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Rosendahl Corp.; Patau v.


FUIFATU SEFO PATAU, Plaintiff

v.

ROSENDAHL CORPORATION, PTE CORPORATION,
UNIVERSITY INDUSTRIES INC.,
RALSTON PURINA COMPANY, Defendants

High Court of American Samoa
Trial Division

CA No. 29-89

May 13, 1991

__________

Only members of the American Samoa Bar Association may practice law in American Samoa. H.C.R. 140.

Because American Samoa's Workmen's Compensation Act disallows compromise contracts between the employer and employee, the employer's liability for workmen's compensation benefits, fixed and guaranteed under the Act, may not be altered by way of contract. A.S.C.A. §§ 32.0554(b), 32.0672.

As a matter of law, a worker who lost his forearm was entitled to 244 weeks of compensation; in addition, the Workmen's Compensation Act also provides for up to 200 weeks of compensation in cases of serious bodily disfigurement. A.S.C.A. §§ 32,0609(3), (15), 32.0609(20).

Only those settlements between the parties that have been approved by the Workmen's Compensation Commission have the effect of discharging an employer's liability for compensation. A.S.C.A. § 32.0668.

Since no release is valid except as otherwise provided for by the Workmen's Compensation Act. summary judgment was not available when the record was unclear on whether the release agreement was approved by the Workmen's Compensation Commission. A.S.C.A. § 32.0672; T.C.R.C.P. 56.

Accepting a workmen's compensation award in a compensation order assigns to the employer all rights to recover damages against a third person, unless the workman commences an action against the third person within six months after such award. A.S.C.A. § 32.0669.

American Samoa's Workmen's Compensation Act seems to have been drawn largely from the federal Longshoremen's and Harbor Workers' Compensation Act. 33 U.S.C. § 933; A.S.C.A. §§ 32.0501 et seq.

A voluntary payment of workmen's compensation does not constitute an "award in a compensation order," which triggers an assignment of an injured worker's cause of action against a third party to his employer. A.S.C.A. § 32.0669. [19ASR2d81]

Actions founded on personal injuries, whether based on contract or tort, must be brought within two years. A.S.C.A. § 43.0120(2).

Specific provisions which toll a statute of limitations are provided by statute. A.S.C.A §§ 43.0124-43.0127.

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

Counsel: For Plaintiff, William H. Reardon and Donald F. Hildre

  For Defendant Ralston Purina Company, Robert A. Dennison III

On Motion for Summary Judgment:

Facts

On March 21, 1987, Fuifatu Sefo Patau ("plaintiff") suffered an amputated forearm as the result of an accident at work. At the time, he was employed by Samoa Packing Company ("S.P.C."), a tuna packer located in the territory. On June 29, 1987, plaintiff filed a workmen's compensation claim with the Workmen's Compensation Commission. He initially retained local counsel but later replaced him with a San Diego law firm,(1)

who apparently negotiated and settled plaintiff's compensation claim directly with American International Underwriters (South Pacific) Inc. (A.I.U.), S.P.C. 's insurer at the time. At the direction of plaintiff’s lawyers, A.I.U. prepared the settlement and release papers. On July 28, 1987, plaintiff executed the release, in return for which A.I.U. paid the sum of $25,016.49 ---as further directed, a check for $3,000.00 was sent to plaintiffs attorneys for legal fees, while the remainder of the settlement proceeds, $22,016.00, was paid directly to plaintiff.

On March 22, 1989, plaintiff filed this action, seeking to recover damages for his injuries. He named, among others, Ralston Purina Company, a corporation who then held all of S.P.C.'s stock. The [19ASR2d82] complaint alleges four causes of action: strict liability, strict tort liability, breach of warranty, and negligence.

One year before that, plaintiff had, on March 21, 1988, filed substantially the same action in the United States District Court, Southern District of California (Case No. 880412-E (BTM)). The District Court dismissed the complaint on November 22, 1988 for failure to properly allege diversity jurisdiction, however, plaintiff was also granted leave to amend. He did not attempt to do so until Ralston moved eight months later to dismiss for failure to prosecute. On August 1, 1989, the District Court dismissed the action with prejudice because of unreasonable delay.

Armed with this dismissal order, Ralston next tiled a motion with the High Court to dismiss this action on res judicata grounds, arguing that the federal district court's order of dismissal with prejudice was a dismissal on the merits. We granted the motion.

The dispute was then taken back toCaliforniawhere, at plaintiff’s insistence, the District Court subsequently clarified that its order of dismissal was not intended as a dismissal on the merits. Thereafter, this Court vacated its own order of dismissal.

Ralston now moves for summary judgment asserting the following affirmative defenses: 1) that the global release negotiated and executed by plaintiff in settlement of his compensation claim barred this action; 2) that plaintiff is barred from bringing a third-party action because of the provisions of A.S.C.A. § 32.0669 of the Workmen's Compensation Act, A.S.C.A. §§ 32.0501 et seq. (hereafter the" Act"); and 3) that the action is barred by the statute of limitations, A.S.C.A. § 43.0120.

Discussion

The Release

In Etimani v. Samoa Packing Company, 19 A.S.R.2d 1 (1991), we recently rejected a similar argument for summary judgment, premised on a like-worded release instrument which was also given in exchange for the payment of a workmen's compensation claim. Ralston's contract argument here is not unlike the argument rejected in Etimani. First, the usual policy arguments given in favor of compromise and settlement are not relevant in a workmen's compensation setting because the Act [19ASR2d83] disallows compromise contracts between the employer and employee.(2) Hence the employer's liability for workmen's compensation benefits, fixed and guaranteed under the Act, may not be altered by way of contract. Indeed, the allusion to compromise and settlement in the subject release seems rather misleading, if not altogether meaningless, in that, given the facts, there was really no dispute as to the extent of S.P.C.'s liability under the Act.(3) The question naturally follows, what was the consideration given for an effective release?

Moreover, only those agreed settlements between the parties that have been approved by the Workmen's Compensation Commission have the effect of discharging an employer's liability for compensation. See A.S.C.A. § 32.0668. Since the record at this time is unclear on whether the subject release was approved by the commission, and bearing in mind that no release is valid except as otherwise provided for by the Act, A.S.C.A. § 32.0672, we find a triable issue of fact. Summary adjudication is not available under these circumstances. T.C.R.C.P.56.

Third-Party Recovery Barred

Elsewhere the Act provides:

[A]cceptance of compensation under an award in a compensation order operates as an assignment to the employer of all rights of the person entitled to compensation to recover damage against such third person unless such individual commences an action [19ASR2d84] against such third person within six months after such award.

A.S.C.A. § 32.0669. Ralston argues, in effect, that plaintiffs settlement with A.I.U. constituted an "acceptance of compensation under an award in a compensation order" and that any cause of action which plaintiff may have had against Ralston has been, therefore, assigned to S.P.C. for failure to file an action within six months after accepting compensation.

The Supreme Court, in Rodriguez v. Compass Shipping Co., 451 U.S. 596 (1981), construed virtually identical language contained in the Longshoremen's and Harbor Workers' Compensation Act ("L.H.W.C.A."), 33 U.S.C. § 933.(4) The Court read this enactment as requiring an employee to file suit within six months or not at all, and that his failure to so file gave rise to an irrevocable assignment of his cause of action to his employer. The Court also explained in Pallas Shipping Agency, Ltd. v. Duris, 461U.S. 529, 533 (1983), that the enactment (§ 933(b))

triggers an assignment of an injured longshoremen's cause of action against a third party only after he has accepted compensation "under an award in a compensation order filed by the deputy commissioner or Board. " (Emphasis in original.) The term "compensation order" ...refers specifically to an administrative award to compensation following proceedings with respect to the claim.

(Emphasis added.) In Etimani v. Samoa Packing, supra, we held this construction to be persuasive.

As noted above, we are not able to say on the extent of the record before us whether the compensation settlement with A.I.U. was ever formally approved by the commission. As a voluntary payment of compensation does not constitute an "award in a compensation order," Pallas, supra, we are again presented with another triable issue of fact. Motion for summary judgment is thus denied on this ground.

Statute of Limitations [19ASR2d85]

Plaintiff asserts that his complaint was timely filed since the statutory period begins the day after the event. T.C.R.C.P. 6. We disagree with plaintiffs conclusion and hold that his complaint was one day late, since the limitation period expired at midnight March 21, 1989. See Jenkins v. Yoder, 324 N.E.2d 520 (Ind. 1975); 51 Am. Jur. 2d Limitation of Actions §§ 58-60 (1970).

A.S.C.A. § 43.0120 unambiguously provides in pertinent part: Actions may be brought within the following times after their causes accrue, and not afterward, except where otherwise especially declared: ...(2) actions founded on injuries to the person..., whether based on contract or tort, ...within 2 years. (Emphasis added). While there are very specific statutory exceptions given that would toll the statute, see A.S.C.A §§ 43.0124-43.0127, the facts here do not come within any of those exceptions. We, therefore, conclude that plaintiffs action is barred by the statute of limitations.

Motion for summary judgment is granted.

It is so ordered.

*********

1. The record is not clear as to how a member of this firm had gained standing to practice law in the territory at the time. Under the Rules of the High Court, only members of the American Samoa Bar Association may practice law in American Samoa. See H.C.R. 140; see also In Re Complaint of lnterocean Ships., Inc., 2 A.S.R.2d 106 (1986).

2. A.S.C.A. § 32.0554(b) provides that "no agreement by any employee to waive his rights to compensation... is valid," while A.S.C.A. § 32.0672 states that "[n]o... release of liability for compensation... payable [under the Act] is valid, except as otherwise provided for by [the Act]."

3. Plaintiff'sSan Diego attorney settled the compensation claim for exactly the same dollar figure which plaintiff’s local attorney had calculated and offered to A.I.U. at the outset. Plaintiff here had lost his forearm; as a matter of law he was entitled to 244 weeks of compensation. See A.S.C.A. § 32.0609(3), (15). In addition, the Act also provides for up to 200 weeks of compensation in cases of serious bodily disfigurement. See A.S.C.A. § 32.0609(20).

4. The Act seems to have been drawn largely from the L.H.W.C.A. In re Westerlund, 4 A.S.R. 998, 1002 (1975).

Logoa`i; Ava v.


AVA VILI for himself and the 
AVA FAMILY of Pava'ia'i, Plaintiff

v.

FOMA'I P. LOGOAI, FA'ALILIU LOGOAI 
and her children, Defendants

AVA V. AVA, Plaintiff

v.

MIKE McDONALD, Defendant

High Court of American Samoa 
Land and Titles Division

LT No. 32-90 
LT No. 36-90

May 8, 1991

__________

The only ways communal land can become individual land is by adverse possession for thirty years or by compliance with the statutory procedures for alienation of communal land, including the approval of the Land Commission and the Governor. A.S.C.A. §§ 37.0120, 37.0201 et seq.

Compliance with the land-registration statute crates a strong presumption that the land belongs to the person or persons named in the certificate of registration; this presumption is conclusive unless rebutted by either (a) compelling proof that the certificate of registration was obtained by fraud or (b) fatal irregularities affirmatively appearing on the face of the registration documents. A.S.C.A. §§ 37.0101 et seq.

Though evidentiary rather than constitutive, the presumption resulting from a land registration is almost always conclusive; as such, it cannot be rebutted merely by evidence that the land has traditionally been reputed to belong to someone other than the registrant or even by the testimony of on or several witnesses who say they never saw the required posting.

If issued by a court having jurisdiction over the parties and the subject matter, an order requiring the Registrar to issue a land-registration certificate is binding on the parties and their successors in interest and can be vacated only in the most extraordinary and compelling of circumstances. T.C.R.C.P. 60(b).

A court order requiring the Registrar to issue a land-registration certificate did not bar a plaintiff from litigating the issue of whether a registration of somebody else's property, [19ASR2d76]affirmatively identified as such by the applicant in his registration documents, is nevertheless a valid registration, when neither this issue nor the plaintiff was previously before the court.

Before REES, Associate Justice, AFUOLA, Associate Judge.

Counsel: For Plaintiff Ava V. AvaTau'ese P.F. Sunia

  For Defendants Forna'i P. Logoai and Fa'aliliu Logoai, Roger K. Hazell

  For Defendant Mike McDonald, William H. Reardon

On Motion for Summary Judgment:

In one of these two consolidated cases, LT No. 32-90, plaintiff Ava Vili asks for declaratory judgment that a registration or purported registration of land called "Lalofatu" as individually owned land of the Fa'aliliu Logoaiand her children is null and void. The stated grounds for the requested relief are that the land in question is communal land of the Ava family and that the Logoai defendants are members of the Ava family who engaged in "manipulation of the legal process to allow the registration of this land." The specific "manipulation" alleged by the complaint is that the defendants are said to have engaged "the aid by a relative in the Registrar's Office to secure this registration without the required publication."

The Logoai defendants now move for summary judgment. The motion appears to be based on the contention that a Certificate of Registration is conclusive no matter how it was obtained. An affidavit in support of the motion is signed by defendants' counsel, rather than by a witness to the events that gave rise to the litigation, and alleges simply that counsel has checked the records and there is indeed a Certificate of Registration. Counsel has also submitted the Registrar's file concerning the registration in question.

It appears affirmatively from the documents in the Registrar's file, however, that the land "Lalofatu" surveyed and registered by the defendants is indeed communal land of the Ava family and not individual land of the defendants. The specific part of the public record from which this fact appears is a "Petition to Permit Surveying of Land" submitted to the Court in 1977 by then-counsel for the present defendants, Fa'aliliu Logoai and her children, and signed by Fa'aliliu herself. [19ASR2d77]

If the land in question was communal land of the Ava family in 1977, there are only two ways it could become individual land of the Logoai defendants: by adverse possession for thirty years, as provided by A.S.C.A. § 37.0120, or by compliance with the statutory procedures for alienation of communal land, including the approval of the Land Commission and the Governor, as provided by A.S.C.A. §§ 37.0201 et seq. Defendants do not claim that either of these things has happened.

It is true, as counsel for defendants observes, that compliance with the land-registration statute (A.S.C.A. §§ 37.0101 et seq.) creates a strong presumption that the land belongs to the person or persons named in the certificate of registration. Indeed, this presumption has been held to be conclusive unless rebutted either (a) by compelling proof that the certificate of registration was obtained by fraud or (b) by fatal irregularities affirmatively appearing on the face of the registration documents. See Ifopo v. Siatu'u, 12 A.S.R.2d 24 (1989); Faleafine v. Suapilimai, 7 A.S.R.2d 108 (1988).

In this case the registration documents convincingly and affirmatively disprove the very thing they would otherwise cause us to presume: that the defendants were the true owners of Lalofatu at the time they offered it for registration. The case before us is almost identical to Faleafine, supra, in which the registrant procured her survey by swearing that the land was her individual land but decided later in the registration process that the land was actually the communal property of a family whose matai title she had acquired in the interim. Because this inconsistency appeared on the face of the registration documents themselves, and because it caused the documents viewed as a whole to be consistent neither with the requirements for registration of individual land nor with the somewhat different requirements for registration of communal land, the registration was held null and void. See also Solomona v. Governor of American Samoa, 17 A.S.R.2d 186, 191-92 (1990), in which the Appellate Division held that formal compliance with the registration procedures did not vest the registrant with title to land which affirmatively appeared to be tidal or submerged land insusceptible of private ownership.

Counsel for defendants seems to misapprehend Ifopo ---as, indeed, the unsuccessful appellants in that case misunderstood the trial court's opinion ---as standing for the proposition that one who successfully negotiates the hurdles in the registration procedure thereby becomes the owner of the registered property even if he did not really own it before. [19ASR2d78]

On the contrary, the legal effect of a registration is evidentiary rather than constitutive. It creates a presumption that the registrant owned the land before he registered it. Because the procedure gives .anyone who contests the registrant's claim a fair chance to state and prove his objections, the resulting presumption is almost always conclusive. It cannot be rebutted, for instance, merely by evidence that the land has traditionally been reputed to belong to someone other than the registrant or even by the testimony of one or several witnesses who say they never saw the required posting. See Ifopo12 A.S.R.2d at 28. In the present case, however, the presumption of prior evidence is rebutted by the best evidence in the world: the admission of the registrants themselves, affirmatively appearing on the face of the very documents which would otherwise constitute their only evidence of title.

To extend the rule of Ifopo to insulate such a registration would transform the rule from a strong evidentiary presumption into a process for vesting and divesting title. Such an extension would implicitly overrule such cases as Faleafille and Solomona and would also create a conflict between the registration statute and the statutes governing alienation of land.

This case differs from Faleafille and Solomona in one important respect: in those cases the invalid certificates of registration were issued by the Registrar's office on its own initiative, whereas in the present case the defendants procured a Court order requiring the Registrar to issue the certificate. Such an order, if issued by a court having .jurisdiction over the parties and the subject matter, is binding on the parties and their successors in interest and can be vacated only in the most extraordinary and compelling of circumstances. See generally T.C.R.C.P. 60(b).

The order at issue in the present case, however, did not resolve (or even purport to resolve) the question with which we are now presented. The order was issued in 1984 in a case styled "In the Matter of the Application by: Fa'aliliu P.S. Logoai and Children, Applicants," LT No. 19-77. The case was then seven years old. It had been filed in 1977 in reaction to the efforts of Ava Vili, the present plaintiff, to prevent defendants' survey. Curiously, however, it did not name Ava or anyone else as a defendant; rather, it was brought as an ex parte proceeding. This was highly irregular insofar as the petition sought relief against a specific person; the effect of the irregularity was to prevent the Court from acquiring jurisdiction over Ava or anyone else. [19ASR2d79]

Nor was Ava or anyone else served with the 1984 application that led to the order to the Registrar. Indeed, not even the Registrar was served until after the order had been issued. Instead, the application was made exparte by Foma'i Paepule, one of the present defendants, who alleged that the Registrar had refused to issue a certificate only because of a minor technicality, the absence of a date on the survey map. The application was given the caption of LT No. 19-77, although that case had been closed for over seven years and although the Registrar had never been a party to the case. Mr. Paepule supplied an affidavit including the missing date, and the Court signed the requested order . While this order might conceivably be conclusive of any controversy between the present defendants and the Registrar having to do with the accuracy of the date in question or with the absence of the date in the registration documents, it did not purport to address the only question at issue between the present parties: whether a registration of somebody else's property, affirmatively identified as such by the applicant in his registration documents, is nevertheless a valid registration. Because neither this issue nor Ava was before the Court in LT No. 19-77, the order in that case does not bar Ava from relitigating the issue. See Puailoa v. Estate of Lagafuaina, 11 A.S.R.2d 54 (1989), aff'd, 19 A.S.R.2d 40 (1991).

Defendants' motion for summary judgment is denied. Indeed, summary judgment for plaintiff might be appropriate, but no motion for such judgment has been filed.

It is so ordered.

*********

Leapagatele v. Malauulu,


LEAPAGATELE KESI, for himself and on behalf
of the LEAPAGATELE family, Plaintiff

v.

LAUPEPA MALAUULU, LAUOI MALAUULU, and
ISUMU LEAPAGA TELE, Defendants

High Court of American Samoa
Land and Titles Division

LT No. 52-90

May 14, 1991

__________

The matai alone has "pule" (authority) over family lands, and an individual family member simply cannot help himself to family lands in derogation of that authority.

Good-faith improvers may he entitled to equitable relief for the value of improvements made to the land, hut those occupying communal lands in direct opposition to the matai's wishes and in violation of a stipulated preliminary injunction are not entitled to such relief.

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

Counsel: For Plantiff, Gata E. Gurr

  For Defendants, Charles v. Ala'ilima

Facts

Plaintiff is the senior matai of the Leapagatele family of Nu'uuli. He has held his family's title since 1958. Defendants Laupepa and Lauoi Malauulu are plaintiffs grand nephews and also members of the Leapagatele family. Towards the end of August 1990, plaintiff discovered that the defendants had begun the foundation of a house on a certain area of family land, known as "Lepine,” without his being consulted. His repeated demands to cease construction were not only met with threats of violence but with his nephew Laupepa's assertion of [19ASR2d110] "pule" over the land. The house is now completed, notwithstanding a stipulated preliminary injunction.

The defendants have never been on family lands before, but it seems that their defiant stance stems, at least in part, from the collaboration of their uncle Isumu Leapagatele, who is also plaintiff’s older brother. The building permit for the house in question was signed by uncle Isumu, who apparently seems to be in the habit of inviting different people onto family lands without the matai's knowledge. See Leapagatele v. Nyel, 17 A.S.R.2d 201 (1990).

Plaintiff petitions eviction, and he seeks an injunction not only to enjoin the defendants Laupepa and Lauoi Malauulu from continuing occupation of the portion of land involved, but also to enjoin Isumu Leapagatele from further signing building permits and other documents involving family lands.

Plaintiff testified that the area affected by defendants' house was assigned many years ago to a woman named Leao;(1) that this assignee has faithfully rendered him traditional service (tautua) just as she had served the previous titleholder, his father; and that, in fact, he had already signed a building permit for Leao so that she could go about restoring her hurricane-damaged home. Plaintiff further testified that neither the defendants nor their mother (who moved to the United States many years ago) render tautua; however, plaintiff also added that he would have been willing to assign to the defendants another area of available, family land had they only asked.

Conclusions

On the foregoing facts, plaintiff matai and family are clearly entitled to the relief sought. The authorities are replete; the matai alone has pule over family lands, and an individual family member simply [19ASR2d111] cannot help himself to family lands in derogation of that pule. The petition for eviction is granted.

Additionally, the defendants Laupepa and Lauoi Malauulu can hardly be said to be good-faith improvers, whereby they may be entitled to equitable relief for the value of improvements made to the land. See Tulisua v. Olo, 8 A.S.R.2d 169 (1988). They may, however, either remove the house or abandon it in favor of the Leapagatele family. That is not to say that the parties cannot, therefore, negotiate a sale agreement of the house, since its removal would most probably be wasteful. On the other hand, if such an agreement cannot be achieved, then the defendants Laupepe and Lauoi Malauulu shall remove their property from Lepine within 60 days; otherwise, the house shall become a part of the Leapagatele family's property.

The petition for injunctive relief is also granted. Accordingly, Laupepa and Lauoi Malauluulu are enjoined from using or occupying any portions of family lands "Lepine,” unless permission from the senior matai, Leapagatele Kesi, is first had and obtained.

Further, the defendant Isumu Leapagatele is enjoined from signing any building permits or documents purporting to involve family lands "Lepine."

It is so ordered.

*********

1. Whether or not this lady is a member of the Leapagatele family is far from clear. We found the matai's responses to be equivocal and even somewhat evasive. On the other hand, there was no testimony to the contrary. The defendants did not bother to show up for trial, although their counsel did appear. As their failure to appear was inexplicable, counsel's motion for a continuance was denied, and trial proceeded as scheduled.

Ko; Nelson & Robertson Pty., Ltd. v.


NELSON & ROBERTSON PTY., Ltd., Plaintiff

v.

U SUK KO, O.O. ENTERPRISES, and DOES I-V, Defendants

High Court of American Samoa
Trial Division

CA No. 85-90

April 4, 1991

__________

Summary judgment was appropriate when plaintiff proved the only debt it sought to collect and defendants presented no evidence to support their suggestion, contained in an affidavit, that they were entitled to offsets. T.C.R.C.P.56.

Before REES, Associate Justice, LOGOAI, Associate Judge, and MAILO, Associate Judge.

Counsel: For Plaintiff, John L. Ward II

  For Defendants U Suk Ko and O.O. Enterprises, Charles V. Ala'ilima

On Motion for Summary Judgment:

Plaintiff has submitted affidavits and balance sheets showing that defendant O.O. Enterprises is indebted to plaintiff in the amount of A$8,567.97. Defendant O Suk Ko has submitted an affidavit which does [19ASR2d13] not deny the particular transactions giving rise to the indebtedness but which, construing it in the light most favorable to defendants, suggests that certain earlier transactions between the parties mayor may not--the affiant is not sure--have partly or wholly offset this indebtedness.

On the evidence before us, and construing this evidence in the light most favorable to defendants, there remains no material issue of fact for resolution. Plaintiff has proved the only debt it seeks to collect, and defendants have presented no evidence to support their suggestion that they may be entitled to offsets. Judgment will therefore enter in favor of plaintiff against defendant O.O. Enterprises. If plaintiff is indebted to defendants or to anyone of them, on account of other transactions, defendant(s) are and remain entitled to bring a separate action to recover this debt.

Summary judgment will not enter against defendant O Suk Ko in his individual capacity. Although the complaint alleges in the alternative that defendant O.O. Enterprises is either a partnership or a corporation, defendants allege in their answer that it is a corporation. We have been presented with no evidence on whether O.O. Enterprises is in fact a corporation or on whether, if it is a corporation, its president, O Suk Ko, should be held personally liable for the debt that is the subject of this action. Plaintiff remains free, of course, to present such evidence in the future course of this proceeding.

We take judicial notice that the Pago Pago branch of the Bank of Hawaii will exchange, as of today, April 4, 1991, $1.25 in Australian dollars for everyUnited States dollar presented. Judgment will therefore enter in favor of the plaintiff and against defendant O.O. Enterprises in the amount of US$6,926.38 and for court costs of $60, for a total of US$6,986.38, to bear interest at the legal rate of six percent per annum. To avoid further difficulties having to do with exchange rates, this judgment may be satisfied only by payment of the requisite amount into the registry of the Court by cash or cashier's check, unless the plaintiff should choose to accept some other form of payment.

It is so ordered.

*********

In re Two Minor Children (Juv. Nos. 149-90, 150-90),


In re TWO MINOR CHILDREN

High Court of American Samoa
Trial Division

JUV No. 149-90
JUV No. 150-90

April 10, 1991

__________

In a petition to relinquish parental rights to a child, a court is required to first consider the best interest and welfare of the child, as well as the best interest of all concerned. A.S.C.A. §§ 45.0102, 45.0402.

A petition to relinquish parental rights to a child is not ordinarily favored unless the evidence is clear and convincing that the prospective adopting parents are in a better [19ASR2d33] position to secure the best interest and welfare of the minor. A.S.C.A. §§ 45.0102, 45.0402.

Before KRUSE, Chief Justice, MATA'UTIA, Associate Judge, MAILO, Associate Judge.

Counsel: For Petitioner, Afoa L.S. Lutu

The natural parents petition to relinquish their parental rights to their two minor children, whose adoption is being sought by their maternal grandparents. The grandparents are 69 and 63 years of age, both now retired and collecting retirement and social security benefits. The natural parents, on the other hand, are 47 and 41 years of age, and both able-bodied. (Indeed, the home-study report by the Office of Child Protective Services explains that the children first came into the grandparents' care because both parents were working at the time.)

In these matters we are required to consider, among other things, the best interest and welfare of the child, A.S.C.A. § 45.0102, as well as the best interests of all concerned, A.S.C.A. § 45.0402. Perhaps the more important of these considerations is the child's best interest and welfare. However, a petition to relinquish parental rights must naturally be regarded, from the child's point of view, as one which goes agai1st the grain, because it is also effectively a petition to be relieved of all legal responsibilities and obligations towards the child. Thus, a petition to relinquish is not ordinarily favored in these cases unless the evidence is clear and convincing that the grandparents are indeed in a better position to secure the best interest and welfare of the minor. In re Three Minor Children, 3 A.S.R.2d 4 (1986); In re Two Minor Children, 4 A.S.R.2d 21 (1987); In re a Minor Child, 6 A.S.R.2d 123 (1987); In re Two Minor Children, 11 A.S.R.2d 91 (1989); In re a Minor Child, 11 A.S.R.2d 107 (1989); In re a Minor Child, 13 A.S.R.2d 33 (1989). The recurring problem we encounter with these petitions has been the question of the minor's future interests. In the natural course of things, these future needs are generally better guaranteed by the child's younger and more able-bodied parents.

The circumstances presented here, however, reveal nothing in the way of the exception as would warrant altering the children's legal relationship to their parents, together with their right to continue to look to them for future support. The principal ground advanced for the [19ASR2d34] petition is that the children have been under the primary care of the grandparents and that they have become close with one another. While not unmindful of this very healthy state of affairs, we see no reason why the grandparents' desire to care for their grandchildren cannot continue indefinitely without our having to employ the drastic measure of terminating the obligation of support imposed by law upon the parents. Petition is denied.

It is so ordered.

*********

In re Matai Title “Seva'aetasi”,


ROBERT S. SEVA'AETASI, Claimant

v.

PAGO PAGO VILLAGE COUNCIL, Objectors

[In re Matai Title "SEVA'AETASI" of the Village of Pago Pago]

High Court of American Samoa
Land and Titles Division

MT No. 3-90

June 10, 1991

__________

An applicant for matai-title registration is normally required to submit, among other things, a "certificate from the chiefs of the village to which the title is attached to the effect that the matai title is an old and traditional title of the Samoan people." A.S.C.A. § 1.0405(b).

The Territorial Registrar's records on land and matai-title registrations are, without contrary evidence, presumed to be accurate.

Despite a written objection by the leading chiefs of the village, a matai title was ordered to be registered in the applicant's name as an "old and traditional title of the Samoan people" when the Territorial Registrar's records pointed to recognition of the title's status in a village prior to its registration, and court cases affirmed the family's landholdings. A.S.C.A. § 1.0405(b). [19ASR2d134]

Before KRUSE, Chief Justice, TAUANU'U, Chief Associate Judge, LOGOAI, Associate Judge, MAILO, Associate Judge, BETHAM, Associate Judge.

Counsel: For Claimant, Asaua Fuimaono

  For Objectors, Tau'ese P.F. Sunia

Robert S. Seva'aetasi (hereafter the "applicant") filed his application with the Territorial Registrar to be registered as the holder of the matai-title "Seva'aetasi" allegedly attached to the village of Pago Pago. In the normal course of things, an applicant for matai-title registration is required to submit, among other things, a "certificate from the chiefs of the village to which the title is attached to the effect that the matai title is an old and traditional title of the Samoan people." See A.S.C.A. § 1.0405(b). However, in this instance, the leading chiefs of Pago Pago not only refused certification, but they actually presented the Territorial Registrar with a written objection to the application for registration, stating that the name "Seva'aetasi" was not a matai title attached to the village of Pago Pago. The matter was referred to the Court.

For the village council, High Talking Chief Tuaolo Lemoe, who is 79 years of age and the traditional spokesman for the Pago Pago village council, testified that the only previous user of the name "Seva'aetasi" within the village of Pago Pago was applicant's father, and that in accordance with information which he had received from a great aunt of his, the applicant's father was a gentleman who hailed from the village of Poutasi on the island of Upolu. Tuaolo further testified that applicant's father, Seva'aetasi, was only recognized in the village as a rnatai taule'ale'a (leading untitled man), and that he had, in his youth, participated with Seva'aetasi in the village aumaga (the organization of untitled men). Seva'aetasi, he continued, was at one time the designated matai taule'ale'a of Leota and at another time the designated matai taule'ale'a of Te'o, consequent to a falling out with the former. Additionally, Tuaolo stated that he had never seen Seva'aetasi sit in the village council.

The applicant, on the other hand, testified that his father had indeed sat in the village council and that he was the first registered holder of the matai title "Seva'aetasi" from the village of Pago Pago, which he claims are appurtenant to the matai title "Seva'aetasi.” [19ASR2d135]

In support of his claim to register succession, the applicant submitted a copy of a "Certificate of Matai Name Registration" dated April 28, 1987, issued by the Territorial Registrar, which purports to certify the registration of the title "Seva’aetasi” in one Sasa; the applicant claims that this individual was his father. The certificate, it seems, was based on an entry in the Registrar's "Index of Matai Title Registration" for the village of Pago Pago. This index not only includes the entry "Seva'aetasi," but it also notes that this title was first registered on February 1, 1912, in a person named Sasa.(1)

To demonstrate the existence of village landholding, the applicant first referred us to the early case of Leota & Fuga v. Seva'aetasi, No.1-1929 (1930). Here the Court confirmed much of Seva'aetasi 's claim to land "Leiliili," notwithstanding Leota 's petition that Seva'aetasi was not a matai. We noted with interest that a significant factor in not granting a new trial was that the trial court had relied heavily on the testimony of none other than the village's leading matai, Mauga. It was Mauga who apparently pointed out to the Court the property line between Seva'aetasi and Leota. We were likewise referred to Government of American Samoa v. Leota, No. 248-1964 (1967), a condemnation proceeding involving a number of Pago Pago villagers whose lands were required for the installation of a water tank, a pipeline and an access road. From the Opinion issued, we noted, also with interest, that the conclusions of the Court were based not only upon the testimony received but also upon stipulation of the parties that certain lands belonged to the "Seva'aetasi family." The Seva'aetasi family eventually received compensation in the sum of $2,937.00 for some 1.01 acres of its land thus condemned.(2) In our view, the evidence preponderates in favor of applicant, and we find accordingly. First, we cannot, without further evidence, doubt the integrity of the Territorial Registrar's records. Such records, after all, were made in the first place to provide us today with some evidence of a previous generation's understanding. Those records reasonably point to the conclusion that [19ASR2d136] Seva'aetasi did enjoy matai status recognition in Pago Pago antecedent to the registration of title in 1912. Furthermore, this recognition is also reasonably evident in the referenced land cases. Besides affirming Seva'aetasi land holdings amidst those of other traditional families, the cases also point to the acknowledgment from time to time of that landholding by the people of Pago Pago.

On the foregoing, we conclude that there is a matai title "Seva'aetasi" and that the said title is an ancient and traditional title of the Samoan people. Therefore, upon applicant's compliance with all the other requirements of A.S.C.A. §§ 1.0401 et seq., the title "Seva'aetasi" shall be registered in the applicant Robert S. Seva'aetasi.

It is so ordered.

Mailo, J.:

I respectfully dissent.

*********

1. While it is obvious that the index, as highlighted by counsel tor the village, has been amended with the aid of white ink, it was also obvious that the amendments did not involve the legible and undisturbed handwritten, original entry, "Seva'aetasi."

2. Additionally, we were also directed to subsequent cases which affirmed yet further landholdings. See Fanene v. Tago, LT No.1417-74 (1975); Ta'ita'i v. Seva'aetasi, 9 A.S.R.2d 118 (1988).

Fanene; Fanene v.


FANENE SU'AFAIGA H. SCANLAN, IRIS F. LEOTA, 
and FA'APATI LEOTA, Applicants

v.

FANENE FETAIAIGA KAVA, Objector

High Court of American Samoa 
Land and Titles Division

LT No. 73-90

May 6, 1991

__________

Summary judgment is appropriate when the only issue raised by an objector to a land/building separation agreement is identical to the issue she and her predecessor raised in a previous case and that issue was litigated and decided between the parties. T.C.R.C .P. 56.

Whether a particular matai has the power to evict people living on communal land depends on many facts and circumstances and is generally not a question for summary judgment. T.C.R.C.P. 56.

Before REES, Associate Justice, AFUOLA, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Applicants, Tau'ese P.F. Sunia

  For Objector, Utu Sinagege R.M. [19ASR2d70]

On Motion for Summary Judgment:

Applicant Fanene Scanlan and objector Fanene Kava are both registered holders of the matai name Fanene in the village of Pago Pago. In Fanene v. Fanene, 4 A.S.R. 603 (1966), the Court held that there are two separate and unrelated Fanene families in the Village of Pago Pago, each entitled to its own matai. Fanene Scanlan is the successor in title to one of the parties to the 1966 case, and Fanene Kava is the successor in title to the other. In 1990, Fanene Scanlan signed a separation agreement for a building to be built by Iris and Fa'apati Leota on Fanene land called Lalopu'aFanene Kava objected to the separation agreement, and the dispute was referred to the Court.

Fanene Kava's objection to the separation agreement is grounded in her contention that the Fanene family is one family (not two as the 1966 Court held) and that the land Lalopu'a belongs to the entire family, not just to that part of it headed by Fanene Scanlan. She therefore appears to contend that a separation agreement for a structure on land Lalopu'a is invalid unless it is signed both by her and by Fanene Scanlan.

Fanene Scanlan moves for summary judgment on the ground that the issue raised by Fanene Kava has already been litigated and decided. In a more recent Fanene v. Fanene case, LT 1089-71, the Court reiterated its earlier decision that "Fanene Filo and Tauveve Fanene families are two separate, different and distinct families." It also found that "Lalopu'a is the communal land of the Fanene Filo family." It therefore held that the matai of the Fanene Filo family had the sole power to sign separation agreements on land Lalopu'a and dismissed an objection brought by Tauveve Fanene. Id., Findings of Fact and Judgment (November 1, 1971).

Fanene Filo and Tauveve Fanene were the immediate predecessors in title of the present litigants, Fanene Scanlan and Fanene Kava. As it happens, both Scanlan and Kava were also named parties to the 1971 case. Both parties concede that the land involved in the present case is part of the same land Lalopu'a that was the subject of the 1971 case. Because the only issue raised by the objector is identical to the issue she and her predecessor raised in the 1971 case and because that issue was litigated and decided between the parties, there is nothing left for this Court to decide.

In her affidavit in opposition to the motion for summary judgment, Fanene Kava raises the possibility that a judgment for Fanene [19ASR2d71] Scanlan in the present case will allow him to evict her from a portion ofLalopu'a on which she claims to have resided for many years. That question is not before us. If it were, Fanene Scanlan would probably not be entitled to summary judgment; whether a particular matai has power to evict people living on Samoan communal land depends on a great many facts and circumstances, and the question of eviction seems not to have been decided in any of the numerous Fanene v. Fanene cases. The issue with which we are presented is whether a separation agreement on land Lalopu'a requires the approval of Fanene ScanlanFanene Kava, or both. On this issue Fanene Scanlan is entitled to summary judgment.

Judgment will enter dismissing the objection and directing the Registrar to record the separation agreement.

It is so Ordered.

*********

EW Truck & Equipment Co. v. Coulter,


EW TRUCK & EQUIPMENT CO., Plaintiff

v.

BOB COULTER d.b.a. SOUTH PACIFIC 
EQUIPMENT AND REPAIR, Defendant,

SOUTH SEAS SHIPPING CO., through its agent 
MATAI MARITIME AGENCY, Inc., Plaintiff

v.

S.P.E.A.R. CO. and EW TRUCK & EQUIPMENT CO., 
Defendants

PATRICK COFFIN, Third-Party Defendant

High Court of American Samoa 
Trial Division

CA No. 59-90 
CA No. 62-90

May 6, 1991

__________

If each party to a contract does things which, assuming no breach by the other party, would amount to a breach of the contract, the first breach is usually deemed to excuse what otherwise would have been the subsequent breach by the other party.

When each party breaches a contract before finding out about the other party's independent breach, and in the absence of any dimension of malice or wilfulness in either party's breach, the most appropriate remedy is to give each party the benefit of the bargain to which it agreed and was entitled.

When three companies may otherwise be entitled to be treated as separate entities for most purposes but found it to their advantage to treat themselves as a single enterprise, the court treated them as a single entity in construing a contract. [19ASR2d62]

Before REES, Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiff EW Truck & Equipment Company, Robert A. Dennison III

  For Plaintiff South Seas Shipping Company, Charles V. Ala'ilima

  For Defendants S.P.E.A.R. Company and Bob Coulter, Roy J.D. Hall, Jr.

