CHUUK STATE SUPREME COURT APPELLATE DIVISION
Cite as Setik v. Ruben,16 FSM Intrm. 158 (Chk. S. Ct. App. 2008)
MARIKO SETIK and ORAN SETIK,
Appellants,
vs.
HERSIN RUBEN and MORIA RUBEN,
Appellees.
CIVIL APPEAL CASE NO. 06-2003
OPINION
Argued: December 10, 2007
Decided: October 2, 2008
BEFORE:
Hon. Judah C. Johnny, Temporary Justice, Presiding*
Hon. Aliksa B. Aliksa, Temporary Justice**
Hon. Repeat Samuel, Temporary Justice***
*Chief Justice, Pohnpei Supreme Court, Kolonia, Pohnpei
**Chief Justice, Kosrae State Court, Lelu, Kosrae
***Attorney at Law, Weno, Chuuk
APPEARANCES:
For the
Plaintiff: Michael Marco
P.O. Box 1578
Weno, Chuuk FM 96942
For the Defendants: Stephen V. Finnen, Esq.
P.O. Box 1450
Kolonia, Pohnpei FM 96941
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Issues of whether the evidence was sufficient to support the trial court's verdict for the appellees and whether the trial court properly found that the evidence was insufficient to support appellants' claim of adverse possession are both issues that involve a review of the trial court's findings of fact under a "clearly erroneous" standard. An appellate court will overturn a trial court's factual findings only when they are not supported by substantial evidence in the record, or if they were the result of an erroneous conception of the applicable law, or if, after a consideration of the entire record, the appellate court is left with a definite and firm conviction that a mistake has been made. Setik v. Ruben, 16 FSM Intrm. 158, 162-63 (Chk. S. Ct. App. 2008).
In meeting the clearly erroneous standard of review, the appellant must ensure an adequate record. If the record does not demonstrate error, the appellant cannot prevail. Setik v. Ruben, 16 FSM Intrm. 158, 163 (Chk. S. Ct. App. 2008).
The burden at trial is on the party asserting the existence of a customary right to prove it by a preponderance of the evidence. Setik v. Ruben, 16 FSM Intrm. 158, 163 (Chk. S. Ct. App. 2008).
When the appellate court does not find anything in the trial court record to suggest that the trial court should have found, by a preponderance of the evidence, that appellants were granted any an alleged enduring, customary right, the trial court's finding was not clearly erroneous. Setik v. Ruben, 16 FSM Intrm. 158, 163 (Chk. S. Ct. App. 2008).
In order to ensure the legal protection of any right they had in the land, parties are required to register that interest. Setik v. Ruben, 16 FSM Intrm. 158, 163 (Chk. S. Ct. App. 2008).
The Land Commission's statutory powers and duties include designating land to be registered, surveying the land and establishing boundaries, and determining title and adjudicating disputed claims through investigation, notice, and public hearings. Setik v. Ruben, 16 FSM Intrm. 158, 163 (Chk. S. Ct. App. 2008).
Land registration is based on the Torrens system of land registration, whereby land ownership is conclusively determined and certified by the government and thereby is easy to determine. The certificate of title issued by the government shows the state of the title and the person in whom it is vested. Determination of title is the basic requirement of the system. Setik v. Ruben, 16 FSM Intrm. 158, 163 (Chk. S. Ct. App. 2008).
Certificates of title are prima facie evidence of ownership as stated therein against the world. A party claiming ownership in land for which there is a determination of ownership showing another as owner, with the appeal period expired, has, at a minimum, the burden of showing facts to establish that the determination of ownership is incorrect. Setik v. Ruben, 16 FSM Intrm. 158, 164 (Chk. S. Ct. App. 2008).
In order for a judgment granting ownership to land to which someone else has a certificate of title to be valid, the judgment would first have to have set aside the other's certificate of title. As a general rule, a certificate of title can be set aside only on the grounds of fraudulent registration. Setik v. Ruben, 16 FSM Intrm. 158, 164 (Chk. S. Ct. App. 2008).
