16ASR2d

=SHANTILAL BROTHERS, Ltd., Plaintiff

v.

KMST WHOLESALE, Inc., Defendant

NELSON & ROBERTSON PTV ., Ltd., AMERICAN SAMOA GOVERNMENT, DIOCESE OF PAGO PAGO, and AFOA L.S. LUTU, Intervenors

High Court of American Samoa
Trial Division

CA No. 87-88

September 7, 1990

__________

American Samoa's chattel mortgage statute requires not just that the mortgage contain some language sufficient to put third parties on inquiry, but that it contain a "description" of the "specific" article or articles mortgaged. A.S.C.A. § 27.1510.

The general rule appears to be that notice of an unrecorded mortgage, given to a creditor who has already "fastened his lien upon the property by judgment," comes too late regardless of whether a writ of execution has issued.

The general rule against mortgages of after-acquired real property contains an important exception for cases in which the property to be acquired is described in the mortgage document. A.S.C.A. § 37.1003.

Before REES, Associate Justice, AFUOLA, Associate Judge, and MATA'UTIA, Associate Judge.

Counsel: For Plaintiff, Gata E, Gurr
For Intervenor Nelson & Robertson, John L. Ward II
For Intervenor Afoa L.S, Lutu, Charles V. Ala'ilima

On Motion for Reconsideration:

Intervenor Nelson & Robertson Pty, , Ltd. moves for reconsideration of our holding that plaintiff Shantilal Brothers, Ltd. , is entitled to the proceeds of a judicial sale of certain property belonging to the defendant, This holding was based on our finding that intervenor's chattel mortgage did not contain "a description of the specific article; [or] [16ASR2d104] articles... mortgaged" within the meaning of A.S.C.A. § 27. 1510(c). Plaintiff, a judgment creditor without actual notice of the chattel mortgage, was therefore entitled to execute its .judgment by seizing ;"f'd selling the property to which the mortgage ostensibly applied. Opinion and Order issued June 5, 1990, at p. 6; see A.S.C.A. § 27.1510.

Intervenor has cited authorities for the proposition that most United States .jurisdictions, prior to the enactment of the Uniform Commercial Code, enforced " general" mortgages even against third parties without actual notice thereof. The rationale was that a mortgage applying to all of a person's property, or to all property within a certain class, necessarily provided (constructive) notice with respect to every particular item owned by that person. Such a description, notwithstanding the absence of specificity or detail, was therefore held sufficient to identify the item in question. See, e.g. , Beflflett ~'. Green, 119 S.E. 620 (Ga. 1923) ("[a]11 of the machinery, esome property within a given class ("one bay mare, two mare mules, one horse mule") would be insufficient, since the mortgagor might or might not own other property within the class. See id. at 622. See also Mulphy Hotels Corp. ~'. Central National Bank Savings and Trust Co., 18 F.2d 719 (6th Cir. 1927) ("all the furniture and equipment"); /11 Re Oli~'er C.PU11ley Graflite COIP. , 14 F .Supp 31 (D. Mu. 1936) ("all the tools, machinery. ..."); First National Bank of Panama City ~'. First National Bank (if Chiple)', 106 So. 422 (Fla. 1925); Emick v. S~~'a.tJord, 191 P. 490 (Kans. 1920) ("[a]11 my personal property of every kind and nature") Childre.I'.1' v. Fir.\.' State Bank of Barllhart, 264 S. W. 350 (Ttx. App. 1924) ("[a]lso all other cattle, sheep ").