These consolidated cases concern contracts for the sale of a truck and its shipment from California to American Samoa. Plaintiff EW Trucking claims that defendant Coulter, then doing business in the name of "SPEAR Co.," agreed to purchase a certain 1966 Ford "bucket truck" for $37,000.60 plus shipping costs of $ 12,168. Defendant claims that he did not agree to purchase the truck on behalf of himself or SPEAR but only on behalf of third-party defendant Patrick Coffin.

By the time the truck arrived in American Samoa, the deal had gone bad; nobody picked up the truck from the dock or paid the $12,168 shipping charges. Plaintiff South Seas Shipping Co./Matai Maritime Agency claims this amount plus interest, costs, and attorney fees against both EW and SPEAR.

The two main issues in the dispute between EW and SPEAR are (1) whether SPEAR agreed to purchase the truck or only to arrange for a sale by EW to Coffin and (2) whether the agreement of the parties included a condition that the truck be insulated against electric current.

On the first issue, we find for plaintiff EW. Numerous facsimile transmissions between EW and SPEAR, both before and after the truck was shipped to American Samoa, reflect what appears to have been the understanding of both parties that SPEAR wanted to buy the truck from EW. Although EW knew SPEAR intended to resell the truck to someone else in American Samoa and that this customer had participated in the selection of the truck from various trucks available from EW and was arranging to finance his purchase through a local bank, it is clear that EW regarded this person not as its own customer but as SPEAR's. This appears not only from the various preliminary communications but also from the evidence immediately surrounding the transaction itself. When SPEAR requested EW to make an exception to its usual policy of requiring cash or a letter of credit before shipping [19ASR2d63] merchandise, EW's chief executive officer told Mr. Coulter of SPEAR that he could authorize this only because SPEAR had made immediate payment on another recent substantial purchase from EW, and that he was relying on SPEAR's promise that payment for the truck would be made immediately upon delivery. We are unable to find that EW would have made such an exception had it been relying only on the credit of Mr. Coffin ---a person with whom it had had no previous dealings and whose name it did not even know ---or even that SPEAR reasonably believed that EW would do this. A few days later, just after the truck had been loaded onto the ship, EW sent SPEAR an invoice by facsimile transmission. The invoice prominently stated that the truck was being "SOLD TO" SPEAR. SPEAR did not protest its designation as the buyer but instead sent a return facsimile to assure EW that payment would be made shortly. We conclude that the parties understood the contract as one by which EW reasonably believed it was selling the truck to SPEAR for resale to SPEAR' s own unidentified customer.(1)

On the question of insulation, however, SPEAR prevails. During the negotiations leading up to the sale, EW sent a facsimile transmission asking: "Does the boom need to be insulated?" SPEAR responded the same day: "Boom needs to be insulated.” EW appears to maintain that this condition was waived or superseded by a later exchange between the parties, during which the 1966 truck was substituted for a 1974 truck SPEAR had originally wanted to buy but which was not ready for shipping. EW informed SPEAR that the 1966 truck, although in use by an electrical contractor, would not be "serviced or certified” before being shipped to American Samoa. The reasoning seems to be that since insulation is one of the things a truck must have in order to be certified, SPEAR’s decision to take the uncertified truck meant that it was no longer insisting on insulation. The evidence does [19ASR2d64] not reflect, however, that SPEAR knew or should have known that an uncertified truck was necessarily an uninsulated one. Indeed, it appears that both SPEAR and EW assumed that the 1966 truck was in fact insulated, until about two months after it had arrived in American Samoa, when an inspection by the local power authority appears to have revealed the contrary. The agreement of SPEAR to accept a truck that had not been certified did not amount to a waiver or modification of its earlier , strong insistence that the truck's boom be insulated.

The weight of the evidence is to the effect that the boom is not insulated but that it can be insulated. Although we have no evidence of what it will cost to insulate the truck, we do have evidence that the cost will not be commercially unreasonable in relation to the contract price. The evidence for this proposition is the testimony of Mr. Coffin, the customer at whose instance SPEAR originally specified that the boom must be insulated. Mr. Coffin has at all times been willing to purchase the truck provided financing can be arranged and is confident that the boom can be insulated without such expense as to make the truck not worth buying.

It is not uncommon for each party to a contract to do things which, assuming no breach by the other party, would amount to a breach of the contract. In such situations the first breach is usually deemed to excuse what otherwise would have been the subsequent breach by the other party. In the present case, however, each party breached the contract before finding out about the other party's independent breach. SPEAR did not reject the truck because it failed to conform to the insulation term of the contract; rather, it wrongfully rejected the truck because it did not have the money to pay for it. Similarly, EW cannot excuse its failure to provide conforming goods by reference to SPEAR's wrongful rejection, because it provided the goods before it had any idea such rejection would occur. Under these circumstances, and in the absence of any dimension of malice or willfulness in either party's breach, the most appropriate remedy is to give each party the benefit of the bargain to which it agreed and was entitled. EW is entitled to the contract price of $37,000.60; SPEAR is entitled to a truck that conforms to all terms of the contract, including the requirement of an insulated boom. SPEAR is obliged to pay the shipping costs, as provided by the contract between the parties. Under the circumstances each party should bear its own costs and attorney fees, and a $2,500 charge for dock storage charges, which was paid by EW, should be evenly divided between the parties. [19ASR2d65]

We further find that Patrick Coffin agreed to purchase the truck from SPEAR for $37,250.60 plus shipping costs. SPEAR and Coffin have a contract for the purchase of the truck for $49,418.60, subject to the condition that the boom be insulated. Coffin is also obliged to indemnify SPEAR for its $1,250 share of the dock storage charges, since these charges would not have been incurred if he had paid for the truck when it arrived at the dock.

We conclude that plaintiffs South Seas Shipping and Matai Maritime have the right to recover the shipping charges either from the shipper (EW) or the consignee (SPEAR). This was an explicit term of the contract of carriage set forth in the bill of lading, which was given to EW when it delivered the truck to the dock. It is also a standard term in such contracts, to which both EW and SPEAR, as merchants who have frequent occasion to do business with shipping companies, would be assumed to agree in the absence of an explicit provision to the contrary. SPEAR is obliged to pay the shipping charges not only by the terms of the contract of carriage, into which EW entered upon SPEAR 's explicit instructions, but also by the terms of its contract with EW. As between EW and SPEAR, therefore, SPEAR is primarily liable and would be obliged to indemnify EW for any amounts the latter should be required to pay the shipping company.

South Seas/Matai Maritime, however, has already collected the full $12,168 it is owed for shipping the truck. On January 3, 1990, about six weeks after SPEAR and EW had become obligated to pay the shipping costs, the Comptroller of a company called Harbor Stevedoring sent a letter to SPEAR acknowledging that his company owed $10,528.10 for equipment it had purchased from SPEAR but stating that Harbor Stevedoring intended to withhold payment of its debt to SPEAR pending settlement of the shipping costs f()r the bucket truck. By April or May of 1990, additional purchases had increased the amount of Harbor Stevedoring's debt to SPEAR to at least $12, 168. Although Mr. Coulter of SPEAR initially protested the non-payment of the debt from Harbor Stevedoring, he eventually agreed with the manager of Harbor Stevedoring (who is also the manager of Matai Maritime and the local manager of South Seas Shipping) that the $12, 168 owed to SPEAR could be withheld pending the outcome of this litigation.

Harbor Stevedoring is, or was in January 1990, partly owned by South Seas Shipping, with the remainder of its stock being owned by the same people who own South Seas Shipping and Matai Maritime. After the events giving rise to this litigation, Harbor Stevedoring merged with [19ASR2d66] Matai Maritime; the successor entity, Harbor Maritime, is therefore a party to the present case. (Counsel should have moved to substitute Harbor Maritime for its predecessor Matai Maritime as a named plaintiff, lest the Court give judgment in the name of a nonexistent corporation.) Business decisions for all these entities, or at least for their operations inAmerican Samoa, appear to have been made by the same person or persons at all times relevant to the litigation. Although the three companies may nevertheless be entitled to insist on being treated as separate entities for most purposes, in this case they found it to their advantage to treat themselves as a single enterprise and should therefore be so treated by the Court.

The gist of the January 1990 letter is that the management of the three entities had decided to apply the SPEAR debt to South Seas as an offset against the Harbor Stevedoring debt to SPEAR. The money --- which the letter acknowledges to have been immediately due and payable to SPEAR ---was not placed in an escrow account, deposited in the registry of the Court, or otherwise sequestered so that neither party would have the use of it pending the outcome of the litigation. Rather, it was (and remains) available for the use of the Harbor/Matai/South Seas entities at the full discretion of the common management thereof. The practical situation of the parties during the past year has been identical to that in which they would have found themselves if Harbor Maritime had written a check tor $12,168 to SPEAR and SPEAR had written an identical check to South Seas. It is therefore appropriate that the debt from SPEAR to South Seas be satisfied out of the funds withheld from SPEAR by South Seas' sister entity and co-plaintiff, Harbor Maritime.

Because South Seas was able to collect its debt by self-help soon after it became due, it is unnecessary for us to determine whether the term in the bill of lading which makes the shipper and consignee liable for "expenses" should be broadly construed to supply a contractual basis for an award of attorney fees to South Seas.

Accordingly, plaintiff EW Truck & Equipment will have judgment against defendant Coulter (dba SPEAR) in the amount of $38,250.60 with pre-judgment interest at the legal rate of six percent from December 4, 1990, for a total of $41,501.90. Judgment will enter against plaintiff EW Truck & Equipment, requiring it to insulate the boom on the truck within sixty days. If plaintiff EW should fail to comply with this part of the judgment, defendant Coulter will have the right to rescind the contract of sale. Defendant Coulter will have .judgment against third-party defendant Coffin in the amount of [19ASR2d67] $50,668.60 plus interest at the legal rate for a total of $54,975.43, due upon tender of the truck after it has been insulated. Execution of the money judgments will be stayed for sixty days.

It is so ordered.

*********

1. Evidence was admitted of various unsuccessful efforts by the parties to mitigate their damages by entering into substitute contracts involving the truck. Under some of these arrangements EW would have reasserted ownership of the truck and would have dealt directly with buyers (or, under one proposed arrangement, a lessee) other than SPEAR. We admitted this evidence over the objection of counsel for EW, for any light it might shed on the parties' understanding about the original contract between SPEAR and EW. We conclude that the attempts to mitigate damages were just that. They were fully consistent with the existence of a binding contract of sale between EW and SPEAR and did not deprive EW of its right to sue on that contract.

Cravens; Beaver v.


LEFAGA S. BEAVER, Plaintiff

v.

WILLIAM H. CRAVENS, W. SCOTT BARRETT, 
SOUTH PACIFIC TRADERS, INC., and DOES I-XX, Defendants

High Court of American Samoa 
Trial Division

CA No. 72-90

April 10, 1991

__________

In construing a trust instrument's terms, a court seeks to ascertain and give effect to the settlor's intention by taking into account the document's subject matter, scheme, and plan, as well as the relationship of the parties; favor effectiveness of the instrument and validity of the trust; favor beneficiaries rather than settlors; and give effect to the whole instrument by reconciling repugnancies and avoiding surplusage.

Interpreting a trust instrument to find the settlor's intention is a question of law.

If there is no genuine issue as to any material fact, summary judgment can be rendered if either party is entitled to a judgment as a matter of law. T.C.R.C.P.56.

The "marital deduction" is a deduction from a decedent's gross estate allowed in computing the estate's liability for federal estate tax. 26 U .S.C. § 2056.

The "marital deduction" was intended to equalize the treatment of estates of married decedents in community property and common law states. 26 U.S.C 2056.

Intended to permit marital property to be taxed in two stages and not to allow a tax-exempt transfer to succeeding generations, the "marital deduction" is generally restricted to the transfer of property interests that will (unless disposed of or consumed) ultimately be included in the surviving spouse's estate. 26 U .S.C. § 2056.

No "marital deduction" is allowed for most terminable interests which perish at the survivor's death and would not be included in her taxable estate or for property which passes to the survivor without having first been included in decedent's gross estate. 26 U.S.C. § 2056.

Inter vivos trusts are used to pass property at death without the time and cost of a probate proceeding; the trust's assets escape probate but may be subject to federal estate tax.

The "marital deduction" allows a couple to arrange their affairs so that their combined wealth is divided between their estates in a manner that achieves the lowest net total tax. 26 U.S.C. § 2056.[19ASR2d15]

The essence of a "life estate power of appointment" trust, qualifying for the "marital deduction," is the combination of income for life and a general power to appoint, both vested in the surviving spouse.

Distributions from decedent's estate to a "power of appointment" trust qualify for the "marital deduction" if they are first included in the gross estate, but the survivor's power to appoint must be quite broad to qualify for the marital deduction. 26 U.S.C. § 2056(a).

No language in a trust instrument is treated as surplusage as long as any other course is reasonably possible.

The general rule, except as provided otherwise by statute or the trust instrument, is that on the death of a trustee and any pending appointment of a new trustee, the trusteeship devolves on any surviving trustees.

Trusts in which the surviving trustor is both beneficiary and trustee are allowed, except where a sole beneficiary is also the sole trustee, on the theory that the legal and equitable titles held as trustee and beneficiary are sufficiently different to prevent the legal estate from merging into the equitable one.

Courts are reluctant to remove trustees, especially those appointed by the settlor.

The general, common-law rule is that trustees must jointly exercise all powers calling for their discretion and judgment.

Legal title to trust property is held in the name of the trustees, not the name of the fictitious trust.

If a party does not deny allegations in a complaint, he is deemed to have admitted it. T.C.R.C.P.8(d).

Since trustees must jointly exercise all powers calling for discretion and judgment, if trustees of a trust whose corpus includes corporate stock call a shareholders' meeting without a co-trustee, the meeting is unauthorized, and its proceedings are of no effect.

A special board meeting held without due notice to all the directors as required by the corporation's bylaws, and in the absence of those directors without notice, is unlawful, and all acts done at such a meeting are void, absent ratification or estoppel.

Under the Rule Against Perpetuities, all future interests must vest or fail no later than twenty-one years after the measuring period of lives-in-being when the interest is created.

Savings clauses are upheld if carefully drafted, so a trust provision creating an interest that could be interpreted as violating Rule Against Perpetuities will not be construed to do so where instrument contains another provision limiting duration of such interests to those permitted by law.

The Rule Against Perpetuities applies only to contingent remainders and executory limitations, not present interest or vested remainders (except for interests vested in a class subject to open).[19ASR2d16]

When an interest is vested in a class subject to open, the number of persons who will take and the size of each person's share must also be determined within the measuring period of the Rule AgainstPerpetuities or the interests of all class members will fail.

Whether a remainder interest in a trust is contingent, vested, or vested subject to being later divested depends on the intent of the trustor as determined from the provisions of the trust instrument.

Since the law favors vested interests, remainders will not be construed as contingent when they can be taken as vested, particularly if the trustor's intent is in doubt.

In construing language in wills and trusts, a condition is deemed to be a condition subsequent which will divest a vested interest rather than a condition precedent to vesting, unless the language of the instrument forbids such a construction.

Gifts which violate the classic Rule Against Perpetuities may be valid under some modern alterations to the Rule, such as the doctrines of "wait-and-see," separability, cy-pres, and equitable approximation.

An entire trust will not fail unless the provisions which violate the Rule Against Perpetuities are so inseparable that eliminating them would violate the settlor's main scheme in settling the trust.

In determining whether a trust's provisions which violate the Rule Against Perpetuities are severable, the grantor's intent governs, and the general rule favors severability.

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

Counsel: For Plaintiff, Charles v. Ala'ilima

  For Defendants William H. Craven, W. Scott Barrett, and South Pacific Traders, John L. Ward II

On Motion for Summary Judgment:

In this case we must construe the terms of a trust instrument to determine how the settlors intended to distribute its assets when the first settlor died.

Facts

The following facts appear undisputed: In 1983 plaintiff Lefaga Beaver and her late husband William Beaver were the majority stockholders in South Pacific Traders, Inc., a corporation operating in [19ASR2d17] Nu'uuli. On December 19, 1983, they signed a trust instrument(1) creating an inter vivos trust ("Beaver Family Trust"), transferred all their shares(2) of South Pacific Traders, Inc. (hereinafter "S.P.T. stock") into the trust as the original corpus of the Trust Estate, Art. I.A, and appointed themselves as trustees. Art. II.A. Mr. Beaver added a codicil to his will on the same day giving, devising, and bequeathing to the trust any property not already transferred to it when he dies ("pour-over provision"). No other assets were transferred to the trust during their joint lifetimes. When Mr. Beaver died on September 18, 1984, certain events occurred under the terms of the trust: 1) the trust became irrevocable, Art. IV; 2) defendants Barrett and Cravens became trustees, Art. II.B; 3) the Trust Estate (including "all property received as a result of the Decedent's death ") divided into two trusts administered separately- -a Survivor's Trust and a Decedent's Trust--and the assets of the inter vivos trust were distributed between them according to the terms of the trust agreement, Art. V. The allocation of assets to the Survivor's Trust vested in its trustees immediately; the Survivor's interest in her trust also vested immediately, Art. V., and she received a power of appointment over the principal and undistributed income of the Survivor's Trust. Art. VI.B.

On February 21, 1990, defendants Cravens and Barrett called a special shareholders' meeting of South Pacific Traders, Inc.. Claiming authority as sole trustees of the Decedent's Trust (which they maintained now held the S.P.T. stock per the allocation of assets required by the trust instrument), they removed the Board of Directors and elected a new board which included Mrs. Beaver and Muliufi HannemanComplaint and Answer, para.16. The new board immediately met (without plaintiff and Hanneman) and elected Cravens to replace plaintiff as president and Abraham Orcini to replace Hanneman as secretary.

Since at least May 1990, plaintiff has not been allowed to function as an officer of the corporation or a trustee of either the Decedent's or Survivor's Trust. On or about July 2, 1990, defendants Cravens and Barrett received a letter from plaintiff in which she exercised her power of appointment under the Survivor's Trust to direct [19ASR2d18] them as trustees to transfer title to all S.P.T. stock held in the Survivor's Trust into her name. As such transfer of S.P.T. stock would make her the major shareholder, she then requested that defendants (as named President and Chairman of South Pacific Traders) call a special shareholders meeting. Defendants responded with the claim that all of the S.P.T. stock comprising the original Trust Estate of the inter vivos trust had been allocated to the Decedent's Trust according to the terms of the trust instrument. Plaintiff then filed suit. Both parties have moved for summary judgment on the following issues:

Discussion

I. Which Trust Received the S.P.T. Stock Upon the Death of Mr. Beaver?

The Decedent's Trust consists of all assets in the inter vivos Trust not allocated to the Survivor's Trust. Art. V.B. The Survivor's Trust consists of the separate property of the survivor plus Marital Deduction Property, defined as:

Out of the other assets subject to the terms of this Trust, including those received by the Trustees upon, or by reason of the death of the Decedent, which are eligible to satisfy the marital deduction, property equal in value to the amount of the maximum "Marital Deduction" allowable in finally determining the Federal Estate Tax in the Estate of the Decedent less the value of all assets or interest which pass, or
have passed to the survivor other than by the terms of this Trust, and which are eligible to satisfy said marital deduction.

In making the selection and allocation of such assets, the Trustee shall do so in a manner to fully utilize the marital deduction... No assets shall be included in this distribution with respect to which a marital deduction is not allowed, or not allowable if included. In the event a distribution or distributions are made for the Decedent's Probate Estate which shall saturate and fully utilize the Federal Estate Marital Deduction, then no additional distribution shall be made to the SURVIVOR's TRUST under the provisions of this subparagraph. [19ASR2d19]

Art. V.A.(2) (emphasis added). Since the instrument does not define "other assets" or "maximum Marital Deduction," the Court must construe these terms to ascertain and give effect to the settlors' intention in creating the trust. In doing so we take into account the document's subject matter, scheme, and plan, as well as the relationship of the parties; favor effectiveness of the instrument and validity of the trust (if possible); favor beneficiaries rather than settlors; and give effect to the whole instrument by reconciling repugnancies and avoiding surplusage76 Am. Jur. 2d Trusts § 17 (1975); 90 C.J.S. Trusts §§ 161-173 (1955). The parties agree on material facts but differ on how they must be interpreted to determine the plan and intent of the settlors. Interpreting a trust instrument to find the settlor's intention is a question of law. Davison v. Duke Univ., 194 S.E.2d 761, 783 (N.C. 1973); Evans v. First Nat'l Bank of Stillwater, 192 P.2d 666, 667 (Okla. 1948). Since there is no genuine issue as to any material fact, summary judgment can be rendered if either party is entitled to a judgment as a matter of law. Trial Court Rule of Civil Procedure 56(a).

Defendants argue as follows. The Beavers executed the trust instrument intending to minimize federal estate taxes by maximizing the estate's marital deduction, to provide lifetime income for the survivor, and to ensure that the Trust Estate would pass to their children when the survivor died. Defendant's Memorandum of Points and Authorities, at 2. "Marital Deduction Property" is restricted to "other assets [than the S.P. T. stockl subject to the terms of this trust." Id. at 3 (emphasis added). A probate action (PR No.29-87) was opened, and all of decedent's property "poured into" the inter vivos trust per his will. These "other assets" that poured over satisfied the maximum marital deduction, were transferred to the Survivor's Trust, and were distributed therefrom to Mrs. Beaver, exhausting and terminating the Survivor's Trust. Id. They argue that the settlors wished to transfer to the survivor only her half of all property acquired during the marriage. Affidavit of W. Scott Barrett, at 5.

Plaintiff, on the other hand, contends as follows. She and Mr. Beaver intended primarily to transfer as much of the trust estate of the decedent as possible to the survivor without paying federal estate tax. They intended the Survivor's Trust to receive all properties passing through either the inter vivos trust or the decedent's estate without being subject to federal estate tax. Plaintiff's Memorandum of Points and Authorities, at 3. None of decedent's property was subject to probate or distributed to the trust at his death, and no estate taxes applied to American Samoa property; hence, all property in the original trust (i.e., [19ASR2d20] the S.P.T. stock) passed to the Survivor's Trust. Complaint, paras. 11, 13, 14. She does not interpret the phrase "other assets"; instead, she argues that the words "saturate" and "fully utilize" imply that if the assets transferred to the survivor other than through the trust do not exhaust the maximum marital deduction, then the trustees must distribute the assets in the inter vivos trust so that the survivor receives all of the trust escaping federal estate tax, i.e., the entire trust. Plaintiffs Memorandum of Points and Authorities, at 4. In order to assess these respective arguments, we need to look at what the trustors meant by "other assets" and "maximum marital deduction."

A. Marital Deduction

The "marital deduction" is a deduction from a decedent's gross estate allowed in computing the estate's liability for federal estate tax. 26 U.S.C. § 2056. Those dying before 1976 could deduct up to 50% of their "adjusted gross estate"(3) that passes or passed to the surviving spouse. 26 U.S.C. § 2056(c)(1), amended by P.L. 94-455, § 2002(a) for estates of decedents dying after 1976. Those dying after 1976 could deduct the greater of $250,000 or 50% of the adjusted gross estate passed or passing to the spouse. 26 U.S.C. § 2056 (c)(1)(A), (B), deleted by P.L. 97-34 for estates of those dying after 12/31/81. Those dying after 1981 could deduct their entire estate if it passed to the spouse. 26 U.S.C. § 2056.

The deduction was first intended to equalize the treatment of estates of married decedents in community property and common law states. Pennsylvania Nat'l Bank v. United States, 387 U.S. 213, 219 (1967). Since the provision was intended to permit marital property to be taxed in two stages, not to allow a tax-exempt transfer to succeeding generations, the deduction is generally restricted to the transfer of property interests that will (unless disposed of or consumed) ultimately be included in the surviving spouse's estate. U.S. v. Stapf, 375 U.S. 118,128 (1963). No deduction is allowed for most terminable interests which perish at the survivor's death and would not be included in her taxable estate. See Estate of Smith565 F.2d 455,459 (7th Cir. 1977). Nor can an estate deduct property that passes to the survivor without [19ASR2d21] having first been included in decedent's gross estate. 26 U.S.C. § 2056(a).

Interpreting the trust instrument here is complicated by the fact that the Beavers and their advisors may not have realized that the law changed in 1981 to allow an unlimited marital deduction. 26 U.S.C. § 2056. Both parties argue as if only half of the estate could be passed via the deduction. Plaintiffs Memorandum of Points and Authorities, at 6; Affidavit of W. Scott Barrett, at 3. In fact, decedent could have passed his entire estate to the survivor and deducted it, if it was first included in the gross estate and met the other requirements for the marital deduction. The parties do not say if the S.P. T. stock was included in Mr. Beaver's gross estate for federal estate tax purposes. If it was not, then clearly it is not an "asset[] subject to the terms of this Trust... eligible to satisfy the marital deduction" and did not pass to the Survivor's Trust. Art. V.A.(2) (emphasis added).

Inter vivos trusts like the original Beaver Family Trust are used to pass property at death without the time and cost of a probate proceeding. Am. Jur. Legal Forms 2d Federal Tax Guide to Legal Forms 180-K-91 (1981); 17A Am. Jur. Legal Forms 2d Trusts §§ 251:93,251:101 (1984). The assets escape probate but may be subject to federal estate tax. The difficult issue is determining what the settlors intended to achieve by creating the Survivor's and Decedent's Trusts.

The marital deduction allows a couple to arrange their affairs so that their combined wealth is divided between their estates (via the marital deduction) in a manner that achieves the lowest net total tax. If the survivor will also be subject to estate tax at death, the couple often transfers just enough via the deduction to eliminate any tax liability (after utilizing the unified tax credit) of the first decedent's estate. To transfer more only subjects the income initially taxed in the first decedent's estate to possible taxation again if it is still in the survivor's estate at her death. But there are also non-tax reasons for restricting the amount transferred to the survivor:

If the... deduction could be secured only by leaving the property to the surviving spouse outright and with no strings attached, its usefulness would in many cases be questionable.

The cost of foregoing the marital deduction is calculable. The potential damage from mismanagement [19ASR2d22] after an outright transfer is infinitely greater and its actual size unpredictable. A kind of economic ownership has been created which when given to the surviving spouse enables the decedent's estate to claim the benefit of the deduction while surrounding the administration and conservation of the property with certain safeguards, wherever such protection may be seemed desirable.

The essence of this economic ownership qualifying for the marital deduction is the combination of income for life and a general power to appoint, both vested in the surviving spouse.

34A Am. Jur. 2d Federal Taxation ¶ 44,661 (1989) (emphasis added).

The Survivor's Trust was structured to quality as a "life estate power of appointment" trust. Arts. VI.A-C, VII.C; see 34A Am. Jur.2d, supra at ¶ 44,662 (conditions required to qualify as "power of appointment" trust). Distributions from decedent's estate to such a trust qualify for the marital deduction if they are first included in the gross estate. 26 U.S.C. § 2056(a). But the survivor's power to appoint must be quite broad to qualify for the marital deduction. A grantor might be willing to give the surviving spouse the full power of disposition needed for the deduction for some property but wish to limit the survivor to a life interest with a vested remainder to children in other property. The creation of two trusts was the safest way of doing this. See Am. Jur. Legal Forms 2d, supra at ¶ 180-P-51 (1981)(4); see also 17A Am. Jur. Legal Forms 2d Trusts §§ 251:251-259 (1984). This seems to be exactly what the Beavers intended. The detail which the trust instrument outlines for the Decedent's Trust implies that the Beavers intended the assets in that trust to be protected from exhaustion or disposal by the survivor but still be available for his/her support as the trustees deemed necessary. Arts. VII.A-C; VIII.C.

B. "Other Assets " [19ASR2d23]

But did the Beavers intend the S.P.T. stock to be transferred to the Decedent's Trust? If the S.P.T. stock was included in Mr. Beaver's gross estate for federal estate tax purposes, was it also included in the "other assets" from which property equal in value to the maximum marital deduction was to be transferred to the Survivor's Trust? Since no language in an instrument is treated as surplusage as long as any other course is reasonably possible, 90 C.J.S., supra at § 161(g)(2), we see only two possible meanings for "other." Either it refers to assets other than the original Trust Estate (the S.P.T. stock), or it refers to assets other than the Survivor's separate property. Looking at the document as a whole, the first interpretation makes more sense. Why would the settlors create two trusts, surround one with provisions that severely restrict the survivor's access to its assets, and then intend to transfer as little as possible to it? In fact, why use the language "maximum marital deduction" (implying benefit to the decedent's estate rather than to the survivor) when determining the amount to flow to the Survivor's Trust?

After examining the trust instrument as a whole, it appears the Beavers wanted both to minimize taxes and to surround the administration and conservation of the S.P.T. stock with safeguards possible only by transferring it to the Decedent's Trust. Any other assets transferred to the Beaver Family Trust without specific instructions for allocation were to be placed in the Decedent's Trust. Art. V.C. This reinforces the view that the settlorsintended most property to remain in the Decedent's Trust. We hold that the S.P.T .stock was transferred to the Decedent's Trust.

II. Who are the Trustees of Decedent's Trust?

Defendants argue that "the plain language of Article II [of the trust instrument]... contemplates that upon the death or resignation of either Original Trustee, that Defendants Cravens and Barrett would succeed both Original Trustees...." Defendant's Memorandum of Points and Authorities, at 5-6. The language, however, is not as plain as defendant contends. In our view, it would have been a simple matter to specify that defendants shall "replace" both the Survivor as well as the Decedent as trustees. Instead, the instrument states that "[i]n the event of the...death of any original Trustee [Mr. and Mrs. Beaver]... the Trustors nominate and appoint to serve as Trustees...WILLIAM H. CRAVENS and W. SCOTT BARRETT." Art. II.B. It does not specify whether the successor trustees replace only the deceased original trustee as Mrs. Beaver contends (Plaintiffs Memorandum of Points and Authorities, at 7-8) or whether both original trustees are replaced. [19ASR2d24]

The general rule, except as provided otherwise by statute or the trust instrument, is that on the death of a trustee and pending appointment, if any, of new trustee, the trusteeship devolves on any surviving trustees. 90 C.J.S. Trusts § 236 (1955); 76 Am. Jur. 2d, supra at § 301 (surviving trustees can generally exercise trust powers). Defendant argues that construing the instrument to allow the surviving trustor to be both beneficiary and trustee would be unreasonable, since it would place her in a position of conflict. Defendant's Memorandum of Points and Authorities, at 5. But such trusts are allowed, except where a sole beneficiary is also the sole trustee, on the theory that the legal and equitable titles held as trustee and beneficiary are sufficiently different to prevent the legal estate from merging into the equitable one. Bogert, Law of Trusts § 30 (5th ed. 1973). Mrs. Beaver is neither the sole trustee nor the sole beneficiary; nothing in the instrument implies that the trustors intended to deprive the survivor of all input and guidance in managing the Decedent's Trust so that it will be well-managed and its assets conserved for their children. The courts are reluctant to remove trustees, especially those appointed by the settlorBogert, .supra at § 160, and it thus seems unwarranted to remove a surviving trustee because of the absence of an express provision clarifying her status. We hold that Mrs. Beaver is a trustee of the Decedent's Trust.

III. Are the Directors and Officers Elected or Appointed at the February 1990 Shareholders' Meeting the Valid Governing Authority of South Pacific Traders, Inc.?

In view of our conclusion that Mrs. Beaver is a co-trustee of the Decedent's Trust, we hold for the following reasons that the special shareholders meeting of February 21, 1990, called by defendants Cravens and Barrett, was invalid. The general rule is that trustees must jointly exercise all powers calling for their discretion and judgment, 76 Am. Jur.2d, supra at § 299, though the Uniform Trust Act ("UTA") permits a majority of a group of three or more trustees to exercise the powers of the trust, absent a provision in the instrument or a court order to the contrary. Id. at § 300. Since we have no pertinent statutes or cases we turn to the common law. SeeTung v. Ah Sam, 4 A.S.R. 764, 767-68 (1971).

The Restatement (Second) of Trusts requires co-trustees to jointly exercise power. Bogert, supra at § 91 n.55. "In the absence of a statute or trust provision to the contrary, a majority of three or more trustees has no power to act or to compel the minority to join in action." Id. (quoting the Restatement). Thus any acts of co-trustees Cravens and Barrett requiring discretion and judgment (e.g., calling a shareholders [19ASR2d25]meeting) require Mrs. Beaver's agreement as co-trustee. 76 Am. Jur.2d, supra at § 299.

There is no provision in our statute dealing with shareholder meetings, see A.S.C.A. Title 30, but the bylaws of South Pacific Traders, Inc. , provide that special meetings of shareholders for any purpose may be called by the president, board of directors, or shareholders holding at least 20% of the voting power of the corporation. S.P. T. Bylaws, Art. IV § 2. Apparently Mrs. Beaver was president at the time, Complaint and Answer, para. 17; the board consisted of plaintiff, Barrett, Fotu SoliaiMuliufi Hanneman, and Abraham Orcini, see Minutes of S.P.T. Shareholders' Meeting, February 21, 1990; Defendant's Memorandum of Points and Authorities, at 6-7; and the co- trustees held joint legal title (see Bogert, supra at § 32) to the majority of S.P .T. stock. See Complaint and Answer, paras. 6, 9; see also Henn, Law of Corporations §§ 187, 1026 (2d ed. 1970) (trustee is ordinarily owner of record with right to vote).(5)

Mrs. Beaver alleges that Cravens and Barrett called the meeting in their capacity as trustees/shareholders and that she received no notice of it.(6) Complaint, para. 16. Since defendants do not deny this, they are deemed to have admitted it. T.C.R.C.P. 8(d). They argue that plaintiff was not entitled to notice since she was no longer a trustee. Answer , para. 16. But since Mrs. Beaver was, as a matter of law, a co-trustee of Decedent's Trust, defendants were required to act jointly with her. See 76 Am. Jur.2d, supra at § 299 (trustees must jointly exercise all powers calling for discretion and judgment). Since they were not [19ASR2d26] empowered to call a shareholders' meeting without their co-trustee, the meeting was unauthorized and its proceedings of no effect. 18A Am. Jur. 2d Corporations § 958 (1985). We hold that the expansion of the board to seven members and the election of new board members was ineffective.

Additionally, there is doubt whether the new enlarged board was properly elected:

1. Did the shareholders have authority to remove the old board and elect a new enlarged board?

2. Could the shareholders remove directors without cause before their terms expired?

See Henn, supra at § 192. The parties disagree on a vital issue of fact: whether plaintiff and Hanneman were notified of the special board meeting of February 21, 1990. See Complaint and Answer, paras16-18; Affidavit of Lefaga Beaver. At that meeting the new board (without plaintiff and Hanneman) elected Cravens to replace plaintiff as president and Abraham Orcini to replace Hanneman as secretary.

A special board meeting held without due notice to all the directors as required by the corporation's bylaws, and in the absence of those directors without notice, is unlawful, and all acts done at such a meeting are void, absent ratification or estoppel. See 18B Am. Jur2d Corporations at § 1453 (1985). The bylaws of South Pacific Traders, Inc. provide "due notice in writing [must be] given to each director in the manner prescribed by statute." S. P. T. Bylaws, Art. II, § 6. The Territory has no statute dealing with notice of directors meetings, see A.S.C.A. Title 30, but reasonable advance notice enumerating any extraordinary matters to be discussed is usually required for special meetings, absent a contrary provision. Henn, supra at § 209. If the corporation did not give plaintiff and Mr. Hanneman such notice, their removal as officers would be void.

IV. Does the Rule Against Perpetuities apply in Samoa to invalidate certain interests created by the Decedent's Trust, and does such partial invalidity so frustrate the intent of the trustors that the entire trust must be voided ?[19ASR2d27]

Finally, plaintiff claims that the trust instrument must be invalidated because it creates future interests which violate the Rule Against Perpetuities. She maintains that invalidating these interests defeats the intention of thesettlors (she and Mr. Beaver) to such an extent that the entire decedent's trust must fail. Plaintiffs Supplemental Memorandum.

Defendants, however, argue that the Rule should not apply in American Samoa, since it is based on a public policy favoring free alienation of property, which directly contradicts the Samoan public policy prohibiting free alienation (A.S.C.A. § 37.0204). Defendants' Supplemental Memorandum.

We look to the trust instrument and observe the following:

1. When the Survivor dies, the assets in the Decedent's Trust shall be divided into separate trusts for each living Beaver child and each group of living descendants of each deceased Beaver child. Art. IV.C.

2. The trust for their child Lotoa terminates when she reaches age thirty- five. Art. VII.C. Each other child's trust continues past the child's death (if the trust has not yet been completely distributed(7) and the child has living descendants) for the benefit of such descendants until the deceased child's youngest child (the grandchild of the settlors) reaches twenty-five.

3. When the deceased child's youngest child reaches twenty-five, the remaining assets in each deceased Beaver child's trust are divided into equal shares for each of the deceased child's living children (settlor'sgrandchildren) and each group of living descendants (settlors' great-grandchildren or beyond) of any deceased children of that deceased child.

4. The instrument is unclear as to whether a deceased child's older children (settlor's grandchildren) can begin withdrawing their share of the [19ASR2d28] deceased child's trust at age twenty-five(8) or whether they must wait until the trust is divided when the youngest sibling reaches twenty-five.

5. If any person is under twenty-five when his portion is to be distributed to him under these terms, his portion vests in him, but the trustees may withhold possession of it and hold it in trust for him until he reaches twenty-five, subject to the provisions regarding the maximum duration of any trust established hereunder. Art. IV.C.(2).

6. If any provision is void, invalid, or unenforceable, the remaining ones shall nevertheless be valid and carried into effect. If any Trust herein established exceeds the longest permissible period, it shall persist in its period for the longest period permissible, then terminate. Art. X.D. The instrument does not specify who will receive the corpus of a trust terminated by this provision.

The Rule Against Perpetuities reflects a public policy favoring free alienability and transferability of property. 61 Am. Jur. 2d Perpetuities §§ I, 7 (1981). The Rule aims against the possibility of interests in property vesting too remotely from the time they are created. W. Burby, Real Property § 183 (1965). Under the Rule, all future interests must vest or fail no later than twenty-one years after the measuring period of lives-in-being when the interest is created. 61 Am. Jur. 2d, supra at § 6. Whether it even applies in Samoa is a question of first impression,(9) but even if it does, we hold that the savings clause in Article X.D. saves the trust: (1) by terminating any trust that reaches the longest period permitted by the Rule, or (2) by severing any provisions that violate the Rule so that they cannot invalidate the entire trust instrument.

Savings clauses are upheld if carefully drafted. See 61 Am. Jur . 2d, supra at § 27 (citing cases where savings clauses were upheld or rejected); 70 C.J.S., supra at § 35 (provision creating an interest that [19ASR2d29]could be interpreted as violating Rule will not be construed to do so where instrument contains another provision limiting duration of such interests to those permitted by law); Nelson v. Mercantile Trust Co., 335 S.W.2d 167, 172-73 (Mo. 1960); Cennamo v. American Sec. & Trust Co., 350 F. Supp. 1354, 1358-59 (D.D.C. 1973); First Ala. Bank of Montgomery v. Adams, 383 So. 2d 1104,1109 (Ala. 1980); 17A Am. Jur. Legal Forms 2d Trusts § 251:408 (1984); 15 Am. Jur. Legal Forms 2d Perpetuities §§ 201:13-14 (1973) (examples of savings clauses).