Land claimants are not exempted from the registration and recording requirements due to their alleged rights being of a customary nature. The preservation of customary rights, as with other enduring rights in property, requires that it be registered. A certificate of title must show all interests in the land except for rights of way, taxes due, and lease or use rights of less than one year and are conclusive upon all persons who have had notice of the proceedings and all those claiming under them. A claim of customary interest in land will not be implicitly recognized in a land registration, but must be explicitly identified. In cases where a certificate of title has been issued, therefore, it is not clearly erroneous for a trial court to disregard the existence of a purported customary right arising prior to the certificate of title's issuance. Setik v. Ruben, 16 FSM Intrm. 158, 164 (Chk. S. Ct. App. 2008).
Under Chuuk's statutory system of land registration, which is designed to ensure good title through the land registration proceedings, it is not for the appellate court to determine whether or not someone had a valid claim of land ownership arising prior to the issuance of a certificate of title, if the claim was never raised or perfected. Setik v. Ruben, 16 FSM Intrm. 158, 164 (Chk. S. Ct. App. 2008).
When neither the 1989 determination of ownership nor the 2000 certificate of title identifies any customary rights in appellants; when in order to preserve the customary rights the appellants contend they were granted in 1973, they were required to register them; when the appellants do not contend that there was anything fraudulent in the registration of the land or that they were in any way deprived of their rights through the registration proceedings; when the appellants do not otherwise present any basis for setting aside the 1989 land registration proceedings; and when they appellants do not present any reason to justify why they failed to assert their alleged customary rights when the land was registered and recorded that might provide a basis to set aside the Land Commission's determination, the 1989 determination of ownership was therefore conclusive as between appellants and appellees. Setik v. Ruben, 16 FSM Intrm. 158, 164 (Chk. S. Ct. App. 2008).
The bona fide, or "innocent," purchaser rule arises from the statutory recording requirements for interests in real estate. For all real estate in each district, the clerk of court is required to make and keep in a permanent record a copy of all documents submitted to him for recording. No transfer of or encumbrance upon title to real estate or any interest therein, other than a lease for a term not exceeding one year, is valid against any subsequent purchaser or mortgagee of the same real estate or interest, or any part thereof, in good faith for a valuable consideration without notice of such transfer or encumbrance, or against any person claiming under them, if the transfer to the subsequent purchaser or mortgagee is first duly recorded. The "registration" of interests in land has the same force and effect
as to such land as a recording. Therefore, a subsequent, bona fide, or "innocent," purchaser has valid title against a prior holder of an interest in the same real estate if one "registers" or "records" the interest before the prior holder. Setik v. Ruben, 16 FSM Intrm. 158, 164-65 (Chk. S. Ct. App. 2008).
The purpose and benefit of the lengthy procedure and notice requirements needed to register land is that a certificate of title, once issued, is conclusive upon all persons who have had notice of the proceedings and all those claiming under them and is prima facie evidence of ownership as therein stated against the world. This is unlike a "conventional" recording system, which makes no averments to the public about the state of title to any parcel of land but merely invites searchers to inspect the copies of the instruments which it contains and to draw their own conclusions as to the state of title. Rather, Chuuk's statutory system of land registration is designed to ensure that buyers can rely on the determination of ownership as a representation of good title. Setik v. Ruben, 16 FSM Intrm. 158, 165 (Chk. S. Ct. App. 2008).
When the appellants' claim is based on a customary grant in 1973 and the grantors' successors in interest registered the land when the Land Commission issued a determination of ownership to them in 1989 and when the Land Commission issued a certificate of title in 2000 to the appellees based on the 1989 determination of ownership and the appellees' 1999 purchase of the property from the grantors' successors in interest; and when the appellants did not object that they failed to receive notice of the Land Commission proceedings or that they were entitled to notice, the appellees, as purchasers, were entitled to rely on the 1989 determination of ownership as conclusive evidence of all interests in the property since the appellants were, in order to preserve any rights they had to the property with respect to appellees, required to assert those rights prior to appellees' registering or recording their interest. When there is no evidence to suggest the appellants ever attempted to register or record their alleged interest, it will not be recognized implicitly and the appellees were therefore bona fide purchasers without notice of appellants' claim when they sought and received a certificate of ownership in 2000. Setik v. Ruben, 16 FSM Intrm. 158, 165 (Chk. S. Ct. App. 2008).
