Dullabhbhai K. Patel & Co., Ltd.; R.S.T.T.A.N. Hisatake, Inc. v.

R.S.T.T.A.N HISATAKE, INC., ANTHONY HISATAKE,
and SONJA HISATAKE, Appellants

v.

DULLABHBHAI K. PATEL, & CO., Ltd., Appellee

High Court of American Samoa
Appellate Division

AP. No. 4-86

October 31, 1986

__________

Territorial statute providing that judgment debtor may apply for an order setting payments on the judgment in accordance with his ability to pay is an important protection for debtors in the absence of a bankruptcy statute, and court should use the full reach of its equitable powers to effect the statutory protection. A.S.C.A § 43.1501.

Territorial statue providing that court should set payments on a judgment in accordance with debtor's ability to pay did not defeat creditor's right to foreclose a chattel mortgage. A.S.C.A §§ 37.1002, 37.1103, 43.1501.

Before REES, Chief Justice, GARDNER*, Acting Associate Justice, KENNEDY**, Acting Associate Justice, TAUANU'U, Chief Associate Judge, and OLO, Associate Judge.

Counsel: For the Appellants, Aviata Fa'alevao
For the Appellee, Roger Hazell

Per KENNEDY, J:

R.S.T.T.A.N. Hisatake, Inc., a defunct corporation, and its principals, Anthony and Sonja Hisatake, appeal the trial division's denial of a motion for an order in aid of judgment. We affirm.

The facts are not in dispute. Dullabhbhai Patel sold Hisatake goods worth approximately $36,000. As security for the purchase price, Hisatake executed a promissory note and a chattel mortgage. Hisatake failed to make the required payments, and Patel sued to enforce the security provisions. Hisatake failed to respond, and the trial division entered a default judgment for Patel. As Patel began foreclosure proceedings, [3ASR2d100] however, Hisatake moved for an order in aid of judgment, claiming dire financial circumstances. After a hearing the trial division denied the motion.

A.S.C.A § 43.1501 described the order in aid of judgment. In pertinent part, it provides that:

(a) At any time after they entry of judgment for the payment of money by one
party to another and before the judgment has been satisfied in full, either
party may apply to the court for an order in aid of judgment.

(b) Upon such application or upon its own motion, the court ... may hold
hearing on the question of the debtor's ability to pay and determine the
fastest manner in which the debtor can reasonably pay the judgment.

(c) In making this determination, the court shall allow the debtor to retain
such property and such portion of his income as may be necessary to
provide the reasonable living requirements of the debtor and his dependents. . . .

In the absence of a bankruptcy statute, § 1501 provides essential relief for debtors and their families, and the trial court should use the full reach of its equitable powers as necessary and appropriate to effect the statutory protection. The action here, however, was not to execute a money judgment but to foreclose a chattel mortgage, and the statute cannot be used to defeat a creditor's security interest in identified property. If such foreclosures were barred, the statute would defeat legitimate security interests recognized by the legislature in other statutory provisions. See A.S.C.A §§ 37.1002, 37.1103.

The mortgage here was on the chattel interest in a house and not on its land, and there is no prohibited alienation by allowing the foreclosure.

The judgment is AFFIRMED.


*Honorable Robert Gardner, Chief Justice Emeritus, High Court of American Samoa, serving by designation of the Secretary of the Interior. **Honorable Anthony M. Kennedy, Judge, United States Court of Appeals for the Ninth Circuit, serving by designation of the Secretary of the Interior.