Only two cases were cited where a savings clause did not save the instrument by cutting short interests otherwise void under the Rule. In Farmers Nat'l Bank v. McKenney, 264 S.W.2d 881 (Ky. App. 1954), the provision creating the interests for "as long as the law allows" was so uncertain in its language that the creator's intent could not be discerned, so the entire provision was held unenforceable. In Hagemmm v. Nat'l Bank & Trust Co., 237 S.E.2d 388 (Va. 1977), the savings clause provided that the corpus of any interest terminated to avoid the Rule would be distributed to the persons to whom it would ultimately go under the other trust provisions, i.e., the very dispositions rendered void by the Rule. The court noted that "[a] 'savings clause' cannot save a void interest by adopting the very provisions which make it void." Id. at 393.

The Beaver trust instrument is ambiguous as to when the trusts created therein terminate, but the beneficiaries can begin to withdraw the corpus at age twenty-five and by the age of thirty-five withdraw the entire amount, terminating the trust. Art. VII.C.(1-2). Nor does the instrument state who receives the corpus if a trust terminates early to avoid a violation of the Rule. These shortcomings might render the savings clause ineffective, if thesettlors' intent could not be discerned. See Farmer's Nat'l Bank v. McKenney, supra. But even if the savings clause does not apply, the only interests that might vest too remotely are those of the great-grandchildren and possibly grandchildren, depending on whether a grandchild's interest vests when the survivor of Mrs. Beaver or her parent (a Beaver child) dies or when the grandchild reaches age twenty-five. The Rule applies only to contingent remainders and executory limitations, not present interest or vested remainders (except for interests vested in a class subject to open). 61 Am. Jur. 2d, supra at §§ 44-46. Where an interest is vested in a class subject to open, the number of persons who will take and the size of each person's share must also be determined within the measuring period of the Rule or the interests of all class members fail. Id. at §§ 33, 44. Whether a remainder interest in a trust is contingent, vested, or vested subject to [19ASR2d30] being later divested depends on the intent of the trustor, as determined from the provisions of the trust instrument. Since the law favors vested interests, remainders will not be construed as contingent when they can be taken as vested, particularly if the trustor's intent is in doubt. 90 C.J.S., supra at § 188.

The measuring period for Decedent's Trust began when Mr. Beaver died, not when the instrument was signed. See Cook v. Horn, 104 S.E.2d 461,464 (Ga. 1958); 61 Am. Jur.2d, supra at § 72; see also w. Burby, supra at § 187 (if conveyor reserves power of revocation, period under Rule computed from time such power is released); Annotation, Settlor's right to revoke or terminate trust, or to withdraw funds or invade corpus thereof, as affecting operation of rule against perpetuities, 7 A.L.R.2d 1091 (1949).

Assuming all future interests were created when Mr. Beaver died(10), all of his and Mrs. Beaver's living children would be lives-in- being when the interests were created, The measuring lives for purposes of the Rule would be the surviving settlor (Mrs. Beaver) and the living Beaver children. See 61 Am. Jur. 2d, supra at §§ 18-19 (common law rule does not restrict number of lives in being which may be selected as measuring lives); see alsoFirst Ala. Bank of Montgomery v. Adams, supra at 1108 (measuring life for testator's bequest to grandchildren is "the survivor of the widow or the daughter"). The gifts to the Beaver children are not class gifts, since they are created (for purposes of the measuring period of the Rule) when Mr. Beaver died. See Burby, supra at § 162 (interest to children not a class gift where interest is created at grantor's death, since size of class is certain then). Since the interests of the Beaver children must vest or fail within their lifetimes, and both the size of the class of "children of Mr. and Mrs. Beaver" and each member's share can be ascertained at Mr. Beaver's death, they do not violate the Rule.

A Beaver grandchild may never receive an interest, since the trust of her parent (a Beaver child) may have terminated because it was completely distributed at the discretion of the trustees or the Beaver child withdrew the entire amount at age thirty-five. The remainder interests of the grandchildren on reaching ages twenty-five, thirty, and thirty-five [19ASR2d31] could be considered as contingent (subject to the condition precedent of reaching the specified ages) or vested when the survivor of her parent (a Beaver child) or Mrs. Beaver dies, with only the enjoyment being postponed until the specified ages. In construing language in wills, a condition is deemed to be a condition subsequent which will divest a vested interest rather than a condition precedent to vesting, unless the language of the instrument forbids such a construction. Joyner v. Duncan, 264 S.E.2d 76, 85 (N.C. 1980). Since wills and trusts are similarly construed, the "age twenty-five" condition is not a condition precedent. The size of the class and the portion each would receive can be ascertained when the survivor dies, a date within the period of the Rule.

Though the grandchildren may not enjoy the corpus of the trust until they are twenty-five or older, their interests vest at the death of the survivor of Mrs. Beaver or their parent (the Beaver child) if the age restriction on reaching the corpus only defers enjoyment, not vesting. See Joyner v. Duncan, supra at 84-85 (class gift to grandchildren on reaching specified ages of 25, 30, 35, and 40 years does not violate Rule, since provision of testamentary trust construed as giving grandchildren a vested interest at birth subject to open, and class would close when testator's surviving son, a life in being, died); Carter v. Berly, 140 So.2d 843 (Miss. 1962) (provision in will providing that active trust should terminate when youngest grandchild becomes twenty-five provided for vesting when testator died and the class' closing within lives-in-being, at death of testator's surviving daughter); Annotation, Distinction as regards rule against perpetuities between time of vesting of future estates and time fixed for enjoyment of possession, 110 A.L.R. 1450; 70 C.J.S. Perpetuities §§ 7, 16(b) (postponement of actual enjoyment or possession beyond allowable perpetuities period does not void interest if it vests within that period).

The gifts to the descendants of the grandchildren probably violate the classic Rule, 61 Am. Jur. 2d, supra at § 35, since some descendants could be born more than twenty-one years after the death of the survivor of Mrs. Beaver or the Beaver children (the measuring lives) and would not take within the period permitted by the Rule. But even these may be valid under some modern alterations to the Rule, such as the doctrines of "wait-and-see," id. at § 29; separability, id. at §§ 35, 89; Annotation, Separability, for purposes of rule against perpetuities, of gift to several persons by one description, 56 A.L.R. 450; cy-pres, 61 Am. Jur2d, supra at § 31; and equitable approximation. Id. at § 32. [19ASR2d32]

Even if the interests to the descendants violate the Rule and are thus invalid, they are probably not so crucial that they drag the entire trust down. The entire Trust would not fail unless the provisions are so inseparable that eliminating them would violate the settlors' main scheme in settling the trust. Id. at §§ 85-89, 95-99; 89 C.J.S., supra at § 79; Bogert, supra at § 50 (invalid contingent interests following trust estates may drag down trust if they violate the Rule, but void and valid interests sometimes are separated and the valid ones enforced); 70 C.J .S. Perpetuities § 21 (1951) (whether invalidity extends to other provisions of instrument depends on whether provisions are so interwoven that some cannot be separated from others without defeating primary intention of maker of instrument and his general plan for disposing of property).

The grantor's intent governs whether the provisions are severable; the general rule favors severability. Armington v. Meyer, 236 A.2d 450, 455 (R.I. 1967). Since the instrument states that if any of its provisions are void, invalid or unenforceable, the rest shall nevertheless be valid, Art. X.D. , this clear statement of the settlors' intent should prevail, and the invalidity of these remote interests to descendants should not drag down the entire Decedent's Trust.

We accordingly hold, and it is so ordered.

*********

1. All terms of the trust are cited to the articles in the trust agreement.

2. Apparently the shares owned by plaintiff and her husband were all issued and outstanding shares. Minutes of S. P. T. Shareholders' Meeting of February 21, 1990.

3. "Adjusted gross estate" is the decedent's estate after certain other deductions are allowed. 26 U.S.C. § 2056(c)(2)(A), deleted by P.L. 97- 34 for estates of decedents dying after 12/31/81.

4. Apparently the editors of Am. Jur. Legal Forms 2d thought that two trusts were no longer needed after the Tax Reform Act of 1981; these paragraphs are deleted in the 1981 revision shown in the 1985 cumulative supplement to the text.

5. Defendants state that the share certificate for the S.P. T. stock is made out in the name "Beaver Family Trust," July 3, 1990, Letter of Barrett to Ala'ilima; Defendants' Memorandum of Points and Authorities, at 2-3, and that Mrs. Beaver is not registered in the corporate books as a shareholder. Answer, para. C. However, legal title to trust property is held in the name of the trustee(s), not the name of the fictitious trust. Price v. Marathon, 463 N.E.2d 410, 414 (Ohio App. 1983); Cohen v. Friedland, 450 So. 2d 905, 906 (Fla. App. 1984). The certificate should be made out in the name of all three trustees jointly, held as trustee for the Beaver Family Trust (Decedent's Trust).

6. Apparently, only Cravens and Barrett attended the shareholders meeting. See Minutes of S.P.T. Shareholders' Meeting, February 21, 1990.

7. "When any such living child of such deceased child or grantor [Mr. and Mrs. Beaver] shall have obtained the age of Thirty Five (35) years, he shall have the right to withdraw the entire amounts of his trust." Art. VII.C.(1). This implies that any Beaver child surviving to age thirty-five may terminate her trust.

8. Each Beaver grandchild can begin to withdraw the principal and accumulated income of his/her trust at age twenty-five, and by age thirty-five may withdraw the entire amount. Art. IV.C.(1). But the trust of a deceased child remains undivided until the youngest child of that deceased child reaches twenty-five. Unless the older grandchildren can withdraw their portion of an undivided interest, the provisions conflict.

9. See Tufele v. Mose7 A.S.R.2d 157 (1988).

10. The defendants argue that the trusts created for children and their descendants from the Decedent's Trust are effective at Mrs. Beaver's death.

Vaiti v. So'oso'o,


LOIMATA VAITI, Plaintiff

v.

SO'OSO'O TUIOLEMOTU and MAPO MAPO, Jr., Defendants

High Court of American Samoa
Trial Division

CA No. 60-90

May 6, 1991

__________

A tortfeasor takes his victims as he finds them, so the actual medical expenses incurred by a particular victim, not the amount that would have been incurred had the defendant been lucky enough to hit some other person, arc the measure of damages.

When a vehicle's owner did not insure his car as required by law and the driver was using the car with his permission, the owner is liable to compensate the plaintiff for any losses up to the $10,000 insurance amount he had a duty to provide. A.S.C.A. § 22.2003.

This liability of an uninsured vehicle's owner is secondary to that of a principal tortfeasor who was driving with the owner's permission; while a plaintiff may collect from either defendant, the vehicle's owner has a right of indemnity and subrogation against the driver. [19ASR2d72]

Before REES, Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiff, Charles V. Ala'ilima

  For Defendants, Togiola T.A. Tulafono

Plaintiff received serious injuries to her leg, as well as abrasions on other parts of her body, when she was struck by a vehicle owned by defendant Mapo and driven by defendant So'oso'o. Plaintiff testified that she got down from a bus, waited for the bus to leave, looked both ways, saw no approaching vehicles, and then walked across the street. Defendant So'oso'o testified that plaintiff darted out from behind the bus, running and looking backwards. Plaintiff was struck by defendant's vehicle and dragged under one of the tires for some distance along the roadway.

The testimony of the two parties is hopelessly at odds. Two eyewitnesses, however, who did not see the accident itself but did see the scene immediately before and after the accident, provided credible testimony that tended to corroborate most of plaintiffs story.

Contrary to the testimony of defendant So'oso'o, the preponderance of the evidence is to the effect that there was only one bus in the vicinity, the bus from which plaintiff had just disembarked. It had driven away before the accident occurred and would have provided no obstacle to defendant's view of the girl, had he been sufficiently observant. The physical evidence, as well as the eyewitness testimony, also tends to corroborate the testimony of the plaintiff that she was struck in the leg by defendant's right-front tire or a part of the vehicle immediately adjacent to the tire, just as she was about to step off the roadway after crossing it, and that she did not hurl herself directly in front of the truck as defendant testified. There were no substantial injuries other than to the leg that was dragged by the tire. As plaintiff was dragged by the vehicle, her entire body, except the leg that had been caught under the tire, was outside and to the right of the vehicle ---i.e., toward the edge of the road, which she testified she had reached or almost reached immediately prior to the collision.

Although the facts here, like those of most cases involving conflicts in testimony, are not free from doubt, the evidence preponderates in favor of plaintiffs position that she was struck by [19ASR2d73] defendant's vehicle just as she completed her crossing of the road. This means, in effect, that defendant had all the time in the world to see the girl crossing the road and to take necessary precautions, but somehow did not. We find that defendant's failure to keep a proper lookout and/or his failure to slow down and allow plaintiff to pass as soon as he saw her in the road was the primary cause of the accident.

By plaintiffs own account, however, she never saw the defendant's vehicle until after it hit her. Even if she did look both ways before crossing, this testimony strongly suggests that she must not have been keeping her eyes on the road as she crossed it. If she had been looking straight ahead or even slightly away from the approaching truck, she would have at least seen it out of the corner of her eye the moment before it hit her, perhaps in time to jump out of the way. Although neither plaintiffs duty nor her breach figured as heavily in the accident as those of defendant, we find that she was at least slightly negligent and that this negligence contributed to her injuries.

We assess the negligence of defendant So'oso'o at seventy-five percent and that of plaintiff Vaiti at twenty-five percent.

Plaintiffs injury was clearly a most painful one. She was required to undergo reconstructive surgery involving tissue transplants from other parts of her body. Her leg will never function quite as a normal leg does; she will always have to wear a brace on her knee in order to walk properly and, in any event, will have difficulty in running, walking for extended periods of time, or engaging in similar activities. We assess the damages for pain and suffering and for the partial loss of the function in plaintiff's leg at $10,000.

Plaintiff also submitted evidence of medical expenses in the amount of $1,886. Defendant points out that plaintiff is a citizen of Western Samoa and that the local hospital therefore charged her more than it would have charged an American Samoan. He suggests that he should not have to pay plaintiffs actual medical bills, but only the lesser amount that the hospital would have charged an American Samoan. This contention is apparently based on the idea that it is hardly defendant's fault that he happened to hit an alien instead of a citizen. It is well settled, however, that a tortfeasor takes his victims as he finds them. The actual medical expenses incurred by this particular victim, not the amount that would have been incurred had the defendant been lucky enough to hit some other person, are the measure of damages. [19ASR2d74]

In addition to the expenses already incurred, plaintiff will need a permanent brace for her leg. This, according to the medical witness, is in preference to a far more expensive series of further operations which might or might not make it possible for plaintiff to do without a brace. Defendant concedes that this brace will cost about $700.

Defendant Mapo, the owner of the car, admits that he did not insure his vehicle as provided by law. He had an explicit statutory duty to provide insurance not only against losses covered by his own negligence but also against those inflicted by the negligence of "any other person who uses the vehicle... with [his] express or implied permission." A.S.C.A. § 22.2003. Because defendant So'oso'o was using the vehicle with defendant Mapo's permission, defendant Mapo's breach of his duty not to allow his car on the road without the required insurance will inflict a loss on the plaintiff in the event defendant So'oso'o should be unable to pay the judgment against him. Defendant Mapo is therefore liable to compensate the plaintiff for any losses up to the $10,000 insurance amount he had a duty to provide. Foma'i v. Samana, 4 A.S.R.2d 102 (1987). This liability is secondary to that of the principal tortfeasor; plaintiff may collect from either defendant, but the vehicle owner (whose statutory duty was for the benefit of the victim of the accident, not of the principal tortfeasor) has a right of indemnity and subrogation against the principal tortfeasor for any amounts he may be required to pay on the judgment.

The total of all damages amounting to $12,586, and the accident having been assessed as seventy-five percent attributable to the negligence of defendants, judgment will enter in favor of plaintiff and against defendants, jointly and severally, in the amount of $9,439.50. Judgment will also enter against defendant So'oso'o, obliging him to indemnity defendant Mapo for any amounts the latter should be required to pay on the principal judgment.

It is so ordered.

*********

In re a Minor Child (Juv. No. 80-90),


In re A MINOR CHILD

High Court of American Samoa
Trial Division

JUV No. 80-90

May 13, 1991

__________

Petitions of healthy, young, natural parents to relinquish their parental rights and obligations in favor of elderly relatives have been consistently rejected by the High Court. A.S.C .A. §§ 45.0102, 45.0402.

A Samoan customary adoption does not require Court approval or a legal termination of the rights and obligation of the natural parents.

Before REES, Associate Justice, MATA'UTIA, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Petitioner, Robert A. Porter

This is a petition to relinquish the parental rights and obligations of the natural parents, who are in their thirties, so that the child may be [19ASR2d98] adopted by some relatives with whom she has been living. The prospective adopting parents are 63 and 69 years of age.

Absent extraordinary circumstances, such as are not present in this case, it is not in the best interests of a child to terminate a legal obligation of support on the part of two healthy, young, natural parents in order to substitute a similar obligation on the part of prospective adopting parents who will be in their seventies and eighties, respectively, before the child reaches her majority.

The Court has consistently rejected petitions such as the present one, and yet a handful of lawyers and legal practitioners ---apparently encouraged by heavily subsidized attorney fees inexplicably provided by the deficit-ridden Territorial Office on Aging ---continue to bring these cases. The apparent motive in many cases is to increase the Social Security payments of elderly people by providing them with a roster of de jure "dependents."

The prospective adopting mother in the present case says she does not want an increase in her Social Security payments and that her only motive is to show her love for the child, whom she has already adopted into her family according to the Samoan custom. In this case there is no need for a legal adoption. A Samoan customary adoption does not require Court approval or a legal termination of the rights and obligation of the natural parents.

The child can go on living with these elderly relatives for as long as her natural parents continue to approve of the arrangement. The petition for relinquishment of the legal rights and obligations of the natural parents is denied.

It is so ordered.

*********

Ghiselli Brothers, Inc. v. Ryan, Inc.,


GHISELLI BROS., Inc., Plaintiff

v.

RYAN Inc. and AMERIKA SAMOA BANK, Defendants

High Court of American Samoa
Trial Division

CA No. 103-89

June 4, 1991

__________

Under the terms of a "c.i.f." contract, the seller pays for shipping costs and also for an insurance policy that will protect the buyer against damage during shipping; the title and the risk of loss or damage to the goods shift to the buyer upon delivery of the goods to the carrier and of the bill of lading and the insurance certificate to the buyer. U.C.C .§ 2-401.

Under a "c.i.f." contract, the buyer's remedy for goods damaged in transit is to file a claim under the insurance policy purchased by the sel1er and surrendered to the buyer, not to reject the goods as "non-conforming."

When buyer's bank was to surrender title documents to the buyer only upon his payment in local currency but instead surrendered the documents by accepting payment which was [19ASR2d129] not immediately transferable to the seller's bank, in violation of a collection letter between both banks, buyer's bank thereby obligated itself to make good any difference between the effect of what it did and what it contracted to do.

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

Counsel: For Plaintiff, John L. Ward II

  For Defendant Ryan Inc., Roy J.D. Hall, Jr.

  For Defendant Amerika Samoa Bank, William H. Reardon

On Motion for Summary Judgment:

Plaintiff Ghiselli Bros., an export company doing business inCalifornia, sold a container full of meat products "c.i.f." to defendant Ryan Inc. inAmerican Samoa. The two companies had done business on similar terms before.

Upon shipping the goods to American Samoa, plaintiff Ghiselli Bros. transmitted to defendant Amerika Samoa Bank a foreign collection letter and sight draft in the amount of $44,033.38, together with the bill of lading for the shipment and a certificate of insurance made payable to Ryan Inc. The transmission was through plaintiff's bank in California, Bank of the West. According to the terms of the foreign collection letter, the Amerika Samoa Bank (hereinafter "the Bank") was to release the documents to Ryan Inc. only upon receiving full payment. The collection letter further provided that the collection was "subject to the current uniform rules for collection of commercial paper issued by the International Chamber of Commerce" and that if its terms were unacceptable to the Bank, the Bank should notify Bank of the West immediately.

The shipment arrived inAmerican Samoaon November 6, 1988. However, Ryan Inc. did not then have the money to pay for the shipment. With the acquiescence of plaintiff, Ryan Inc. arranged for the container to remain on the dock, with the refrigerated container plugged into a power supply there.

On January 19, 1989, the chief executive officer of Ryan presented the Bank a check in the amount of $50,114.05, the total amount of the sight draft and of another invoice from Ghiselli. The check was drawn on Ryan's account at the Bank. The Bank accepted the [19ASR2d130] check and surrendered the bill of lading and Insurance certificate to Ryan.

The Ryan executive then went to the offices of the shipping company, presented the bill of lading, and was given access to the container. Upon opening the container he found that its contents were spoiled. He then called the Bank and ordered that payment be stopped on his check. Although it was at least two hours after the Bank's closing time, the Bank immediately issued a stop order. The next morning Ryan returned the bill of lading and insurance certificate to the Bank. Ryan's account was never charged for the amount of the check.

The Bank kept the bill of lading and insurance certificate. It did not provide notice of dishonor to the Bank of the West or to Ghiselli. Ghiselli appears to have found out within a few days that the documents had been given to Ryan but that neither Ryan nor the Bank intended to forward any funds to Ghiselli.

Ghiselli and Ryan have filed motions for summary judgment. In a memorandum answering Ghiselli's motion, the Bank also requests summary judgment in its favor. The facts stated above are undisputed. The only important factual dispute is about how the goods were damaged. Plaintiff Ghiselli says they were damaged on the dock, possibly because Ryan ordered the port authorities to turn the electricity on and off on alternate days. Ryan denies giving any such order and suggests that the goods may have been damaged while still on the ship.

Because the goods were shipped c.i.f., this factual dispute is not material to the case before us. Under the terms of a c.i.f. contract, the seller pays for shipping costs and also for an insurance policy that will protect the buyer against damage during shipping. The title and the risk of loss or damage to the goods shift to the buyer upon delivery of the goods to the carrier and of the bill of lading and the insurance certificate to the buyer. See U.C.C. § 2-401; R. Nordstrom & N. Lattin, Sales & Secured Transactions 265 (1968). If, as Ryan contends, the goods were damaged in transit because of a faulty refrigerated container, Ryan ' s remedy was to file a claim under the insurance policy purchased by the seller and surrendered to Ryan by the Bank upon presentation of Ryan's check. Contrary to Ryan's assertions, damage in transit would not give the buyer a right to reject the goods as "non-conforming." Indeed, the substitution of the insurance policy for a buyer's right to reject goods damaged in transit (or to refuse to pay for goods lost in transit) is the whole point of a c.i.f. contract. [19ASR2d131]

Under a c.i.f. contract the seller receives a purchase price payable as the parties agree and for that consideration is bound to arrange for the carriage of the goods to their agreed destination, for insurance upon them for the benefit of the buyer, and either to pay the cost of the carriage and insurance or allow it on the purchase price. When this has been done the seller has fully performed and is entitled to be paid upon delivery of the documents to the buyer regardless of whether the goods themselves have arrived at their destination or ever will.

Warner Bros. & Co., Ltd. v. Israel, 101 F.2d 59, 60 (2d Cir. 1939).

Because plaintiff Ghiselli Bros. prevails as a matter of law even on defendant Ryan's version of the facts, plaintiff is entitled to summary judgment against Ryan.

The dispute between Ghiselli Bros. and the Bank is slightly more complicated. The Bank argues that it became obligated to transmit the funds to Ghiselli only after it had been "paid," and that the Bank was never "paid" because Ryan stopped payment on its check before the Bank had executed some of the steps necessary to render the check "paid."

The Court confesses to some skepticism about the Bank's assertion that checks are not "paid" until late in the evening on the day they are presented and that in accordance with "modern banking practices" the drawer has an absolute right to stop payment up to that time. If this is true even when the check has been negotiated for documents evidencing title, it would logically seem also to be true when the check has been cashed. If the bank had given the Ryan executive $44,000 of its own money in exchange for the check, we find it difficult to imagine that it would have obeyed the executive's after-hours instructions to stop payment, even if he had also promised to come by the next morning and pay back the money. The answer to such instructions would presumably be that the check had already been paid. If the Bank can deem a check paid the instant it surrenders its money, it is difficult to understand why Ghiselli's documents could not have been given the same consideration.

For the purpose of Ghiselli's motion for summary .judgment against the Bank, however, we must accept as true the Bank's statements about what is entailed by modern banking practices. These statements [19ASR2d132] are to the effect that the Bank, under its contract with its account-holder Ryan Inc., was obliged to stop payment on the check, even though it had been negotiated for the title documents. The Bank concludes that it never became liable to forward any funds to Ghiselli, because Ryan's stop- payment order had the effect of causing the sight draft never to have been paid.

Even if true, this is beside the point. Ghiselli does not sue the Bank on the Bank's contract with its account-holder Ryan. Rather, it sues on a separate and distinct contract between Ghiselli and the Bank. The terms of this contract were clear: the Bank was to surrender the title documents only upon payment. According to the International Chamber of Commerce rules incorporated by reference in the contract, "the collecting bank must... only release the documents to the drawee against payment in local currency which is immediately available for disposal in the manner specified in the collection order." Upon receiving payment, the Bank was to remit $44,033.38 to Bank of the West for transmission to Ghiselli. Although these terms were set forth in documents provided by Ghiselli and not signed by any Bank officer, they were the standard terms of a standard banking transaction, and the Bank was free to reject them by so advising Bank of the West.

Instead, the Bank surrendered the documents to Ryan. Even if the Bank cannot be deemed previously to have accepted the proffered contract to become a collection agent tor Ghiselli, this act was certainly an acceptance. This same act, assuming the correctness of the Bank's contention about its obligations to Ryan, was also a breach of the contract with Ghiselli. By accepting something other than local currency --- something which the Bank now says was not as good as currency, in that it was not immediately available to be transmitted to Bank of the West as required by the sight draft and collection letter ---in exchange tor the title documents, the Bank varied the terms of its performance under the contract. It thereby obligated itself to make good any difference between the effect of what it did and the effect of what it had contracted to do. By doing an act which its contract with Ghiselli authorized it to do only when the sight draft had been "paid," the Bank undertook as between itself and Ghiselli that the draft had in tact been paid.

Ghiselli is therefore entitled to summary judgment against the Bank.

We express no opinion concerning the rights and liabilities between Ryan and the Bank. Each claims a right of indemnity against [19ASR2d133] the other. Ryan has not advanced a plausible basis for the imposition of such indemnity against the Bank, and the Bank does not appear to have moved for summary judgment against Ryan.

Although plaintiff Ghiselli requests an award of attorney fees, it advances no contractual or legal basis for such an award.

Accordingly, judgment will enter in favor of plaintiff Ghiselli Bros., Inc., and against defendants Ryan Inc. and AmerikaSamoa Bank jointly and severally, in the amount of $44,033.38.

It is so ordered.

*********

Ava v. Logoai,


AVA VILI for himself and the
AVA FAMILY of Pava'ia'i, Plaintiff

v.

FOMA'I P. LOGOAI, FA'ALILIU LOGOAI
and her children, Defendants

AVA V. AVA, Plaintiff

v.

MIKE McDONALD, Defendant

High Court of American Samoa
Land and Titles Division

LT No. 32-90
LT No. 36-90

May 8, 1991

__________

The only ways communal land can become individual land is by adverse possession for thirty years or by compliance with the statutory procedures for alienation of communal land, including the approval of the Land Commission and the Governor. A.S.C.A. §§ 37.0120, 37.0201 et seq.

Compliance with the land-registration statute crates a strong presumption that the land belongs to the person or persons named in the certificate of registration; this presumption is conclusive unless rebutted by either (a) compelling proof that the certificate of registration was obtained by fraud or (b) fatal irregularities affirmatively appearing on the face of the registration documents. A.S.C.A. §§ 37.0101 et seq.

Though evidentiary rather than constitutive, the presumption resulting from a land registration is almost always conclusive; as such, it cannot be rebutted merely by evidence that the land has traditionally been reputed to belong to someone other than the registrant or even by the testimony of on or several witnesses who say they never saw the required posting.

If issued by a court having jurisdiction over the parties and the subject matter, an order requiring the Registrar to issue a land-registration certificate is binding on the parties and their successors in interest and can be vacated only in the most extraordinary and compelling of circumstances. T.C.R.C.P. 60(b).

A court order requiring the Registrar to issue a land-registration certificate did not bar a plaintiff from litigating the issue of whether a registration of somebody else's property, [19ASR2d76] affirmatively identified as such by the applicant in his registration documents, is nevertheless a valid registration, when neither this issue nor the plaintiff was previously before the court.

Before REES, Associate Justice, AFUOLA, Associate Judge.

Counsel: For Plaintiff Ava V. Ava, Tau'ese P.F. Sunia

  For Defendants Forna'i P. Logoai and Fa'aliliu Logoai, Roger K. Hazell

  For Defendant Mike McDonald, William H. Reardon

On Motion for Summary Judgment:

In one of these two consolidated cases, LT No. 32-90, plaintiff Ava Vili asks for declaratory judgment that a registration or purported registration of land called "Lalofatu" as individually owned land of the Fa'aliliu Logoai and her children is null and void. The stated grounds for the requested relief are that the land in question is communal land of the Ava family and that the Logoai defendants are members of the Ava family who engaged in "manipulation of the legal process to allow the registration of this land." The specific "manipulation" alleged by the complaint is that the defendants are said to have engaged "the aid by a relative in the Registrar's Office to secure this registration without the required publication."

The Logoai defendants now move for summary judgment. The motion appears to be based on the contention that a Certificate of Registration is conclusive no matter how it was obtained. An affidavit in support of the motion is signed by defendants' counsel, rather than by a witness to the events that gave rise to the litigation, and alleges simply that counsel has checked the records and there is indeed a Certificate of Registration. Counsel has also submitted the Registrar's file concerning the registration in question.

It appears affirmatively from the documents in the Registrar's file, however, that the land "Lalofatu" surveyed and registered by the defendants is indeed communal land of the Ava family and not individual land of the defendants. The specific part of the public record from which this fact appears is a "Petition to Permit Surveying of Land" submitted to the Court in 1977 by then-counsel for the present defendants, Fa'aliliu Logoai and her children, and signed by Fa'aliliu herself. [19ASR2d77]

If the land in question was communal land of the Ava family in 1977, there are only two ways it could become individual land of the Logoai defendants: by adverse possession for thirty years, as provided by A.S.C.A. § 37.0120, or by compliance with the statutory procedures for alienation of communal land, including the approval of the Land Commission and the Governor, as provided by A.S.C.A. §§ 37.0201 et seq. Defendants do not claim that either of these things has happened.

It is true, as counsel for defendants observes, that compliance with the land-registration statute (A.S.C.A. §§ 37.0101 et seq.) creates a strong presumption that the land belongs to the person or persons named in the certificate of registration. Indeed, this presumption has been held to be conclusive unless rebutted either (a) by compelling proof that the certificate of registration was obtained by fraud or (b) by fatal irregularities affirmatively appearing on the face of the registration documents. See Ifopo v. Siatu'u, 12 A.S.R.2d 24 (1989); Faleafine v. Suapilimai, 7 A.S.R.2d 108 (1988).

In this case the registration documents convincingly and affirmatively disprove the very thing they would otherwise cause us to presume: that the defendants were the true owners of Lalofatu at the time they offered it for registration. The case before us is almost identical to Faleafine, supra, in which the registrant procured her survey by swearing that the land was her individual land but decided later in the registration process that the land was actually the communal property of a family whose matai title she had acquired in the interim. Because this inconsistency appeared on the face of the registration documents themselves, and because it caused the documents viewed as a whole to be consistent neither with the requirements for registration of individual land nor with the somewhat different requirements for registration of communal land, the registration was held null and void. See also Solomona v. Governor of American Samoa, 17 A.S.R.2d 186, 191-92 (1990), in which the Appellate Division held that formal compliance with the registration procedures did not vest the registrant with title to land which affirmatively appeared to be tidal or submerged land insusceptible of private ownership.

Counsel for defendants seems to misapprehend Ifopo ---as, indeed, the unsuccessful appellants in that case misunderstood the trial court's opinion ---as standing for the proposition that one who successfully negotiates the hurdles in the registration procedure thereby becomes the owner of the registered property even if he did not really own it before. [19ASR2d78]

On the contrary, the legal effect of a registration is evidentiary rather than constitutive. It creates a presumption that the registrant owned the land before he registered it. Because the procedure gives .anyone who contests the registrant's claim a fair chance to state and prove his objections, the resulting presumption is almost always conclusive. It cannot be rebutted, for instance, merely by evidence that the land has traditionally been reputed to belong to someone other than the registrant or even by the testimony of one or several witnesses who say they never saw the required posting. See Ifopo, 12 A.S.R.2d at 28. In the present case, however, the presumption of prior evidence is rebutted by the best evidence in the world: the admission of the registrants themselves, affirmatively appearing on the face of the very documents which would otherwise constitute their only evidence of title.

To extend the rule of Ifopo to insulate such a registration would transform the rule from a strong evidentiary presumption into a process for vesting and divesting title. Such an extension would implicitly overrule such cases as Faleafille and Solomona and would also create a conflict between the registration statute and the statutes governing alienation of land.

This case differs from Faleafille and Solomona in one important respect: in those cases the invalid certificates of registration were issued by the Registrar's office on its own initiative, whereas in the present case the defendants procured a Court order requiring the Registrar to issue the certificate. Such an order, if issued by a court having .jurisdiction over the parties and the subject matter, is binding on the parties and their successors in interest and can be vacated only in the most extraordinary and compelling of circumstances. See generally T.C.R.C.P. 60(b).

The order at issue in the present case, however, did not resolve (or even purport to resolve) the question with which we are now presented. The order was issued in 1984 in a case styled "In the Matter of the Application by: Fa'aliliu P.S. Logoai and Children, Applicants," LT No. 19-77. The case was then seven years old. It had been filed in 1977 in reaction to the efforts of Ava Vili, the present plaintiff, to prevent defendants' survey. Curiously, however, it did not name Ava or anyone else as a defendant; rather, it was brought as an ex parte proceeding. This was highly irregular insofar as the petition sought relief against a specific person; the effect of the irregularity was to prevent the Court from acquiring jurisdiction over Ava or anyone else. [19ASR2d79]

Nor was Ava or anyone else served with the 1984 application that led to the order to the Registrar. Indeed, not even the Registrar was served until after the order had been issued. Instead, the application was made ex parte by Foma'i Paepule, one of the present defendants, who alleged that the Registrar had refused to issue a certificate only because of a minor technicality, the absence of a date on the survey map. The application was given the caption of LT No. 19-77, although that case had been closed for over seven years and although the Registrar had never been a party to the case. Mr. Paepule supplied an affidavit including the missing date, and the Court signed the requested order . While this order might conceivably be conclusive of any controversy between the present defendants and the Registrar having to do with the accuracy of the date in question or with the absence of the date in the registration documents, it did not purport to address the only question at issue between the present parties: whether a registration of somebody else's property, affirmatively identified as such by the applicant in his registration documents, is nevertheless a valid registration. Because neither this issue nor Ava was before the Court in LT No. 19-77, the order in that case does not bar Ava from relitigating the issue. See Puailoa v. Estate of Lagafuaina, 11 A.S.R.2d 54 (1989), aff'd, 19 A.S.R.2d 40 (1991).

Defendants' motion for summary judgment is denied. Indeed, summary judgment for plaintiff might be appropriate, but no motion for such judgment has been filed.

It is so ordered.

*********

Atualevau; Magalei v.


MAGALEI LOGOVII, TUIA'ANA MOI,
and the MAGALEI FAMILY, Plaintiffs

v.

ASIFOA ATUALEVAO, Defendants

ELIAPO OLOAVA TAUVELA, FUESINA D. PURCELL,
SEGAULA R. ROBERTS, LUAUMA V. VAL MOANANU, and
MO'I TUIA'ANA, Objector/Plaintiffs

v.

ASIFOA AND CHILDREN, Claimants/Defendants

ASIFOA ATUALEVAO, Objector/Plaintiff

v.

OLOAVA SENE TAUVELA, Claimant/Defendant

R.S. TAGO SEVA'AETASI, Intervenor

High Court of American Samoa
Land and Titles Division

LT No. 23-88
LT No. 21-88
LT No. 34-85

May 13, 1991

__________

The Governor and the Land Commission must approve conveyances of communal land. A.S.C.A. §§ 37.0203-37.0204.

The mere filing of a document with the Registrar, without compliance with either the procedures for the registration of land or those for the conveyance of communal land, conveys no title. A.S.C.A. §§37.0101 et seq., §§37.020l et seq.

Although a family had been required by the military to leave the area during World War II, this did not constitute an abandonment of the sort that might entitle strangers to claim [19ASR2d87] the rights of first occupancy; rather, the latter could have acquired the land only by conveyance from the original owner or by adverse possession.

Acquiring land by adverse possession requires possession which is exclusive, continuous, open, notorious, and hostile to anyone else's claim of ownership for the statutory period. A.S.C.A. § 37.0120.

A survey which has never been posted in accordance with statutory requirements cannot be registered. A.S.C.A. §§ 37.0101 et seq.

Even if procedural defects prevent a family from registering its land survey, a court may nonetheless adjudicate the rights of parties who have received notice of the family's claim, filed their competing claims, and fully litigated their claims.

A certificate of registration issued after compliance with the registration statutes is evidence of a title good against the world and therefore can only be issued after strict compliance with the statutory procedures.

Before REES, Associate Justice, AFUOLA, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiffs Magalei Logovii, Tuia'ana Moi, and the Magalei Family, Tau'ese P.F. Sunia

  For Defendant Asifoa Atualevao, Claimants/Defendants Asifoa and Children, and Objector/Plaintiff Asifoa Atualevao, Charles V. Ala'ilima

  For Claimant/Defendant Oloava Sene Tauvela, Togiola T.A. Tulafono R.S. Tago Seva'aetasi, Pro Se

These three consolidated cases involve part of the land called Tafeta in the Village of Faleniu, on the mountainside along the road to A'oloau and A'asu Fou.

In 1985 Oloava Sene Tauvela offered two parcels of this land for registration as the individually owned property of herself, her siblings, and their late parents ("Tauvela & Teuila and children"). Asifoa Atualevao objected, claiming that the land in question was communal land of the Atualevao family.

In 1988, while the Tauvela case was still pending, Magalei and Tuia'ana of Faleniu sued to enjoin the burial of a family member of Asifoa Atualevao on adjacent land they claimed to belong to the Magalei family. [19ASR2d88]

In 1989 Asifoa offered a large tract of land, which overlapped the parcels claimed by Tauvela and which also apparently included the land involved in the burial dispute, as his own individually owned land (i.e., not as communal land of the Atualevao family), which he called "Malologa." Various people filed objections, including the Tauvela claimants and representatives of the Magalei/Tuia'ana family. The three cases were consolidated for trial.

We take judicial notice of the following prior cases concerning Tafeta, most of which involved some or all of the present parties: Luolemono v. Tago, 3 A.S.R. 43 (1953); Magolei v. Tago, LT No. 23- 1955 (Dec. 30, 1955); Goloio v. Luo, 3 A.S.R. 245 (1956); Filo v. Lualemono, LT No. 43-1961 (Sept. 7, 1961); Lualemana v. Filo, LT No. 55-1961 (Dec. 11, 1961), aff'd 3 A.S.R. 642 (1961); Magalei v. Lualemano, 4 A.S.R. 242, aff'd 4 A.S.R. 849 (1962); and Atualevao v. Magalei, LT No. 1524-75 (Jan. 23, 1978).