Adverse possession is a disfavored method or doctrine of acquiring title to land. To prove a adverse possession claim, a claimant must demonstrate that the occupation was without the owner's permission, the land was used openly, notoriously, exclusively, continuously and under claim of right, and that the owner did not challenge such action until after the statute of limitations had run. A claimant must prove all elements of adverse possession before title is issued based on the doctrine. Setik v. Ruben, 16 FSM Intrm. 158, 165 (Chk. S. Ct. App. 2008).
The adverse possession element of "under claim of right" means that the claimant intends to hold the land as his own to the exclusion of all others. It has the same meaning as "hostile." Adverse possession does not apply when the use of the land is with the owner's permission. The consistent assertion of ownership necessary for a claim of adverse possession must, therefore, be distinguished from a mere right of use. Setik v. Ruben, 16 FSM Intrm. 158, 166 (Chk. S. Ct. App. 2008).
When the requisite element of hostility is absent from a party's assertion of adverse possession, it is irrelevant whether the party had occupied the land for twenty years before the certificate of title was issued because the occupation was not hostile. Setik v. Ruben, 16 FSM Intrm. 158, 166 (Chk. S. Ct. App. 2008).
A trial court finding that the appellants occupied the land during the prior ownership under a right of use will not be overruled unless it is clearly erroneous, and when there is nothing in the record to indicate that the appellants ever challenged the ownership of the land, the court will not overturn the trial court's ruling against the claim for adverse possession without anything to indicate error in the trial court's finding that the appellants' use was permissive. Setik v. Ruben, 16 FSM Intrm. 158, 166 (Chk. S. Ct. App. 2008).
An adverse possession claim will never prevail over a validly issued certificate of title. Setik v. Ruben, 16 FSM Intrm. 158, 166 (Chk. S. Ct. App. 2008).
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JUDAH C. JOHNNY, Temporary Justice, Presiding:
This is an appeal from the trial court's decision in Chuuk State Supreme Court trial division Civil Action No. 82-2001 confirming appellees' ownership of certain land. We affirm.
The Chuuk State Supreme Court trial division judgment was entered on October 28, 2003. At issue was the validity of a land transfer from Martina Asan and members of her lineage to the appellees, Hersin and Moria Ruben.
The property was registered with the Land Commission on August 7, 1989 when a determination of ownership was issued naming Martina Asan and members of her lineage as owners. Record on Appeal at 22. On April 8, 1999, appellees executed a sale agreement with Martina Asan and members of her lineage for the purchase of the property. On November 22, 2000, the Land Commission issued a certificate of title to appellees based on the August 7, 1989 determination of ownership and the April 8, 1999 sale agreement.
On May 1, 2001, appellees filed their complaint for trespass against appellants, Mariko and Oran Setik, who were occupying the land at the time of its sale to appellees. On May 28, 2001, appellants answered and counterclaimed. Appellants contended that the land had been registered by Mauris and Pikiso Bossy in 1971 and, in 1973, the Bossys transferred an enduring, customary right to occupy the land through the custom referred to as "Niwinin Kilisou," and that they had otherwise gained a legal interest in the property through adverse possession by their continuous occupation of the land since 1973. The matter went to trial and, on October 29, 2003, judgment was entered in favor of appellees. The trial court found that appellants had a mere use right in the property under permission first from the Bossys and then from Martina Asan, which was extinguished when Martina Asan and her lineage members sold the property to appellees. The trial court noted that appellants did not offer any evidence to support their contention of a customary right in the property. Trial Court Judgment at 2.
A. Issues and Standard of Review
The issues before us are whether the evidence was sufficient to support the trial court's verdict
for the appellees and whether the trial court properly found that the evidence was insufficient to support appellants' claim of adverse possession. Both issues involve a review of the trial court's findings of fact under a "clearly erroneous" standard. Chk. Civ. R. 52(a). An appellate court will overturn a trial court's factual findings only when they are not supported by substantial evidence in the record, or if they were the result of an erroneous conception of the applicable law, or if, after a consideration of the entire record, the appellate court is left with a definite and firm conviction that a mistake has been made. Nakamura v. Moen Municipality, 15 FSM Intrm. 213, 217 (Chk. S. Ct. App. 2007); Ruben v. Hartman, 15 FSM Intrm. 100, 108 (Chk. S. Ct. App. 2007).