Other cases, however, held that a general reference to all of a person's property or to all property of a certain class did not constitute a "description" of any particular item. See, e.g. , U.S. v. United Aircraft CoIJ), 80 F. Supp 52 (D. Conn 1948) ("all parts, engines, equipment and accessories" held insufficient); Simofl5ofI v. McHemy, 92 P. 906 (Colo. 1907) ("all bedding, dishes, cooking utensils, together with all things, both useful and ornamental" too general to give third parties adequate notice of the subject property); Farlller's & Merchant '.\. Bank ~'.Stock££lale, 96 N .W .732 (Iowa 1903) ("all other personal property I now own, or in the future may acquire");Fir.\l State Bank ~'. Fir.\.' State Emlk, 32 S. W .2d 378 (Tex. App 1930) (holding insufficient the description "all other cattle" as incapable of giving notice to subse [16ASR2d105]

The task before us, moreover, is not to determine what was the majority rule at common law with respect to general mortgages, or what the best judge-made rule would be. Rather, it is to enforce a particular statute. Our statute, unlike some of those construed by cases from other jurisdictions, requires not just that the mortgage contain some language sufficient to put third parties on inquiry, but that it contain a "description" of the "specific" article or articles mortgaged. The language in intervenor's mortgage apparently intended to apply to items such as those sold by plaintiff was as follows: " All of Mortgagor's furniture, machinery, apparatus, appliances, tools, supplies, materials, trade and other fixtures and equipment, including automotive equipment, now owned or hereafter acquired " While this language is arguably a" description" of sorts, it certainly does not contain a description of any "specific" article or articles, as our statute requires. Indeed, a reference to "all" of a general class of things would appear to be the very opposite of a "description" of a "specific" thing.

Intervenor appeals for a liberal construction of the statute on the ground that plaintiff, like the intervenor itself, is a business entity who lent money to defendant rather than an individual who purchased some mortgaged item. Aside from the difficulty we would have in fashioning a rule that would make general mortgages specific enough to bind creditors but too general to bind purchasers, this hardly appears to be a case in which law is at odds with equity. The record reflects that intervenor made massive extensions of credit to the defendant at a time when it was already deeply in debt to the plaintiff. A few months later--- at a time when there is no evidence that plaintiff had actual knowledge of intervenor's dealings with the defendant---plaintiff brought its claim to judgment. Our mortgage recordation statute creates a narrow exception to the rule that a debtor's property is the pledge of his general creditors. If intervenor had complied with the statute in every particular , its claim would have trumped that of plaintiff even though plaintiff's claim was first in time and was first brought to judgment. Not having complied with the statute, intervenor must take its place in line.

Finally, intervenor argues that even if a general mortgage is insufficient to bind third parties without notice, it is binding on plaintiff because "the Court records in this case clearly reveal [that] Plaintiff had received notice of the Chattel Mortgage when it filed for its second Writ of Execution on December 1, 1989 ." On the contrary, the earliest record evidence we can find of plaintiff's actual knowledge of intervenor's mortgage is a facsimile message from intervenor's counsel to a collec1ion agent for plaintiff, dated about seven weeks after the writ of execution. [16ASR2d106]

It refers to a previous discussion but does not say when this occurred. In any event, the general rule appears to be that notice of an unrecorded mortgage, given to a creditor who has already "fastened his lien upon tl. , property by judgment, " comes too late regardless of whether a writ of execution has issued. See G. Osborlle, Handbook on the Law of Mortgages § 211 at 376 & n.63 (2d ed. 1970), and authorities cited therein.

Intervenor does make one telling criticism of our opinion. Contrary to \V hat we may have implied, the general rule against mortgages of after-acquired real property ~mhoditd in A.S.C.A. § 37. 1003 contains an important exception for cases in which the property to be acquired is described in the mortgage document. The problems posted hy general mortgages on the one hand, and mortgages of after- acquired property on the other, are related but distinct. Having held that the present mortgage does not contain a description of any of the specific articles that \vert seized and sold pursuant to plaintiff's writ of execution, we need not decide whether the rule of A.S.C.A. § 37.1003 should be applied by analogy to personal property, and whether, if so, that rule presents a second ground for the invalidity of the mortgage.

The motion to reconsider is denied.