I. The Magalei/Tuia'ana Claim

From the records of the above-cited cases and from the testimony taken in the present case, it is clear that the land now in dispute is part of the large area called Tafeta that was cleared by the people of Faleniu and divided among the chiefs of that village in the early part of the present century, as recounted in Magalei v. Lualemana, supra. It further appears that the three parcels offered for registration by Asifoa and by the Tauvela claimants are within the part of Tafeta that was given to the Magalei/Tuia'ana family when the land was divided in or around 1922. (1) [19ASR2d89]

Although it appears that Tuia'ana is the matai who has been looking after this part of Tafeta on behalf of the extended Magalei/Tuia'ana family, we are not asked to adjudicate the rights of the various matai within that family as among themselves, and we express no opinion on this question.

II. The Moea'i Claim

The Moea'i family, also of Faleniu, owns an adjacent part of Tafeta. The evidence is to the effect that the Moea'i part of Tafeta includes a 9.08-acre tract downhill from the land now in dispute, just on the other side of the houses belonging to intervenor R.S. Tago Seva'aetasi. This Moea'i tract appears to have been the location of the plantations of Filo, a man connected to the Moea'i family who was the successful litigant in LT Nos. 43-1961 and 55-1961, supra. Moea'i testified that the Magalei/Tuia'ana family own the part of Tafeta in the uphill (mauga or northwesterly) direction from his holdings. The three tracts offered for registration in the cases now before us are entirely within the Magalei/Tuia'ana portion and do not encroach the Moea'i parcel.

III. The R.S. Tago Seva'aetasi Claim

Intervenor R.S. Tago Seva'aetasi came to this area just after World War II, in connection with his work for the government commission that was assessing war claims damages. He requested a place to live from the chiefs of Faleniu, and the chiefs designated a place for him to have a house and plantations. Later, however, Tago fell out with the chiefs of Faleniu, claiming that the land was part of A'oloau and that he had acquired the land he was living on through a family [19ASR2d90] connection to A'oloau. See Magalei v. Tago, supra. In 1955 the Court held that Tago had entered onto the land by permission of the chiefs of Faleniu and that he had the right to remain on part of the land for seven years, after which the chiefs of Faleniu would have the right to evict him.Id.

In 1957, however, Tago was able to procure from two chiefs of Faleniu a purported deed to a large part of Tafeta. The deed purports to convey not only the land then occupied by Tago but also the areas occupied (then as now) by Asifoa and by the Tauvela claimants. A survey prepared by Tago, which he says reflects the land conveyed to him by the deed, overlaps the Asifoa parcel and one of the Tauvela parcels and appears to include houses belonging to Asifoa and Tauvela. Tago's testimony about the extent of his holdings, however, is to the effect that he does not claim the Asifoa and Tauvela houses.

In any event, there are numerous flaws in the deed. It conveys no particular land by reference to metes and bounds or other cognizable boundaries; it was not signed by Magalei or Tuia'ana, whose family owned a large part of the area it purported to convey; it does not appear to have been approved by the Governor or the Land Commission, as required by statute for conveyances of communal land. A.S.C.A. §§ 37.0203-.0204. Nor, although the deed and an accompanying survey were tiled for registration in the office of the Territorial Registrar, have they ever been offered for registration as the property of Tago in accordance with the procedures set forth in A.S.C.A. §§ 37.0l01 et seq. The mere tiling of a document with the Registrar, without compliance either with the procedures set forth in A.S.C.A. §§ 37.0101 et seq. for the registration of land or with those set forth in A.S.C.A. §§ 37.0201 et seq. for the conveyance of communal land, conveys no title.

The purported deed may have given Tago a license to continue living in the area where his houses are. This would depend on the circumstances, including whether the matai whose family owned the area where Tago's houses are gave his consent to the deed or to the underlying agreement. (The landowner may be Moea'i, who did sign the deed, or it may be Magalei or Tuia'ana, who did not.) Tago has no legal interest, however, in the tracts now offered for registration by Tauvela or by Asifoa.

IV. The Tau'ela Claim [19ASR2d91]

The Tauvela claimants came to this area shortly after the end of the Second World War. Fred Lobendahn, a man who married into the family, had something to do with building the government road up the mountain; the Tauvela family is also connected to A'oloau, the village that had recently moved to the top of the mountain from its old location on the north shore. It appears that during the late 1940s and early 1950s, a number of ambitious and/or adventurous A'oloau people were spilling over onto the southern slope of the mountain toward the villages of Pava'ia'i and Faleniu.

This is by no means the first case in which the postwar migration from A'oloau has given rise to disputes between people of A'oloau and residents of other villages asserting traditional claims to the land along the mountainside. In the present case, however, the A'oloau people settled on land which was subject not just to vague general assertions of political dominion by neighboring villages, but to specific claims of ownership based on the pre-war settlement and division of Tafeta by the villagers of Faleniu. See Magalei v. Lualemana, supra. Although the Faleniu people had been required to leave during the War (1942-46) when the Marines occupied the area, this did not constitute an abandonment of the sort that might entitle strangers (who appear to have arrived virtually on the heels of the departing Marines) to claim the rights of first occupancy. Rather, the Tauvela people could have acquired the land only by conveyance from the original owner (the Magalei/Tuia'ana family) or by adverse possession.

As it happens, the Tauvela claim is buttressed both by a sort of conveyance from Tuia'ana and by occupation sufficient to satisfy the adverse possession statute. Shortly after the Tauvelas arrived they were approached by Tuia'ana, who told them they were on his land. They negotiated with Tuia'ana and eventually it was discovered that they were related to him. He then told them they could go on living forever on the land they were occupying. Since 1950 or so he has never disturbed their possession and has supported them in land disputes with other claimants, including Asifoa.

Tuia'ana testified that he regarded his settlement with the Tauvelas not as a license but as an outright conveyance; that although the land remains in some sense Tuia'ana\Magalei land, as far as he is concerned the Tauvelas can register it. This, however, is not the way the land laws work. Because the conveyance from Tuia'ana was not approved by the Governor or the Land Commission, it did not operate to pass title to Tauvela or his heirs. See A.S.C.A. §§ 37.0201 et seq. [19ASR2d92]

The Tauvela people, however, occupied the parcels they now claim from some time in the late 1940s until about 1973, when a taro patch that had long been maintained by the late Tauvela on the smaller of the two parcels was taken over by Asifoa. This period was longer than the twenty years required for adverse possession by the statute then in force. The Tauvela occupancy was exclusive, continuous, open, and notorious, and it was hostile to a claim of ownership by anyone else --- including the claim that might have been asserted by Tuia'ana or Magalei but which Tuia'ana had renounced.

It is important to notice that the Tauvelas were not occupying the land as licensees of Tuia'ana. Rather, Tuia'ana says he acknowledged the Tauvelas as outright owners of the land and then left them alone for twenty years. Although ineffective as an outright conveyance, this acknowledgment and subsequent non-interference had the effect of allowing the Tauvelas to acquire the land by adverse possession.

We are satisfied that a recent resurvey (Drawing No.110-15-90) by the Tauvela claimants of their parcel entitled "Fanuaomavaega No.2" (the land in and around the former taro patch, originally designated parcel No.1) is an accurate survey of this portion of their land. However, this survey cannot be registered because it has never been posted in accordance with the requirements of A.S.C.A. §§ 37.0101 et seq. (Nor is it clear whether the pulenu'u of the Village of Faleniu was present at the survey and gave the required notice within the village.) The original survey of this parcel, the one that was in fact offered for registration in 1984, does not accurately portray either the size, shape, or location of this part of the Tauvela land. Accordingly, the offer of registration is denied.

If, however, the Tauvela claimants wish to offer the new survey for registration ---after retracing it, if necessary, in order to comply with the statutory requirement of notice in the village of Faleniu ---all parties to the present litigation will be estopped from offering any objection. The present parties' claims to the subject land have already been litigated, and as among the present parties, this parcel has been held to belong to the Tauvela claimants.

The other Tauvela survey offered for registration in 1984 does appear to accurately reflect the size and shape of a tract occupied by the Tauvelas since the late 1940s and containing at least one Tauvela house. A surveyor's error ---apparently in calculating or transcribing one of the coordinates of the starting point of the survey, and having the effect of [19ASR2d93] placing the survey about 200 feet west of where all parties believe the Tauvela-occupied area to be ---might not be fatal if it were proved that the field survey itself had been located in the proper place and conducted in accordance with all statutory requirements. The 1984 survey, however, was announced in A'olau rather than Faleniu. The whole of Tafeta has long been held to belong to Faleniu. Although this does not prevent people of A'olau from acquiring land in Tafeta by conveyance or adverse possession, they cannot register such land without giving the required notices in the village wherein the land is located.

Again, however, the defects in the registration do not prevent us from adjudicating the rights of the present parties, who have in fact received notice of the Tauvela claim, filed their competing claims, and fully litigated their claims. In the event the Tauvela claimants should re-offer this parcel for registration (presumably after correcting the surveyor's error and complying with all statutory requirements), all parties to the present litigation will be estopped from offering objections.

Another minor adjustment, on the western boundary, may be necessary before the larger Tauvela tract can be re-offered for registration. This matter is discussed in connection with the Asifoa/Atualevao claim.

V. The Asifoa/Atualevao Claim

Asifoa Atualevao also came down from A'oloau during the late 1940s or perhaps during the very early 1950s. His occupation of the area around where his houses now are, although interrupted by long absences, was supplemented by the presence of other Atualevao family members.

In 1975 Asifoa and his wife attempted to register a tract of land as their individually owned property. This tract was apparently intended to include the area immediately around the Asifoa houses, as well as a somewhat larger tract of land to the northeast, which had long been occupied by the Tauvela people. Magalei, Tuia'ana, and Oloava Tauvela objected. The Court rejected th Asifoa claim for several reasons: serious technical flaws in the survey, the "considerable merit" of the competing claim by the Tauvela people, and what the Court regarded as inconsistencies in the Asifoas' theory about how the land had become their property. Atualevao v. Magalei, supra. [19ASR2d94]

Some of the parties to the present case contend that the present Asifoa/Atualevao claim must be denied because it has already been litigated and rejected. In obvious anticipation of this argument, Asifoa has amended his pleadings to claim the land not as his individual property but as that of the Atualevao family. His son Atualevao Sosene Asifoa, the present holder of the Atualevao matai title, has joined in this new claim. Counsel for Asifoa and Atualevao also points out that most of the land unsuccessfully claimed by Mr. & Mrs. Asitoa in 1975 is outside the boundaries of their present claim.

Although Asifoa's change of heart with respect to the true ownership of this land seems at least partly motivated by strategy rather than conscience, it does make his claim far easier to reconcile with the true facts of the case. For reasons we have already stated at length, we reject Asifoa's claim that he was the original occupant of this land. If he or the Atualevao family has acquired ownership, it must be by adverse possession from the Tuia'ana/Magalei people who had owned it at least since 1922. Asifoa himself has left the land on several different occasions, and each of these absences lasted for several years. He has therefore not been on the land continuously for long enough to acquire it by adverse possession. Other members of the Atualevao family, however, including the then-holder of the Atualevao title, were on the land while Asifoa was there and also while he was away. Indeed, it seems clear that Atualevao family members have been present in the area of the Asifoa houses continuously since 1952 at the latest. Although Asifoa himself may have been intending all along to register the land some day in his own name rather than in that of his family, there is no evidence that this intention became public at any time before 1975. The general pattern of occupation seems tar more consistent with communal than individual ownership.

The rejection of Asifoa's claim in 1978 was motivated at least partly by the Court's skepticism about the individual-ownership aspect of the claim. The Court also clearly regarded the Tauvela claim over the area including the Tauvela houses as superior to that of Asifoa. Neither of these factors is present in the case now before us, since Asifoa has abandoned not only his claim to individual ownership but also any claim at all to the area around th Tauvela houses. The Atualevao family is therefore not collaterally estopped by the rejection of the Asifoa claim in 1978.

On the merits, we find that the Atualevao family's occupation of the area in the immediate vicinity of the Asifoa houses has been [19ASR2d95] continuous, exclusive, open, notorious, and hostile since 1952 at the latest. They therefore acquired the area by adverse possession from the Tuia'ana/Magalei family no later than 1972. Although Tuia'ana had confronted Asifoa during the early 1950s, just as he had confronted Tauvela, in this case there was no settlement. Tuia'ana went on regarding the land occupied by the Asifoa\Atualevao people as rightfully belonging to the Tuia'ana\Magalei" family, but did not assert this position in Court until 1975. By then, however, the Atualevao people had been on the land long enough to perfect their title by adverse possession.

The Asifoa/Atualevao survey is quite a bit larger than the area of their proven adverse possession. The southwestern portion of their survey overlaps the western most Tauvela survey. This was the location of Tauvela's taro patch. We find the Tauvela evidence, to the effect that Tauvela cultivated this land on his own account, more convincing than Asifoa's testimony that Tauvela's long occupation was always as Asifoa's licensee. The Tauvela claimants therefore prevail with respect to this area. With respect to the steep slopes in the northern and northwestern portion of the Asifoa/Atualevao survey, there is no convincing evidence of any Asifoa or Atualevao occupation until quite recently. The Magalei/Tuia'ana family, the original owner of the land, therefore prevails in these areas.

We hold that the area of the Atualevao family's proven adverse possession is bounded on the west by the Tauvela tract depicted in Drawing No.110-15-90; on the south and east by the southern and eastern boundaries of the Asifoa survey; and on the north by the 825-foot contour line. This contour line appears to define as nearly as possible the beginning of the steep slope; it can be seen clearly on Drawing No. 110-15-90, and the depiction in that drawing corresponds to an identical line in the inset portion of the Asifoa survey, Drawing No. 9-15-89.

The Asifoa survey also has a slight overlap on the east with the larger of the two Tauvela surveys. Both parties testified that there is no serious disagreement on the boundary in this area, that their boundary is a line of trees and that the only question is whether the trees themselves are on the Atualevao side or the Tauvela side of the boundary. We conclude that the trees should be the exact boundary rather than being slightly on one side or the other. Each party may have to adjust its survey accordingly before making any new offer of registration.

The Atualevao family is not entitled to immediate registration of any part of the Asifoa survey, because the only notice that was ever [19ASR2d96] given of such registration was given in A'oloau rather than Faleniu and notified prospective objectors of a claim by Asifoa rather than by the Atualevao family. A certificate of registration issued after compliance with the registration statutes is evidence of a title good against the world and therefore can only be issued after strict compliance with the statutory procedures. See Vaimaona v. Tuitai, 18 A.S.R.2d 88 (1991); Faleafine v. Suapilimai, 7 A.S.R.2d 108 (1988). That the Atualevao family has not done what it has to do to establish a title good against the world, however, does not prevent the Court from pronouncing judgment with respect to the rights of parties who have had notice of the Atualevao claim and have fully litigated their competing claims. See Vaimaona, supra. If, therefore, the Atualevao family should offer for registration that portion of the Asifoa survey which has been held in this opinion to belong to them, the other parties to these consolidated cases will be estopped to object.

VI. Conclusion and Order

Judgment shall issue as follows:

1) Denying the offers of registration by Oloava Tauvela in LT No. 34-85 and by Asifoa Atualevao in LT No. 21-89.

2) Declaring that the 3.0631-acre tract depicted in Drawing No. 110-15-90 is the property of the heirs of Tauvela and his wife Teuila.

3) Declaring that the 7.70-acre tract depicted in Drawing No. 11-11-84, with the stated coordinates corrected so that the western boundary should correspond to a line of trees on the eastern boundary of the Asifoa survey, is the property of the heirs of Tauvela and of his wife Teuila.

4) Declaring that the tract included within the following boundaries is the property of the Atualevao family: Beginning at a point defined by the intersection of the eastern boundary of the Tauvela tract entitled Fanuaomavaega No.2, as depicted in Drawing No.110-15-90, and the 825-foot contour line, also depicted in that drawing; thence southeasterly along the eastern boundary of Fanuaomavaega No.2 to the intersection with the southernmost boundary of the Asifoa survey, Drawing No. 9-15-89; thence easterly and northerly along the various courses of the southern and eastern boundaries of the Asifoa survey; thence northerly along a line of trees, which is along or near the eastern boundary of the Asifoa survey and which is also along or near the [19ASR2d97] western boundary of the Tauvela tract depicted in Drawing No. 11-11-84, to the intersection with the 825-foot contour line; thence westerly along the 825-foot contour line to the point of beginning.

4) Declaring that the remaining land within the Asifoa survey is the property of the Magalei/Tuia'ana family of Faleniu.

5) Enjoining all parties to withdraw, within the next thirty days, from any land now occupied by them and held to belong to other parties, to remove their crops and any other belongings they may have on such land, and not to go on such land thereafter except by permission of the lawful owner.

It is so ordered.

*********

1. Counsel for Asifoa contended at trial that the land now in dispute is not within the land called Tafeta, which the Court has repeatedly held to have been cleared and settled by the Faleniu people in 1922, but is instead somewhat uphill from this land. The evidence for this proposition is Asifoa's own testimony that there were large trees on the land when he got there in the late 1940s.


Aside from the unlikelihood that the Faleniu people would have cut down every single, large tree when they cleared the land in 1922, there is abundant evidence that all the land now in dispute is within the land Tafeta, whose ownership has been adjudicated over and over again in the High Court. Moea'i, who owns the land just downhill, testified that his portion of Tafeta is not the part that is furthest uphill and that Tuia'ana owns the portion uphill from him. The evidence of Tuia'ana, Tago, and Tauvela also makes it clear that Tuia'ana has been exercising some sort of pule over this area at least since the 1940s.

 

Moreover, all parties, including Asifoa, agree that the house of Lua Mamoe which was involved in Galoia v. Lua, supra ---and which the Court held to be within Tafeta and subject to the pule of Tuia'ana --- was located only a few feet from where the Asifoa houses are now. The evidence is to the effect that Lua's house was just outside the land now in dispute, in an uphill direction toward A'olau. This places the presently disputed land squarely within Tafeta, not outside it and not on its fringes.

American Samoa Gov’t ; Randall v.


EMMA RANDALL, Plaintiff

v.

AMERICAN SAMOA GOVERNMENT, Dr. A. TROUP,
and DOES I through X, Defendants

High Court of American Samoa
Trial Division

CA No. 37-85

June 3, 1991

__________

[19ASR2d127]

When the defense that the complaint was not filed within the Government Tort Liability Act's statute of limitations was not available at the time ASG tiled its answer, failure to plead this defense did not amount to a waiver of the statute of limitations with respect to any future amendment of the complaint. A.S.C.A. § 43.1204.

Even though the failure to plead in its answer the statute of limitations applicable to the Government Tort Liability Act could not be characterized as a waiver with respect to any future amendment of the complaint, ASG was estopped from raising the statute of limitations with respect to an amended complaint when the same combination of defenses raised in its motion to dismiss could have been raised in its answer to the original complaint five years earlier, but the government instead vigorously litigated on the merits for several years and also sought affirmative relief from plaintiff by way of counterclaims and cross-claims. A.S.C.A. § 43.1204.

Before REES, Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiff, John L. Ward II

  For DefendantAmerican Samoa Government, Richard D. Lerner, Assistant Attorney General

On Motion for Reconsideration:

We denied defendant's motion to dismiss. Defendant now moves for reconsideration. This motion is also denied.

We will, however, modify the findings of fact and conclusions of law contained in the opinion denying the motion to dismiss, as follows:

The complaint was filed just before the expiration of the two-year statute of limitations but was not served until some months later. At the time defendant filed its answer, the defense that the complaint was not filed within the statute of limitations was not available. Failure to plead this defense did not, therefore, amount to a waiver of the statute of limitations with respect to any future amendment of the complaint.

Defendant could, however, have raised in 1985 exactly the combination of defenses it eventually did raise in 1990: (1) that the complaint had been filed prior to exhaustion of plaintiffs administrative remedy; (2) that the Court therefore lacked subject matter .jurisdiction over the action at the time it was filed; and (3) that, although plaintiff had subsequently exhausted her administrative remedy, she could not cure [19ASR2d128] the original defect by filing an amended complaint, because the statute of limitations had subsequently run. Because it failed to raise these defenses in 1985 or within a reasonable time thereafter, but instead has vigorously litigated on the merits for several years and has also sought affirmative relief from plaintiff by way of counterclaims and cross-claims, defendant is estopped from raising the statute of limitations with respect to an amended complaint, even though the failure to plead the statute of limitations in the answer cannot be characterized as a waiver.

The remainder of our original analysis, including the analysis of prejudice to the plaintiff on account of defendant's conduct of the lawsuit, applies with equal force to estoppel as to waiver.

Except as set forth above, the motion to reconsider is denied.

It is so ordered.

*********

American Samoa Gov’t; Randall v.


EMMA RANDALL, Plaintiff

v.

AMERICAN SAMOA GOVERNMENT, Dr. A. TROUP,
and DOES I through X, Defendants

High Court of American Samoa
Trial Division

CA No. 37-85

May 17, 1991

__________

[19ASR2d112]

Because an injured person cannot sue until he has exhausted his administrative remedy, the Government Tort Liability Act provides that no tort action may be instituted against ASG unless the claimant has first presented the claim in writing to the Attorney General, and the claim has been finally denied by the Attorney General. A.S.C.A. § 43.1204.

A prospective plaintiff's "claim" under the Government Tort Liability Act does not accrue, and therefore the two-year limitation period does not begin to run, until after the claim has been finally denied by the Attorney General. A.S.C.A. §§ 43.1204-43.1205.

Under the statute of limitations applicable to the Government Tort Liability Act, the High Court has construed the term "claim" as being synonymous with "cause of action." A.S.C.A. § 43.1204.

The general rule is that a tort claim accrues when a person has been injured and knows or should have known the essential facts about his injury and its probable cause.

Persons who have been injured by private persons have two years after the cause of action accrues in which to file suit. A.S.C.A. § 43.0120(2).

Under the Government Tort Liability Act, injured persons may bring suit within two years from the date of injury (or, in certain cases, of knowledge thereof). A.S.C.A. § 43.1204.

The right to sue under the Government Tort Liability Act is absolutely barred by failure to bring an administrative claim within a two-year period from the date of injury, and the Attorney General has a reasonable time in which to review such claim. A.S.C.A. §§ 43.1204-43.1205.

Tolling is frequently deemed consistent with the purposes of statutes of limitation, particularly when the plaintiff was unable to bring suit due to circumstances that were in the primary control of the defendant.

An action under the Government Tort Liability Act is subject to dismissal when the statute of limitations has run or when administrative remedies have not been exhausted. A.S.C.A. §§ 43.1204-43.1205; T.C.R.C.P. 12(b).

ASG waived the statute of limitations applicable to the Government Tort Liability Act when it did the following: filed an answer which affirmatively admitted that the Court had jurisdiction over the parties and the subject matter; vigorously litigated the merits of the action for several years; required the defendant to undergo a deposition and to answer numerous interrogatories, requests for production of documents, and requests for admissions; sought and obtained affirmative relief from the Court by filing what amounted to a mandatory counterclaim, a permissive counterclaim, and another permissive counterclaim on behalf of a wholly-owned entity; and effectively reduced one of these claims to a substantial judgment. A.S.C.A. § 43.1204.

The two-year statute of limitations applicable to the Government Tort Liability Act is not a jurisdictional prerequisite but is a statute of limitations, an affirmative defense which is waived if not affirmatively pled by the defendant. A.S.C.A. § 43.1204.

Unlike its quite differently phrased and structured counterpart in the Federal Tort Claims Act, the statute of limitations applicable to American Samoa"s Government Tort Liability [19ASR2d113] Act has been held to be subject to tolling during the minority of an injured person. A.S.C.A. § 43.1204.

The usual reason given for construing statutes of limitation for suits against the United States Government as jurisdictional (i.e., not subject to waiver and/or tolling)--that the limitations are deemed an integral part of the initial waiver of sovereign immunity, which should not be extended by courts beyond the intent of Congress--does not apply to ASG.

In the absence of any evidence that the Fono meant the two-year limitation on tort actions against ASG to be construed and applied differently than the similar two-year limitation on tort actions against private persons, the High Court will not conclude that the Fono intended or would have intended the "harsh result" of depriving litigants against the Government of the benefit of the traditional rule that a party entitled to plead the statute of limitations can waive the statute by not pleading it as an affirmative defense and by proceeding to litigate the suit on its merits. A.S.C.A. § 43.1204.

Prejudice to the plaintiff resulting from ASG's failure to plead in its answer the statute of limitations applicable to the Government Tort Liability Act should be evaluated as of the time that the defendant finally asserted the statute, not when plaintiff failed to plead the statute as a defense and could not have cured the defect in his action by filing a new complaint. A.S.C.A. § 43.1204.

Before REES, Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiff, John L. Ward II

  For DefendantAmerican Samoa Government, Richard D. Lerner, Assistant Attorney General

On Motion to Dismiss:

Defendant American Samoa Government (ASG) moves to dismiss this medical-malpractice action on the ground that the action was filed prior to exhaustion of the administrative remedy prescribed in A.S.C.A. § 43.1204. This section of the Government Tort Liability Act provides that no action may be instituted upon a tort claim against ASG unless the claimant has first presented the claim in writing to the Attorney General, and the claim has been finally denied by the Attorney General. Because the complaint was filed on March 11, 1985, and the Attorney General cannot be deemed to have denied the administrative claim until June 6, 1985, ASG maintains that the Court lacks subject- matter jurisdiction over the action.

Defendant ASG further contends that the two-year statute of limitations expired on May 8, 1985, and that it is therefore impossible [19ASR2d114] for plaintiff to cure the jurisdictional defect by amendment of her complaint to allege the intervening denial of her administrative claim.

The material facts are as follows:

1) Assuming the facts in the complaint to be true, the medical malpractice that caused plaintiff's injuries occurred between March 28, 1983, and May 8, 1983, and plaintiff would appear to have learned the extent and probable causes of her injuries shortly thereafter .

2) On March 6, 1985, counsel for plaintiff filed an administrative claim with the Attorney General.

3) On March 11, 1985, counsel for plaintiff filed the complaint in the present action.

4) The complaint was not immediately served upon defendant ASG or upon the other named defendant, Dr. Troup.

5) On March 20, 1985, counsel for plaintiff submitted to the Court a draft order for service by publication upon Dr. Troup, alleging that he could not be found within the Territory. The then-Chief Justice responded with a one-line note to counsel to the effect that the statutory requirements for service by publication had not been met. The apparent reference was to the failure of the accompanying affidavit to state a particular ground on which the absent defendant was alleged to be amenable to extraterritorial service.

6) The Attorney General appears never to have responded in writing to the administrative claim that had been filed on March 6. According to the provision of A.S.C.A. § 43.1205 (as amended by a law that became effective May 29, 1985, while plaintiff's administrative claim was pending) plaintiff was entitled to consider her administrative claim denied on June 6, 1985.

7) A copy of the complaint in the present action and a summons were served on defendant ASG on or about November 26, 1985.

8) On December 12, 1985, defendant ASG filed an answer on behalf of itself and Dr. Troup. The answer did not plead either the non- exhaustion of the administrative remedy (A.S.C.A. § 43.1205) or the two-year statute of limitations (A.S.C.A. § 43.1204) as a defense. [19ASR2d115] Indeed, the answer affirmatively admitted plaintiffs allegation that "[t]his court has jurisdiction herein."

9) The answer also admitted that Dr. Troup was acting at all relevant times in the course and scope of his duty as a surgeon employed by ASG.

10) Nothing further appears to have happened until June of 1988, when plaintiff moved for a trial date. Between 1988 and late 1990, several trial dates were set and continued by stipulation of the parties, and defendant ASG made several discovery requests, with all of which plaintiff appears to have complied.

11) On September 19, 1988, defendant ASG filed a counterclaim for various medical bills, some for services alleged to have been rendered to plaintiff and others for services "to a patient which she sponsored for immigration purposes." In the same pleading, counsel for ASG filed a third-party claim on behalf of the local power authority (an entity wholly owned by ASG) against plaintiff for unpaid electric bills.

12) On May 22, 1989, counsel for ASG and the power authority secured an entry of plaintiffs default on the counterclaim and third-party complaint. Plaintiff then moved to set aside the entry of default. The motion was granted with reference to the medical bills but denied with reference to the electric bills.

13) On October 9, 1990, the defendant brought the present Motion to Dismiss. The motion was heard on October 26. The court took the motion under advisement and granted a further continuance of the trial, pending a decision on the motion.

In addition to its memorandum in support of the motion to dismiss, defendant ASG has appended copies of this Court's two opinions in Mataipule v. Tifaimoana Partnership, Ltd., 14 A.S.R.2d 100 (1990); 16 A.S.R.2d 48 (1990), on motions presenting issues nearly identical to those raised by the present motion. ASG has also appended the lengthy and scholarly memoranda it had submitted to the Court in Mataipule. Although there are some distinctions between this case and that one, ASG's primary arguments herein are addressed to the errors it believes the Court committed in Mataipule. [19ASR2d116]

Defendant ASG urges this Court to reject the holding and the reasoning of Mataipule (which was decided before a different panel of judges) on two questions.

First, the Mataipule Court held that a prospective plaintiffs "claim" under the Government Tort Liability Act does not accrue, and therefore that the two-year limitation period provided by A.S.C.A. § 43.1204 does not begin to run, until after the claim has been finally denied by the Attorney General in accordance with the procedure set forth in A.S.C.A. § 43.1205. The Court construed the term "claim" as synonymous with "cause of action. " Because an injured person cannot sue until he has exhausted his administrative remedy ---a proposition with which ASG wholeheartedly agrees ---and because the plain language of A.S.C.A. § 43.1204 would appear to give such persons two years in which to sue, the Court reasoned that the two years must begin on the day exhaustion occurs. Mataipule, 14 A.S.R.2d at 102-05.

The Mataipule Court's decision on this point is well-reasoned and well-supported. Courts have frequently construed references to the accrual of a "claim" as being synonymous with the accrual of a "cause of action." See Mataipule, 16 A.S.R.2d at 51-55, and authorities cited therein. It is particularly interesting that this construction was given to the pre-1966 version of 28 U.S.C. § 2401(b), the statute on which A.S.C.A. § 43.1204 may have been modeled. See id. at 52, and authorities cited therein.

Nevertheless, if the question were properly before us we might well agree with defendant ASG that A.S.C.A. § 43.1204 should be construed consistent with the general rule that a tort claim accrues when a person has been injured and knows or should have known the essential facts about his injury and its probable cause. See Utu v. American Samoa Government, 9 A.S.R.2d 88, 91 (1988). As ASG points out, Mataipule could have the odd effect of giving injured persons an indefinite amount of time in which to sue, since the Government Tort Liability Act does not explicitly specify a time limit for bringing administrative claims. Even if, as the Mataipule Court suggests, a separate two-year limit for bringing the administrative claim could be imposed by analogy to the two-year limit on lawsuits, the effect would be to give people injured by government employees four-and-one-half years to sue, in curious contrast to the two years given those who have been injured by private persons. See A.S.C.A. § 43.0120(2). [19ASR2d117]

The alternative holding of Mataipule, which ASG also urges us to reject, is far less problematic. Rather than subtracting the three-month administrative review period provided in A.S.C.A. § 43.1205 from the two-year statute of limitations provided in A.S.C.A. § 43.1204, the Court decided to add it. On ASG's construction of the two statutes, a plaintiff who did not act on his claim for one year and nine months would be forever barred from bringing it. (The Attorney General could, however, choose out of the kindness of his heart to revive the claim by acting in less than the required three months.) Instead, the Court construed the two statutes together to require that an action be filed within two years from the date of injury but that this period is tolled during such time as the Attorney General has a timely filed administrative claim under consideration.

This construction would appear to be the least unsatisfactory of all the alternatives, in that it appears faithful to the language and apparent legislative purposes of both of the sections in question. Injured persons may bring suit within two years from the date of injury (or, in certain cases, of knowledge thereof), as clearly provided by the Fono in A.S.C.A. § 43.1204, rather than only one year and nine months, as urged by counsel for ASG. The right to sue is absolutely barred by failure to bring an administrative claim within the same two-year period, as provided by A.S.C.A. § 43.1205; and the Attorney General has a reasonable time in which to review such claim, as is also provided by that section.

Tolling is frequently deemed consistent with the purposes of statutes of limitation. This is particularly true when the period of tolling is one during which the plaintiff was unable to bring suit due to circumstances that were in the primary control of the defendant. ASG's principal argument against the tolling of the period prescribed in A.S.C.A. § 43.1204 is that this statute is "jurisdictional" and that jurisdictional statutes of limitation, unlike ordinary ones, cannot be tolled. We believe this argument to be circular. Courts tend to characterize a particular statute of limitation as jurisdictional or not after they have decided, for reasons given or assumed, that it ought or ought not to be regarded as tollable, waivable, and/or subject to equitable estoppel. To say that it ought not to be so regarded because it is jurisdictional assumes the whole ground in dispute.

We are not, however, directly presented with either of the questions decided by the Court in Mataipule. This is because in the present case ---unlike Mataipule, in which ASG pled both the statute of [19ASR2d118] limitations and the failure to exhaust administrative remedies in its answer ---several years have elapsed between the filing of the action and the bringing of the present motion to dismiss.

Thus, for instance, if we were to follow Mataipule and hold that the present plaintiffs tort claim accrued on June 6, 1985, the day her administrative claim was deemed denied, the two-year period in which she might have filed her suit would have run from that day until June 6, 1987. As ASG points out, she could therefore no longer cure the jurisdictional defect, if any. An amended complaint would relate back to the date she filed her original complaint, at which time the Court could not exercise .jurisdiction because plaintiff had not yet exhausted her administrative remedies. A new lawsuit filed in 1991 would not present this problem, because plaintiff has now exhausted her administrative remedies. It would, however, be filed several years after the latest date at which the two-year statute of limitations might arguably have begun to run and would therefore be subject to dismissal.

Similarly, our tentative agreement with the Mataipule Court's opinion on the tolling of the statute is of no help to the present plaintiff. Such tolling would have begun on March 6, 1985, when she filed her administrative complaint. It would have ended on June 6, 1985, when her complaint was deemed denied by three months' inaction on the part of the Attorney General. The running of the statute ---which, assuming it began on the day the alleged malpractice ended, had only about two months to go when the tolling began in March 1985 ---would then resume, and on or about August 10, 1985, plaintiff lost her right to file a new lawsuit. At any time thereafter she would be presented with the same problem as in the previous illustration: an amended complaint would either "relate back" to a time when she had not exhausted her administrative remedies or, in the absence of "relation back, " it would be dismissed because the statute of limitations had run.

In our opinion, during all the time from the filing of the complaint in the present action until the present day, there has been only about a two-month period (from June 6, 1985, to about August 10, 1985) when both of the following conditions held: (a) plaintiff could bring a lawsuit, having exhausted her administrative remedy, and (b) the statute of limitations had not yet run, Had plaintiff amended her complaint at any time during that brief period or had she dismissed this action and filed a new one, her suit would not have been subject to dismissal either as premature under § 43.1205 or as barred by § 43.1204. By November 1985, however, when her eight-month old complaint was finally served [19ASR2d119] on counsel for ASG, the action was subject to dismissal for either of these reasons, and possibly also for failure to effect service within a reasonable time. All ASG had to do was plead any of these defenses in its answer ---or, at its option, by bringing a motion to dismiss before filing an answer. See T.C.R.C.P. 12(b).

ASG, however, did not plead any such thing. Instead, it filed an answer which not only did not raise any of these issues but also affirmatively admitted that the Court had jurisdiction over the parties and the subject matter. It proceeded to litigate the merits of the action quite vigorously for several years. It required the defendant to undergo a deposition and to answer numerous interrogatories, requests for production of documents, and requests for admissions. It also sought and got affirmative relief from the Court, by filing what amounted to a mandatory counterclaim, a permissive counterclaim, and another permissive counterclaim on behalf of its wholly-owned power company, and has effectively reduced one of these claims to a substantial judgment. Under these circumstances we hold that ASG has waived the statute of limitations.

Again, defendant ASG urges that the statute of limitations is jurisdictional and therefore cannot be waived. The authority cited for this proposition is twofold. First, the High Court has held that the administrative remedy provided by A.S.C.A. § 43.1205 (not the statute of limitations provided by A.S.C.A. § 43.1204) is jurisdictional. See, e.g., Gobrait v. Americana Hotels, Inc., 1 A.S.R.2d 1 (1978). Second, statutes prescribing the time period in which actions may be brought against the United States are frequently construed ---similarly to requirements for the exhaustion of administrative remedies, with which such time periods are often intertwined ---as jurisdictional prerequisites to suit, rather than as statutes of limitation properly so called. See, e.g., Smith v. United States, 873 F .2d 218 (9th Cir. 1989); Ippolito-Lutz, Inc. v. Harris, 473 F. Supp. 255 (S.D.N. Y. 1979).

We have been cited to no case, and know of none, holding that the two-year statute of limitations provided in A.S.C.A. § 43.1204 is anything other than an ordinary statute of limitations: that is, an affirmative defense which is waived if not affirmatively pled by the defendant. Unlike its quite differently phrased and structured counterpart in the Federal Tort Claims Act, the limitation of A.S.C.A. § 43.1204 has been held to be subject to tolling during the minority of an injured person. Utu v. American Samoa Government, supra; Lutu v. American Samoa Government, 7 A.S.R.2d 61 (1988). This strongly suggests that [19ASR2d120] A.S.C.A. § 43.1204 is a real statute of limitations, not a deceptively similar jurisdictional prerequisite. We so hold.

The usual reason given for construing statutes of limitation for suits against the United Statesas jurisdictional (i.e., not subject to waiver and/or tolling) is that the limitations in question are deemed an integral part of the initial waiver of sovereign immunity. See Smith, 873 F .2d at 221. The United States Supreme Court has observed that the limitation period "is a condition of [the] waiver" by which the government agreed to let itself be sued at all, and that "we should not take it upon ourselves to extend the waiver beyond that which Congress intended." United States v. Kubrick, 444 U.S. 111, 117-18 (1979). The Court has also taken pains to point out, however, that it is equally incorrect for courts to "assume the authority to narrow the waiver that Congress intended. " Id. at 118.

Whether the Fono, in prescribing a two-year limitation period for tort claims against the Government, created a traditional statute of limitations or something else altogether is a question of legislative intent. As often as not, such questions boil down to inquiries into what the legislature would have intended if it had adverted in advance to the problem at hand. In the absence of any evidence at all that the Fono meant the two-year limitation on tort actions against the Government to be construed and applied according to a different and almost opposite set of rules than the similar two-year limitation on tort actions against private persons, we cannot simply assume that it did. In particular, we cannot conclude that the Fono intended or would have intended what ASG concedes is the "harsh result" of depriving litigants against the Government of the benefit of the traditional and eminently sensible rule that a party entitled to plead the statute of limitations can waive the statute by not pleading it as an affirmative defense and by proceeding to litigate the suit on its merits.(1) [19ASR2d121]

Finally, however, ASG argues that even if the statute of limitations is waiveable, it should not be deemed to have waived the statute in the present case because plaintiff was not "prejudiced" by ASG's failure to plead the statute in its answer. This lack of prejudice is said to be because at the time ASG filed its answer, the statute of limitations had already run. "Thus, even if ASG had raised the issue at its first opportunity, it was too late for plaintiff to cure the deficiency by filing a new complaint." This argument proves far too much. By definition, after a statute of limitations has run it is always too late for a plaintiff to cure the deficiency by filing a new complaint. If absence of prejudice were to be evaluated as of the day plaintiff failed to plead the statute as a defense and could be established merely by showing that on such date the plaintiff could not have cured the defect in his action by filing a new complaint, then there would never be any prejudice, and no defendant could ever successfully waive the defense by failing to plead it.