In meeting the standard of review, the appellant must ensure an adequate record. If the record does not demonstrate error, the appellant cannot prevail. Cheida v. FSM, 9 FSM Intrm. 183, 189 (App. 1999).
B. Customary Rights must Be Proven by a Preponderance of the Evidence.
At trial, appellants contended that they were granted a customary right by the Bossys in 1973. There was no evidence presented, however, that appellants' alleged customary right was registered or recorded by the Bossys or their successors in interest, Martina Asan and members of her lineage. The 1989 determination of ownership does not specify any customary rights in appellants. There was no other evidence submitted to support appellants' allegation of a customary right. The trial court concluded that appellants had not proven the existence of a customary right. In their appellate brief, appellants do not identify any evidence that the trial court should have considered but merely recite their belief in having obtained a customary right from the Bossys in 1973.
The burden at trial was on the party asserting the existence of a customary right to prove it by a preponderance of the evidence. Senda v. Semes, 8 FSM Intrm. 484, 497 (Pon. 1998); see also Pohnpei v. AHPW, Inc., 14 FSM Intrm. 1, 18 (App. 2006) (When the appellant introduced no evidence of customary law at anytime before the appeal, it is deemed to have waived the issue).
The trial court did not find any evidence in support of an alleged enduring, customary right granted to appellants in 1973. This court does not find anything in the record to suggest that the trial court should have found, by a preponderance of the evidence, that appellants were granted any such right. Therefore, the trial court's finding was not clearly erroneous.
C. Customary Rights Must be Registered.
In order to ensure the legal protection of any right they had in the land, appellants were required to register that interest. The current system of land registration in Chuuk dates from the Trust Territory period. Title 67 of the Trust Territory Code, governing land registration, has been retained by the Chuuk State Code. Mori v. Haruo, 15 FSM Intrm. 468, 471 (Chk. S. Ct. App. 2008) (citing Chipuelong v. Chuuk, 6 FSM Intrm. 188, 196 n.6 (Chk. S. Ct. Tr. 1993)).
Title 67 vests authority to register land in the Land Commission. The Commission's statutory powers and duties include designating land to be registered, 67 TTC 104, surveying the land and establishing boundaries, 67 TTC 106, and determining title and adjudicating disputed claims through investigation, notice, and public hearings, 67 TTC 107-114; Mori, 15 FSM Intrm. at 471. Land registration, as established by Title 67, is based on the Torrens system of land registration, whereby land ownership is conclusively determined and certified by the government and thereby is easy to determine. The certificate of title issued by the government shows the state of the title and the person in whom it is vested. Determination of title is the basic requirement of the system. To that end, the Land Commission holds a proceeding to settle and declare the state of the title. Once the Commission
completes its inquiry and conducts a public hearing, it must issue a determination of ownership, pursuant to which a certificate of title is issued. Determinations of ownership are appealable to the trial division of the Chuuk State Supreme Court and ultimately to the appellate division of the Chuuk State Supreme Court. Mori, 15 FSM Intrm. at 471.
Certificates of title are prima facie evidence of ownership as stated therein against the world. Ruben v. Hartman, 15 FSM Intrm. 100, 113 (Chk. S. Ct. App. 2007). A party claiming ownership in land for which there is a determination of ownership showing another as owner, with the appeal period expired, has, at a minimum, the burden of showing facts to establish that the determination of ownership is incorrect. Mori, 15 FSM Intrm. at 471; Benjamin v. Kosrae, 3 FSM Intrm. 508, 510 (Kos. S. Ct. Tr. 1988). In order for a judgment granting ownership to land to which someone else has a certificate of title to be valid, the judgment would first have to have set aside the other's certificate of title. Ruben, 15 FSM Intrm. at 113. As a general rule, a certificate of title can be set aside only on the grounds of fraudulent registration. Id.
