NMD to convey h i s
p l a int i f f.
act ion
and
An
action
courts
for
spec i f ic
typ ica l l y
deny
per formance
such
rel i e f
pa rty comes into court with " uncl ean hands. "
12 . 1 0
( 1973 ) .
natura l l y
A
from
re fus a l
the
Court 1 s
to
grant
if
D.
spec i f i c
conc l u s ion
that
is
l and to the
an
equ itab l e
the
request ing
Dobbs,
Remed ies §
p e r formance
the
part i e s
f l o�t�s
s eeking
spec i f i c p e r formance were attempt ing to obta in such rel i e f in order
to
impl ement
an
unconstitu t ional
unconstitut i ona l ity ,
P i erce was
the
scheme .
Court ' s
G iven
enforcement
the
f i nd ing
dec i s ion
in
of
Aldan­
ind i sputab l y correct and was uncontrovers i a l .
More to the point ,
in Aldan- P i erce
the Court ' s refusal t o enforce
did n o t p o s e any
o f t h e r i s ks
Court i n the l anguage quoted above.
the opt i o n
r e f e rred t o by the
T i t l e to the l and i nvolved in
that c a s e a l ready was in the name o f the de fendant, Mr. Ma fnas ,
the Court ' s refu s a l to
and
force him to convey the l a nd d i d not create
any con fus i on i n the l and records .
Yet the Court ' s observa t ion about potent i a l dangers l urking in
a rt ic l e
Some
XII ,
s e ct ion
possible
" u n l eash cha o s "
methods
this
of
the
of
en forc ing
in the NMI.
approach enforcement
In
6
case,
It
Cons t i tution
surely
art i c l e
i s ther e fore
XII
was
correct.
could
indeed
incumbent upon us to
i ssues w ith the utmost caut i o n and b a lance.
the
c i rcumstances
a re
qu i t e d i f f e rent than
A ldan-Pi e rc e a n d t h e potenti a l for chaos i s much greater.
are
not b e ing asked
to
enforce
NMD
from b eing forced to
art i c l e X I I
convey t i tl e ,
555
j u st
nor even
in
Here , we
by protect i ng an
j us t by d ivesting
non-NMDs o f the ir unconst itut ional interests in l and .
I nstead the
Court contemp l ates stripping one NMD , Diana Ferreira , of her t it l e
t o land in order t o restore the prev ious ownership o f other NMDs ,
who voluntari ly
sold the
l and
at
a
mutual ly
agreed price and
without any knowledge of Diana ' s unconstituti onal agreement with
her non-NMD partners .
Moreover ,
the
record
i nd icates
that
the
Gr i z z ards
and
Ferre iras have al ready entered into agreements with third parties
who have attempted to acquire interests in the land .
c a s e its e l f may eventual ly serve
truth that broad
to i l lustrate the
interpretati ons o f the term
Thus , thi s
inescapab l e
"transacti on "
can
inj ect untold confusion into the l and title system of the NMI .
Th i s is s o in part because of the multipl ier e f fect inherent in the
broad interpretation itsel f .
term ,
the
greater
the
The broader the appl icat ion o f the
number
of
agreements
and
actions
to
be
declared void and set a s ide .
More than that however , thi s court ' s adoption o f an expansive
i nterpretation o f the term transaction would deprive the l aw of
predictab i l ity .
I f the term i s expanded to
inc lud e agreements
entered into by parties who have no reason to know that thei r
apparentl y l ega l agreement is somehow related t o an attempt by non­
NMDs to acqu i re a proh ib ited interest in l and , l itera l ly no person
and no agreement will be secure .
In the instant case , perhaps the Court regards the agreements
between
the
Mafnas
s isters
and
Diana
556
Ferre ira
as
part
of
the
"transaction" to be declared void on the theory that the deed to
Diana Ferreira created a resulting trust in non-NMDs .