On the contrary, however, we believe prejudice to the plaintiff should be evaluated as of the time that the defendant finally does get around to asserting the statute. In the six years that have intervened since defendant's failure to plead the statute, plaintiff has been subjected to active litigation on the merits. The record reflects that she has been required not only to comply with voluminous and unusually intrusive discovery requests, but also to defend against three separate claims for affirmative relief asserted against her by ASG. She will almost certainly have judgment taken against her on at least one of these claims. The record also reflects that after 1985 plaintiff gave up her attempt to serve and sue the principal, alleged tortfeasor, the absent Dr. Troup, presumably because of ASG's admission in its answer that he had been acting in the course and scope of his duty. See A.S.C.A. § 1207. It is quite likely that none of these things would have happened had ASG [19ASR2d122] made a timely assertion of the statute of limitations. We find that the plaintiff would be unduly prejudiced if ASG were allowed to rescind its waiver of the statute at this late date.

Accordingly, the motion to dismiss is denied. Plaintiff will be given leave to file an amended complaint, asserting the exhaustion of her administrative remedy, at any time within twenty days from today. The amended complaint will be effective on the day it is filed. Defendant's waiver of the statute of limitations will be deemed to apply for so long as plaintiff continues her diligent prosecution of the action.

It is so ordered.

*********

1. Aside from the absence of any apparent legislative intent to enact a different set of rules for tort suits against the government than for similar suits against private parties, what structural and semantic evidence there is suggests that A.S.C.A. § 43.1204 should be read as an ordinary statute of limitations. The statute is referred to in its caption as a "statute of limitations." It contains no explicit reference to jurisdiction. Unlike some time limits that have been held to be jurisdictional, it is set forth in a separate section of the statute rather than in the same sentence or paragraph as an exhaustion of remedies provision or as the substance of the cause of action it limits. See Zipes v. Trans World Airlines, Inc., 455 U.S. 385 (1982), in which the Supreme Court stated flatly that "a statute of limitations," unlike a "jurisdictional prerequisite to filing," is "subject to waiver, estoppel, and equitable tolling." Id. at 393, 398. In Zipes the Court found references to a statute in its own text and legislative history as a "statute of limitations" or a "period of limitations," together with the absence of any explicit reference to jurisdiction in the text or legislative history, as dispositive indications that the statute was a true statute of limitations and not a non-waiveable jurisdictional prerequisite to the filing of suit. Id. at 392-98.

American Samoa Gov’ t v. Taylor,


AMERICAN SAMOA GOVERNMENT, Plaintiff

v.

HARRY TAYLOR aka TAPUA VALOGO TAYLOR, Defendant

High Court of American Samoa
Trial Division

CR No. 8-90

May 14, 1991

__________

Defendant's statement made after a police officer asked "What happened?," immediately upon encountering him a short distance from the crime scene, is admissible evidence because the defendant was neither in police custody nor undergoing custodial "interrogation."

Although the police officer had just been given information implicating the defendant in the crime, the question "What happened?" was deemed to have been "investigatory" rather than "accusatory" because the officer was trying to gather preliminary and general information, rather than to elicit a confession.

After a defendant told police interrogators that he wished to have a lawyer before making a statement, it was impermissible for the officers to give the impression that making a statement to the police was required to participate in the legal process, by their responding that the defendant should make a statement and that a copy would be sent to his lawyer , especially in light of the intimidating circumstances he had faced earlier in his incarceration.

Once a defendant invokes his right to counsel, interrogation is to cease until he had been allowed to consult a lawyer.

If the interrogation proceeds in violation of a defendant's right to counsel, the resulting statements of the defendant may not be used as evidence against him--not even statements which, but for the initial invocation of the right to counsel, would seem thoroughly voluntary. [19ASR2d106]

When a statement is suppressed as having been taken in violation of a defendant's right to counsel, the suppression applies not only to the statement but also to any information the government may have discovered as a result of the statement, unless such information would have been "ultimately or inevitably" discovered without the statement.

Defendant's motion to dismiss is denied when he does not move to suppress any particular evidence alleged to have been discovered by the government as a result of a suppressed statement but instead moves for dismissal of the charges unless the government can affirmatively show that it can convict him without the use of any such evidence, especially when the evidence not only fails to show that the government plans to present any impermissible evidence but also indicates that the government has substantial evidence which was not discovered as a result of the suppressed statement.

Before REES, Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiff, Thomas E. Dow and Jeffrey Buckner, Assistant Attorneys General

  For Defendant, Barry I. Rose, Assistant Public Defender

On Motion to Dismiss and on Motion to Suppress Evidence:

Defendant moves to suppress two statements he is alleged to have made to police officers on the grounds that the circumstances under which these statements were taken violated his Fifth and Sixth Amendment rights.

Defendant also moves for dismissal of the charges against him on the ground that the prosecution of the case is based on information derived from these two statements and from other allegedly impermissible sources, rather than on "independent investigative efforts."

The first of the two statements was a one-sentence response the defendant made when a police officer asked him "What happened?" This statement appears to have been made by the defendant of his own free will. No Miranda warnings had been given before the police officer asked the defendant "What happened?," but under the circumstances this does not render the statement inadmissible as evidence. The defendant was not in custody: he had not been arrested, handcuffed, physically restrained in any way, or told directly or indirectly that he was not free to go. Nor was the statement made in the course of anything that could remotely be called a process of custodial "interrogation." The police officer asked the defendant "What happened?" immediately upon [19ASR2d107] encountering him a short distance from the scene of the incident in question. Although the police officer had just been given information implicating the defendant in the crime for which he was eventually charged the two-word question appears to have been "investigatory" rather than "accusatory." That is, the officer was trying to gather preliminary and general information, rather than to elicit a confession. See People v. Wright, 66 Cal. Rptr. 95 (Cal. App. 1968). The motion to suppress this statement is denied.

The second statement was made the next day at the Correctional Facility in response a process of custodial interrogation. A number of most unpleasant things had happened to the defendant during the twenty- two hours since his arrest. He had been assaulted twice by a ranking police official, stripped of all his clothing, held for about twenty hours in a cell without a bed or mattress, held incommunicado without access to visitors. and subjected to the shining of a flashlight in his face at frequent intervals during the night.

The defendant was not interrogated until the next afternoon. By then his clothing had been returned, and he had been offered food. The two interrogators had taken no part in any of the events of the night before, and the interrogation itself was neither explicitly threatening or even impolite. Arguably, there had been a sufficient break in the flow of events to render the defendant capable of making a fully voluntary statement, notwithstanding the intimidating circumstances to which he had been exposed during the early hours of his incarceration.

The preponderance of the evidence, however, is to the effect that the defendant told the interrogators that he wished to have a lawyer before he made a statement. The response from one of the interrogating officers was to the effect that he should go ahead and make a statement and that a copy of the statement would be given to his lawyer. The effect of this response, at least against the backdrop of what had happened to the defendant the night before, was to give him the impression that making a statement to the police was his ticket of admission to the legal process. This was an impermissible impression for the officers to give the defendant. Once he had invoked his right to counsel, they had an obligation not to ask any further questions until he had been allowed to consult a lawyer. Instead, it appears that the officers proceeded with the interrogation.

The defendant then signed and initialed a series of written waivers (including one that said he did not want a lawyer) and gave a [19ASR2d108] lengthy statement. It is clear that his attitude during this part of the interrogation was cheerful and cooperative and that the interrogators continued to be polite and friendly. It appears that defendant, a man of extremely limited intellect and education, genuinely wanted to explain himself; although he had a hazy recollection that he was entitled to a lawyer and should not make a statement until he consulted with one, he was willing enough to go along with the officer's explanation that the statement came first, the lawyer later. To say that the defendant's "will was overborne" as a result of the initial denial of his right to counsel, therefore, is at best an imperfect metaphor. Nevertheless, the United States Supreme Court has made it clear that when a defendant invokes his right to counsel, the interrogation is to cease until he has been afforded that right. If the interrogation proceeds in violation of this rule, the resulting statements of the defendant may not be used as evidence against him ---not even statements which, but for the initial invocation of the right to counsel, would seem thoroughly voluntary. See Brewer v. Williams, 430U.S. 387 (1977). The second statement must therefore be suppressed.

When a statement is suppressed as having been taken in violation of the defendant's right to counsel, the suppression applies not only to the statement but also to any information the government may have discovered as a result of the statement, unless such information would have been "ultimately or inevitably" discovered even without the statement. Nix v. Williams, 467U.S. 431, 448 (1984).

Defendant does not move to suppress any particular evidence alleged to have been discovered by the government as a result of the suppressed statement. Instead, he moves for dismissal of the charges unless the government can affirmatively show that it can convict him without the use of any such evidence. This motion is denied. The limited record now before us not only tails to show that the government plans to present any impermissible evidence but also indicates that the government does have substantial evidence ---e.g., a body, a pathologist's report, an arguably inculpatory statement that has not been suppressed ---which was not discovered as a result of the suppressed statement. If the government does plan to use any evidence which it discovered as a result of this statement, it should so notify the Court at the outset of trial and should be prepared to show that it would have discovered such evidence in the absence of the statement.

It is so ordered.

*********

American Samoa Gov’t v. Taylor,


AMERICAN SAMOA GOVERNMENT, Plaintiff

v.

HARRY TAYLOR aka TAPU AVALOGO TAYLOR, Defendant

High Court of American Samoa
Trial Division

CR No. 8-90

May 14, 1991

__________

The bifurcated-proceedings statute divides the inquiry into whether the defendant "committed the criminal act charged" and whether he was "insane at the time of the commission of the criminal act." A.S.C.A. §§ 46.1301-46.1302.

A defense of diminished mental capacity consists of showing that a mental disease or defect, although not rendering the defendant "insane," nevertheless prevented him from having the requisite state of mind to be guilty of the charged crime.

The testimony of the government's expert may, in some circumstances, include statements made to him by a criminal defendant during the compelled examination, although the witness may testify only about the alleged mental disease or defect and not about "guilt or innocence" (i.e., about whether the defendant would be guilty in the absence of any such disease or defect). A.S.C.A. § 46.1304.

In a bifurcated criminal trial, the jury is not exposed to evidence of the defendant's mental capacity until the jury makes an independent finding as to whether the defendant committed the act charged. A.S.C.A. §§ 46.1301-46.1302.

When a crime includes an intent element, a finding of guilt in the first part of a bifurcated trial also implicitly includes a finding that the defendant either had the requisite intent or would have had it but for the mental disease or defect. A.S.C.A. §§ 46.1301-46.1302.

A criminal defendant who puts his mental capacity at issue may be compelled to submit to an examination by the government's expert, who may testify about his observations and conclusions. A.S.C.A. § 46.1304.

Regarding a defense of diminished mental capacity, when a mental disease or detect is alleged to have resulted in a criminal defendant's "incapacity to intend" rather than in "insanity," the testimony of the government's expert must be limited to the question of such incapacity and may not be considered by the jury for any other purpose.

Although a defense of diminished mental capacity is arguably comprehended within the "guilt" phase of a bifurcated trial, the interests in a fair trial and an orderly proceeding may be better served by reserving all evidence of mental disease or defect for the "insanity" phase because a jury is likely to view the evidence as being highly probative of issues other [19ASR2d100] than the criminal defendant's mental state, and a limiting instruction would likely be ineffective. A.S.C.A. §§ 46.1301-46.1302.

During the first phase of a bifurcated criminal trial involving the defense of diminished mental capacity, the court limited the evidence to whether the defendant is or would be guilty, assuming the absence of any mental disease or defect such as would render him incapable of understanding the difference between right and wrong, incapable of conforming his conduct to such a standard, or otherwise incapable of having any requisite mental element of the crimes charged or of any lesser-included offenses. A.S.C.A. §§ 46.1301-46.1302.

During the first phase of a bifurcated criminal trial involving the defense of diminished mental capacity, though necessarily concerned with the defendant's thoughts relevant to the charged offenses, the court limited both parties from addressing such questions by expert testimony from psychiatrists or psychologists or by other evidence calculated to show that defendant did or not have a mental disease or defect. A.S.C.A. §§ 46.1301-46.1302, 46.1304.

During the "guilt" phase of a bifurcated criminal trial, the government may not make any use of statements made by the defendant to the government's expert witness or of any evidence discovered as a result of such statements that would not ultimately have been discovered had the statements not been made, unless the defendant put a fact at issue which could only be effectively addressed by the otherwise-inadmissible evidence and if required in the interest of justice. A.S.C.A. §§ 46.1301-46.1302, 46.1304.

If the defendant is found guilty of one or more crimes in the first phase of a bifurcated criminal trial involving the defense of diminished mental capacity, the trial will proceed to the second stage, during which the parties may present evidence on whether the defendant had a mental disease or defect which would either support an insanity defense or tend to negate the existence of any requisite mental elements of the crime or crimes. A.S.C.A. §§ 46.1301-46.1302.

During the second phase of a bifurcated criminal trial involving the defense of diminished mental capacity, the government may use evidence obtained during its expert's examination of the defendant or as a result of such evidence, including but not limited to statements made by the defendant to the expert. A.S.C.A. §§ 46.1301-46.1302, 46.1304.

Defense counsel's motion for a bifurcated criminal trial constituted an implicit waiver of any objection to a procedure which, although clearly consistent with the legislative purpose of the bifurcated-trial statute, is not clearly authorized regarding a defense of diminished mental capacity. A.S.C.A. §§ 46.1301-46.1302.

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

Counsel: For Plaintiff, Thomas E. Dow, Assistant Attorney General

  For Defendant, Barry I. Rose, Assistant Public Defender [19ASR2d101]

On Motion for Bifurcated Trial:

Defendant, having served notice of his intention to rely on defenses of insanity and/or of diminished mental capacity, now moves for a bifurcated trial. The prosecution has no objection, provided that the nature and scope of each part of the proposed proceeding are made clear.

In the proceeding contemplated by defendant's motion, the defendant would first be tried for the crimes with which he has been charged, without reference to any mental disease or defect or to the effect, if any, of such defect on guilt or innocence. If and only if the defendant is found guilty of one or more of the offenses charged (or of some lesser included offense or offenses), the trial would proceed to its second stage. In the second stage of the proceeding, the defendant would present testimony, including but not limited to expert evidence, of the alleged mental disease or defect, and the prosecution would have the opportunity to offer evidence to rebut or refute the defendant's evidence.

The proceeding contemplated by the defendant's motion is not squarely within the language of the statutory authorization for bifurcated proceedings provided in A.S.C.A. §§ 46.1301 et seq. The statute speaks in terms of a division of the inquiry into whether the defendant "committed the criminal act charged" and whether he was "insane at the time of the commission of the criminal act." A.S.C.A. §§ 46.1301-.1302.

A defense of diminished mental capacity speaks to a question that is conceptually somewhere in between the two questions contemplated by our statute: whether defendant "committed the. ..act charged" and, if so, whether he was "insane" at the time. This question ---whether a mental disease or defect, although not rendering the defendant" insane," nevertheless prevented him from having the requisite state of mind to be guilty of the crime with which he is charged ---is arguably comprehended within the question whether the defendant "committed the criminal act charged." This is because one who commits the act without the requisite intent has arguably not committed a "criminal" act. If so, diminished mental capacity should be considered within the first ("guilt") stage of a bifurcated proceeding, not within the second ("insanity") stage.

Such a division, however, would defeat the obvious purpose of the statute. Bifurcated trials are designed to make it possible for a government expert witness ---to whose examination the defendant may [19ASR2d102] be lawfully compelled to submit after putting his own mental capacity at issue ---to testify about his observations of the defendant's mental condition without incidentally affecting the jury's decision about whether the defendant was otherwise guilty of the crime charged. Such testimony may, in some circumstances, include statements made by the defendant to the expert witness during the compelled examination. Although the witness may testify only about the alleged mental disease or defect and not about "guilt or innocence" (i.e., about whether the defendant would be guilty in the absence of any such disease or defect), evidence about how the defendant's mind works may have a strong tendency to influence the jury's determination of what sorts of things he might have done and intended. If the evidence about mental condition seems highly probative of other issues ---and especially when such evidence consists partly of the defendant's own statements ---a limiting instruction may be ineffective.

A bifurcated trial solves this problem by not exposing the jury to such evidence until and unless the jury first makes an independent finding that the defendant committed the act charged. Where the crime includes an intent element, a finding of guilt in the first part of the trial also implicitly includes a finding that the defendant either had the requisite intent or would have had it but for the mental disease or defect.

Despite the tendency of bifurcated trial statutes to describe the subject of the second part of the proceeding as "insanity" rather than as "mental disease or detect, " a defense of diminished mental capacity falling short of insanity not only is conceptually similar to the insanity defense but also is likely to be supported by the same kinds of evidence and to present the same practical problems. Specifically, a defendant who puts his mental capacity at issue must submit to an examination by an expert witness for the prosecution, and the expert may testify about his observations and conclusions. This is true even though the expert's observations and conclusions about diminished capacity other than insanity may be seen as directly relevant to "guilt" rather than to "sanity" ---i.e., to a mental element of the crime itself rather than to a side constraint on conviction. See United States v. Halbert, 712 F.2d 388 (9th Cir. 1983). Where the mental disease or detect is alleged to have resulted in "incapacity to intend" rather than in "insanity," the expert's testimony must be limited to the question of such incapacity and may not be considered by the jury for any other purpose. See id. at 390.

If anything, however, diminished-capacity evidence is even more likely than insanity evidence to seem highly probative of other issues in
[19ASR2d103] the case, particularly of questions about the defendant's mental state that are theoretically distinct from the question whether the defendant's mind was so diseased or defective that he could not possibly have had the requisite state of mind. It is therefore even less likely in diminished-capacity cases than in insanity cases that a limiting instruction would effectively erect a wall of evidentiary separation between the disease-or-defect question and the question of "guilt but for the defect."

Logically, therefore, both the defendant's interest in a fair trial, untainted by inadvertent self-incrimination, and the interest of all concerned in an orderly proceeding would be better served by reserving all evidence of mental disease or defect for the second part of a bifurcated proceeding rather than combining it with the inquiry into whether defendant would otherwise be guilty. The case for such reservation is particularly compelling where, as in the present case, the defendant wishes to present essentially the same evidence to support both an insanity defense and a defense of diminished capacity.

Accordingly, we order that the trial set for May 28, 1991, will be a bifurcated proceeding.

The first part of the proceeding will be limited to evidence of whether the defendant is or would be guilty, assuming the absence of any mental disease or defect such as would render him incapable of understanding the difference between right and wrong, incapable of conforming his conduct to such a standard, or otherwise incapable of having any requisite mental element of the crimes charged or of any lesser-included offenses. Although this stage of the proceeding will necessarily be very much concerned with what the defendant was or was not thinking at various times relevant to the offenses charged, neither party may address such questions by way of expert testimony from psychiatrists or psychologists or by other evidence calculated to show that defendant did or not have a mental disease or defect.

Nor may the government make any use during this stage of the proceeding of statements made by the defendant to the government's expert witness or of any evidence discovered as a result of such statements that would not ultimately have been discovered had the statements not been made. See United States v. Stockwell, 743 F.2d 123 (2d Cir. 1984); cf. Nix v. Williams, 467 U.S. 371 (1984). (The Court can imagine relaxing these rules if the defendant should open the door to otherwise-inadmissible evidence by putting some tact at issue which could [19ASR2d104] only be effectively addressed by such evidence and under such circumstances as would require its admission in the interest of justice.)

If the defendant is found guilty of one or more crimes in the first stage of the bifurcated proceeding, it will proceed to the second stage. At this stage the defendant may present evidence, including but not limited to expert testimony, that he had a mental disease or defect such as would either support an insanity defense or tend to negate the existence of any requisite mental elements of the crime or crimes found in the first stage of the proceeding or of any lesser-included offenses. The government may offer similar evidence in rebuttal.

The jury will then be instructed to consider this evidence, along with the evidence presented at the first stage of the proceeding, and to deliver one or more special verdicts in response to questions put in writing by the Court. For instance, if the defendant were to be found guilty of murder in the first degree, the jury might be asked to decide whether the defendant suffered from a mental disease or defect which caused him to be unable to understand the difference between right and wrong or to conform his conduct thereto (the question of insanity); whether he suffered from a mental disease or defect which caused him to be unable to "deliberate" (the distinctive mental element of first-degree murder); whether he suffered from a mental disease or defect which caused him to be unable to do a certain act "purposely," "knowingly," or "recklessly" (elements required for various forms of second-degree murder); and other questions relevant to appropriate lesser-included offenses. If the answer to any of these questions should be affirmative, the Court would modify (i.e., reduce) the general verdict given after the first stage of the trial as necessary to conform it to the special verdicts given after the second stage.

Should the trial proceed to its second stage, the government would not then be prohibited from using evidence obtained during its expert's examination of the defendant or as a result of such evidence, including but not limited to statements made by the defendant to the expert, provided such evidence is not inadmissible under some other rule of law or evidence.

For the record, we note that the Court has discussed the defendant's motion and the implications and possible consequences thereof in a pre-trial conference with counsel for the defense and the prosecution. We find that the motion reflects a considered and intelligent decision by defense counsel to maximize the chances for a fair trial and [19ASR2d105] to minimize the risks to which the defendant might otherwise be exposed by putting at issue the questions of insanity and diminished capacity. The implicit waiver of any objection to a procedure which, although clearly consistent with the legislative purpose of the bifurcated-trial statute, is not clearly authorized by the letter thereof, we find to have been made after thorough and careful consideration of these objectives.

*********

Jennings v. Jennings,


TINOUSI JENNINGS as the administratrix of the ESTATE and
widow of the late DAVID ELI JENNINGS,
and as Guardian Ad Litem for JOHN DAVID JENNINGS,
a Minor; ZENOBIA ZELPHER JENNINGS; and
CHRISTABEL LUPE JENNINGS, Plaintiffs

v.

WALLACE H. JENNINGS, JACK THOMPSON,
ELIZA THOMPSON,
TUA FALEMANU as the TERRITORIAL REGISTRAR,
and AMERICAN SAMOA GOVERNMENT, Defendants

ESTATE OF DAVID JENNINGS,
TINOUSI JENNINGS, Executrix

v.

JACK THOMPSON and ELIZA THOMPSON, Defendants

High Court of American Samoa
Trial Division Land and Titles Division

CA No. 11-84
LT No. 54-90

April 11, 1991

__________
[19ASR2d35]

A failure to respond to the court’s notice of dismissal and to move within the ten days required by statute for a reconsideration of its order of dismissal did not constitute "excusable neglect" under Rule 60(b). A.S.C.A. § 43.0802(a); T.C.R.C.P. 60(b)(1).

A motion for relief from judgment cannot be used as a substitute for appeal by one who has missed the deadline for appeal. T.C.R.C.P. 60(b).

A motion for relief from judgment on the ground of excusable neglect must be brought not more than one year after the judgment was entered or taken. T.C.R.C.P. 60(b).

Bringing an action in the wrong division of the High Court does not render the action or judgment a nullity; absent a showing that an erroneous caption made some practical difference. the proper remedy is to give the case a new caption.

When the High Court dismisses cases for want of diligent prosecution, civil actions will be dismissed with prejudice if good cause is not shown to the contrary, but land-and-titles actions will be dismissed without prejudice.

The statutes of limitations for filing suit are two years for actions on personal injury, three years for actions on unwritten contracts, ten years for actions on written contracts, and twenty years for actions to recover real property. A.S.C.A. § 43.0120.

An oversight by the Court or a court official, as opposed to one by a party or his counsel, is generally regarded as an "other reason justifying relief from the judgment" under Rule 60(b)(6); motions grounded on such oversights need not be brought within one year, but only within a reasonable time. T.C.R.C.P. 60(b)(6).

A party who moves for relief from a judgment must prove a substantial likelihood that such relief will lead to a different outcome on the merits. T.C.R.C.P.60(b).

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

Counsel: For Plaintiffs, Charles V. Ala'ilima

  For Defendants Jack and Eliza Thompson, Roy J.D. Hall, Jr.

Plaintiff moves for relief from the judgment entered on February 17, 1988, dismissing her action (CA No. 11-84) to recover a parcel of land in the possession of defendants Jack and Eliza Thompson. The facts and procedural history are as follows:

Plaintiff's contention in CA No. 11-84 was that this land belonged to the late Alexander Jennings and that an interest in it had been inherited by her children, for whom she was acting as guardian ad litem. The Thompson defendants responded that the land had always belonged to them and that a deed purporting to convey the land from Jack [19ASR2d36] Thompson to Alexander Jennings was a forgery. Some depositions were taken, but prosecution of the case ceased at or around the time plaintiff's attorney was appointed Attorney General of the Territory in late 1984 or early 1985. When plaintiff contacted her attorney at some time after his appointment, he told her he could no longer handle the case and that she should consult his immediate predecessor as Attorney General, with whom he had made some arrangements for taking over cases.

The Court has been informed of this arrangement not only in the present case but also in a number of others. The details of the arrangement have never been clear to the Court, but it appears that in many cases (including the present one) the original attorney felt that he had discharged his obligations to his clients by telling them he could no longer handle the case and that they should consult the designated replacement attorney. The latter, on the other hand, apparently believed that he had no obligations absent a specific agreement to take on the particular client. The actual situation, at least in the present case, was that the Court had never granted (nor even been given the opportunity to consider) a motion to withdraw as counsel. The original attorney of record therefore remained such, notwithstanding his assumption of official duties.

On January 14, 1988, in the course of a routine review of old case tiles, the Court served upon plaintiffs counsel of record a notice that CA No. 11-84 did not appear to have been diligently prosecuted and would be dismissed with prejudice unless good cause to the contrary should be shown within thirty days. On February 17, 1988, having received no response, the Court dismissed the action.

On September 26, 1990, plaintiff filed a new action, LT No. 54- 90, seeking essentially the same relief she had sought in CA No. 11-84. The complaint in the new action acknowledged that an earlier action on the same subject had been dismissed and that the dismissal "purports to be" a dismissal on the merits, but suggested this dismissal did not bar the later action for two reasons: first, plaintiff's attorney in the earlier action never told her about its pending dismissal, and second, CA No. 11-84 was brought in the Trial Division rather than in the Land and Titles Division of the High Court, which has jurisdiction over land controversies.

Plaintiff simultaneously advanced these same arguments in a motion to vacate the judgment of dismissal in CA No.11-84. Although this motion was styled as a motion in LT No. 54-90, the Court directed [19ASR2d37] that it be refiled as a motion in CA No. 11-84, so as to constitute a direct rather than a collateral attack upon the judgment it seeks to vacate.

Plaintiff subsequently submit an affidavit from her attorney in CA No. 11-84, to the effect that he never received the Court's notice of dismissal. The Clerk of the High Court, however, responded with another affidavit to the effect that both the January 14 notice of pending dismissal and the February 17 order of dismissal were indeed placed in counsel's Court box, but that the secretary who had been assigned to pick up pleadings and notices from this attorney's Court box during the period had a habit of misplacing them. The Court also cannot help but take judicial notice of the fact that difficulties similar to the present one occurred in connection with a number of the then-Attorney General's private cases during this period. Notices from the Court concerning these cases, even when they specifically required a response, were generally ignored; only second or third notices, ordering that the client show cause why he should not be held in contempt of Court for not responding to the earlier notices, generally succeeded in getting the attorney's attention. Although we cannot say whether this was because the secretary lost the papers or because the attorney misunderstood his continuing obligations to the private clients for whom he remained attorney of record, we are satisfied that the notices were served.

Plaintiff’s principal argument, to the effect that the failure to respond to the January 14 notice and to move within the ten days required by statute for a reconsideration of the February 17 order of dismissal should be regarded as "excusable neglect" within the meaning of T.C.R.C.P. 60(b), is without merit. As we restated the well-settled law on this proposition in Lualemana v. Asifoa, 17 A.S.R.2d 151 (1990):

A motion for [relief from judgment] under Rule 60(b) cannot to [sic] be used as a substitute for appeal by one who has missed the deadline for appeal. Although courts have made exceptions to this rule when the party did not learn of the judgment prior to the appeal deadline through some fault of the clerk or another court official, it is an abuse of discretion for the court to use relief from .judgment to allow an appeal where the party missed the deadline through his own fault or through the fault of his lawyer. Spika v. Village of Lombard, 763 F.2d 282, 285 (1985), and authorities cited therein. [19ASR2d38]

Id. at 157.

Although the present case is arguably distinguishable from that of Lualemana in that the judgment here was rendered essentially by default rather than after a trial on the merits ---a factor going not so much to the excusability of the neglect as to the likelihood that vacating the judgment will ultimately lead to a different ultimate outcome on the merits ---plaintiffs motion also runs afoul of the explicit requirement of Rule 60(b) that a motion for relief from judgment on the ground of excusable neglect be brought "not more than one year after the judgment ...was entered or taken." T.C.R.C.P. 60(b).

Plaintiff also contends that the judgment of dismissal in the earlier action should not be held dispositive of the merits because it was rendered by the wrong division of the High Court.

We agree that the action should have been brought not in the Trial Division but in the Land and Titles Division. Plaintiffs attorney styled it as a "Civil Action" in the "Trial Division" either by inadvertence or because of a belief held by some attorneys that a case having anything to do with a will should be brought in the Trial Division even if the action also concerned land. This mistake did not render either the action or the eventual judgment in it a nullity. The Trial Division and the Land and Titles Division consist of exactly the same judges operating under almost exactly the same rules. Except in matai-title cases, the difference between a Civil Action and a Land and Titles Action rarely goes beyond the caption. Absent a showing that an erroneous caption made some practical difference, the proper remedy is to give the case a new caption, not to vacate everything and start over.

In the present case, however, the caption actually did make a practical difference. In dismissing cases for want of diligent prosecution, the Court uses one standard form for all civil actions and another for actions concerning the right to possession of land. The civil form gives notice that the case will be dismissed with prejudice if good cause is not shown to the contrary; the land and titles form gives notice that the case will be dismissed without prejudice. These forms reflect the Court's considered judgment that most civil cases should be tried within a very few years or not tried at all, whereas in land cases it is frequently better to let sleeping dogs lie than to present the parties with a choice between immediate litigation and losing their claims forever. The concerns that give rise to these contrasting judgments are similar to those reflected in the different statutes of limitation: two years for actions founded on [19ASR2d39] personal injury, three years for actions on unwritten contracts, ten years for actions on written contracts, and twenty years for actions to recover real property. See A.S.C.A. § 43.0120.

Had CA No. 11-84 been styled a Land and Titles action, as it should have been, the dismissal would have been without prejudice. Had the Court noticed, at the time it issued the judgment of dismissal in 1988, that this action was actually one concerning the right to possession of real property, the standard form for Civil Actions would have been discarded or amended so as to enter the order of dismissal without prejudice. (We can say this with confidence because the judge who signed the 1988 order is also the writer of the present opinion.)

An oversight by the Court or a court official, as opposed to one by a party or his counsel, is generally regarded as an "other reason justifying relief from the judgment" under Rule 60(b)(6). There is no requirement that motions grounded on such oversights be brought within one year, only within "a reasonable time." T.C.R.C.P. 60(b)(6). This motion was brought about two and one-half years after the judgment of dismissal. We are satisfied that plaintiff herself did not learn her case had been dismissed until shortly before the motion for relief was brought. In light of this circumstance and of the twenty-year statute of limitations on actions for the recovery of land, we believe this was a reasonable time. (Although certain facts in the controversy that gave rise to these cases may have happened more than forty years ago, the most recent important development was a purported conveyance to the Thompson defendants by the former executor of the estate of Alexander Jennings in 1976.)

Finally, a party who moves for relief from a judgment under Rule 60(b) must prove a substantial likelihood that such relief will lead to a different outcome on the merits. If plaintiff can prove the facts she alleges in her complaint, and unless defendants can bear the rather heavy burden of proving the forgery they allege in their answer, plaintiff would appear to stand an excellent chance of prevailing on the merits.

Accordingly, the motion for relief from judgment is granted. The judgment of dismissal in CA No. 11-84 will be modified so as to be a dismissal without prejudice.

It is so ordered.

*********

Fanene v. Fanene,


FANENE SU'AFAIGA H. SCANLAN, IRIS F. LEOTA,
and FA'APATI LEOTA, Applicants

v.

FANENE FETAIAIGA KAVA, Objector

High Court of American Samoa
Land and Titles Division

LT No. 73-90

May 6, 1991

__________

Summary judgment is appropriate when the only issue raised by an objector to a land/building separation agreement is identical to the issue she and her predecessor raised in a previous case and that issue was litigated and decided between the parties. T.C.R.C .P. 56.

Whether a particular matai has the power to evict people living on communal land depends on many facts and circumstances and is generally not a question for summary judgment. T.C.R.C.P. 56.

Before REES, Associate Justice, AFUOLA, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Applicants, Tau'ese P.F. Sunia

  For Objector, Utu Sinagege R.M. [19ASR2d70]

On Motion for Summary Judgment:

Applicant Fanene Scanlan and objector Fanene Kava are both registered holders of the matai name Fanene in the village of Pago Pago. In Fanene v. Fanene, 4 A.S.R. 603 (1966), the Court held that there are two separate and unrelated Fanene families in the Village of Pago Pago, each entitled to its own matai. Fanene Scanlan is the successor in title to one of the parties to the 1966 case, and Fanene Kava is the successor in title to the other. In 1990, Fanene Scanlan signed a separation agreement for a building to be built by Iris and Fa'apati Leota on Fanene land called Lalopu'a. Fanene Kava objected to the separation agreement, and the dispute was referred to the Court.

Fanene Kava's objection to the separation agreement is grounded in her contention that the Fanene family is one family (not two as the 1966 Court held) and that the land Lalopu'a belongs to the entire family, not just to that part of it headed by Fanene Scanlan. She therefore appears to contend that a separation agreement for a structure on land Lalopu'a is invalid unless it is signed both by her and by Fanene Scanlan.

Fanene Scanlan moves for summary judgment on the ground that the issue raised by Fanene Kava has already been litigated and decided. In a more recent Fanene v. Fanene case, LT 1089-71, the Court reiterated its earlier decision that "Fanene Filo and Tauveve Fanene families are two separate, different and distinct families." It also found that "Lalopu'a is the communal land of the Fanene Filo family." It therefore held that the matai of the Fanene Filo family had the sole power to sign separation agreements on land Lalopu'a and dismissed an objection brought by Tauveve Fanene.Id., Findings of Fact and Judgment (November 1, 1971).

Fanene Filo and Tauveve Fanene were the immediate predecessors in title of the present litigants, Fanene Scanlan and Fanene Kava. As it happens, both Scanlan and Kava were also named parties to the 1971 case. Both parties concede that the land involved in the present case is part of the same land Lalopu'a that was the subject of the 1971 case. Because the only issue raised by the objector is identical to the issue she and her predecessor raised in the 1971 case and because that issue was litigated and decided between the parties, there is nothing left for this Court to decide.

In her affidavit in opposition to the motion for summary judgment, Fanene Kava raises the possibility that a judgment for Fanene [19ASR2d71] Scanlan in the present case will allow him to evict her from a portion of Lalopu'a on which she claims to have resided for many years. That question is not before us. If it were, Fanene Scanlan would probably not be entitled to summary judgment; whether a particular matai has power to evict people living on Samoan communal land depends on a great many facts and circumstances, and the question of eviction seems not to have been decided in any of the numerous Fanene v. Fanene cases. The issue with which we are presented is whether a separation agreement on land Lalopu'a requires the approval of Fanene Scanlan, Fanene Kava, or both. On this issue Fanene Scanlan is entitled to summary judgment.

Judgment will enter dismissing the objection and directing the Registrar to record the separation agreement.

It is so Ordered.

*********

Faleatua v. Tauiliili,


PA'U and MUA FALEATUA, Plaintiffs

v.

TAUILIILI PEMERIKA and SINA KAISANO and family,
Defendants

High Court of American Samoa
Land and Titles Division

LT No. 42-90

May 30, 1991

__________

Equitable relief of compensation for the value of improvements made to the land is only available to an occupant who has made improvements in "good faith" and whose possession was under some color or claim of title.

Ordinarily, an improver’s knowledge of an adverse land claim vitiates a claim to "good faith" for the purposes of receiving compensation.

An improver of land may be charged with actual notice when he receives notice of some fact or circumstance that would put a man of ordinary prudence to an inquiry which would, if honestly followed, lead to the knowledge of the adverse title.

Before KRUSE, Chief Justice, TAUANU'U, Chief Associate Judge, BETHAM, Associate Judge. [19ASR2d123]

Counsel: For Plaintiffs, Asaua Fuimaono

  For Defendant Tauiliili Pemerika, Charles V. Ala'ilima

Since the early 1970s, plaintiffs and defendant Tauiliili have been adjacent landowners. Their respective lots were a part of a subdivision developed by Chief A.P. Lutali near the northwest comer of TafunaAirport. The lots purchased by the parties roughly formed an inverted "L" which encompassed a vacant lot comprising 0.60 acres, more or less. It is this vacant lot which has given rise to this suit.

Tauiliili early proposed to plaintiffs that they should both utilize the vacant lot on the misguided presumption that the lot was landlocked and that, therefore, it was of no practical value to anyone else. Without first seeking Lutali 's views on the matter, the parties did indeed make use of the vacant lot over the years. For Tauiliili's part, he planted various crops, put in a pig pen, and subsequently erected a small house, which he eventually made available for the use of defendant Sina Kaisano. He has maintained these uses to date; however, the small house was leveled by hurricane Ofa, and it has now been replaced by a FEMA structure(1) of a more permanent nature.(2) Defendant's use, on the other hand, had been more sporadic and apparently a lot less evident to Lutali, who was critical only of Tauiliili's self-help.

In 1987, plaintiffs approached Lutali to sell them the vacant lot. According to plaintiffs, they were told by Lutali to survey the lot, which they did after giving notice to the neighbors. Lutali corroborated this testimony.

Tauiliili, who was also present at the survey, admitted that he was told by the surveyor and others that the survey was being undertaken in view of a sale to plaintiffs. He further testified that he then went and [19ASR2d124] saw Lutali to express his own interest in purchasing the land, since he had a home built on the lot; that Chief Lulali had told him that nothing had been finalized with the plaintiffs; and that Lutali had advised that he would get back to him.

In fact, Lutali concluded a sale agreement with plaintiff:'i, who at the outset deposited the sum of $16,000.00 towards the agreed selling price of $19,000.00. Although the remaining balance was informally agreed upon to be payable in the future by way of installments, Lutali did issue a deed immediately to plaintiffs. Consequently, the Territorial Registrar registered title in plaintiffs' name.

