Court Opinion

ID: 9297002
Source: CourtListenerOpinion
Date Created: 2022-11-29 17:28:26.21222+00
Date Added: 2024-06-11T17:13:21.784255
License: Public Domain

OPINION
BORJA, Justice:
Diana C. Ferreira (hereafter Diana), a person of Northern Mariana Island descent (hereafter NMI descent), filed a quiet title action against defendants Rosalia Mafnas Borja, Isidora Mafnas Salas, and Isabel Mafnas Santos (hereafter Mafnas sisters). The Mafnas sisters were the sellers of three parcels of land to Diana. The lots are described as Lot Nos. 008 B 22, 23, and 24, containing a total'area of 21,182 square meters, more or less. The *518Mafnas sisters filed an answer denying ownership in Diana and affirmatively stating that the acquisition of the land by Diana violated Article XII of the NMI Constitution.
Both parties filed motions for summary judgment. The trial court granted summary judgment in favor of the Mafnas sisters holding that the acquisition of the land by Diana violated Article XII of the NMI Constitution.
Diana appeals. We affirm the decision of the trial court.
FACTS
The series of transactions at issue in this case commenced with a 1980 Partnership Agreement (hereafter Agreement). James and Bobbi Grizzard (husband and wife) (hereafter the Grizzards) and Frank F. and Diana C. Ferreira (husband and wife) (hereafter the Ferreiras) executed this Agreement. The sole purpose of the partnership was to purchase "for sale, lease and development the property described above as part of Lot 008 B 10 . . ." Agreement, Article One.1
The Grizzards would contribute $41,000 to the partnership. *519Frank F. Ferreira would contribute "all amounts needed for surveying, subdividing, legal fees, and accounting services to the partnership, such services being of the approximate amount of Nine Thousand Dollars ($9,000.00)." Agreement, Article Four.
In Article Four, also, it is provided that Diana,
as a citizen of Northern Mariana descent will purchase- the property described . . . with the $41,000 contributed by [the Grizzards]. Upon the purchase of the described real property, [Diana] will execute a lease of the real property to the partnership, for the maximum period of time allowed by law, being forty (40) years and to include a "change of law" provision for purchase in fee simple absolute should the law change with the consideration for this provision being the $41,000 paid in hand and the mutual promises contained in this agreement. In addition, the lease will contain a provision for the purchase of improvements put on the land by the lessee.
Diana acquired fee title but she never granted the partnership the short-term leases required by the Agreement. Instead, Diana used additional funds from James Grizzard to acquire two additional adjacent parcels, taking fee title in herself. The three parcels were purchased for about one hundred thousand dollars ($100,000).
On March 25, 1988, in a document entitled, "Quitclaim, Release of Claims, and Assignment," Nansay Micronesia, Inc. acquired the Grizzards' interests in the three parcels of laxid, and all other rights they had under the Agreement. The consideration paid for all the Grizzards' interests was one million one hundred thousand dollars ($1,100,000). On the same day, Nansay Micronesia, Inc. assigned the interests it acquired from the Grizzards to the *520Ferreiras.
Also on March 25, 1988, Diana entered into an agreement to lease with Nansay for fifty-five years. The consideration for the agreement to lease was the assignment by Nansay Micronesia, Inc. of its interests, in the three parcels of land and in the Agreement to the Ferreiras. Concurrently, Diana agreed to convey her fee simple interest in the three parcels of land to Ana Little for $60,000.
ISSUES PRESENTED
1. Whether the trial court committed reversible error in granting summary judgment in favor of the Mafnas sisters where the record before it presented multiple genuine issues as to material facts, by weighing conflicting evidence of record, resolving material factual disputes without trial and assessing the credibility of deposition evidence without having heard testimony.
2. Whether the trial court committed reversible error in concluding that the Grizzards and Frank Ferreira acquired a constitutionally impermissible interest in NMI land when Diana purchased the land from the Mafnas sisters.
3. Whether, as applied to this case, Article XII of the Constitution of the Northern Mariana Islands violates Diana's right to equal protection of the laws as guaranteed her by the Fourteenth Amendment to the Constitution of the United States.
STANDARD OF REVIEW
A grant of summary judgment is reviewed de novo. If there is *521no genuine issue of material fact, the analysis shifts to whether the substantive law was correctly applied. Commonwealth Ports Authority v. Hakubotan Saipan Enterprises, Inc., No. 90-005 (N.M.I. Aug. 8, 1991). If an incorrect substantive law was applied, the appellate court should, in its de novo review, determine if the result is correct under a different theory. Ross v. Communications Satellite Corp., 759 F.2d 355 (4th Cir. 1985); 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure: Civil 2d § 2716 (1983) . The evidence and inferences are viewed in a light most favorable to the non-moving party. Cabrera v. Heirs of De Castro, No. 89-018, 1 N.Mar.I. 102 (June 7, 1990).