The other
possible theory is that the conveyance of land to Diana Ferreira
was a necessary and integral part of the implementation of the
Ferreira-Griz zard partnership agreement , and therefore , because of
this close logical relationship , should be considered part of their
transact ion .
In any event ,
the salient point is that when they executed
their deed , the Mafnas sisters apparently had no knowledge of the
attempts of the· non-NMDs to acquire interest in the land .
no
indication
that
they
were
aware
of
the
existence
There is
of
the
partnership agreement between the Ferreiras and the Grizzards , and
of course there is no showing that they knew of any of the specific
provisions which rendered the agreement unconstitutional .
nonetheless ,
that
they
were
part
of
the
To say ,
unconstitutional
transaction is to take an extraordinarily expansive view of the
term transaction .
Thus ,
what
the
Mafnas
sisters
entered
into
willingly
and
believed was a perfectly valid arrangement has now been declared
void by the Court .
While the declaration of voidness apparently
redounds to the benefit of the Mafnas sisters in this case ,
it
should be remembered that the void ab initio provision can work
both ways .
Presumably ,
if the Mafnas sisters had negotiated an
exceptionally good deal and if Diana Ferreira subsequently had
decided she wanted to renounce the agreement ,
557
she could have had
the s a l e o f the
l and d e c l a red v o i d und e r the
s am e theory .
There is no appa rent purp o s e to be s e rved i n exp l o r i ng a l l o f
the
po s s ib l e
results
What
t ransact ion .
of
is
such
clear
a
is
broad
that
i nt e rpretation
i f thi s
of
the
Court upho l d s
t e rm
a
rul e
wh ich p e rm i t s the vo i ding o f agreements entered into b y persons who
have no know l edge and no reason to know o f the uncons t i tu t iona l i ty
of
the i r
agreements
or
i ndeed
even
of
the
p o s s i b i l i ty
that
the
agreements are l og i c a l l y or pract ica l ly r e l ated t o the a cqui s it i on
of
a
forb idden
interest
windfa l l s ,
and
courts
l awyers
and
others
by
may
a
non-NM D ,
suffer
spend years
s o rt through the mes s .
some
c a t astroph i c
and
v a luab l e
persons
may
losses ,
reap
wh i l e
resources
the
try ing
A l l o f th i s woul d happen a rb i tr a r i ly .
to
The
resu l t s wou l d not necess a r i l y bear any r e l a t ionship to the purity
or i l l eg a l ity of the intentions of the part i e s when they enter into
the i r respect ive agreement s .
It
Court
is
must
important
to
s t r iv e
e s t a b l ish
to
avoid
such
a
a
s i tuat i on .
Instead ,
s tr a i gh t forward
th i s
und ers tand ab l e
interpreta t i on o f the t e rm transac t i o n and the i nt e rpret a t i on must ,
i n s o f a r as poss ibl e ,
avo id i n j ect i ng c o n fu s i o n into the great mass
o f bus iness transact ions entered i nt o
In
any
n o rmal
sense ,
the
in the NMI .
trans a c t i on
in
th i s
case
which
is
unconst itut ional must b e o n l y the partnership agreement whereby the
non-NMD sought t o acqu ire
thi s
agreement ,
A lthough
the
I
submi t ,
forbidden i nterests
which
const itut i o n a l
shou l d
h i story
558
is
be
i n l a nd .
held
spars e ,
void
It
is o n l y
ab
initio .
that
wh ich
is
ava i la b l e supports thi s way o f interpret i ng the t e rm transact ion .
The Ana lys i s o f the Const ituti on says,
at page
178 :
This
sect i on p rov ides
that
any
t ransact ion
made
in
v io l a t ion o f s ect ion 1 i s vo i d f rom t h e begi nn ing a n d h a s
no force o r e f fect .
Thi s means that i f a person s e l l s
l and t o a ( non-NMD ] , that transac t ion never takes e f fect
and never h a s any consequences with respect t o the t i t l e
The t i t l e remains in the person who t r i ed
o f the l and .
t o s e l l it .