Notwithstanding, the vacant lot remained in Tauiliili's use and occupation. Plaintiffs apparently acquiesced in this continuing use and occupation until sometime in June 1990, when defendant Mua Faleatua discovered that Tauiliili had prepared boxing for the foundation of some new structure on the lot.(3) Mrs. Faleatua testified that after making this discovery, she went to the Office of Samoan Affairs the following day seeking to put a stop to Tauiliili's construction. She put the date at June 24, 1990, as she departed the island that very evening to attend a family fa'alavelave in Honolulu. As the result of her visit, the Office of Samoan Affairs, by letter dated June 26, 1990, notified both parties that a meeting at the Office of Samoan Affairs had been set for July 11, 1990. The letter also requested Tauiliili to cease construction in the meantime.

As it turned out, the meeting did not take place, as it was postponed owing to a conflict with the scheduling of a church conference in Apiato which both Tauiliili and Mrs. Faleatua were delegates. At the same time, the construction, as Mrs. Faleatua discovered while on the return flight from the church conference, had never abated in the interim. From the air, she noticed that the construction project, which she had assumed had been stopped, appeared to be roofed and nearly completed. She testified that she was surprised at seeing this and that she again visited the Office of Samoan Affairs the following day and there produced her deed to the disputed land. She stated that she also confronted Tauiliili with a copy of the deed immediately before filing [19ASR2d125] suit, but apparently to no avail. She and her husband Pa'u Faleatua then filed suit seeking, among other things, defendants' eviction.

The defendants do not contest plaintiffs' ownership of the lot. However, Tauiliili counterclaims for equitable relief, contending that he is entitled to be compensated by plaintiffs for the value of improvements he has made to land. Such relief, however, is available only to an occupant who has made improvements in "good faith," Fonoti v. Fagaima, 5 A.S.R.2d 158 (1987); Roberts v. Sesepasara, 8 A.S.R.2d 124 (1988), and whose possession must have been under some color or claim of title. See 42 C.J.S. Improvements § 7(a), at 432 (1944 & supp. 1985). In support of his claim, Tauiliili testified that he had always believed that the vacant lot belonged to Lutali and that he had built the FEMA home after first securing Lutali's permission to build. Additionally, he claims that the Faleatuas had never told him about their purchase of the land and that Lutali had led him to believe that the lot was still available for sale, since the Faleatuas had not completely paid off the balance of the purchase monies.

The counterclaim is fraught with a number of tactual contradictions against any claim to possession under color or claim of title. First, Lutali emphatically denied offering Tauiliili anything in the way of permission; the land was simply not his to give to Tauiliili. Second, the sale of the vacant lot to the Faleatuas was concluded in the year 1987, however, hurricane Ofa, the causal reason for FEMA assistance, did not occur until February 1990. In these circumstances, the alleged permission from Lutali to build a FEMA house on property which Lutali had three years earlier conveyed to a third party is highly suspect. Third, and perhaps more telling, is the fact that Tauiliili had (mis)represented in his application for FEMA assistance that he, not Chief Lutali, was owner of the building site. This fact is altogether inconsistent with his claim to Lutali's ownership and, hence, permission.

Finally, Tauiliili was put on notice a number of times as to the existence of a competing claim to the vacant lot, although he nonetheless took it upon himself to build upon it, knowing full well that he had no right to such use and occupation. Ordinarily, an improver's knowledge of an adverse claim vitiates a claim to "good faith" for the purposes of receiving compensation. Tulisua v. Olo, 8 A.S.R.2d 169 (1988). In addition, an improver may be charged with actual notice

where there is brought home to him notice of some tact or circumstance that would put a man of ordinary [19ASR2d126] prudence to such an inquiry as would, if honestly followed, lead to the knowledge of the adverse title.

42 C.J .S. Improvements § 7(b)(4)(b)(aa), at 436. Here, Tauiliili was put on notice of plaintiffs' adverse claim at the time of survey in 1987. He was put on notice when contacted by the Office of Samoan Affairs on or about June 22, 1991. He was put on notice when Mrs. Faleatua confronted him with her deed immediately before filing suit. He was put on notice when suit was filed. Yet the exhibits presented by plaintiff to substantiate the value. of his investment showed receipts for building supplies acquired between the months of June and October 1990. In these circumstances, Tauiliili can hardly be said to be a "good-faith" improver for purposes of equitable relief. The counterclaim is dismissed. The petition for eviction is granted.

Tauiliili may, however, remove his improvements. Since this must inevitably involve economic waste in regard to the FEMA house, the Court strongly urges the parties to seriously attempt to negotiate a sale agreement of the said house. If such an agreement cannot be achieved, then Tauiliili shall remove the house and any other property of his on the land within 60 days or suffer such property to become a part of the realty.

Judgment accordingly. It is so ordered.

*********

1. A hurricane-relief home financed by the Federal Assistance Management Agency (FEMA).

2. Tauiliili attempted to justify his unilateral decision to use the vacant lot by stating that the structures which he placed on the land, the pig pen and small house, were easily removable and not of a permanent nature. Chief Lutali also testified that when he confronted Tauiliili about his unauthorized use of the vacant lot, the latter responded that his use of the lot was merely provisional in nature.

3. After hurricane Ofa had destroyed what we have referred to as the "small house," Tauiliili successfully applied to FEMA for hurricane disaster relief. He was awarded a grant of $7,400.00 to rebuild.

Fa'atasiga v. M/V Ocean Pearl,


AFAMILIONA FA'ATASIGA, Plaintiff

v.

THE M/V OCEAN PEARL, Defendant in rem;
INTEROCEAN SHIPS, Inc., and Estate of JOHN MEDINA,

Defendants in personam

In the Matter of the Complaint of INTEROCEAN SHIPS, Inc.,
Owner and Operator of the M/V "OCEAN PEARL,"
for Exoneration from or Limitation of Liability

High Court of American Samoa
Trial Division

CA No. 152-83
CA No. 43-84

May 6, 1991

__________

The High Court of American Samoa has no authority, statutory or otherwise, to order a stay of admiralty proceedings in a federal district court.

The High Court's general admiralty jurisdiction includes limiting a shipowner's liability to the value or the ship, although lacking the statutory power of federal district courts to enforce this principle by injunction, pending the outcome or the limitation proceeding.

Th High Court refused to approve parties' stipulation to lift a stay or an action in federal district court when no such stay was issued because of the lack of statutory authority to do so.

Before REES, Associate Justice.

Counsel: For Plaintiff, Roy J.D. Hall and Paul F. Cronin

  For Defendant Interocean Ships, Inc., William H. Reardon, William L. Banning, and Stephen T. Erb

  For Defendant Estate of John Medina, Charles V. Ala'ilima and Charles Schoemaker, Jr.

The first of the two above-captioned actions, CA No. 152-83, was a personal-injury action filed in 1983 and dismissed in 1988. (The dismissal was technically for lack of prosecution, but it appears from the [19ASR2d60] file of the other action, CA No.43-84, that a settlement in CA No. 152-83 had been reached in 1986.)

The second action, CA No.43-84, arose out of a petition by plaintiffInterocean Ships for limitation of liability. The court entered a judgment on February 20, 1987, assessing the value of the ship at $1.9 million and limiting liability to that amount. Two parties appealed, but both appeals were voluntarily dismissed.

The Court bas now received a request for approval of a stipulation in what appears to be a related case, Lulley v. M/V Ocean Pearl, Case No. 86-189-CIV-T-17, in the United States District Court for the Middle District of Florida. The stipulation represents that theFlorida action was "stayed by order of the High Court of theAmerican Samoa" and that "[t]he said stay is still pending at this time." It appears to request the High Court to lift the stay of theFlorida action so as to allow the transfer of that action to the Southern District of California.

The High Court's file in the above-captioned cases, however , reflects no order staying the Florida action. On the contrary, the record in CA No. 43-84 reflects that the Court, in a written and reported decision, refused to enter such an order. In re Complaint of Interocean Ships, Inc., 2 A.S.R.2d 21 (1984). This decision was upheld by the Appellate Division on the ground that the High Court of American Samoa has no authority, statutory or otherwise, to order a stay of admiralty proceedings in a federal district court. In re Complaint of Interocean Ships, Inc., 2 A.S.R.2d 76 (1985). The Appellate Division held, however, that the High Court's general admiralty jurisdiction does comprehend the substantive principle of admiralty law that a shipowner's liability may be limited to the value of the ship (although not the power given by statute to federal district courts to enforce this principle by injunction, pending the outcome of the limitation proceeding). The Appellate Division remanded the action to the Trial Division for further proceedings consistent with its holding. Id. at 80-81. These proceedings resulted in the aforementioned February 1987 decision assessing the value of the ship at $1.9 million and limiting the shipowner's liability to that amount.

Because there is no stay for this Court to lift, the requested approval of the proposed stipulation would be without any apparent legal or practical effect.

*********

Etimani v. Samoa Packing Co.,


DAVID T. ETIMANI and
NATIONAL PACIFIC INSURANCE, LTD.,
a Corporation, Plaintiffs

v.

SAMOA PACKING COMPANY and DOES I-X, Defendants

High Court of American Samoa
Trial Division

CA No. 97-89

April 2, 1991

__________

Summary judgment is appropriate when the pleadings and supporting papers show "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." T.C.R.C.P.56.

In ruling on a summary-judgment motion, the court must view all pleadings and supporting papers in the light most favorable to the opposing party, treat the opposing party's evidence as true, and draw from such evidence the inferences most favorable to him. T.C.R.C.P. 56.

The old common-law rule that the release of one tortfeasor releases all tortfeasors does not apply to workmen's compensation claims because an employer is not a joint tortfeasor and the policy reasons behind a general release are inapplicable.

The "exclusive remedy" provision of the Workmen's Compensation Act extinguishes any tortious cause of action against an employer. A.S.C.A. § 32.0522(a).

Workmen's Compensation Act of American Samoa is highly similar to, and seems to have been drawn largely from, the federal Longshoremen's and Harbor Workers' Compensation Act. A.S.C.A., Title 32; 33 U.S.C. §§ 901 et seq.

Most jurisdictions recognize only one exception to the "exclusive remedy" provision of workmen's compensation acts--an indemnity action by a third party against an employer-- because this is not an action for "damages" but for reimbursement.

The workmen's compensation statute limits an employer's liability to pay compensation to the amount which the commissioner determines is payable over the amount the employee recovered against a third person, and an employer may maintain an action against the employee for any overpayment. A.S.C.A. § 32.0669(c).

Reversing the earlier common-law rules, the modern trend is that a valid release of one tortfeasor from liability, by the injured person, does not discharge others liable for the same harm, unless they agree otherwise. Restatement (Second) of Torts § 885(1) (1979).

In construing the common law, the High Court ordinarily follows the Restatement of Law. [19ASR2d2]

Disallowing compromise contracts between the employer and employee, the Workmen's Compensation Act bars an agreement to prevent the employee from receiving or altering the amount of compensation fixed and guaranteed to him by statute. A.S.C.A. § 32.0554(b), A.S.C.A. § 32.0672.

A settlement agreement which has been approved by the Workmen's Compensation Commission effectively discharges an employer's liabilities under the Act. A.S.C.A. § 32.0668.

When a defendant has provided no showing regarding the context in which a release was signed--the negotiations preceding its execution; the circumstances under which it was signed; whether the underlying payment was a settlement under A.S.C.A. § 32.0668, commuted per A.S.C.A. § 32.0666; or whether the Commissioner had approved such settlement or issued a formal compensation order--an inference of invalidity must be drawn in plaintiff's favor for purposes of summary judgment. A.S.C.A. §§ 32.0668, 32.0666; T.C.R.C.P. 56.

A court will not presume that an injured worker settling a workmen's compensation claim clearly intended to release all his future claims against a third party who did not participate in negotiating the contract and apparently paid no consideration for such release.

A request for costs is properly denied in a negligence suit sounding in tort because it is not a proceeding "in respect to any claim or compensation order." A.S.C.A. § 32.0639.

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

Counsel: For Plaintiffs, John L. Ward II

  For Defendant Samoa Packing Company, Robert A. Dennison III

On Motion for Summary Judgment:

Facts

On November 18, 1987, plaintiff Etimani, in the course of his employment with Polynesia Shipping Services, Inc., fell and was injured while on the premises of defendant Samoa Packing Company, a fish-packing company. Etimani apparently filed a claim for workmen's compensation and on January 11, 1989 signed a release prepared in September 1988 at the request of plaintiff N.P.I., the workmen's compensation insurer of Polynesia Shipping Services. The release, notarized the same date, reads in part: [19ASR2d3]

DAVID ETIMANI, hereinafter called the "Payee", ... inconsideration of the sum of. ..($11,065.82) paid by NATIONAL PACIFIC INSURANCE COMPANY (hereinafter Payor)... and POLYNISIAN [sic] SHIPPING COMPANY, INC.,... hereby release and discharge Payor and POLYNISIAN [sic] SHIPPING COMPANY, INC. and any and all other persons and parties in the world, from any and all claims, demands, damages, actions, or causes of action whatsoever, which said Payee has, has ever had or may have, whether or not known or whether anticipated or not, resulting from, arising out of, to arise out of or connected with, directly or indirectly, with that certain industrial injury, to wit: injury to his left leg which occurred on or about November 18, 1987, wherein claimant was injured....[S]aid payment... compromises and settles all disputes between the parties for the purpose of payment of this claim.... THE PAYEE FURTHER AGREES to indemnify and hold harmless the Payor and POLYNESIAN SHIPPING COMPANY, INC, against loss or liability arising from any and all claims, demands, damages, actions, causes of action or any other matter whatsoever, which may have been or may hereafter be at any time made or brought
as a result of, arising out of the matters released hereby and further, the undersigned waives the right under A.S.C.A. §§ 32.0501, et seq., to maintain any further action or suit against the Payor and POLYNESIAN SHIPPING COMPANY, INC..

On November 3, 1989, plaintiffs Etimani and N.P.I. filed a complaint against defendant Samoa Packing, alleging that its negligence caused Etimani's fall and resulting injuries. Defendant Samoa Packing Company ("Samoa Packing") moves for summary judgment, claiming two affirmative defenses: (1) that the claims of both plaintiffs David Etimani and National Pacific Insurance Limited ("N.P.I.") are barred by the terms of the global release signed by Etimani; or (2) alternatively, that Etimani assigned his claim to N.P.I. under the terms of A.S.C.A. [19ASR2d4] § 32.0669(1) and thus must be dismissed as a party to the proceedings. Neither assertion can be sustained as a matter of law, and we deny summary judgment to defendant on both issues for the reasons noted below.

Discussion

Summary judgment is appropriate where the pleadings and supporting papers show "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." T.C.R.C.P. 56. In ruling on such a motion, the court must view all pleadings and supporting papers in the light most favorable to the opposing party, United States v. Diebold, Inc., 369 U.S. 654 (1952), treat the opposing party's evidence as true, and draw from such evidence the inferences most favorable to him. Lokan v. Lokan, 6 A.S.R.2d 44, 45 (1987).

I. Release

In support of its contention that the release also discharged any and all claims which Etimani may have had against it, Samoa Packing alludes to the old common law rule that the release of one tortfeasor will operate to release all. 76 C.J .S. Release § 50 (1952); Annotation, Release of One Joint Tort Feasor as Discharging Liability of Others: Modern Trends, 73 A.L.R.2d 406, 407 (1960); 66 Am. Jur. 2d Release § 37 (1973). The rule does not apply here for several reasons. [19ASR2d5]

First, the employer is not a joint tortfeasor.(2) Most workmen's compensation statutes provide that an employer can be liable only under the workmen's compensation act; this "exclusive remedy" provision extinguishes any tort cause of action against an employer. 2A Larson, at § 76.00. The language of our corresponding "exclusive remedy" provision(3) impels the same conclusion.(4) See Shields v. Bechtel Power [19ASR2d6] Corp., 439 F. Supp. 192 (D. Wyo. 1977); Cripes v. Haynes, 350 So. 2d 956 (La. 1977); Newsome v. Finch, 375 So. 2d 1144 (Fla. App. 1979); Certain Underwriters at Lloyd's v. United States, 511 F.2d 159, 163 (5th Cir. 1975).

Second, the policy reasons usually given for the rule are not applicable in the workmen's compensation context. The reasons usually given to explain why general releases are interpreted to include unnamed third parties are: (1) to protect the potentially liable party who settles against third party suits for indemnity or contribution(5) and (2) to prevent double recovery by the injured party.(6) Neither rationale applies in workmen's compensation cases. The employer who settles is exempt from contribution or indemnity liability as a joint tortfeasor.(7) Any liability he has under a contract theory of indemnity arises from his independent relationship with the third party. As for double recovery, the compensation statute limits an employer's liability to pay compensation to "the excess of the amount which the commissioner determines is payable. ..over the amount [the employee] recovered against such third person." A.S.C.A. § 32.0669(c). At the same time, an employer may maintain an action against the employee for any overpayment, preventing double recovery. Peters v. North River Ins. [19ASR2d7] Co. of Morristown, N.J., 764 F.2d 306, 312 (5th Cir. 1985); see also cases cited at 33 U.S.C. § 933 n. 30 (1980).

While the joint tortfeasor rule still survives in some jurisdictions, its continued vitality is doubtful. It has been vigorously attacked by commentators, 73 A.L.R.2d, supra, and in the absence of statutory regulation the modem trend favors abrogating the rule and looking to the intent of the parties executing a release to determine who is released. Id. The modem "intent of the parties" rule is also reflected in the Restatement of Law; Restatement (Second) of Torts § 885(1) (1979) provides: "[A] valid release of one tortfeasor from liability for a harm, given by the injured person, does not discharge others liable for the same harm, unless it is agreed that it will discharge them." This "is a reversal of earlier common law rules." Id., comment b. As this Court has, in construing the common law, ordinarily followed the Restatement of Law, see Tung v. Ah Sam, 4 A.S.R. 764 (1971); DBAS v. Ilalio, 5 A.S.R.2d 1 (1987), we reject the argument that the release also discharges Samoa Packing on the basis of the early common law rule on the release of joint tortfeasors.

Samoa Packing additionally argues that Etimani's execution of the release was "knowing and intelligent" and that the document thus executed "unequivocally" released "any and all persons and parties in the world from any and all claims and causes of action arising out the incident of November 18, 1987, in which [Etimani] was injured." Memorandum of Points and Authorities, at 2. These factual conclusions, however, are made on the basis of an affidavit from the then lawyer for the insurer. The affidavit reads in pertinent part: "[t]he Release appears to have been duly executed by David Etimani before a notary public on or about January 11, 1989, as indicated on the release." (Emphasis added). The affidavit really adds nothing in the way of explaining the release nor circumstances behind the release, which, in our view, are far from unequivocal.

The context of the release is Polynesia Shipping's liability for workmen's compensation benefits pursuant to the Workmen's Compensation Act (hereafter the" Act"). The Act disallows compromise contracts between the employer and employee.(8) Thus, there can be no [19ASR2d8] agreement to prevent the employee from receiving or altering the amount of compensation fixed and guaranteed to him by statute. We note, however, that the terms of the release before us certainly purport to reflect a situation of settlement in the sense of mutual compromise --- "[the] payment [made to Etimani]... compromises and settles all disputes between the parties." Release, para. 2. While the Act does recognize those settlement agreements which have been approved by the Workmen's Compensation Commission as effectively discharging an employer's liabilities under the Act, see A.S.C.A. § 32.0668, we are unable to determine from the face of the release in issue whether such commission approval was ever obtained. In this regard there is, without further evidence, a doubt as to the validity of the release. The more troublesome question is whether Etimani, in order to receive workmen's compensation benefits to which he was otherwise entitled under the Act, was at all required to sign a release in the first place. (The concern here is significant since Etimani does not appear to have been represented by counsel when he ostensibly signed away rights of which he may not have been aware.) In other words, was there consideration given to Etimani for the global release? The extent of the record is, again, not sufficiently clear on these points.

Moreover, if Polynesia Shipping's liability to Etimani for compensation is based on the provisions of A.S.C.A. § 32.0605 (dealing with permanent total disability) or pursuant to § 32.0609 (providing a schedule for permanent partial disability), then the release's compromise and concession language is not only thoroughly misleading but also completely meaningless, since the benefits thereunder are capable of calculation to a mathematical certainty and thus beyond dispute. Indeed, in as much as the release does reflect an exercise of compromising Etimani's statutory benefits, it is invalid. See A.S.C.A. § 32.0672.

On the facts before us, we are unable to say whether the release in question is, indeed, a valid release given the Act's restrictions on compromise contracts. The defendant has provided no showing regarding the context in which the release was signed ---the negotiations preceding its execution; the circumstances under which it was signed; whether the underlying payment was a settlement under A.S.C.A. § 32.0668, commuted per A.S.C.A. § 32.0666; or whether the Commissioner had approved such settlement or issued a formal compensation order. All we know is that the release was prepared in [19ASR2d9] September 1988 at the request of plaintiff N.P.I., signed by plaintiff Etimani on January 11, 1989, notarized, and accompanied by an interpreter's certificate (apparently signed by Etimani) stating that the release was translated, acknowledged, understood, and freely executed. In these circumstances and for purposes of summary judgment, the inference of invalidity must be drawn in plaintiffs favor. T.C.R.C.P. 56.

Furthermore, we cannot presume that an injured worker settling a workmen 's compensation claim clearly intended to release all his future claims against a third party who did not participate in negotiating the contract and apparently paid no consideration for such release. In circumstances where a releasor was led to believe that he was getting all that he was entitled to in damages or benefits, some courts have construed the release given as limited to the "settlement of those matters only to which the minds of the parties met, and may not be considered to be in satisfaction of anything not consented to by the plaintiff." Jordan v. Guerra, 144 P.2d 349, 352 (Cal. App. 1943); see also Ruiz v. City of Albuquerque, 577 P.2d 424 (N.M. App. 1978).(9) That Etimani was led to believe that he was only entitled to a payment of $11,065.82 for injuries sustained is yet another inference (most favorable to plaintiff) which might reasonably be drawn in the following circumstances: Etimani was not aware that he could also file a common law action in damages against third parties; he was neither represented by counsel, nor did the terms of the release give him the slightest hint that he also had common law rights against third parties which were also the subject of settlement; and the release was given in pursuance of a workmen's compensation claim.(10) Therefore, the release (presuming it is valid) would at best extend only to plaintiff Etimani's workmen's compensation claims and not to any common law remedies he may have against third parties. Id. [19ASR2d10]

For the foregoing reasons we deny summary judgment on the issue.

II. Assignment of the Claim

Defendant argues in the alternative that plaintiff Etimani "accept[ed]... compensation under an award in a compensation order" on January 11, 1989, when he signed the release settling his workmen's compensation claim and thereby assigned all rights to maintain a third-party action to N.P.I. by failing to commence this action within six months.

Jurisdictions vary as to whether a third party may assert subrogation as a valid defense when the employee attempts to sue. 2A Larson, at §§ 75.40-75.45. In Rodriguez v. Compass Shipping Co., 451 U.S. 596 (1981), the Supreme Court allowed subrogation as a defense in a L.H.W.C.A. case. It held that L.H. W.C.A., 33 U.S.C. §§ 901 et seq., with language almost identical to that of our statute,(11) divests an employee of all rights to sue a third party six months after he accepts compensation pursuant to an award in a compensation order.(12) Id. But a subsequent Supreme Court case, Pallas Shipping Agency, Ltd. v. Duris, [19ASR2d11] 461 U.S. 529 (1983), vitiates the cases cited by defendant(13) and indeed provides support for plaintiffs' argument; that is, defendant has failed to plead or prove the "award in a compensation order" which A.S.C.A. § 32.0669 requires to trigger assignment of the claim to N.P.I..

The Rodriguez Courtdid not decide whether informal agreements were equivalent to formal orders for purposes of triggering a § 933(b) assignment but assumed for purposes of the decision that they were. Rodriguez, supra at 598 n.3. But the Pallas Court held that § 933(b) of L.H.W.C.A., 33 U.S.C. § 901 et seq., requires a formal compensation order or award to trigger the assignment of the employee's right of action against third parties to the employer. Pallas, supra. We find the Supreme Court's reasoning on a statute so closely paralleling ours(14) to be persuasive. Under L.H.W.C.A. regulations an employer can obtain a formal compensation order simply by requesting it once a voluntary agreement has been implemented. The Court implied that the employer should thus bear any consequences of his failure to secure such an order. Pallas, supra at 538. Here, an employer could likewise obtain approval of an agreed settlement from the workmen's compensation commission which would effectively discharge the employer's liability, notwithstanding the Act's provisions against compromise contracts. See A.S.C.A. § 32.0668.

We deny summary judgment on the "assignment of claim" issue since defendant has failed to show a formal award as required by A.S.C.A. § 32.0669.

III. Costs Assessment Under A.S.C.A. § 32.0639 [19ASR2d12]

Plaintiff asks that the costs of these proceedings be assessed against defendant pursuant to A.S.C.A. § 32.0639. We deny the request. This is a negligence suit sounding in tort rather than a proceeding "in respect to any claim or compensation order" where § 32.0639 would apply.

It is so ordered.

*********

1. [A]cceptance of compensation under an award in a compensation order operates as an assignment to the employer of all rights of the individual entitled to compensation to recover damages against such third person unless such individual commences an action against such third person within 6 months after such award.... Where the employer is insured and the carrier has assumed the payment of the compensation, the carrier shall be subrogated to all rights of the employer under this section.

A.S.C.A. § 32.0669(a), (e).

2. See 1 A. Larson, The Law of Workmen's Compensation §§ 1.20, 2.00 (1983) (stressing fundamental differences between tort and workmen's compensation schemes in philosophy, tests of liability, injuries compensated, elements of damage, defenses available, amount of compensation, and ownership of award). Furthermore, a third-party tort feasor cannot sue or .join a negligent employer because "the employer is not jointly liable to the employee in tort; therefore he cannot be a joint tortfeasor" and "[t]he claim[s] of the employee against the employer... [and] the third person... are different in kind and cannot result in a common liability. " 2A Larson, at § 76.20. Compensation law is "wholly substitutional" for the common law of tort, not in the sense of liability tor liability and exemption for exemption, but "[o]ne entire system was substituted for another, and when the old system went out, all the exceptions and immunities that were a part of the old system naturally went out with it." 1 C Larson, at § 50.43).

3. The liability of an employer [under this Act] shall be exclusive and in place of all other liability of such employer to. ..anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death.... A.S.C.A. § 32.0522(a) (emphasis added). The language is identical to that of the Federal Longshoremen and Harbor Worker's Compensation Act ("L.H.W.C.A."), 33 U.S.C. § 905, and the Federal Employees' Compensation Act ("F.E.C.A."), 5 U.S.C. §757(b). Haleck v. Scanlan, 4 A.S.R. 998, 1002 (1975) (Workmen's Compensation Act of American Samoa, 24 A.S.C. [recodified as Title 32], "extraordinarily similar to and seems to have been drawn largely from [L.H. W.C.A.]"); see also United Airlines v. Wiener, 335 F.2d 379, 403 (1964) (exclusive remedy clauses in L.H.W.C.A. and F.E.C.A. are identical).

4. Most jurisdictions recognize only one exception to the "exclusive remedy" provision ---an indemnity action by a third party against an employer, which is not an action for "damages" but for reimbursement. 2A Larson, at §§ 76.41-76.50. But even then the employer is not a joint tort feasor, since a claim of indemnity is grounded in contract or equity rather than tort. 41 Am. Jur. 2d Indemnity §§ 2, 20, 21 (1968); Ocean Drilling & Exploration Co. v. Berry Bros. Oilfield Serv., 337 F.2d 511, 514 (5th Cir. 1967); General Electric Co. v. Cuban Am. Nickel Co., 396 F.2d 89,100-02 (5th Cir. 1968); United Airlines, Inc. v. Wiener, supra at 402-04.

The possibility of Polynesia Shipping being liable to indemnify defendant under a contract theory is relevant in deciding whether the parties to the release intended to release defendant as a third party beneficiary, White v. General Motors Corp., 541 F. Supp. 190, 194-95 & n.10 (D.C. Md. 1982), and might affect whether defendant could claim the benefit of the parol evidence rule in construing the terms of the release. But no claim to indemnity could transform Polynesia Shipping into a joint tort feasor.

5. Morison v. General Motors Corporation, supra, at 954; Auer v. Kawasaki Motors Corp., U.S.A., 830 F.2d 535, 539 (4th Cir. 1987).

6. State ex. rel Normandy Orthopedics, supra at 831.

7. Supra note 4.

8. See A.S.C.A. § 32.0554(b) ("[N]o agreement by an employee to waive his rights to compensation... is valid."), and A.S.C.A. § 32.0672 ("No... release of liability for compensation... payable [under the Act] is valid, except as otherwise provided for by [the Act].").

9. In Jordan v. Guerra, plaintiff accepted $150.00 in settlement of a claim for the death of his son. Plaintiff executed a release of all liability stemming from the accident, having been led to believe that all that he could claim was funeral expenses and time lost. In his action for wrongful death, the court construed the release as being ineffective beyond the discharge of liability for funeral expenses and time lost.

10. It was further held in Ruiz v. City of Albuquerque that any reasonable doubt as to the intent of the parties and the effect of a release should be construed in favor of the workman. Id. at 428.

11. Acceptance of such compensation under an award in a compensation order filed by the deputy commissioner of Board [sic] shall operate as an assignment to the employer of all right of the person entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award.

33 U.S.C, § 933(b).

12. For collected cases dealing with this issue, see Annotation, Right of Injured Employee to Sue Third-Part Tortfeasor Under, or Affected by, § 33(b) of the Longshoremen's and Harbor Worker's Compensation Act (33 U.S.C. §933(b)), 2 A.L.R.Fed. 1015 (1969). In 1984 Congress revised § 933(b), virtually eliminating a Rodriguez-type situation, by providing that if an employer does not tile suit against a third party within ninety days after the cause of action was assigned under § 933(b), the right to bring such action reverts to the person entitled to compensation. 33 U.S.C. § 933(b), as amended by P,L. 98-426, § 21, 98 Stat. 1652 (1984). Our statute has not been so revised.

13. Sorrentino v. Lloyd, 528 F. Supp. 1119 (E.D.N.Y. 1981); Verderame v. Torm Lines, 670 F.2d 5 (2d Cir. 1982); Simmons v. Sea-Land Serv., Inc., 676 F.2d 106 (4th Cir. 1982), vacated and remanded 462U.S. 1114 (1983).

14. The language of our statute parallels LHWCA in several provisions cited by the Pallas Court. Compare 33 U.S.C. §§ 914(e)-(f) with A.S.C.A. § 32.0663(a)-(b); 33 U.S.C. § 914(c) with A.S.C.A. § 32.0661(a); 33 U.S.C. § 921(c) and A.S.C.A 32.0652; 33 U.S.C. § 921(a) with A.S.C.A. § 32.0651; 33 U.S.C. § 921(d)-(e) with A.S.C.A. § 32.0653.

Estate of Lagafuaina; Puailoa v.


PUAILOA TAVETE, Plaintiff-Appellant

v.

Estate of LAGAFUAINA LAISENE, FA'AOPOOPO LAGAFUAINA,

Executrix; HUGO GEBAUER; MARCUS LANGKILDE, personally and as

Executor of the Estate of MARIE LANGKILDE; LEFAGA BEAVER;

SMITH HO CHING; TELE'A PULETASI; FALENOFOA STEFFANY;

ROBERT C. PAYES; ROY J.D. HALL, Jr.; TUI MARCUS;
and SOLA PENEI SEWELL, Defendants-Appellees

High Court of American Samoa
Appellate Division

AP No. 20-89
LT No. 18-87

April 18, 1991

__________

A person who takes an interest in real properly from one who litigated the property’s title is in privity with him and so is bound by res judicata .

The doctrine of stare decisis, applies only to questions of law, not questions of fact or applications of principles of law to particular facts.

Res judicata applies only to a "final" judgment between the "parties" or those in privity with them. Restatement (Second) of Judgments §17 (1988).

Even if erroneous, a court's decision as to whether a parcel of land is a person's individual land or a family's communal land is binding on later courts. [19ASR2d41]

Before FONG,* Acting Associate Justice, Presiding, KLEINFELD,** Acting Associate Justice, MALAET ASI,*** Acting Associate Justice, VAIVAO, Associate Judge, and LOGOAI, Associate Judge.

Counsel: For Plaintiff, Charles V. Ala'ilima

  For Defendants Lagafuaina, Payes, and Sewell, Albert Mailo

  For Defendants Gebauer, Ho Ching, Marcus, Puletasi, and Steffany, Gata E. Gurr

  For Defendant Langkilde, William H. Reardon

  For Defendant Beaver, Tautai A.F. Fa'alevao

KLEINFELD, J.:

This appeal involves a dispute a century old. We affirm the decision below. This decision should end the dispute over who owns the disputed 60 acres of Malaeimi, the Puailoa family or the heirs and assigns of Lagafuaina Laisene. The Lagafuaina Laisene heirs and assigns own it.

The Land and Titles Division published an opinion at 11 A.S.R.2d 54 (1989), and a decision on a motion for reconsideration at 12 A.S.R.2d 84 (1989). These decisions are masterpieces of lucidity and precision. We adopt the statements of fact in those decisions and the analysis of law, except for the legal analysis on the two issues we do not find it necessary to reach, adverse possession and laches. Since we affirm on the main ground of the decision below, res judicata, we do not reach these alternative grounds of the decision below. The summary of facts and law herein is designed only to facilitate easy reference, and the reader needing a more complete explanation should read the decisions of the Land and Titles Division. [19ASR2d42]

In 1895 Fanene of Nu'uuli defeated W. McArthur & Company in the Supreme Court of Samoa, when the Company attempted to register a mortgage on land called Malaeimi in the village of Faleniu. In 1906 Puailoa Vaiuli, who had developed the land and had assisted Fanene of Nu'uuli in defeating the McArthur claim, leased 360 acres within Malaeimi to the Church of Jesus Christ of Latter Day Saints. The rent was paid by the Church to Puailoa Vaiuli until he died in 1929. After his death, his widow, Salataima, received the rent.

The critical determination of ownership in this case arose out of a dispute in 1931 between matais of the Puailoa family and Puailoa Vaiuli's widow, Salataima, over who was entitled to the rent. If Puailoa Vaiuli had owned the land individually, then his widow was entitled to the rent, but if it had been communal land of the Puailoa family, then the Puailoa family, through its matais, would be entitled to the rent. Salataima, the widow, was not a member of the Puailoa family, and having no children by Puailoa Vaiuli, she had no right to remain on the land if it was Puailoa family land.

The High Court decided in the 1931 case, Nouata v. Pasene, LT No. 18-1930, that the widow was entitled to the rent, not the Puailoa family. Here is the critical language of the 1931 Nouata decision:

[T]hat part of Malaeimi that is leased to the Mormon missionaries is the property of the widow of Puailoa and that she should have during her lifetime the rents.

....

While she is living it is suggested that she shall make a written statement signed by two witnesses, who she wants this money to go to after her death. It is only a suggestion but it might be a good idea for her to give it to the Puailoa family after she dies.

Puailoa matais approached Chief Justice Wood, Governor Lincoln, and United States Senator Hiram Bingham in their political and legal attempts to have this decision overturned, but it was not reopened. The judgment stood.

In 1953 Salataima sold the Church 300 of the 360 acres. She died in 1956 and left her brother Lagafuaina, whose estate is the lead defendant in the case at bar, the remaining 60 acres of Malaeimi. She had not made a written, witnessed statement that the Puailoa family [19ASR2d43] should receive the rent after her death, as the court had suggested in 1931. The defendants in this case, in addition to Lagafuaina's estate, include a number of individuals to whom he sold portions of the 60 acres, his granddaughter, who built a house on the land, and other persons taking interests through Lagafuaina. Lagafuaina and those taking interests under him have invested in improvements of a value exceeding a million dollars since the late 1950s.

The Puailoa family never accepted its 1931 defeat. In 1978, 47 years after the judgment, Puailoa Tavete moved for a new trial in the 1931 case. The motion, filed in Nouata v. Pasene, LT No.18-1930, was denied. Appeal was taken, and the appellate division upheld the denial in a decision written by Acting Associate Justice Kennedy, now Justice Kennedy of the United States Supreme Court:

[T]he predecessor in interest of the party making this motion submitted himself to the jurisdiction of the trial court in the 19311itigation and therefore had sufficient notice of the pendency of the suit. The only way, then, that the irregularity allegedly committed by the 1931 court in making a determination concerning the status of the land can be grounds for finding the judgment void is if the determination was so remote from the subject matter of the litigation that the court could not adjudicate the two matters simultaneously....

[I]t was apparently understood by all parties that the status of the land Malaeimi, whether personally belonging to Salataima or whether communal, was in dispute as well as who could lawfully claim the matai title Puailoa... [T]he two matters were inextricably intertwined, and. ..[Puailoa Nouata], who was apparently the party adversely affected by any determination of the status of the land Malaeimi, was reasonably and actually notified that the two matters would be jointly resolved.

Nouata v. Pasene, 1 A.S.R.2d 25, 31-33 (1980). The Nouata 1980 decision did not construe the language of the 1931 decision, but it did decide with finality that the decision should not be reopened, on account of lack of jurisdiction, to decide who had title to the 360 acres and that the decision was binding as to the Puailoa family: "We intimate no views [19ASR2d44] as to the interpretation of the 1931 decision or its bearing on the ultimate question of title, only that it is valid as to these parties. " Id. at 35.

The Puailoa family, though, still did not accept the result. The family began moving people onto the 300-acre portion of Malaeimi which Salataima had sold to the Church. The Church sued them for trespass and lost in Reid v. Aipopo, LT Nos. 007-79, 041-79. The trial court construed the 1931 decision to give the widow only "the rent from the church lease.” The court then construed the 1931 decision to establish that Malaeimi was communal land of the Puailoa family, so the widow's conveyance of 300 acres was void. The appellate division affirmed as to the 300 acres Salataima had sold the church, on the ground that this construction amounted to a finding of fact and was not clearly erroneous. Reid v. Puailoa, AP No. 14-82 (March 30, 1983) (the reported opinion at 1 A.S.R.2d 85 does not include the full slip sheet opinion).

It is quite important to note, as the trial division in the case at bar did, that the trial division's decision in Reid was reversed, insofar as it had any bearing on Lagafuaina's 60 acres. The appellate decision says:

The judgment of the trial court purported not only to affect the status of the land claimed by the Mormon Church, but also the status of an additional 60 acres to which the Church had no connection, and, as well, addressed the rights and liabilities of several persons who were not parties to the action. The trial court eventually terminated the property rights of several individuals without their knowledge and without granting them an opportunity to defend their interests.

Elementary concepts of due process require notice and a hearing prior to the deprivation of property rights.... One is not bound by a judgment resulting from litigation in which he is not designated as a party and to which he has not been made a party by service of process....

Those portions of the decision of the trial court attempting to dispose of property not claimed by the Mormons, and affect[ing] the rights of individuals who were not parties to the litigation were erroneous and are reversed. [19ASR2d45]

Reid v. Puailoa Tavete, AP Nos. 014-82, 015-82, 016-82, slip op. at 16- 17.