*********

In re A MINOR CHILD

High Court of American Samoa
Trial Division

JUV No.4-90

September 10, 1990

__________

Petition by middle aged, able-bodied natural parents to relinquish their parental rights was denied since they failed to show relinquishment was in the best interest of their minor child where her father was gainfully employed and required to pay child support to her under a divorce decree. while her grandmother who wished to adopt her received social security benefits, [16ASR2d107]

Before KRUSE, Chief Justice, TAUANU'U, Chief Associate Judge, and OLO, Associate Judge.

Counsel: For Petitioner, Isa-Lei F. Iuli

The natural parents petition for the relinquishment of their parental rights. The child is eight years of age and has been living with her maternal grandmother who seeks the adoption. Grandmother is 58 years of age, recently a widow, and currently a recipient of social security benefits. The natural parents, on the other hand, are able-bodied and in their early forties, although they have been divorced since February 27, 1986. The father has been gainfully employed for many years as a technician with the government's television station and e.1ms an annual salary of $00,000.00. He is required to make certain child support payments under the decree of divorce. The natural parents have other grown children; however, the minor is their only remaining dependent.

We have no reason to doubt grandmother's devotion towards her grandchild and her fitness to take care of her. The child may continue to live with the her grandmother as long as the parents agree. However , we are unable to conclude in the circumstances that the child's best interests would be served by granting the petition and thereby terminating the child's right to look to her able-bodied parents for support. Her pending dependency is for many years yet to come.

The petition is therefore denied.

It is so Ordered.

*********

[16ASR2d108]

In re A MINOR CHILD

High Court of American Samoa
Trial Division

JUV No.25-90

September 10, 1990

__________

Petition by middle aged, able-bodied natural parents to relinquish their parental rights was denied since they failed to show relinquishment was in the best interest of the minor where petitioners, their minor child, and the grandmother wishing to adopt him all lived together, the child was aware of his natural parents, and the parents were gainfully employed while the grandmother received only social security benefits and rental income.

Before KRUSE, Chief Justice, OLO, Associate Judge, and MATA'UTIA, Associate Judge.

Counsel: For Petitioner, Isa-Lei F. Iuli

This is a petition for relinquishment of parental rights in anticipation of adoption of the parties' 6 year old minor child by his paternal grandmother. The primary ground for the petition is that the child has been reared by grandmother who is now 66 years of age, a recent widow, and whose source of income is social security benefits and certain rentals. The natural parents are in their mid-thirties and have both been gainfully employed. We are informed by the home study concluded by the Child Protective Services, Department of Human Resources, that all parties concerned are living together and that the child is aware of her natural parents. The natural father candidly admitted that he and his wife would naturally take over the child's care should grandmother become incapacitated.

The termination of parental rights also means the termination of a parent's legal obligations of support towards the child. The vital concern, therefore, in these matters is whether the child's best interests will be served by granting the petition. We are unable to conclude herein that termination of the parents' legal rights and duties would be in the child's best interests. The child's remaining period of minority is significant; he should be able to look to his relatively younger al1d able parents to provide for his future. The petition is denied.

[16ASR2d109]

It is so ordered.

*********

CAROLYN J. MAHONEY, Plaintiff

v.

JAMES M. MAHONEY, Defendant

High Court of American Samoa
Trial Division

DR No.81-81

September 10,1990

__________

Where a party to a divorce decree issued by the High Court which provided for custody and support of the parties' minor children and a property settlement later sought to modify the decree when the parties no longer lived in American Samoa, the Court declined to exercise jurisdiction on the issues of child support and custody, since the courts of domicile or residence could more effectively enforce terms ensuring the children's welfare and best interests and had a more substantial interest in doing so.

Where a party to a divorce decree issued by the High Court which provided for a property settlement later sought to modify the decree when the parties no longer lived in American Samoa, the Court asserted jurisdiction regarding the property issue since the property in question was still located in American Samoa.

Petition to modify the property settlement agreement in a divorce decree on the ground of mistake was denied where the language of the agreement unambiguously stated that one party would pay a fixed sum to another and did not condition such payment on the successful sale of the 'property in question.