•
.
.
Th i s Ana l y s i s con f i rms that in speak ing o f the " tran s a c t i on , 11
the Convention had in m ind d i rect deal ings between the non-NMD,
the NMD who " tr i ed to s e l l " the l and to the non-NMD.
i nd i ca t ion
that
the
term
transact ion
was
to
knowledge
of
the
attempt
of
the
non-NMD
to
There was no
include
anc i l l ary or r e l ated dea l i ngs with other persons,
and
the
NMD ' s
who act without
acqu i re
a
forb i dden
the
Ana lys i s
interes t.
It
bears
d o e s n o t s ay,
emphas i z i ng
o r imply,
that
that
the
C i rcu i t
pun i t iv e .
noted
908
F . 2d
title
wou l d b e
i n Wab o l ,
at
4 23 .
res tored
art ic l e
The
to,
erected
been
to
l and to a
the
NMD
who
on
had
for the
XII i s paterna l i s t ic,
restra ints
not pun i s h NMDs,
has
in
As the Court o f App e a l s
des i gned to protect,
i ndeed
u s ed
The exampl e r e f l ec t s the conventi on ' s
deal t d i rectly with the non-NMD .
N i nth
exampl e
that t h e NMD who " tr i ed to s e l l "
non-NMD should b e puni shed .
expectation
the
al i enat ion
not
are
and thi s protec t i on extends
e spec i a l l y
for,
NMDs
who
enter
into
trans actions with non-NMDs .
The
goal
of
a rt i c l e
XII
is
559
to
p re serve
" un i que
social
and
econom ic bene f i t s " f low ing f rom l and ownersh ip by a s s u r i ng that the
land does not p a s s
Mar i ana
" out of
I s l a nds . "
the hands o f the peop l e o f the Northern
Ana ly s i s
of
the
Con s t i t ut i on
165 .
at
That
purpose is fu l ly served by d ec l a r ing vo i d the p a rtn ersh ip agreement
between
D i an a
mand a t e
from
that D i ana
Ferre i ra
the
f ramers
Ferre i ra
transact i on
with
t rans a ct ion
b e a rs
u nconst i t ut i ona l
One
act i on
last
ente r i ng
$1 . 1
to
M a fnas
a
aspect
w i th
go
non-NMDs .
ext r aord in ary
l og i c a l
s i s t ers ,
was
a s s i gnment
all
excess
brought
by
to
her
l ea s e
non-NMD s ,
the
t o Nansay o f t h e i r
of
Diana
by
of
D i ana
Nansay
the
D i ana
interests
Th i s
Ferre ira
l and
$ 2 m i l l i on .
Of
to th�
from
On the other hand ,
agreement
b e tween
assure
that
the
t itle
e f f o rt
to
Inc .
in
her .
Prior
to
Nansay
had p a i d
exch ange
land
for
the i r
and unde r th e
i t appears that D i a n a Fe rre ira ,
cours e ,
i f th i s Court
including the convey a n c e s
r ight o f Ms .
an
Mi crones i a ,
in
in
s i st e r s to D i ana Ferr e i r a , v o i d ab in i t i o ,
as
no
Ferre i ra ' s
qu i e t
in
Fe rre i r a ,
G r i z z a rds ,
U l t imate ly ,
of the transact ions ,
ra i sed
to
b e c au s e
who i nv e sted noth i ng o f her own i n th i s t ransact i on ,
in
h ave
non-NMDs .
cons i d era t i on .
posed
p a r t n e rsh i p agreement .
to
demands
Nansay ' s
to
we
l engths
merely
connect i o n
i n t o t h a t agreement w i th
m i l l ion
P l a i n ly ,
is puni shed and d ep r i v e d o f the b e n e f i t o f h e r
the
cond i t i ons
connect i o n
to
the
trans a c t i o n w ith
o r ig i n a l l y
s a t i s fy
a nd
is
to rece i v e
should d e c l are
from the Ma fna s
s e r ious quest i ons may be
Ferre i ra to
rec e iv e that money .
i f th i s Court d e c l a re s on l y the p artnersh ip
th e G r i z z ards
and
560
the
Ferre i ra s
to
be
vo id ,
it
s e ems
upon
though such a d e c l ara t i o n w i l l have
as
l i t t l e a c tu a l
imp a c t
the p a rt i e s involved here and the l and w i l l b e u s e d in w a y s
a n d by p e r s o n s una f fected by o u r ru l ing .