In the same year as his success on appeal regarding the 300 acres, Puailoa Tavete filed the present lawsuit regarding the 60 acres. The theory of the lawsuit is that the 1979 decision's construction of the 1931 decision on the 300 acres should also be applied to the 60 acres, so that the Puailoa family, rather than the various individuals taking under Lagafuaina, will be deemed to have title. The trial court held that the 1931 decision was res judicata and construed the decision to establish that the entire 360 acres was individually owned by Salataima and not communally owned by the Puailoa family. The trial court found that the parties with interests in the 60 acres were not bound by the 1979 judgment, because they were not parties or in privity with parties which participated in that litigation. We think that this is exactly right.

The long and complex history makes the issues seem more complicated than they are. The chain of title for Malaeimi divided into two when Salataima sold 300 acres to the church and left 60 acres to her brother Lagafuaina. The 300 hundred acres and the 60 acres have been the subject of separate litigation. If A conveys Blackacre to B and Whiteacre to C, and then D, claiming title superior to A 's to both parcels, successfully sues B for title to Blackacre, C's title to Whiteacre is unaffected by the judgment. C was not a party to D's litigation against B, so he cannot be precluded from re-litigating the issue which D litigated against B.

Puailoa Tavete is in privity with the matais of the Puailoa family who litigated in 1931, because he takes whatever interest he holds on behalf of the family from the matais who claimed to hold an interest in the 360 acres in 1931. The defendants in this case who took their interests from Lagafuaina are in privity with Lagafuaina, because they took from him, and their title can be no better than his. The estate of Lagafuaina is in privity with Salataima because Lagafuaina inherited from her, and his estate's title can be no better than hers. The estate of Lagafuaina, though, is not in privity with the Mormon Church and so is not bound by the Church's defeat in the Reid case, because Lagafuaina took from Salataima, not from the Church. His title is not dependent on the Church’s title, because the chain of title split into two branches when Salataima sold 300 acres to the Church and devised 60 acres to her brother, Lagafuaina. [19ASR2d46]

Of course we consider the persuasive force of the Reid case, even though it is not binding upon the Lagafuaina interests. The doctrine of stare decisis is inapplicable, because it applies only to questions of law, not questions of fact or applications of principles of law to particular facts. 20 Am. Jur. 2d Courts § 185 (1965). Lagafuaina and his heirs did not take title from the Mormon Church and were not parties to Reid, so to give any more force to Reid would be res judicata through the back door. As to the Lagafuaina 60 acres, the Lagafuaina interests were not "parties," and the Reid judgment was reversed on appeal, so the trial court decision was not "final." Since res judicata applies only to a "final" judgment between the "parties" or those in privity with them, Restatement (Second) of Judgments § 17 (1988), the doctrine cannot apply.

The Nouata court in 1931 quite plainly decided whether Malaeimi was individually owned or communally owned. The court described the widow's contention as being that the Puailoa family lands "belonged to the holder of the name Puailoa except that land which was leased by Puailoa to the Mormons and that belongs to her on his death. She also says that this land leased to the Mormons came to Puailoa under the name Vaiuli and not under the name Puailoa." We see no room for doubt that the court meant to decide in that case whether the land was individually or communally owned. Since the Puailoa family were "parties" to that decision, and the decision is "final" under Nouata v. Pasene, 1 A.S.R.2d at 35, it does have res judicata effect. Restatement (Second) of Judgments § 17. That means that we cannot properly reexamine whether, as between the widow's heirs and assigns and the Puailoa family, the land is individually or communally owned. 46 Am. Jur. 2d Judgments § 415 (1969).

The trial court decision in Reid may be meant as an interpretation of what Nouata means and not a reexamination of Nouata on the merits. We have given it respectful consideration, but we find the trial court's interpretation in the case at bar more persuasive. In plain English, Nouata decided that the 360 acres was "the property of the widow. " This was an answer to the question of whether Malaeimi was her property or Puailoa communal property. What the court called a suggestion to the widow, that she prepare a will stating who should receive the Church rents after her death, is best construed to be exactly what that court said it was--"only a suggestion." We just do not see ambiguity in the language saying that the land was "the property of the widow" or the phrase "only a suggestion." The phrase "she should have during her lifetime the rents" is better interpreted as a concrete answer [19ASR2d47] to the Mormon Church's question, "To whom should we pay the rent?" than words qualifying the widow's title. The Church's question precipitated the dispute, so the court answered it. In 1931, as the trial court in the case at bar pointed out, land was plentiful, but cash was scarce, so the court's attention would naturally be drawn to the issue of specifying who should receive the cash. We do not decide whether the 1931 decision was right or wrong, only that it decided the question of whether the 360 acres was the individual property of Salataima or the communal property of the Puailoa family. Even if erroneous, the 1931 decision is binding. Restatement (Second) of Judgments § 17 comment d.

We adopt the statement of facts in section 1 of the trial division's decision and affirm it on the basis of the res judicata effect of the 1931 decision, which is section II of the trial division's decision, and the effect of Reid v. Puailoa, at section IV of the trial division's decision. We do not reach the issue of adverse possession. We intimate no view on whether section III of the trial division's decision regarding adverse possession is correct, because it is unnecessary for us to reach that issue. Likewise, it is not necessary for us to decide whether laches would apply against the Puailoa family, as section V of the trial division finds.

A century of litigation over title to one parcel of land is more than enough. As the 1980 decision in Nouata v. Pasene noted, "[T]here must be an end to litigation someday." Nouata, 1 A.S.R.2d at 35 (quoting Ackermann v. United States, 340U.S. 193, 198 (1950). After 60 years, this is the end. The past must now be past.

*********

*Honorable Harold M. Fong,ChiefJudge,United StatesDistrict Court, District of Hawaii, serving by designation of the Secretary of the Interior.

**Honorable Andrew J. Kleinfeld,Judge,United States District Court, District of Alaska, serving by designation of the Secretary of the Interior.

***Honorable Maleatasi Togafau, District Judge, serving by designation of the Secretary of the Interior.

Coulter; EW Truck & Equipment Co. v.


EW TRUCK & EQUIPMENT CO., Plaintiff

v.

BOB COULTER d.b.a. SOUTH PACIFIC
EQUIPMENT AND REPAIR, Defendant,

SOUTH SEAS SHIPPING CO., through its agent
MATAI MARITIME AGENCY, Inc., Plaintiff

v.

S.P.E.A.R. CO. and EW TRUCK & EQUIPMENT CO.,
Defendants

PATRICK COFFIN, Third-Party Defendant

High Court of American Samoa
Trial Division

CA No. 59-90
CA No. 62-90

May 6, 1991

__________

If each party to a contract does things which, assuming no breach by the other party, would amount to a breach of the contract, the first breach is usually deemed to excuse what otherwise would have been the subsequent breach by the other party.

When each party breaches a contract before finding out about the other party's independent breach, and in the absence of any dimension of malice or wilfulness in either party's breach, the most appropriate remedy is to give each party the benefit of the bargain to which it agreed and was entitled.

When three companies may otherwise be entitled to be treated as separate entities for most purposes but found it to their advantage to treat themselves as a single enterprise, the court treated them as a single entity in construing a contract. [19ASR2d62]

Before REES, Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Plaintiff EW Truck & Equipment Company, Robert A. Dennison III

  For Plaintiff South Seas Shipping Company, Charles V. Ala'ilima

  For Defendants S.P.E.A.R. Company and Bob Coulter, Roy J.D. Hall, Jr.

These consolidated cases concern contracts for the sale of a truck and its shipment fromCaliforniatoAmerican Samoa. Plaintiff EW Trucking claims that defendant Coulter, then doing business in the name of "SPEAR Co.," agreed to purchase a certain 1966 Ford "bucket truck" for $37,000.60 plus shipping costs of $ 12,168. Defendant claims that he did not agree to purchase the truck on behalf of himself or SPEAR but only on behalf of third-party defendant Patrick Coffin.

By the time the truck arrived in American Samoa, the deal had gone bad; nobody picked up the truck from the dock or paid the $12,168 shipping charges. Plaintiff South Seas Shipping Co./Matai Maritime Agency claims this amount plus interest, costs, and attorney fees against both EW and SPEAR.

The two main issues in the dispute between EW and SPEAR are (1) whether SPEAR agreed to purchase the truck or only to arrange for a sale by EW to Coffin and (2) whether the agreement of the parties included a condition that the truck be insulated against electric current.

On the first issue, we find for plaintiff EW. Numerous facsimile transmissions between EW and SPEAR, both before and after the truck was shipped to American Samoa, reflect what appears to have been the understanding of both parties that SPEAR wanted to buy the truck from EW. Although EW knew SPEAR intended to resell the truck to someone else in American Samoaand that this customer had participated in the selection of the truck from various trucks available from EW and was arranging to finance his purchase through a local bank, it is clear that EW regarded this person not as its own customer but as SPEAR's. This appears not only from the various preliminary communications but also from the evidence immediately surrounding the transaction itself. When SPEAR requested EW to make an exception to its usual policy of requiring cash or a letter of credit before shipping [19ASR2d63] merchandise, EW's chief executive officer told Mr. Coulter of SPEAR that he could authorize this only because SPEAR had made immediate payment on another recent substantial purchase from EW, and that he was relying on SPEAR's promise that payment for the truck would be made immediately upon delivery. We are unable to find that EW would have made such an exception had it been relying only on the credit of Mr. Coffin ---a person with whom it had had no previous dealings and whose name it did not even know ---or even that SPEAR reasonably believed that EW would do this. A few days later, just after the truck had been loaded onto the ship, EW sent SPEAR an invoice by facsimile transmission. The invoice prominently stated that the truck was being "SOLD TO" SPEAR. SPEAR did not protest its designation as the buyer but instead sent a return facsimile to assure EW that payment would be made shortly. We conclude that the parties understood the contract as one by which EW reasonably believed it was selling the truck to SPEAR for resale to SPEAR' s own unidentified customer.(1)

On the question of insulation, however, SPEAR prevails. During the negotiations leading up to the sale, EW sent a facsimile transmission asking: "Does the boom need to be insulated?" SPEAR responded the same day: "Boom needs to be insulated.” EW appears to maintain that this condition was waived or superseded by a later exchange between the parties, during which the 1966 truck was substituted for a 1974 truck SPEAR had originally wanted to buy but which was not ready for shipping. EW informed SPEAR that the 1966 truck, although in use by an electrical contractor, would not be "serviced or certified” before being shipped to American Samoa. The reasoning seems to be that since insulation is one of the things a truck must have in order to be certified, SPEAR’s decision to take the uncertified truck meant that it was no longer insisting on insulation. The evidence does [19ASR2d64] not reflect, however, that SPEAR knew or should have known that an uncertified truck was necessarily an uninsulated one. Indeed, it appears that both SPEAR and EW assumed that the 1966 truck was in fact insulated, until about two months after it had arrived in American Samoa, when an inspection by the local power authority appears to have revealed the contrary. The agreement of SPEAR to accept a truck that had not been certified did not amount to a waiver or modification of its earlier , strong insistence that the truck's boom be insulated.

The weight of the evidence is to the effect that the boom is not insulated but that it can be insulated. Although we have no evidence of what it will cost to insulate the truck, we do have evidence that the cost will not be commercially unreasonable in relation to the contract price. The evidence for this proposition is the testimony of Mr. Coffin, the customer at whose instance SPEAR originally specified that the boom must be insulated. Mr. Coffin has at all times been willing to purchase the truck provided financing can be arranged and is confident that the boom can be insulated without such expense as to make the truck not worth buying.

It is not uncommon for each party to a contract to do things which, assuming no breach by the other party, would amount to a breach of the contract. In such situations the first breach is usually deemed to excuse what otherwise would have been the subsequent breach by the other party. In the present case, however, each party breached the contract before finding out about the other party's independent breach. SPEAR did not reject the truck because it failed to conform to the insulation term of the contract; rather, it wrongfully rejected the truck because it did not have the money to pay for it. Similarly, EW cannot excuse its failure to provide conforming goods by reference to SPEAR's wrongful rejection, because it provided the goods before it had any idea such rejection would occur. Under these circumstances, and in the absence of any dimension of malice or willfulness in either party's breach, the most appropriate remedy is to give each party the benefit of the bargain to which it agreed and was entitled. EW is entitled to the contract price of $37,000.60; SPEAR is entitled to a truck that conforms to all terms of the contract, including the requirement of an insulated boom. SPEAR is obliged to pay the shipping costs, as provided by the contract between the parties. Under the circumstances each party should bear its own costs and attorney fees, and a $2,500 charge for dock storage charges, which was paid by EW, should be evenly divided between the parties. [19ASR2d65]

We further find that Patrick Coffin agreed to purchase the truck from SPEAR for $37,250.60 plus shipping costs. SPEAR and Coffin have a contract for the purchase of the truck for $49,418.60, subject to the condition that the boom be insulated. Coffin is also obliged to indemnify SPEAR for its $1,250 share of the dock storage charges, since these charges would not have been incurred if he had paid for the truck when it arrived at the dock.

We conclude that plaintiffs South Seas Shipping and Matai Maritime have the right to recover the shipping charges either from the shipper (EW) or the consignee (SPEAR). This was an explicit term of the contract of carriage set forth in the bill of lading, which was given to EW when it delivered the truck to the dock. It is also a standard term in such contracts, to which both EW and SPEAR, as merchants who have frequent occasion to do business with shipping companies, would be assumed to agree in the absence of an explicit provision to the contrary. SPEAR is obliged to pay the shipping charges not only by the terms of the contract of carriage, into which EW entered upon SPEAR 's explicit instructions, but also by the terms of its contract with EW. As between EW and SPEAR, therefore, SPEAR is primarily liable and would be obliged to indemnify EW for any amounts the latter should be required to pay the shipping company.

South Seas/Matai Maritime, however, has already collected the full $12,168 it is owed for shipping the truck. On January 3, 1990, about six weeks after SPEAR and EW had become obligated to pay the shipping costs, the Comptroller of a company called Harbor Stevedoring sent a letter to SPEAR acknowledging that his company owed $10,528.10 for equipment it had purchased from SPEAR but stating that Harbor Stevedoring intended to withhold payment of its debt to SPEAR pending settlement of the shipping costs f()r the bucket truck. By April or May of 1990, additional purchases had increased the amount of Harbor Stevedoring's debt to SPEAR to at least $12, 168. Although Mr. Coulter of SPEAR initially protested the non-payment of the debt from Harbor Stevedoring, he eventually agreed with the manager of Harbor Stevedoring (who is also the manager of Matai Maritime and the local manager of South Seas Shipping) that the $12, 168 owed to SPEAR could be withheld pending the outcome of this litigation.

Harbor Stevedoring is, or was in January 1990, partly owned by South Seas Shipping, with the remainder of its stock being owned by the same people who own South Seas Shipping and Matai Maritime. After the events giving rise to this litigation, Harbor Stevedoring merged with [19ASR2d66] Matai Maritime; the successor entity, Harbor Maritime, is therefore a party to the present case. (Counsel should have moved to substitute Harbor Maritime for its predecessor Matai Maritime as a named plaintiff, lest the Court give judgment in the name of a nonexistent corporation.) Business decisions for all these entities, or at least for their operations inAmerican Samoa, appear to have been made by the same person or persons at all times relevant to the litigation. Although the three companies may nevertheless be entitled to insist on being treated as separate entities for most purposes, in this case they found it to their advantage to treat themselves as a single enterprise and should therefore be so treated by the Court.

The gist of the January 1990 letter is that the management of the three entities had decided to apply the SPEAR debt to South Seasas an offset against the Harbor Stevedoring debt to SPEAR. The money --- which the letter acknowledges to have been immediately due and payable to SPEAR ---was not placed in an escrow account, deposited in the registry of the Court, or otherwise sequestered so that neither party would have the use of it pending the outcome of the litigation. Rather, it was (and remains) available for the use of the Harbor/Matai/South Seas entities at the full discretion of the common management thereof. The practical situation of the parties during the past year has been identical to that in which they would have found themselves if Harbor Maritime had written a check tor $12,168 to SPEAR and SPEAR had written an identical check toSouth Seas. It is therefore appropriate that the debt from SPEAR to South Seas be satisfied out of the funds withheld from SPEAR by South Seas' sister entity and co-plaintiff, Harbor Maritime.

Because South Seas was able to collect its debt by self-help soon after it became due, it is unnecessary for us to determine whether the term in the bill of lading which makes the shipper and consignee liable for "expenses" should be broadly construed to supply a contractual basis for an award of attorney fees toSouth Seas.

Accordingly, plaintiff EW Truck & Equipment will have judgment against defendant Coulter (dba SPEAR) in the amount of $38,250.60 with pre-judgment interest at the legal rate of six percent from December 4, 1990, for a total of $41,501.90. Judgment will enter against plaintiff EW Truck & Equipment, requiring it to insulate the boom on the truck within sixty days. If plaintiff EW should fail to comply with this part of the judgment, defendant Coulter will have the right to rescind the contract of sale. Defendant Coulter will have .judgment against third-party defendant Coffin in the amount of [19ASR2d67] $50,668.60 plus interest at the legal rate for a total of $54,975.43, due upon tender of the truck after it has been insulated. Execution of the money judgments will be stayed for sixty days.

It is so ordered.

*********

1. Evidence was admitted of various unsuccessful efforts by the parties to mitigate their damages by entering into substitute contracts involving the truck. Under some of these arrangements EW would have reasserted ownership of the truck and would have dealt directly with buyers (or, under one proposed arrangement, a lessee) other than SPEAR. We admitted this evidence over the objection of counsel for EW, for any light it might shed on the parties' understanding about the original contract between SPEAR and EW. We conclude that the attempts to mitigate damages were just that. They were fully consistent with the existence of a binding contract of sale between EW and SPEAR and did not deprive EW of its right to sue on that contract.

Beaver v. Craven,


LEFAGA S. BEAVER, Plaintiff

v.

WILLIAM H. CRAVENS, W. SCOTT BARRETT,
SOUTH PACIFIC TRADERS, INC., and DOES I-XX, Defendants

High Court of American Samoa
Trial Division

CA No. 72-90

April 10, 1991

__________

In construing a trust instrument's terms, a court seeks to ascertain and give effect to the settlor's intention by taking into account the document's subject matter, scheme, and plan, as well as the relationship of the parties; favor effectiveness of the instrument and validity of the trust; favor beneficiaries rather than settlors; and give effect to the whole instrument by reconciling repugnancies and avoiding surplusage.

Interpreting a trust instrument to find the settlor's intention is a question of law.

If there is no genuine issue as to any material fact, summary judgment can be rendered if either party is entitled to a judgment as a matter of law. T.C.R.C.P.56.

The "marital deduction" is a deduction from a decedent's gross estate allowed in computing the estate's liability for federal estate tax. 26 U .S.C. § 2056.

The "marital deduction" was intended to equalize the treatment of estates of married decedents in community property and common law states. 26 U.S.C 2056.

Intended to permit marital property to be taxed in two stages and not to allow a tax-exempt transfer to succeeding generations, the "marital deduction" is generally restricted to the transfer of property interests that will (unless disposed of or consumed) ultimately be included in the surviving spouse's estate. 26 U .S.C. § 2056.

No "marital deduction" is allowed for most terminable interests which perish at the survivor's death and would not be included in her taxable estate or for property which passes to the survivor without having first been included in decedent's gross estate. 26 U.S.C. § 2056.

Inter vivos trusts are used to pass property at death without the time and cost of a probate proceeding; the trust's assets escape probate but may be subject to federal estate tax.

The "marital deduction" allows a couple to arrange their affairs so that their combined wealth is divided between their estates in a manner that achieves the lowest net total tax. 26 U.S.C. § 2056. [19ASR2d15]

The essence of a "life estate power of appointment" trust, qualifying for the "marital deduction," is the combination of income for life and a general power to appoint, both vested in the surviving spouse.

Distributions from decedent's estate to a "power of appointment" trust qualify for the "marital deduction" if they are first included in the gross estate, but the survivor's power to appoint must be quite broad to qualify for the marital deduction. 26 U.S.C. § 2056(a).

No language in a trust instrument is treated as surplusage as long as any other course is reasonably possible.

The general rule, except as provided otherwise by statute or the trust instrument, is that on the death of a trustee and any pending appointment of a new trustee, the trusteeship devolves on any surviving trustees.

Trusts in which the surviving trustor is both beneficiary and trustee are allowed, except where a sole beneficiary is also the sole trustee, on the theory that the legal and equitable titles held as trustee and beneficiary are sufficiently different to prevent the legal estate from merging into the equitable one.

Courts are reluctant to remove trustees, especially those appointed by the settlor.

The general, common-law rule is that trustees must jointly exercise all powers calling for their discretion and judgment.

Legal title to trust property is held in the name of the trustees, not the name of the fictitious trust.

If a party does not deny allegations in a complaint, he is deemed to have admitted it. T.C.R.C.P.8(d).

Since trustees must jointly exercise all powers calling for discretion and judgment, if trustees of a trust whose corpus includes corporate stock call a shareholders' meeting without a co-trustee, the meeting is unauthorized, and its proceedings are of no effect.

A special board meeting held without due notice to all the directors as required by the corporation's bylaws, and in the absence of those directors without notice, is unlawful, and all acts done at such a meeting are void, absent ratification or estoppel.

Under the Rule Against Perpetuities, all future interests must vest or fail no later than twenty-one years after the measuring period of lives-in-being when the interest is created.

Savings clauses are upheld if carefully drafted, so a trust provision creating an interest that could be interpreted as violating Rule Against Perpetuities will not be construed to do so where instrument contains another provision limiting duration of such interests to those permitted by law.

The Rule Against Perpetuities applies only to contingent remainders and executory limitations, not present interest or vested remainders (except for interests vested in a class subject to open). [19ASR2d16]

When an interest is vested in a class subject to open, the number of persons who will take and the size of each person's share must also be determined within the measuring period of the Rule Against Perpetuities or the interests of all class members will fail.

Whether a remainder interest in a trust is contingent, vested, or vested subject to being later divested depends on the intent of the trustor as determined from the provisions of the trust instrument.

Since the law favors vested interests, remainders will not be construed as contingent when they can be taken as vested, particularly if the trustor's intent is in doubt.

In construing language in wills and trusts, a condition is deemed to be a condition subsequent which will divest a vested interest rather than a condition precedent to vesting, unless the language of the instrument forbids such a construction.

Gifts which violate the classic Rule Against Perpetuities may be valid under some modern alterations to the Rule, such as the doctrines of "wait-and-see," separability, cy-pres, and equitable approximation.

An entire trust will not fail unless the provisions which violate the Rule Against Perpetuities are so inseparable that eliminating them would violate the settlor's main scheme in settling the trust.

In determining whether a trust's provisions which violate the Rule Against Perpetuities are severable, the grantor's intent governs, and the general rule favors severability.

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

Counsel: For Plaintiff, Charles v. Ala'ilima

  For Defendants William H. Craven, W. Scott Barrett, and South Pacific Traders, John L. Ward II

On Motion for Summary Judgment:

In this case we must construe the terms of a trust instrument to determine how the settlors intended to distribute its assets when the first settlor died.

Facts

The following facts appear undisputed: In 1983 plaintiff Lefaga Beaver and her late husband William Beaver were the majority stockholders in South Pacific Traders, Inc., a corporation operating in [19ASR2d17] Nu'uuli. On December 19, 1983, they signed a trust instrument(1) creating an inter vivos trust ("Beaver Family Trust"), transferred all their shares(2) of South Pacific Traders, Inc. (hereinafter "S.P.T. stock") into the trust as the original corpus of the Trust Estate, Art. I.A, and appointed themselves as trustees. Art. II.A. Mr. Beaver added a codicil to his will on the same day giving, devising, and bequeathing to the trust any property not already transferred to it when he dies ("pour-over provision"). No other assets were transferred to the trust during their joint lifetimes. When Mr. Beaver died on September 18, 1984, certain events occurred under the terms of the trust: 1) the trust became irrevocable, Art. IV; 2) defendants Barrett and Cravens became trustees, Art. II.B; 3) the Trust Estate (including "all property received as a result of the Decedent's death ") divided into two trusts administered separately- -a Survivor's Trust and a Decedent's Trust--and the assets of the inter vivos trust were distributed between them according to the terms of the trust agreement, Art. V. The allocation of assets to the Survivor's Trust vested in its trustees immediately; the Survivor's interest in her trust also vested immediately, Art. V., and she received a power of appointment over the principal and undistributed income of the Survivor's Trust. Art. VI.B.

On February 21, 1990, defendants Cravens and Barrett called a special shareholders' meeting of South Pacific Traders, Inc.. Claiming authority as sole trustees of the Decedent's Trust (which they maintained now held the S.P.T. stock per the allocation of assets required by the trust instrument), they removed the Board of Directors and elected a new board which included Mrs. Beaver and Muliufi Hanneman. Complaint and Answer, para. 16. The new board immediately met (without plaintiff and Hanneman) and elected Cravens to replace plaintiff as president and Abraham Orcini to replace Hanneman as secretary.

Since at least May 1990, plaintiff has not been allowed to function as an officer of the corporation or a trustee of either the Decedent's or Survivor's Trust. On or about July 2, 1990, defendants Cravens and Barrett received a letter from plaintiff in which she exercised her power of appointment under the Survivor's Trust to direct [19ASR2d18] them as trustees to transfer title to all S.P.T. stock held in the Survivor's Trust into her name. As such transfer of S.P.T. stock would make her the major shareholder, she then requested that defendants (as named President and Chairman of South Pacific Traders) call a special shareholders meeting. Defendants responded with the claim that all of the S.P.T. stock comprising the original Trust Estate of the inter vivos trust had been allocated to the Decedent's Trust according to the terms of the trust instrument. Plaintiff then filed suit. Both parties have moved for summary judgment on the following issues:

Discussion

I. Which Trust Received the S.P.T. Stock Upon the Death of Mr. Beaver?

The Decedent's Trust consists of all assets in the inter vivos Trust not allocated to the Survivor's Trust. Art. V.B. The Survivor's Trust consists of the separate property of the survivor plus Marital Deduction Property, defined as:

Out of the other assets subject to the terms of this Trust, including those received by the Trustees upon, or by reason of the death of the Decedent, which are eligible to satisfy the marital deduction, property equal in value to the amount of the maximum "Marital Deduction" allowable in finally determining the Federal Estate Tax in the Estate of the Decedent less the value of all assets or interest which pass, or
have passed to the survivor other than by the terms of this Trust, and which are eligible to satisfy said marital deduction.

In making the selection and allocation of such assets, the Trustee shall do so in a manner to fully utilize the marital deduction... No assets shall be included in this distribution with respect to which a marital deduction is not allowed, or not allowable if included. In the event a distribution or distributions are made for the Decedent's Probate Estate which shall saturate and fully utilize the Federal Estate Marital Deduction, then no additional distribution shall be made to the SURVIVOR's TRUST under the provisions of this subparagraph. [19ASR2d19]

Art. V.A.(2) (emphasis added). Since the instrument does not define "other assets" or "maximum Marital Deduction," the Court must construe these terms to ascertain and give effect to the settlors' intention in creating the trust. In doing so we take into account the document's subject matter, scheme, and plan, as well as the relationship of the parties; favor effectiveness of the instrument and validity of the trust (if possible); favor beneficiaries rather than settlors; and give effect to the whole instrument by reconciling repugnancies and avoiding surplusage. 76 Am. Jur. 2d Trusts § 17 (1975); 90 C.J.S. Trusts §§ 161-173 (1955). The parties agree on material facts but differ on how they must be interpreted to determine the plan and intent of the settlors. Interpreting a trust instrument to find the settlor's intention is a question of law. Davison v. Duke Univ., 194 S.E.2d 761, 783 (N.C. 1973); Evans v. First Nat'l Bank of Stillwater, 192 P.2d 666, 667 (Okla. 1948). Since there is no genuine issue as to any material fact, summary judgment can be rendered if either party is entitled to a judgment as a matter of law. Trial Court Rule of Civil Procedure 56(a).

Defendants argue as follows. The Beavers executed the trust instrument intending to minimize federal estate taxes by maximizing the estate's marital deduction, to provide lifetime income for the survivor, and to ensure that the Trust Estate would pass to their children when the survivor died. Defendant's Memorandum of Points and Authorities, at 2. "Marital Deduction Property" is restricted to "other assets [than the S.P. T. stockl subject to the terms of this trust." Id. at 3 (emphasis added). A probate action (PR No.29-87) was opened, and all of decedent's property "poured into" the inter vivos trust per his will. These "other assets" that poured over satisfied the maximum marital deduction, were transferred to the Survivor's Trust, and were distributed therefrom to Mrs. Beaver, exhausting and terminating the Survivor's Trust. Id. They argue that the settlors wished to transfer to the survivor only her half of all property acquired during the marriage. Affidavit of W. Scott Barrett, at 5.

Plaintiff, on the other hand, contends as follows. She and Mr. Beaver intended primarily to transfer as much of the trust estate of the decedent as possible to the survivor without paying federal estate tax. They intended the Survivor's Trust to receive all properties passing through either the inter vivos trust or the decedent's estate without being subject to federal estate tax. Plaintiff's Memorandum of Points and Authorities, at 3. None of decedent's property was subject to probate or distributed to the trust at his death, and no estate taxes applied to American Samoa property; hence, all property in the original trust (i.e., [19ASR2d20] the S.P.T. stock) passed to the Survivor's Trust. Complaint, paras. 11, 13, 14. She does not interpret the phrase "other assets"; instead, she argues that the words "saturate" and "fully utilize" imply that if the assets transferred to the survivor other than through the trust do not exhaust the maximum marital deduction, then the trustees must distribute the assets in the inter vivos trust so that the survivor receives all of the trust escaping federal estate tax, i.e., the entire trust. Plaintiffs Memorandum of Points and Authorities, at 4. In order to assess these respective arguments, we need to look at what the trustors meant by "other assets" and "maximum marital deduction."

A. Marital Deduction

The "marital deduction" is a deduction from a decedent's gross estate allowed in computing the estate's liability for federal estate tax. 26 U.S.C. § 2056. Those dying before 1976 could deduct up to 50% of their "adjusted gross estate"(3) that passes or passed to the surviving spouse. 26 U.S.C. § 2056(c)(1), amended by P.L. 94-455, § 2002(a) for estates of decedents dying after 1976. Those dying after 1976 could deduct the greater of $250,000 or 50% of the adjusted gross estate passed or passing to the spouse. 26 U.S.C. § 2056 (c)(1)(A), (B), deleted by P.L. 97-34 for estates of those dying after 12/31/81. Those dying after 1981 could deduct their entire estate if it passed to the spouse. 26 U.S.C. § 2056.

The deduction was first intended to equalize the treatment of estates of married decedents in community property and common law states. Pennsylvania Nat'l Bank v. United States, 387 U.S. 213, 219 (1967). Since the provision was intended to permit marital property to be taxed in two stages, not to allow a tax-exempt transfer to succeeding generations, the deduction is generally restricted to the transfer of property interests that will (unless disposed of or consumed) ultimately be included in the surviving spouse's estate. U.S. v. Stapf, 375 U.S. 118,128 (1963). No deduction is allowed for most terminable interests which perish at the survivor's death and would not be included in her taxable estate. See Estate of Smith, 565 F.2d 455,459 (7th Cir. 1977). Nor can an estate deduct property that passes to the survivor without [19ASR2d21] having first been included in decedent's gross estate. 26 U.S.C. § 2056(a).

Interpreting the trust instrument here is complicated by the fact that the Beavers and their advisors may not have realized that the law changed in 1981 to allow an unlimited marital deduction. 26 U.S.C. § 2056. Both parties argue as if only half of the estate could be passed via the deduction. Plaintiffs Memorandum of Points and Authorities, at 6; Affidavit of W. Scott Barrett, at 3. In fact, decedent could have passed his entire estate to the survivor and deducted it, if it was first included in the gross estate and met the other requirements for the marital deduction. The parties do not say if the S.P. T. stock was included in Mr. Beaver's gross estate for federal estate tax purposes. If it was not, then clearly it is not an "asset[] subject to the terms of this Trust... eligible to satisfy the marital deduction" and did not pass to the Survivor's Trust. Art. V.A.(2) (emphasis added).

Inter vivos trusts like the original Beaver Family Trust are used to pass property at death without the time and cost of a probate proceeding. Am. Jur. Legal Forms 2d Federal Tax Guide to Legal Forms 180-K-91 (1981); 17A Am. Jur. Legal Forms 2d Trusts §§ 251:93,251:101 (1984). The assets escape probate but may be subject to federal estate tax. The difficult issue is determining what the settlors intended to achieve by creating the Survivor's and Decedent's Trusts.

The marital deduction allows a couple to arrange their affairs so that their combined wealth is divided between their estates (via the marital deduction) in a manner that achieves the lowest net total tax. If the survivor will also be subject to estate tax at death, the couple often transfers just enough via the deduction to eliminate any tax liability (after utilizing the unified tax credit) of the first decedent's estate. To transfer more only subjects the income initially taxed in the first decedent's estate to possible taxation again if it is still in the survivor's estate at her death. But there are also non-tax reasons for restricting the amount transferred to the survivor:

If the... deduction could be secured only by leaving the property to the surviving spouse outright and with no strings attached, its usefulness would in many cases be questionable.

The cost of foregoing the marital deduction is calculable. The potential damage from mismanagement [19ASR2d22] after an outright transfer is infinitely greater and its actual size unpredictable. A kind of economic ownership has been created which when given to the surviving spouse enables the decedent's estate to claim the benefit of the deduction while surrounding the administration and conservation of the property with certain safeguards, wherever such protection may be seemed desirable.

The essence of this economic ownership qualifying for the marital deduction is the combination of income for life and a general power to appoint, both vested in the surviving spouse.

34A Am. Jur. 2d Federal Taxation ¶ 44,661 (1989) (emphasis added).

The Survivor's Trust was structured to quality as a "life estate power of appointment" trust. Arts. VI.A-C, VII.C; see 34A Am. Jur.2d, supra at ¶ 44,662 (conditions required to qualify as "power of appointment" trust). Distributions from decedent's estate to such a trust qualify for the marital deduction if they are first included in the gross estate. 26 U.S.C. § 2056(a). But the survivor's power to appoint must be quite broad to qualify for the marital deduction. A grantor might be willing to give the surviving spouse the full power of disposition needed for the deduction for some property but wish to limit the survivor to a life interest with a vested remainder to children in other property. The creation of two trusts was the safest way of doing this. See Am. Jur. Legal Forms 2d, supra at ¶ 180-P-51 (1981)(4); see also 17A Am. Jur. Legal Forms 2d Trusts §§ 251:251-259 (1984). This seems to be exactly what the Beavers intended. The detail which the trust instrument outlines for the Decedent's Trust implies that the Beavers intended the assets in that trust to be protected from exhaustion or disposal by the survivor but still be available for his/her support as the trustees deemed necessary. Arts. VII.A-C; VIII.C.

B. "Other Assets " [19ASR2d23]

But did the Beavers intend the S.P.T. stock to be transferred to the Decedent's Trust? If the S.P.T. stock was included in Mr. Beaver's gross estate for federal estate tax purposes, was it also included in the "other assets" from which property equal in value to the maximum marital deduction was to be transferred to the Survivor's Trust? Since no language in an instrument is treated as surplusage as long as any other course is reasonably possible, 90 C.J.S., supra at § 161(g)(2), we see only two possible meanings for "other." Either it refers to assets other than the original Trust Estate (the S.P.T. stock), or it refers to assets other than the Survivor's separate property. Looking at the document as a whole, the first interpretation makes more sense. Why would the settlors create two trusts, surround one with provisions that severely restrict the survivor's access to its assets, and then intend to transfer as little as possible to it? In fact, why use the language "maximum marital deduction" (implying benefit to the decedent's estate rather than to the survivor) when determining the amount to flow to the Survivor's Trust?

After examining the trust instrument as a whole, it appears the Beavers wanted both to minimize taxes and to surround the administration and conservation of the S.P.T. stock with safeguards possible only by transferring it to the Decedent's Trust. Any other assets transferred to the Beaver Family Trust without specific instructions for allocation were to be placed in the Decedent's Trust. Art. V.C. This reinforces the view that the settlors intended most property to remain in the Decedent's Trust. We hold that the S.P.T .stock was transferred to the Decedent's Trust.

II. Who are the Trustees of Decedent's Trust?

Defendants argue that "the plain language of Article II [of the trust instrument]... contemplates that upon the death or resignation of either Original Trustee, that Defendants Cravens and Barrett would succeed both Original Trustees...." Defendant's Memorandum of Points and Authorities, at 5-6. The language, however, is not as plain as defendant contends. In our view, it would have been a simple matter to specify that defendants shall "replace" both the Survivor as well as the Decedent as trustees. Instead, the instrument states that "[i]n the event of the...death of any original Trustee [Mr. and Mrs. Beaver]... the Trustors nominate and appoint to serve as Trustees...WILLIAM H. CRAVENS and W. SCOTT BARRETT." Art. II.B. It does not specify whether the successor trustees replace only the deceased original trustee as Mrs. Beaver contends (Plaintiffs Memorandum of Points and Authorities, at 7-8) or whether both original trustees are replaced. [19ASR2d24]

The general rule, except as provided otherwise by statute or the trust instrument, is that on the death of a trustee and pending appointment, if any, of new trustee, the trusteeship devolves on any surviving trustees. 90 C.J.S. Trusts § 236 (1955); 76 Am. Jur. 2d, supra at § 301 (surviving trustees can generally exercise trust powers). Defendant argues that construing the instrument to allow the surviving trustor to be both beneficiary and trustee would be unreasonable, since it would place her in a position of conflict. Defendant's Memorandum of Points and Authorities, at 5. But such trusts are allowed, except where a sole beneficiary is also the sole trustee, on the theory that the legal and equitable titles held as trustee and beneficiary are sufficiently different to prevent the legal estate from merging into the equitable one. Bogert, Law of Trusts § 30 (5th ed. 1973). Mrs. Beaver is neither the sole trustee nor the sole beneficiary; nothing in the instrument implies that the trustors intended to deprive the survivor of all input and guidance in managing the Decedent's Trust so that it will be well-managed and its assets conserved for their children. The courts are reluctant to remove trustees, especially those appointed by the settlor, Bogert, .supra at § 160, and it thus seems unwarranted to remove a surviving trustee because of the absence of an express provision clarifying her status. We hold that Mrs. Beaver is a trustee of the Decedent's Trust.

III. Are the Directors and Officers Elected or Appointed at the February 1990 Shareholders' Meeting the Valid Governing Authority of South Pacific Traders, Inc.?

In view of our conclusion that Mrs. Beaver is a co-trustee of the Decedent's Trust, we hold for the following reasons that the special shareholders meeting of February 21, 1990, called by defendants Cravens and Barrett, was invalid. The general rule is that trustees must jointly exercise all powers calling for their discretion and judgment, 76 Am. Jur.2d, supra at § 299, though the Uniform Trust Act ("UTA") permits a majority of a group of three or more trustees to exercise the powers of the trust, absent a provision in the instrument or a court order to the contrary. Id. at § 300. Since we have no pertinent statutes or cases we turn to the common law. See Tung v. Ah Sam, 4 A.S.R. 764, 767-68 (1971).