Petition to modify the property settlement provision in a divorce decree on the ground of mistake was denied where the provision was part of a final divorce decree that had settled the property rights of the parties for at least ten years.

Court orders providing for property settlements, unlike orders for alimony, may not be modified by the court to reflect changes in the circumstances of the parties.

Before KRUSE, Chief Justice, TAUANU'U , Chief Associate Judge, and MATA'UTIA, Associate Judge.

[16ASR2d110]

Counsel: For Plaintiff, Ellen A. Ryan
For Defendant, John L. Ward II

On Motion to Modify Decree:

The plaintiff herein, now known as Carolyn Kirschman, (hereafter "Kirschrnan") was granted a decree of divorce from the defendant James J. Mahoney (hereafter "Mahoney") on April 22, 1981. The decree provides tor the custody and support of the parties' minor children and also incorporates a property settlement agreement. The property settlement agreement is dated April 22, 1981, and appears to have been signed by both parties and their respective counsel. Clause 4 of this agreement reads as follows: "Defendant shall pay Plaintiff the further cash sum of $6,100.00 within 30 days of the sale of the Sea Ray (boat), but no later than approximately six months from today. "

The parties and their remaining minor child have long since removed from American Samoa ---Kirschman is now domiciled in Missouri while Mahoney has been living in California. Notwithstanding, Mahoney has specifically returned to this jurisdiction to seek a modification of the decree with respect to his obligations under clause 4 of the property settlement agreement, and with respect to continuing child support. He asserts mistake and changed circumstances as grounds for relief. Mahoney has subsequently added a prayer to his petition seeking an amended custody order on the grounds that the minor now desires to live with him. Kirschman, on the other hand, has appeared through counsel opposing the petition on the grounds of forum non conveniens.

On the issue of custody and child support, we decline to exercise jurisdiction. Absent some showing of special need, it should appear fairly obvious that the best interests and welfare of the parties' 16 year old child demands more than an attempt at long distance evaluation. The courts of domicile or residence have a more substantial interest in the welfare of the child, and they would also be more effective at dealing with the child's best interests and welfare from the standpoint of enforcement. Accordingly, the petition is dismissed to the extent that it seeks to modify the provisions of the decree pertaining to custody and child support.

As to the property issue, we assert jurisdiction since the boat, the subject of clause 4, is still located in American Samoa. As we noted above, Mahoney asserts mistake as a ground for modification of clause[16ASR2d111]

4. He testified that the boat was in a damaged condition at the time of settlement, however, tor purposes of resolving the division of the marital asset, they agreed to assign the boat a resale value of$25,000.00. I1ce there was at the time an outstanding $12,000.00 mortgage interest against the boat, Mahoney asserted that the figure of $6,100.00 payable to Kirschman, represented an equal division of the sale proceeds less the mortgage interest (which he had agreed to discharge). According to him, the boat could not be readily be sold, as it had actually sustained more damage than they had suspected, and on-island repair services proved inadequate.

Mahoney stated that he was eventually relocated by his employer; however, prior to his leaving the territory, he managed to conclude a certain "Bill of Sale and Sales Agreement" with a Mr. Crispin and a Mr. Jamieson. Under this agreement, Mahoney transferred all his interest in the boat to Crispin and Jamieson. In return, the latter agreed: to pay Mahoney $10,000 within a year; to put the boat into seaworthy condition and sell the same on open market; and, after deducting the sum of $10,000 paid to Mahoney together with out of pocket expenses incurred by them, the sale proceeds would be divided equally among the three of them. Mahoney duly received the recited $10,000 from Crispin and Jamieson, which money he applied against the mortgaged debt --- now fully discharged. As to the boat, it has yet to be made seaworthy, although Kirschman is still seeking to collect the $6,100.00 payable to her under clause 4.