Appellants are not exempted from the registration and recording requirements due to their alleged rights being of a customary nature. The preservation of customary rights, as with other enduring rights in property, required that it be registered. Ruben, 15 FSM Intrm. at 112-13. A certificate of title must show all interests in the land except for rights of way, taxes due, and lease or use rights of less than one year and are conclusive upon all persons who have had notice of the proceedings and all those claiming under them. Id. A claim of customary interest in land will not be implicitly recognized in a land registration, but must be explicitly identified. Id. In cases where a certificate of title has been issued, therefore, it is not clearly erroneous for a trial court to disregard the existence of a purported customary right arising prior to the issuance of the certificate of title. Luzama v. Pohnpei Enterprises Co., 7 FSM Intrm. 40, 50 (App. 1995).
Under Chuuk's statutory system of land registration, which is designed to ensure good title through the land registration proceedings, it is not for the appellate court to determine whether or not someone had a valid claim of land ownership arising prior to the issuance of a certificate of title, if the claim was never raised or perfected. Hartman v. Chuuk, 12 FSM Intrm. 388, 400 (Chk. S. Ct. Tr. 2004).
In this case, neither the 1989 determination of ownership nor the 2000 certificate of title identifies any customary rights in appellants. In order to preserve the customary rights they contend they were granted by the Bossys in 1973, they were required to register them. Appellants do not contend that there was anything fraudulent in the registration of the land or that they were in any way deprived of their rights through the registration proceedings. Appellants do not otherwise present any basis for setting aside the 1989 land registration proceedings. In sum, appellants do not present any reason to justify why they failed to assert their alleged customary rights when the land was registered and recorded that might provide a basis to set aside the determination of the Land Commission. The 1989 determination of ownership was, therefore, conclusive as between appellants and appellees, as successors in interest to Martina Asan and members of her lineage. Ruben, 15 FSM Intrm. at 113.
D. The Appellees are Protected by the Bona Fide Purchaser Rule.
Appellees are also protected from appellants' claim by the bona fide purchaser rule. The bona fide, or "innocent," purchaser rule arises from the statutory recording requirements for interests in real estate. For all real estate in each district, the clerk of court is required to "make and keep in a permanent record a copy of all documents submitted to him for recording." 57 TTC 301. No transfer of or encumbrance upon title to real estate or any interest therein, other than a lease for a term not exceeding one year, is valid against any subsequent purchaser or mortgagee of the same real estate or
interest, or any part thereof, in good faith for a valuable consideration without notice of such transfer or encumbrance, or against any person claiming under them, if the transfer to the subsequent purchaser or mortgagee is first duly recorded. 57 TTC 301. The "registration" of interests in land, pursuant to 67 TTC 119 "has the same force and effect as to such land as a recording" under 57 TTC 301. Therefore, a subsequent, bona fide, or "innocent," purchaser has valid title against a prior holder of an interest in the same real estate if one "registers" or "records" the interest before the prior holder. Id.; Asanuma v. Flores, 1 TTR 458, 460-61 (Pal. 1958).
The purpose and benefit of the lengthy procedure and notice requirements needed to register land is that a certificate of title, once issued, is conclusive upon all persons who have had notice of the proceedings and all those claiming under them and shall be prima facie evidence of ownership as therein stated against the world. This is unlike a "conventional" recording system, which makes no averments to the public about the state of title to any parcel of land but merely invites searchers to inspect the copies of the instruments which it contains and to draw their own conclusions as to the state of title. In re Engichy, 12 FSM Intrm. 58, 69 (Chk. 2003). Rather, Chuuk's statutory system of land registration is designed to ensure that buyers can rely on the determination of ownership as a representation of good title.
Appellants' claim is based on a customary grant from the Bossys in 1973. The Bossys' successors in interest, Martina Asan and members of her lineage, registered the land when the Land Commission issued a determination of ownership to them in 1989. On November 22, 2000, the Land Commission issued a certificate of title to appellees based on 1989 determination of ownership and their 1999 purchase of the property from Martina Asan and members of her lineage. Appellants did not object that they failed to receive notice of the Land Commission proceedings or that they were entitled to notice.