The Restatement (Second) of Trusts requires co-trustees to jointly exercise power. Bogert, supra at § 91 n.55. "In the absence of a statute or trust provision to the contrary, a majority of three or more trustees has no power to act or to compel the minority to join in action." Id. (quoting the Restatement). Thus any acts of co-trustees Cravens and Barrett requiring discretion and judgment (e.g., calling a shareholders [19ASR2d25] meeting) require Mrs. Beaver's agreement as co-trustee. 76 Am. Jur.2d, supra at § 299.

There is no provision in our statute dealing with shareholder meetings, see A.S.C.A. Title 30, but the bylaws of South Pacific Traders, Inc. , provide that special meetings of shareholders for any purpose may be called by the president, board of directors, or shareholders holding at least 20% of the voting power of the corporation. S.P. T. Bylaws, Art. IV § 2. Apparently Mrs. Beaver was president at the time, Complaint and Answer, para. 17; the board consisted of plaintiff, Barrett, Fotu Soliai, Muliufi Hanneman, and Abraham Orcini, see Minutes of S.P.T. Shareholders' Meeting, February 21, 1990; Defendant's Memorandum of Points and Authorities, at 6-7; and the co- trustees held joint legal title (see Bogert, supra at § 32) to the majority of S.P .T. stock. See Complaint and Answer, paras. 6, 9; see also Henn, Law of Corporations §§ 187, 1026 (2d ed. 1970) (trustee is ordinarily owner of record with right to vote).(5)

Mrs. Beaver alleges that Cravens and Barrett called the meeting in their capacity as trustees/shareholders and that she received no notice of it.(6) Complaint, para. 16. Since defendants do not deny this, they are deemed to have admitted it. T.C.R.C.P. 8(d). They argue that plaintiff was not entitled to notice since she was no longer a trustee. Answer , para. 16. But since Mrs. Beaver was, as a matter of law, a co-trustee of Decedent's Trust, defendants were required to act jointly with her. See 76 Am. Jur.2d, supra at § 299 (trustees must jointly exercise all powers calling for discretion and judgment). Since they were not [19ASR2d26] empowered to call a shareholders' meeting without their co-trustee, the meeting was unauthorized and its proceedings of no effect. 18A Am. Jur. 2d Corporations § 958 (1985). We hold that the expansion of the board to seven members and the election of new board members was ineffective.

Additionally, there is doubt whether the new enlarged board was properly elected:

1. Did the shareholders have authority to remove the old board and elect a new enlarged board?

2. Could the shareholders remove directors without cause before their terms expired?

See Henn, supra at § 192. The parties disagree on a vital issue of fact: whether plaintiff and Hanneman were notified of the special board meeting of February 21, 1990. See Complaint and Answer, paras. 16-18; Affidavit of Lefaga Beaver. At that meeting the new board (without plaintiff and Hanneman) elected Cravens to replace plaintiff as president and Abraham Orcini to replace Hanneman as secretary.

A special board meeting held without due notice to all the directors as required by the corporation's bylaws, and in the absence of those directors without notice, is unlawful, and all acts done at such a meeting are void, absent ratification or estoppel. See 18B Am. Jur. 2d Corporations at § 1453 (1985). The bylaws of South Pacific Traders, Inc. provide "due notice in writing [must be] given to each director in the manner prescribed by statute." S. P. T. Bylaws, Art. II, § 6. The Territory has no statute dealing with notice of directors meetings, see A.S.C.A. Title 30, but reasonable advance notice enumerating any extraordinary matters to be discussed is usually required for special meetings, absent a contrary provision. Henn, supra at § 209. If the corporation did not give plaintiff and Mr. Hanneman such notice, their removal as officers would be void.

IV. Does the Rule Against Perpetuities apply in Samoa to invalidate certain interests created by the Decedent's Trust, and does such partial invalidity so frustrate the intent of the trustors that the entire trust must be voided ? [19ASR2d27]

Finally, plaintiff claims that the trust instrument must be invalidated because it creates future interests which violate the Rule Against Perpetuities. She maintains that invalidating these interests defeats the intention of the settlors (she and Mr. Beaver) to such an extent that the entire decedent's trust must fail. Plaintiffs Supplemental Memorandum.

Defendants, however, argue that the Rule should not apply in American Samoa, since it is based on a public policy favoring free alienation of property, which directly contradicts the Samoan public policy prohibiting free alienation (A.S.C.A. § 37.0204). Defendants' Supplemental Memorandum.

We look to the trust instrument and observe the following:

1. When the Survivor dies, the assets in the Decedent's Trust shall be divided into separate trusts for each living Beaver child and each group of living descendants of each deceased Beaver child. Art. IV.C.

2. The trust for their child Lotoa terminates when she reaches age thirty- five. Art. VII.C. Each other child's trust continues past the child's death (if the trust has not yet been completely distributed(7) and the child has living descendants) for the benefit of such descendants until the deceased child's youngest child (the grandchild of the settlors) reaches twenty-five.

3. When the deceased child's youngest child reaches twenty-five, the remaining assets in each deceased Beaver child's trust are divided into equal shares for each of the deceased child's living children (settlor's grandchildren) and each group of living descendants (settlors' great-grandchildren or beyond) of any deceased children of that deceased child.

4. The instrument is unclear as to whether a deceased child's older children (settlor's grandchildren) can begin withdrawing their share of the [19ASR2d28] deceased child's trust at age twenty-five(8) or whether they must wait until the trust is divided when the youngest sibling reaches twenty-five.

5. If any person is under twenty-five when his portion is to be distributed to him under these terms, his portion vests in him, but the trustees may withhold possession of it and hold it in trust for him until he reaches twenty-five, subject to the provisions regarding the maximum duration of any trust established hereunder. Art. IV.C.(2).

6. If any provision is void, invalid, or unenforceable, the remaining ones shall nevertheless be valid and carried into effect. If any Trust herein established exceeds the longest permissible period, it shall persist in its period for the longest period permissible, then terminate. Art. X.D. The instrument does not specify who will receive the corpus of a trust terminated by this provision.

The Rule Against Perpetuities reflects a public policy favoring free alienability and transferability of property. 61 Am. Jur. 2d Perpetuities §§ I, 7 (1981). The Rule aims against the possibility of interests in property vesting too remotely from the time they are created. W. Burby, Real Property § 183 (1965). Under the Rule, all future interests must vest or fail no later than twenty-one years after the measuring period of lives-in-being when the interest is created. 61 Am. Jur. 2d, supra at § 6. Whether it even applies in Samoa is a question of first impression,(9) but even if it does, we hold that the savings clause in Article X.D. saves the trust: (1) by terminating any trust that reaches the longest period permitted by the Rule, or (2) by severing any provisions that violate the Rule so that they cannot invalidate the entire trust instrument.

Savings clauses are upheld if carefully drafted. See 61 Am. Jur . 2d, supra at § 27 (citing cases where savings clauses were upheld or rejected); 70 C.J.S., supra at § 35 (provision creating an interest that [19ASR2d29] could be interpreted as violating Rule will not be construed to do so where instrument contains another provision limiting duration of such interests to those permitted by law); Nelson v. Mercantile Trust Co., 335 S.W.2d 167, 172-73 (Mo. 1960); Cennamo v. American Sec. & Trust Co., 350 F. Supp. 1354, 1358-59 (D.D.C. 1973); First Ala. Bank of Montgomery v. Adams, 383 So. 2d 1104,1109 (Ala. 1980); 17A Am. Jur. Legal Forms 2d Trusts § 251:408 (1984); 15 Am. Jur. Legal Forms 2d Perpetuities §§ 201:13-14 (1973) (examples of savings clauses).

Only two cases were cited where a savings clause did not save the instrument by cutting short interests otherwise void under the Rule. In Farmers Nat'l Bank v. McKenney, 264 S.W.2d 881 (Ky. App. 1954), the provision creating the interests for "as long as the law allows" was so uncertain in its language that the creator's intent could not be discerned, so the entire provision was held unenforceable. In Hagemmm v. Nat'l Bank & Trust Co., 237 S.E.2d 388 (Va. 1977), the savings clause provided that the corpus of any interest terminated to avoid the Rule would be distributed to the persons to whom it would ultimately go under the other trust provisions, i.e., the very dispositions rendered void by the Rule. The court noted that "[a] 'savings clause' cannot save a void interest by adopting the very provisions which make it void." Id. at 393.

The Beaver trust instrument is ambiguous as to when the trusts created therein terminate, but the beneficiaries can begin to withdraw the corpus at age twenty-five and by the age of thirty-five withdraw the entire amount, terminating the trust. Art. VII.C.(1-2). Nor does the instrument state who receives the corpus if a trust terminates early to avoid a violation of the Rule. These shortcomings might render the savings clause ineffective, if the settlors' intent could not be discerned. See Farmer's Nat'l Bank v. McKenney, supra. But even if the savings clause does not apply, the only interests that might vest too remotely are those of the great-grandchildren and possibly grandchildren, depending on whether a grandchild's interest vests when the survivor of Mrs. Beaver or her parent (a Beaver child) dies or when the grandchild reaches age twenty-five. The Rule applies only to contingent remainders and executory limitations, not present interest or vested remainders (except for interests vested in a class subject to open). 61 Am. Jur. 2d, supra at §§ 44-46. Where an interest is vested in a class subject to open, the number of persons who will take and the size of each person's share must also be determined within the measuring period of the Rule or the interests of all class members fail. Id. at §§ 33, 44. Whether a remainder interest in a trust is contingent, vested, or vested subject to [19ASR2d30] being later divested depends on the intent of the trustor, as determined from the provisions of the trust instrument. Since the law favors vested interests, remainders will not be construed as contingent when they can be taken as vested, particularly if the trustor's intent is in doubt. 90 C.J.S., supra at § 188.

The measuring period for Decedent's Trust began when Mr. Beaver died, not when the instrument was signed. See Cook v. Horn, 104 S.E.2d 461,464 (Ga. 1958); 61 Am. Jur.2d, supra at § 72; see also w. Burby, supra at § 187 (if conveyor reserves power of revocation, period under Rule computed from time such power is released); Annotation, Settlor's right to revoke or terminate trust, or to withdraw funds or invade corpus thereof, as affecting operation of rule against perpetuities, 7 A.L.R.2d 1091 (1949).

Assuming all future interests were created when Mr. Beaver died(10), all of his and Mrs. Beaver's living children would be lives-in- being when the interests were created, The measuring lives for purposes of the Rule would be the surviving settlor (Mrs. Beaver) and the living Beaver children. See 61 Am. Jur. 2d, supra at §§ 18-19 (common law rule does not restrict number of lives in being which may be selected as measuring lives); see also First Ala. Bank of Montgomery v. Adams, supra at 1108 (measuring life for testator's bequest to grandchildren is "the survivor of the widow or the daughter"). The gifts to the Beaver children are not class gifts, since they are created (for purposes of the measuring period of the Rule) when Mr. Beaver died. See Burby, supra at § 162 (interest to children not a class gift where interest is created at grantor's death, since size of class is certain then). Since the interests of the Beaver children must vest or fail within their lifetimes, and both the size of the class of "children of Mr. and Mrs. Beaver" and each member's share can be ascertained at Mr. Beaver's death, they do not violate the Rule.

A Beaver grandchild may never receive an interest, since the trust of her parent (a Beaver child) may have terminated because it was completely distributed at the discretion of the trustees or the Beaver child withdrew the entire amount at age thirty-five. The remainder interests of the grandchildren on reaching ages twenty-five, thirty, and thirty-five [19ASR2d31] could be considered as contingent (subject to the condition precedent of reaching the specified ages) or vested when the survivor of her parent (a Beaver child) or Mrs. Beaver dies, with only the enjoyment being postponed until the specified ages. In construing language in wills, a condition is deemed to be a condition subsequent which will divest a vested interest rather than a condition precedent to vesting, unless the language of the instrument forbids such a construction. Joyner v. Duncan, 264 S.E.2d 76, 85 (N.C. 1980). Since wills and trusts are similarly construed, the "age twenty-five" condition is not a condition precedent. The size of the class and the portion each would receive can be ascertained when the survivor dies, a date within the period of the Rule.

Though the grandchildren may not enjoy the corpus of the trust until they are twenty-five or older, their interests vest at the death of the survivor of Mrs. Beaver or their parent (the Beaver child) if the age restriction on reaching the corpus only defers enjoyment, not vesting. See Joyner v. Duncan, supra at 84-85 (class gift to grandchildren on reaching specified ages of 25, 30, 35, and 40 years does not violate Rule, since provision of testamentary trust construed as giving grandchildren a vested interest at birth subject to open, and class would close when testator's surviving son, a life in being, died); Carter v. Berly, 140 So.2d 843 (Miss. 1962) (provision in will providing that active trust should terminate when youngest grandchild becomes twenty-five provided for vesting when testator died and the class' closing within lives-in-being, at death of testator's surviving daughter); Annotation, Distinction as regards rule against perpetuities between time of vesting of future estates and time fixed for enjoyment of possession, 110 A.L.R. 1450; 70 C.J.S. Perpetuities §§ 7, 16(b) (postponement of actual enjoyment or possession beyond allowable perpetuities period does not void interest if it vests within that period).

The gifts to the descendants of the grandchildren probably violate the classic Rule, 61 Am. Jur. 2d, supra at § 35, since some descendants could be born more than twenty-one years after the death of the survivor of Mrs. Beaver or the Beaver children (the measuring lives) and would not take within the period permitted by the Rule. But even these may be valid under some modern alterations to the Rule, such as the doctrines of "wait-and-see," id. at § 29; separability, id. at §§ 35, 89; Annotation, Separability, for purposes of rule against perpetuities, of gift to several persons by one description, 56 A.L.R. 450; cy-pres, 61 Am. Jur. 2d, supra at § 31; and equitable approximation. Id. at § 32. [19ASR2d32]

Even if the interests to the descendants violate the Rule and are thus invalid, they are probably not so crucial that they drag the entire trust down. The entire Trust would not fail unless the provisions are so inseparable that eliminating them would violate the settlors' main scheme in settling the trust. Id. at §§ 85-89, 95-99; 89 C.J.S., supra at § 79; Bogert, supra at § 50 (invalid contingent interests following trust estates may drag down trust if they violate the Rule, but void and valid interests sometimes are separated and the valid ones enforced); 70 C.J .S. Perpetuities § 21 (1951) (whether invalidity extends to other provisions of instrument depends on whether provisions are so interwoven that some cannot be separated from others without defeating primary intention of maker of instrument and his general plan for disposing of property).

The grantor's intent governs whether the provisions are severable; the general rule favors severability. Armington v. Meyer, 236 A.2d 450, 455 (R.I. 1967). Since the instrument states that if any of its provisions are void, invalid or unenforceable, the rest shall nevertheless be valid, Art. X.D. , this clear statement of the settlors' intent should prevail, and the invalidity of these remote interests to descendants should not drag down the entire Decedent's Trust.

We accordingly hold, and it is so ordered.

*********

1. All terms of the trust are cited to the articles in the trust agreement.

2. Apparently the shares owned by plaintiff and her husband were all issued and outstanding shares. Minutes of S. P. T. Shareholders' Meeting of February 21, 1990.

3. "Adjusted gross estate" is the decedent's estate after certain other deductions are allowed. 26 U.S.C. § 2056(c)(2)(A), deleted by P.L. 97- 34 for estates of decedents dying after 12/31/81.

4. Apparently the editors of Am. Jur. Legal Forms 2d thought that two trusts were no longer needed after the Tax Reform Act of 1981; these paragraphs are deleted in the 1981 revision shown in the 1985 cumulative supplement to the text.

5. Defendants state that the share certificate for the S.P. T. stock is made out in the name "Beaver Family Trust," July 3, 1990, Letter of Barrett to Ala'ilima; Defendants' Memorandum of Points and Authorities, at 2-3, and that Mrs. Beaver is not registered in the corporate books as a shareholder. Answer, para. C. However, legal title to trust property is held in the name of the trustee(s), not the name of the fictitious trust. Price v. Marathon, 463 N.E.2d 410, 414 (Ohio App. 1983); Cohen v. Friedland, 450 So. 2d 905, 906 (Fla. App. 1984). The certificate should be made out in the name of all three trustees jointly, held as trustee for the Beaver Family Trust (Decedent's Trust).

6. Apparently, only Cravens and Barrett attended the shareholders meeting. See Minutes of S.P.T. Shareholders' Meeting, February 21, 1990.

7. "When any such living child of such deceased child or grantor [Mr. and Mrs. Beaver] shall have obtained the age of Thirty Five (35) years, he shall have the right to withdraw the entire amounts of his trust." Art. VII.C.(1). This implies that any Beaver child surviving to age thirty-five may terminate her trust.

8. Each Beaver grandchild can begin to withdraw the principal and accumulated income of his/her trust at age twenty-five, and by age thirty-five may withdraw the entire amount. Art. IV.C.(1). But the trust of a deceased child remains undivided until the youngest child of that deceased child reaches twenty-five. Unless the older grandchildren can withdraw their portion of an undivided interest, the provisions conflict.

9. See Tufele v. Mose, 7 A.S.R.2d 157 (1988).

10. The defendants argue that the trusts created for children and their descendants from the Decedent's Trust are effective at Mrs. Beaver's death.

Barber; Puailoa v.


TEPATASI PUAILOA, Plaintiff

v.

KENNISON BARBER, Defendant

High Court of American Samoa
Trial Division

CA No. 11-89

April 24, 1991

__________

A plaintiff seeking damages for personal injuries is entitled to recover the reasonable value of medical services rendered to him because of the injury.

ASG provides free medical attention to American Samoans and qualified residents, but it can, under the equitable principle of subrogation, look to the tortfeasor for reimbursement. A.S.C.A. § 13.0601.

Before KRUSE, Chief Justice, AFUOLA, Associate Judge, MATA'UTIA, Associate Judge.

Counsel: For Plaintiff, Charles V. Ala'ilima

  For Defendant, Togiola T.A. Tulafono

Upon joint motion of the parties, trial herein was bifurcated on the separate issues of liability and damages. We earlier found the defendant negligent and that his negligence was the proximate cause of certain injuries sustained by plaintiff. We held that the defendant was accordingly liable to the plaintiff for damages and subsequently heard further evidence.

After the accident, plaintiff was admitted to the L.B.J.TropicalMedicalCenterat Faga'alu. He had minor lacerations and extensive bruising, but he also complained of severe pains especially to his back, neck, and right hip-joint area, together with numbness in his legs. While x-rays failed to reveal any evidence of fracture or spinal injury, plaintiff became progressively weak in his legs and was shortly thereafter virtually bound to a wheelchair. To compound the difficulty with the diagnostic efforts, plaintiff was also known to have an extended history of "Bechterew's disease" (ankylosing spondylitis)--a condition which [19ASR2d49] produces degenerative changes in the spine and spinous processes with ossification of tendons and soft tissue; the spine becomes fused and rigid with the result that flexion thereby naturally becomes curtailed; this, in turn, affects a certain range of body movements.(1) At the same time, it became increasingly evident that plaintiff was also showing signs of spinal cord damage, and therefore the admitting physician, Dr. No'ovao, recommended off-island spinal testing and treatment which could not be facilitated locally. Plaintiff was eventually referred to Straub Clinic in Honolulu, Hawaii.(2) [19ASR2d50]

On November 29, 1988, plaintiff was admitted to Straub and was immediately referred to a number of specialists. Examinations not only confirmed a significant degree of ankylosing spondylitis, they also revealed a fracture to the T5 or T6 vertebra. The examining doctors also discovered an accumulation of debris made up of "bony fragments and disc material as well as hematoma" against the spinal cord (mid-thoracic area), which was causing a build-up of pressure. On December 10, 1988, plaintiff had to undergo a thoracic laminectomy to remove the mentioned debris. Post-operatively, plaintiff appeared at first to be doing well, but he subsequently began feeling weak again in his lower extremities. Another exam revealed more hematoma build-up in the same area of the spine, and plaintiff had to undergo another laminectomy two days later. Following the latter operation, plaintiff was observed as beginning to improve in his "function and strength." According to Dr . John B. McCully of the L.B.J. Tropical Medical Center, surgical division, the recovery process thereafter, albeit slow and painful, was basically a matter of physical therapy assisted by certain medication to assist in rehabilitating muscle damage. Over many months plaintiff gradually regained his mobility.

In terms of measuring recovery from injuries resulting from the accident, Dr. McCully explained on the witness stand that this was difficult to do in the case of plaintiff, since recovery is usually measured by comparison with a prior, healthy body. Plaintiffs current complaints and debilitating condition were also consistent with ankylosing spondylitis throughout his entire spine. On balance, Dr. McCully opined that plaintiff had probably recovered completely from the injuries he sustained as a result of the accident.

At the time of the accident, plaintiff was 36 years old. He testified that he has been a resident of Californiasince 1960; however, he also says that he has been in Samoaoff-and-on since 1985 helping to manage his father's estate, for which he basically received bed and board. Plaintiff also alluded to having been in the trucking business in California, which he gave up for reasons unknown. The trucking business, however, varied in explanation from that of a self-employed truck driver to that of an autonomous operation run by five employees. We find that plaintiffs relationship with his father's household more accurately depicts his economic situation at the time of the accident. On the foregoing, we fix general damages in the sum of $35,000.00.

Plaintiff also seeks judgment for his medical bills incurred with Straub, which we have already alluded to in footnote 2, supra. It is trite [19ASR2d51] law that a plaintiff seeking damages for personal injuries is entitled to recover the reasonable value of medical services rendered to him because of the injury. See 22 Am. Jur. 2d Damages § 197 (1988).(3) The question that follows is "what is reasonable?" The evidence shows that plaintiffs admitting physician, Dr. No'ovao, felt that off-island examination was necessary. There was no evidence to the contrary. Also in evidence is a copy of an itemized invoice from Straub Clinic relating to services presumably rendered to plaintiff. Apart from a number of unexplained items under the notation "phone call,” the billings do reflect the course of treatment otherwise explained in the medical evidence. The invoice presents a total figure, inclusive of state taxes, in the amount of $58,656.00, of which $220.00 represents unexplained phone calls for which defendant may not be held liable. We hold that the foregoing constitutes a prima facie showing of reasonable value of medical expenses and accordingly fix special damages in the sum of $58,400.00.

Less the sum of $10,000.00 paid by defendant's insurer for compulsory third-party liability (see note 2, supra), we conclude that plaintiff, Tepatasi Puailoa, shall have judgment against the defendant, Kennison Barber, in the sum of $83,400.00.

It is so ordered.

*********

1. In a letter to plaintiffs attorney, dated September 20, 1990, Dr. John B. McCully of the L.B.J. Surgical Division summarized his findings following his examination of plaintiff. Among other things, Dr. McCully noted that plaintiffs lower or lumbar spine was notably flat--he had a stoop and walked slowly; while able to bend forward to touch his knees, plaintiff had no extension and virtually no lateral flexion to either side; rotation, or ability to twist from side to side, was limited at 20 to 30 degrees. His head and neck movements were also significantly reduced-- he had no upward gaze ability (extension) other than eye movement; forward flexion was at 50%; lateral flexion, right and left side, was 10 degrees at most; and rotation was also 10 degrees. The hips have also become significantly deformed because of a certain degree of fusion; x- rays show that the sacroiliac joints have been obliterated; this has also reduced flexion and hence movement. Finally, x-rays also revealed degenerative changes with both knee-joints, with a loss of lateral joint space.

2. There was a six-week delay in oft'-island evacuation because of money problems. Dr. No'ovao's notes on file suggest that while plaintiffs case was referred to the hospital's off-island referral committee, the committee did not seem to regard plaintiff as eligible for off-island treatment at government expense and insisted that plaintiff pursue such insurance claims as may be available to him. Eventually, the defendant's insurer for compulsory third-party liability insurance under A.S.C.A. §§ 22.2001 et seq. settled with plaintiff and paid out policy limits in the amount of $10,000.00. According to plaintiff, half of this sum was deposited with Straub Clinic, while the remainder was used for his airfares and other incidental expenses. As a result of extended hospitalization in Honolulu, plaintiff apparently owed Straub Clinic some $58,000.00. This debt has been reduced to final judgment. See Straub Clinic v. Puailoa, CA No. 100-89 (1990).

3. This element of damages is rarely at issue in this jurisdiction. Statutorily, "medical attention shall be provided free by the government" to American Samoans and qualified residents. A.S.C.A. § 13.0601. In turn, the government can, under the equitable principle of subrogation, look to the tortfeasor for reimbursement. See A.I.U. v. American Samoa Government, 3 A.S.R.2d 115 (1986). Whether plaintiff could have looked to the government for his medical bills is not an issue before us.

Bank of Hawaii; Pene v.


SEIGAFOLAVA R. PENE (H/C) and
CARMENCITA PENE, Appellants

v.

BANK OF HAWAII, Appellee

High Court of American Samoa
Appellate Division

AP No. 11-89

April 26, 1991

__________

A court may extend personal jurisdiction over persons or businesses on the basis of their contacts with American Samoa. A.S.C.A. § 3.0103(b).

A court may exercise personal jurisdiction in civil cases over persons who either reside or are found in American Samoa, have been duly summoned, or voluntarily appear. A.S.C.A. § 3.0103(a).

Before FONG,* Acting Associate Justice, KLEINFELD,** Acting Associate Justice, MALEAT ASI,*** Acting Associate Justice, TAUANU'U, Chief Associate Judge, LOGOAI, Associate Judge.

Counsel: Appellants, Pro Se

  For Appellee, John L. Ward II

Fong, J.: [19ASR2d53]

Appellants Seigafolave R. Pene (H/C) and Carmencita Pene (hereinafter the Penes) have filed and extraordinary brief for relief and/or final reconsideration of the court's Opinion and Order on Petition for Rehearing, filed on February 11,1991. See Pene v. Bank of Hawaii, 18 A.S.R.2d 65 (1991).

Appellants have previously petitioned this court for rehearing and/or reconsideration of the Opinion and Order filed by this court on December 11, 1990, affirming the trial court's order granting summary judgment in favor of appellee-plaintiff Bank of Hawaii.

Appellants first argue that there was not strife between Mr. Pene and his wife. Whether or not this is true is of no consequence to the court, as it does not affect the written or unwritten status of the Note and Security Agreement.

Appellants have raised no new issues of fact or law and have merely submitted extensive portions of the transcript of the hearing on their previous motion. Appellant Seigafolave Pene restates his opinion that he is an expert in Samoan customs and traditions; however, the court is not persuaded that its decision in any way violates any portion of the Revised Constitution of American Samoa.

Appellants then assert that although personal jurisdiction may be properly extended over persons residing inAmerican Samoa, the High Court will not have jurisdiction unless the disputed transaction itself took place withinAmerican Samoa. However, A.S.C.A. § 3.0103(b), which allows the court to extend personal jurisdiction over persons or businesses on the basis of their contacts with American Samoa, does not dilute the effect of A.S.C.A. § 3.0103(a), which states: "A court may exercise personal jurisdiction in civil cases over persons residing or found in American Samoa, or who have been duly summoned or voluntarily appear."

Appellee properly brought suit against appellants inAmerican Samoa, where they have lived for more than five years. Appellants' interpretation of the statute would allow any resident ofAmerican Samoato avoid suit for any incident which occurred within theUnited Statesor any other country simply by rushing back toAmerican Samoa. Jurisdiction is proper in the High Court.

Accordingly, having reviewed appellants' arguments in support of their petition for rehearing and finding none compelling, appellants' [19ASR2d54] extraordinary brief for relief and/or final reconsideration is hereby DENIED.

*********

*Honorable Harold M. Fong, ChiefJudge, United StatesDistrict Court, District of Hawaii, serving by designation of the Secretary of the Interior .

**Honorable Andrew J. Kleinfeld,Judge,United States District Court, District of Alaska, serving by designation of the Secretary of the Interior.

***Honorable Maleatasi Togafau, District Judge, serving by designation of the Secretary of the Interior.

American Samoa Gov’t; Saufo'i v.


LUMANA'I and TAUSISI SAUFO'I, Appellants

v.

AMERICAN SAMOA GOVERNMENT,
CONTINENTAL INSURANCE COMPANY,
FATA HOLT, and KILISI PAULI, Appellees

High Court of American Samoa
Appellate Division

AP No. 4-90

April 30, 1991

__________

When plaintiffs' pleadings asked for damages for the death of their child in terms of "emotional distress," the trial division properly treated the suit as an action for wrongful death. A.S.C.A §§ 43.5001 et seq.

The trial division's factual findings may not be set aside by the appellate division unless clearly erroneous. A.S.C.A. § 43.0801(b); T.C.R.C.P. 52(a).

The "clearly erroneous" standard is used by an appellate court to test a lower court's findings of negligence, as well as related findings such as "proximate cause." A.S.C.A. § 43.0801(b); T.C.R.C.P. 52(a).

A trial court's finding of parents' negligent entrustment was not supported by the record when no evidence showed that the teacher, albeit a relative, was the sort of person who could not be entrusted with the minor's safety or suggested that the teacher's want of care at the critical moment was other than an isolated lapse in attention.

A trial court's finding of negligence based on a school's violating a rule regarding the pickup and delivery of children is unsupported when no evidence showed that compliance with the rule would have prevented the accident. [19ASR2d55]

Before KRUSE, Chief Justice, FONG,* Acting Associate Justice, KLEINFELD,** Acting Associate Justice, VAIVAO, Associate Judge, LOGOAI, Associate Judge.

Counsel: For Appellants, Charles V. Ala'ilima

  For Appellees Continental Insurance, Fata Holt, and Kilisi Pauli, Roy J.D. Hall, Jr.

  For AppelleeAmerican Samoa Government, Arthur Ripley, Jr., Assistant Attorney General

Kruse, C.J.:

The appellants are the parents of a young child who was killed after being struck by a bus. They sued the bus driver, the bus owner, and the insurer of the bus. They also sued the American Samoa Government (ASG) in its capacity as the proprietor of an Early Childhood Education (ECE) pre-school center which the minor attended on the day of the fatality. Although the appellants in their pleadings below talked of damages in terms of "emotional distress," the trial division properly treated the suit as an action for wrongful death, pursuant to the remedial provisions of A.S.C.A. §§ 43.5001 et seq. Consequently, the Court awarded damages as follows: to the eligible survivors, the amount of $40,000.00 to compensate for pecuniary injury and loss of love and affection;(1) and to the minor's estate, the sum of $50.00 for medical expenses incurred by the minor. (2) In so holding, the trial division concluded culpable conduct on the part of the bus driver , the ECE teacher, and the appellants; however, the claim against the government as proprietor of the ECE center was dismissed. Further, the Court assessed liability at 50% for the driver, and hence his employer [19ASR2d56] and insurer, 25% for the teacher, and 25% for the appellants. See Saufo'i v. American Samoa Gov't, 14 A.S.R.2d 15 (1990).

The appellants appeal against the trial division's conclusions (a) dismissing the complaint against the government in its proprietary capacity and (b) holding the appellants comparatively negligent.

Discussion

A. ASG Primary Liability

Appellants first argue error with the trial division 's failure to find the government negligent in its placement of the ECE center in a high-volume traffic area without providing sufficient safeguards.

The trial division, however, in concluding that ASG was not negligent in the placement of the ECE center, explained:

Forced to choose between having early childhood education classes in private homes or not having them at all, ASG adopted a variety of safeguards ---very small class sizes, limitation of enrollment to children living in the immediate neighborhood, and especially the rule that parents must drop off and pick up their children from each class ---to minimize traffic safety problems. These measures... appear in general to be at least as effective as the designation of each ECE center as a school and posting of the surrounding area as a school zone.

Id. at 20. Furthermore, the Court also doubted the absence of traffic signs as being a cause-in-fact in circumstances where the vehicle was being driven at a speed below the usual posted school-zone limit and where the driver had acknowledged his previously seeing young children in the area at other times. Id.

Appellants have stated the standard for appellate review as "whether the facts and the law presented do not provide grounds for relief," (Appellants' Brief at page 3). If appellants are seeking a de novo review of the evidence together with our independent conclusions thereon, such relief is beyond our mandate as it is set out in A.S.C.A. § 43.0801(b). This enactment provides: "The findings of fact of the trial ...[Court] may not be set aside by the appellate division unless clearly [19ASR2d57] erroneous." See also T.C.R.C.P. 52(a).(3) The "clearly erroneous" rule is also the standard for testing a lower court's findings of negligence. McAlister v. United States, 348 U.S. 19 (1954). See also 9 C. Wright & A. Miller, Federal Practice and Procedure, Civil § 2590 (1971). Additionally, the courts have also applied the clearly erroneous standard to related findings such as "proximate cause. " See cases cited by Wright & Miller, Civil § 2590 at n.84.

Given our scope of review, and having thoroughly reviewed the record, we find substntial evidence from which the trial division could and did find that the government was not negligent in its placement of the ECE center.

B. Appellants' Liability

On the other hand, we did not find sufficient evidence on the record to sustain the trial division's determination of negligence on the part of the appellants. The trial division essentially held that the appellants' entrustment of the minor to the teacher's after-school care was negligent. The court seemed to suggest that the appellants, more so than ASG, were in a better position to judge the strengths and weaknesses of the teacher because she was their relative. On the other hand, the court did not actually find that the teacher, albeit a relative, was the sort of person who could not be entrusted with the minor's safety. At the same time, we could not find on the record any evidence to that effect or anything to suggest that the teacher's want of care at the critical moment was other than an isolated lapse in attention. A conclusion of negligent entrustment is not supported by the record.

The trial division also appeared to suggest negligence on the part of the appellants because they knew about the school rule regarding the delivery and pickup of children, and yet they violated that rule by private arrangement with their relative, the teacher. The ECE Supervisor had instructed teachers that no student should be allowed into a class unless accompanied to the door by a parent or other adult. Again, the trial division did not make a finding, nor was it evident on the record, whether the rule's safety aspect was something that was either made known or readily apparent to the appellants. In any event, we have [19ASR2d58] difficulty seeing why a school rule ---which is not inherently obvious as a safety measure ---could rise to the level of a general duty of care.

There was no evidence for the proposition that compliance with the rule would have prevented the accident. Had the rule been obeyed, one of the child's parents would have been at the school to take her home when school was supposed to end at 10:30 in the morning. But the teacher ended school early, at 9:15, because she had a doctor's appointment. Several children were still at school while the teacher was still cleaning up, and they all disappeared outside the door. Besides the teacher's child and the Saufo'i children, another child had not yet been picked up. Since all this happened at least a half-hour before the time the parents should have been there to pick-up the children at the end of school, the parents' failure to be there at 10:30 cannot be treated as a proximate cause of the accident. Evidently, pickups were disrupted by the early ending of school that day, independently of the teacher's prior undertaking to bring the Saufo'i children home.

We hold the trial division's finding of negligence on the part of the appellants to be unsupported by the evidence and, therefore, clearly erroneous.

Conclusion

For reasons given, we affirm the trial division's finding that the American Samoa Government was not negligent in the placement of the ECE center and reverse the determination of negligence on the part of the appellants.

Accordingly, damages awarded in the amount of $40,050.00 shall be thus apportioned ---consistent with the trial division 's comparative assessment of liability of the bus driver as being twice that of the teacher ---as follows: the bus driver, his employer and insured, 66.66% or $26,700.00; and the teacher and her employer ASG, 33.33 % or $13,350.00.

It is so ordered.

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*Honorable Harold M. Fong,ChiefJudge,United StatesDistrict Court, District of Hawaii, serving by designation of the Secretary of the Interior.

**Honorable Andrew J. Kleinfeld,Judge,United States District Court, District of Alaska, serving by designation of the Secretary of the Interior.

1. See A.S.C.A. § 43.5001(c).

2. See A.S.C.A. §43.5001(a).

3. T.C.R.C.P. 52(a) provides: "Findings of tact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses."

American Samoa Gov’t; Moors v.


MISIMOA MOORS, Jr., A Minor, by Misimoa Moors,

his Guardian ad Litem, Plaintiff

v.

AMERICAN SAMOA GOVERNMENT, Defendant

High Court of American Samoa
Trial Division

CA No. 18-89

May 6, 1991

__________

Resulting in an attractive nuisance, the actions and omissions of a school's employees amounted to a serious breach of their duty to take care for the schoolchildren's safety when they left a long-abandoned trailer on the premises and failed to remove an air-conditioning unit or replace its missing support braces.

On the scale of damage awards in American Samoa, fairly mild injuries frequently result in awards or settlements in the range of $10,000, but even the most serious and painful injuries rarely result in awards over $50,000.

Before REES, Associate Justice, TAUANU’U, Chief Associate Judge, MATA'UTIA, Associate Judge.

Counsel: For Plaintiff, Gata E. Gurr

  For Defendant, Richard D. Lerner, Assistant Attorney General

This case concerns a schoolyard accident in which plaintiff Misimoa Moors, who was then twelve years of age, lost an eye. Misimoa and one or two other boys were running alongside an [19ASR2d68] abandoned trailer that had been left on the school premises. One or more of the boys jumped up and touched, slapped, and/or hung on an old, air-conditioning unit that was protruding from the side of the trailer. The metallic braces that had once held the air conditioner to the side of the building were gone, and the building itself, according to the school janitor, was visibly "rotten." The air conditioner fell on Misimoa, causing the eye injury.

Misimoa testified that it was another boy who touched the air conditioner, but the preponderance of the evidence is to the effect that he himself jumped up and touched the air conditioner, probably not very gently. This action, perhaps along with the recent similar actions of Misimoa's companions, was the most immediate cause of the accident. Although a twelve-year-old cannot have been expected to know much about the laws of physics or the mechanics of air-conditioner support, he was old enough to see that he was playing in a dangerous place and to know that old, rotten things may fall down when hit or hung upon.

The evidence preponderates at least as strongly, however, in support of the proposition that the defendant's employees knew or should have known they had an attractive nuisance in their schoolyard. Indeed, it is clear that they did know this and that they made occasional efforts to discourage children from playing around the trailer. This was not enough. Unlike twelve-year-olds, an organization that owns and maintains school buildings Call be charged with detailed knowledge of such facts as that missing braces and rotten walls conduce to falling wall-units (especially when exposed to twelve-year-olds) and with the responsibility to take remedial action. The actions and omissions of defendants' employees in leaving the trailer on the premises long after it had been deemed unfit for any sort of use, and in failing to replace the missing braces or remove the air-conditioning unit, amounted to a serious breach of their duty to take care for the safety of schoolchildren, even moderately negligent ones.

We assess the negligence of the defendant and its employees at seventy-five percent and the negligence of Misimoa at twenty-five percent.

Misimoa testified that there was very little physical pain associated with his injury. Nor is there any evidence that he will lose income on account of the loss of his eye. He did have to undergo an operation, and in a few years will probably face a choice between another operation or operations or a fairly mild degree of permanent disfigurement. As the defendant concedes, the loss of an eye is generally recognized as a substantial injury in itself, aside from any pain and suffering or other specific consequences. On the scale of damage awards in American Samoa---in which fairly mild injuries frequently result in [19ASR2d69] awards or settlements in the range of $10,000, but even the most serious and painful injuries rarely result in awards over $50,000---we assess the plaintiffs damages at $20,000.

Because the consequences of this accident are seventy-five percent attributable to the negligence of the defendant and twenty-five percent to that of the plaintiff, judgment will enter against defendant American Samoa Government in the amount of $15,000.

It is so Ordered.

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