Mahoney seeks to be relieved of the requirements of clause 4, and in lieu thereof, he proposes to offer plaintiff the entire one-third share of the proceeds he would otherwise be entitle-d to under the agreement with Crispin and Jamieson. He has further suggested that the boat be sold under Court supervision. .

We decline the invitation to be involved with supervising the sale of marital property, and tor reasons set out below, we deny the petition to modify clause 4. In the first place, the claim to mistake rings hollow when viewed in the context of give and take, compromise and settlement. Had the facts turned out differently and the boat actually attracted a sizable profit beyond the parties' anticipation, could Kirschman have similarly asserted mistake and claimed more money than the agreed $6,100.00'? We think not. Quite clearly, the language of clause 4 does not, as Mahoney's claim to mistake seems to presume, condition the payment of the $6,100.00 on a successful and profitable sale of the boat. Rather, Clause 4 of the property settlement agreement simply stipulates [16ASR2d112] that a further payment of $6,100.00 shall be made by Mahoney to Kirschman within a determinate period; that is, "within 30 days of the sale of the boat but no later than approximately six months from today. " (Emphasis added.) If the parties had. indeed, intended some aleatory feature with the provision, they could have easily employed more exact expression. As things stand, there is no ambiguity with the wording of clause 4. Furthermore, this provision has been incorporated as part of a final decree that has, for many years now, settled property rights between two people.

Additionally, while alimony orders have been held to be modifiable (as the parties' circumstances change) and enforceable by contempt proceedings, property orders are not so regarded. Warren v. Wanen. 361 P. 2d 525 (Wyo. 1961 ); Annotation, Alimony as affected by wife's remarriage in absence of controlling specific statute, 48 A. L.R.2d 270, 302 (1956). Clause 4, as incorporated and made a part of the decree, orders the payment of $6,100.00 by Mahoney to Kirschman as a means of carrying out a division of a marital asset---the boat---as distinct from ordering the payment of periodic alimony. As a provision, therefore, pertaining to the division of property, clause 4 may not thus be modified judicially. See also Pierson v. Pierson, 88 N.W.2d 500 (Mich. 1958); Nelson v. Nelson, 182 P.2d 416 (Or. 1947); Austad v. Austad, 269 P.2d 284 (Utah 1954).

The petition is, accordingly, denied. It is so Ordered.

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[16ASR2d113]

UTU SINAGEGE and UTU FAMILY, Plaintiffs

v.

PAOLO SIVIA, MOENOA IOPU, and PAOLO FAMILY, Defendants

High Court of American Samoa
Land and Titles Division

LT No.45-90

September 12,1990

__________

Preliminary injunction was granted where plaintiff showed he was likely to prevail on the merits at trial and would suffer great injury before then if defendant was not enjoined from continuing construction of a house on land whose ownership was disputed. A.S.C.A. § 43.1301(j).

Before KRUSE, Chief Justice, TAUANU'U , Chief Associate Judge, and AFUOLA, Associate Judge.

Counsel: For Plaintiffs, Utu Sinagege R.M.
For Defendants, Togiola T.A. Tulafono

On Motion for Preliminary Injunction:

This matter came on regularly for hearing the II th day of September, 1990, upon plaintiff.'s motion for a preliminary injunction to enjoin the defendants from constructing a FEMA hurricane relief home on a site adjacent to the graveyard situated towards the rear of the respective existing guest houses of the Utu family and Paolo family, in the village of Amouli.

The Court finds sufficient grounds for the issuance of a preliminary injunction. The evidence preponderates in favor of plaintiffs in terms of the likelihood of prevailing on the merits at trial, and after weighing the equities between the parties, it appears likely that great injury will result to the applicant before a full and final trial can he had on the merits. A.S.C.A. § 43.1301(j).

[16ASR2d114]

Accordingly, and pending the final disposition of this matter or further order of this Court,

The defendants and each of them, and those in concert with the defendants, are hereby enjoined from continuing the construction of a FEMA home on that site adjacent to the graveyard situated towards the rear of the respective existing guest houses of the Utu family and Paolo family, in the village of Amouli.