Appellees, as purchasers, were entitled to rely on the 1989 determination of ownership as conclusive evidence of all interests in the property. Ruben, 15 FSM Intrm. at 113. In order to preserve any rights they had to the property with respect to appellees, therefore, appellants were required to assert those rights prior to appellees' registering or recording their interest. There is no evidence to suggest appellants ever attempted to register or record their alleged interest, and it will not be recognized implicitly. Ruben, 15 FSM Intrm. at 112-13. Appellees were therefore bona fide purchasers without notice of appellants' claim when they sought and received a certificate of ownership in 2000.
E. If the Use is Permissive, there is no Adverse Possession.
Appellants contend that even if their customary rights are not recognized, they have a valid claim to the land through adverse possession by their uninterrupted occupation of the land since 1973 when the Bossys granted them entry to the land. Appellants' first argument, that they occupied the land under a customary right granted by the Bossys, undermines their second, as the record suggests that their belief in a customary right in the land resulted from their continuing, permissive use of the land.
Adverse possession is a disfavored method or doctrine of acquiring title to land. Cheni v. Ngusun, 6 FSM Intrm. 544, 547 (Chk. S. Ct. App. 1994). To prove a claim of adverse possession, a claimant must demonstrate that the occupation was without the owner's permission, the land was used openly, notoriously, exclusively, continuously and under claim of right, and that the owner did not challenge such action until after the statute of limitations had run. Iriarte v. Etscheit, 8 FSM Intrm. 231, 239 (App. 1998). An appellant must prove all elements of adverse possession before title is issued based on the doctrine. Heirs of Obet v. Heirs of Wakap, 15 FSM Intrm. 141, 145 (Kos. S. Ct. Tr. 2007).
The adverse possession element of "under claim of right" means that the claimant intends to hold the land as his own to the exclusion of all others. It has the same meaning as "hostile." Iriarte, 8 FSM Intrm. at 239. Adverse possession does not apply when the use of the land is with the owner's permission. Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 286 (Kos. S. Ct. Tr. 2006). The consistent assertion of ownership necessary for a claim of adverse possession must, therefore, be distinguished from a mere right of use. Iriarte, at 8 FSM Intrm. at 239; Heirs of Likiaksa v. Heirs of Lonno, 3 FSM Intrm. 465, 468 (Kos. S. Ct. Tr. 1988).
Appellants contend that their uninterrupted occupation of the land since 1973 results in adverse possession, as appellees were not issued a certificate of title until 2000, after appellants had already occupied the land for more than twenty years. When the requisite element of hostility is absent from a party's assertion of adverse possession, however, it is irrelevant whether the party had occupied the land for twenty years before the certificate of title was issued because their occupation was not hostile. Iriarte, 8 FSM Intrm. at 239.
The trial court found that appellants occupied the land first with the permission of the Bossys and then with the permission of Martina Asan. The trial court concluded that appellants occupied the land during the prior ownership under a right of use. Such finding will not be overruled unless it is clearly erroneous. Nakamura, 15 FSM Intrm. at 217; Ruben, 15 FSM Intrm. at 108. There is nothing in the record to indicate that appellants ever challenged the ownership of the Bossys or Martina Asan and members of her lineage. Without anything to indicate error in the trial court's finding that appellants' use was permissive, the court will not overturn the trial court's ruling against the claim for adverse possession. Cheida, 9 FSM Intrm. at 189; Iriarte, 8 FSM Intrm. at 239; see also Heirs of Obet, 15 FSM Intrm. at 145.
Furthermore, an adverse possession claim will never prevail over a validly issued certificate of title. In re Engichy, 12 FSM Intrm. 58, 69 (Chk. 2003); see also Iriarte, 8 FSM Intrm. at 239. In 2000, the Land Commission granted a certificate of title to appellees pursuant to the 1989 determination of ownership issued to their predecessors in interest. Since the validity of that certificate of title and the 1989 determination of ownership was never questioned, the court is unable to discern that appellants ever occupied the land under a claim of right, rather than merely with the permission of the previous owners. Therefore, the trial court's finding that appellants failed to demonstrate facts to sustain a claim of adverse possession was not clearly erroneous.
We affirm the trial court's decision granting judgment in favor of appellees.
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