ANALYSIS
Summary Judgment and Article XII
We will address the first two issues jointly since a discussion of one requires a discussion of the other.
Our analysis starts with the pertinent constitutional provision. Article XII, as amended in 1985, is as follows:
ARTICLE XII
Section 1: Alienation of Land.
The acquisition of permanent and long-term interests in real property within the Commonwealth shall be restricted to persons of Northern Marianas descent.
Section 2: Acquisition.
The term acquisition used in section 1 includes acquisition by sale, lease, gift, inheritance or other means.
Section 3: Permanent and Long-Term Interests in Real Property.
*522The term permanent and long-term interests in real property used in Section 1 includes freehold interests and leasehold interests of more than fifty-five years including renewal rights ....
Section 4; Persons of Northern Marianas Descent.
A person of Northern Marianas descent is a person who is a citizen or national of the United States and who is of at least one-quarter Northern Marianas Chamorro or Northern Marianas Carolinian blood or a combination thereof or an adopted child or a person of Northern Marianas descent if adopted while under the age of eighteen years. For purposes of determining Northern Marianas descent, a person shall be considered to be a full-blooded Northern Marianas Chamorro or Northern Marianas Carolinian if that person was born or domiciled in the Northern Mariana Islands by 1950 and was a citizen of the Trust Territory of the Pacific Islands before the termination of the Trusteeship with respect to the Commonwealth.
Section 5: Corporations.
-A corporation shall be considered to be a person of Northern Marianas descent so long as it is incorporated in the Commonwealth, has its principal place of business in the Commonwealth, has directors one-hundred percent of whom are persons of Northern Marianas descent and has voting shares (i.e. common or preferred) one-hundred percent of which are actually owned by persons of Northern Marianas descent as defined by Section 4. Minors, as defined by applicable laws of the Commonwealth, may not be eligible to become directors of a corporation. No trusts or voting by proxy by persons not of Northern Marianas descent may be permitted. Beneficial title shall not be severed from legal title.
Section 6; Enforcement.
Any transaction made in violation of section 1 shall be void ab initio. Whenever a corporation ceases to be qualified under Section 5, a permanent or long-term interest *523in land in the Commonwealth acquired by the Corporation after the effective date of this amendment shall be immediately forfeited without right of redemption to the government of the Commonwealth ....
Commonwealth Code, vol. 1, pp. B-334 & B-335.
For a person to succeed in a cause of action alleging a violation of Article XII, certain material facts have to be clearly present and undisputed. These facts are:
1. An acquisition of NMI land;
2. The acquisition is a permanent and long-term interest;
3. The acquisition was made by a person who is not of NMI descent.
To determine if the above necessary facts exist in this case, we must answer the question of whether the long-term and permanent interest acquired by Diana from the Mafnas sisters in Lot Nos. 008 B 22, 23, and 24 was, as a matter of law, a constitutionally impermissible acquisition by the Grizzards.
The following facts appear from the record:
1. Diana is a person of NMI descent;
2. The partnership of the Grizzards, Frank Ferreira and Diana is not recognized in the constitution as a person capable of owning a permanent and long-term interest in Commonwealth real property;
3. The Grizzards and Frank Ferreira are not persons of NMI descent;
4. Diana acquired in her name the properties from the Mafnas sisters with funds provided entirely by the Grizzards; and
*5245. The properties were acquired in furtherance of a partnership agreement between the Grizzards and the Ferreiras, dated October 21, 1980.
The above facts are undisputed material facts. These undisputed material facts are sufficient for purposes of a summary judgment proceeding involving a claim that Article XII of the NMI Constitution was violated.
The disputed genuine issues of material fact that Diana claims with regard to "control" over an agent are not relevant. The issue of control was discussed by the trial court in its agency analysis. As we discuss later, common law principles of trust are dispositive. The other disputed issue of material fact raised by Diana deals with the claim of ownership to the properties. Again, as we will note later, Diana cannot raise a genuine issue of fact by refuting in her deposition what is stated in the Agreement.
As we stated earlier, where there is no genuine issue of material fact, the analysis then shifts to whether the correct substantive law was applied, bearing in mind that the evidence and inferences are viewed in a light most favorable to the non-moving party. Cabrera v. Heirs of De Castro, supra.
The trial court, in its grant of summary judgment, concluded that Diana's acquisition of Lot Nos. 008 B 22, 23, and 24 from the Mafnas sisters "violated Article XII, Section 1 of the Constitution and is void ab initio under Section 6 thereof." Ferreira v. Borja, C.A. No. 86-796, "Order Re Motion and Cross-Motion for Summary *525Judgment" at 28 (Super. Ct. Sept. 13, 1988). We initially examine this conclusion in view of the substantive law applied by the trial court. Commonwealth Ports Authority v. Hakubotan Saipan Enterprises, Inc., supra. If the incorrect substantive law was applied, we then must determine if the result is correct under a different theory of law. Ross v. Communications Satellite Corp., supra; 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure: Civil 2d § 2716 (1983).