It is so Ordered.

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ERNEST THOMPSON, Plaintiff

v.

NATIONAL PACIFIC INSURANCE, Defendant

High Court of American Samoa
Trial Division

CA No.47-90

September 19,1990

__________

Where auto insurance policy excluded coverage for damages incurred while the vehicle was operated by a person under the influence of intoxicating liquor or any drug, but continued coverage provided on behalf of "any other person or party" who proves he did not consent to the vehicle being driven hy the intoxicated driver, "any other person or party" refers to third party beneficiaries rather than the insured.

Where auto insurance policy excluded coverage for damages incurred while the vehicle was operated hy a person under the int1uence, hut continued coverage provided on behalf of third party beneficiaries who did not consent to the vehicle being driven hy the intoxicated driver, defendant insurance company was granted summary judgment against plaintiff insured who had not consented to his intoxicated brother driving the vehicle, since the exception to the exclusionary clause did not apply where the indemnity and/or insurance was provided on behalf of the insured.

Before KRUSE, Chief Justice, TAUANU'U, Chief Associate Justice, and VAIVAO, Associate Judge.

[16ASR2d115]

Counsel: For Plaintiff, Ellen A. Ryan
For Defendant, John L. Ward II

On Motion for Summary Judgment

Plaintiff Ernest Thompson is the owner of a pick up truck which was damaged in a single vehicle collision. At all relevant times, the truck was insured by defendant National Pacific Insurance and driven hy plaintiffs brother Bert, who was then visiting the island and had taken the vehicle without specifically notifying or asking plaintiff. As a result of the collision, Bert was cited and convicted of the following traffic violations: operating a vehicle without a valid driver's license and operating a vehicle while under the influence of alcohol.

When plaintiff made a claim on his motor vehicle policy for damage to the pickup truck as a result of the collision, defendant denied the claim. The basis for the denial is an exclusionary clause in the policy which, the defendant contends, does not extend coverage to damages occasioned to the truck while it is being operated by a person under the influence of intoxicating liquor, or by a person who is not validly licensed to drive in the territory. In its motion for summary judgment, the defendant cites clause 4 (a) and (e) in the policy, which in pertinent part reads as follows:

THIS POLICY DOES NOT COVER --- 4. Loss damage liability and/or compensation for damage. ..caused whilst the Motor Vehicle--- (a) is being driven by. ..any person under the influence of intoxicating liquor or of any drug provided that this exclusion shall not apply to indemnity and/or insurance provided on behalf of any other person or party if such other person or party proves that he did not consent to the Motor Vehicle being driven by or being in charge of the person when such person was under the influence of intoxicating liquor or of any drug.

[16ASR2d116] is being driven by. ..any person with the consent of the Insured if the driver was not duly authorised under all relevant Laws By-Laws and Regulations to be driving such vehicle for the purpose for which it is being used.

(e)

Discussion

The parties agree that the case is an appropriate one for summary judgment; however, they have differing views on the correct construction of the exclusionary clause. The defendant contends that the policy does not cover damages to the pickup truck arising while the vehicle was being driven by a person under the influence of intoxicating liquor. Plaintiff, on the other hand, reads the proviso attached to clause 4 (a) as having the effect of maintaining coverage in circumstances where an insured can prove that he did not consent to the use of the vehicle by the driver .

On this point, we have to agree with the defendant. The proviso clearly refers only to "indemnity and/or insurance provided on behalf of any other person or party" (emphasis added), whereas in contradistinction, plaintiff is referred throughout the insurance contract as the "insured." The proviso's reference to "any other party" is plainly a reference to third party beneficiaries, not the insured, and thus in the circumstances before us the question of consent or absence of consent has no bearing at all on whether the exclusionary clause 4 (a) applies or does not apply.

We conclude that the damages here claimed are excluded from coverage under the terms of policy. Defendant's motion for summary judgment is granted.

It is so Ordered.

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[16ASR2d117]