There c a n ,
o f cours e ,
be
l eg i t i mate concern then that a ru l i ng restr i c t i ng the a r t i c l e XI I ,
se ct i o n
6
t e rm
t r a n s a c t ion
e f f e c t i vely rend ers
I n my v i ew ,
to
the
p a rtnersh i p
agreement
the cons t i tut i o n a l prohib i t i o n a nu l l i ty .
th i s c o n c e rn i s not wel l founded .
I t i s i mportant
to bear i n m i nd the l im i ted purp o s e s o f a rt i c l e X I I ,
l and
of
the
its e l f
Comm o nweal th
from
p a s s ing
out
of
to prevent the
the
hands
of
the
peop l e of the Northern M a r i a n a I s l ands and to p r o t e c t NMDs in the i r
deal i ng s c oncern i ng l and w i th non -NMDs .
In th i s case ,
will
i f we dec l a re the partner s h i p agreemen t v o i d , we
have a l e rted non-NMDs
and lTMD s that they cannot r e l y upon or
e n force any part of a trans act i on i n which they know the non -NMD is
a ttempt i ng to acqu i re a p e rman ent or l ong term i n tere s t in l a nd i n
the Commonwe a l th .
Land
wou ld
not
N o rth ern Mar i ana
pass
I s l ands
out
of
the
hands
of
the
peop l e
as a r e s u l t o f such a d ec i s ion .
of
the
F i na l l y ,
a l though Di ana Ferr e i ra i s protected by the p r i nc ip l e enumerated i n
art i c l e
XI I ,
sect i on
6
and
could
at
a s p e c t of the p a rtnersh i p ag reement ,
comm i tments
con c l uded
is
that
not
she
very
have ren ounc ed any
her vo l untary adherence to her
She
surpr i s ing .
fared
any . t i me
wel l
in
has
th i s
qu i t e
understandably
part icular
venture .
Just as we are not d e s i gnated to pun i sh D i a na F e rr e i ra f o r entering
into an agreement w i t h non-NMDs ,
there i s no occ a s i on h e re
561
for us
to rush to her protect ion .
IV .
Conclus ion
The restrict ions upon al ienat ion spec i f i ed in article X I I o f
the NMI Const itut ion have been care fu l l y des igned to accompl ish
purposes o f cruc ial importance to the peop l e of th i s Commonwealth
whi l e minimiz i ng d isrupt ion ,
and imp ingement upon other r igh ts .
These 11 l east restrictive means , " ident i fied by the framers , must be
ful ly and f i rmly enforced but we may not expand them in the name of
j udicial creativity .
Court
For a l l o f the reasons stated , I bel ieve th is
shou ld eschew the result ing trust doctrine and fashion an
analysi s
derived
spec i f ica l l y
from
artic l e
XII
and
case ,
agree
its
constitut iona l history .
Nevertheless ,
in
th is
part icul ar
I
w ith
my
c o l league s that the partnersh ip agreement represents an attempt by
a non-NMD to a cquire an unconst itut i onal interest i n l and o f the
Commonwea l th and is therefore void ab initio .
However ,
I do not
bel ieve that thi s dec ision should have any bearing whatever upon
the prior and separate agreement of the Mafnas s i sters to s e l l
the i r l and to Diana Ferreira and I s e e n o basis whereby the i r sale
o f land t o her should be held voi d .
I bel ieve she should preva i l
in t h e qu iet title action and I there fore respectfu l ly d is sent .
Judge
562