The trial court applied principles of agency in arriving at its conclusion. Whether Diana is in fact an agent of the Grizzards and Frank is not dispositive. What is dispositive is whether Diana's acquisition of the properties, using funds provided entirely by the Grizzards, resulted in the acquisition by persons not of NMI descent of an impermissible interest in Commonwealth real property. The issue is whether the acquisition by Diana resulted in the acquisition by the Grizzards and Frank Ferreira of an equitable fee interest in Commonwealth real property and, therefore, the transaction violates Article XII.
The trial court erroneously applied agency principles in reaching its judgment. It is the law of trust that govern since only through trust principles may one acting as an agent acquire a fee interest. But although the substantive law applied was incorrect, the judgment is correct. The result we reach in applying principles of trust is the same as the trial court's result in applying principles of agency.
*526An appellate court has an obligation to determine if the judgment or order of a trial court is correct even if the wrong ground or reasoning was used. In re the Estate of Dela Cruz, No. 90-023, slip op. at 13, n. 10 (N.M.I. Feb. 7, 1991); Ross v. Communications Satellite Corp., supra; Proctor v. State Farm Mut. Auto Ins. Co., 675 F.2d 308 (D.C. Cir. 1982), cert. denied. 459 U.S. 839 (1982) .
In Restatement (Second) of Trusts § 440 (1959), it is stated that, "Where a transfer of property is made to one person and the purchase price is paid by another, a resulting trust arises in favor of the person by whom the purchase price is paid, except as stated in §§ 441, 442, and 444." See also Aldan-Pierce v. Mafnas, No. 89-003, slip op. at 21 (N.M.I. July 5, 1991).
Is Diana a trustee for the Grizzards under a resulting trust theory? The answer is yes.
Disregarding the exceptions for the moment, what we have here is a transfer of three parcels of land to Diana with the entire purchase price being paid by the Grizzards. This creates a resulting trust under Section 440 of the Restatement (Second) of Trusts in favor of the one paying the purchase price. When Diana acquired the lots from the Mafnas sisters, Diana held bare legal title to the properties, and the Grizzards held equitable title. "The trustee of a resulting trust holds only the naked legal title for the benefit of the person furnishing the consideration . . . who holds the equitable interest." Aldan-Pierce v. Mafnas, supra, *527at 22. (Citation and footnote omitted.)
In Aldan-Pierce v. Mafnas, supra. we held that
If a resulting trust in real property in the Commonwealth has arisen in favor of a person who is not of Northern Marianas descent, it is subject to being declared invalid in a judicial proceeding if the equitable interest held for them in trust violates Article XII.
Id. at 34. (Footnote omitted.)
The most crucial evidence against Diana is the partnership agreement. This document not only establishes that Diana was never meant to be the fee simple absolute owner of the properties, but • also dispels any exception to a resulting trust.
The undisputed facts show that the partnership among the four was formed to buy and sell, or lease property. Each partner had a role. Diana was to purchase and hold title. The Grizzards were to provide the purchase money. Frank was to provide real estate expertise. Each performed their respective partnership roles.
The question is whether Diana possesses both legal and equitable titles to the properties, or whether she is holding title in trust for the benefit of all the four partners. If the latter, did the three partners not of NMI descent acquire an equitable fee simple interest in the properties? If so, such violates Article XII.
The Agreement clearly shows that Diana was to hold title to the properties for the benefit of the partnership. Agreement, Articles One and Four. There are three provisions in the Agreement *528that conclusively show that Diana was holding title for the benefit of the partnership. The first provision is in Article Four. It states that any lease agreement to the partnership must include a "change of law" provision. The article defines "change of law" as meaning that the partnership (i.e., Diana, Frank, and the Grizzards collectively) will purchase the land in fee simple absolute should the law change with no additional consideration. Second, Article Four also states that Diana, or whoever is the lessor at the end of the lease period, must purchase the improvements placed on the land by the partnership, or whoever is the lessee then. And third, Article Five(3) provides that if Diana withdraws from the partnership for any reason, she must convey her right, title and interest in the land to a person of NMI descent, to be designated by the partnership.
These provisions establish an intent that Diana would obtain fee simple title, but subject to the partnership restrictions. She must convey her fee simple interest if 1) there is a change in the law, or 2) she decides to withdraw from the partnership. The consideration for her interest in the event of a change in law is the "mutual promises contained in this agreement." The consideration to be paid for her interest in the event she withdraws from the partnership "are the mutual promises contained in this agreement and one dollar ($1.00) to be paid in hand." She is restricted in what she may do with her title to the properties. And if none of the two conveyance possibilities arise, she must *529purchase the improvements placed on the premises by the , lessee at the end of the lease term.
Diana, James Grizzard, and Frank Ferreira disputed, in their depositions, that Diana was to obtain anything less than a fee simple absolute interest. However, these refutations do not prohibit a court from granting summary judgment. See United States v. Kasuboski, 834 F.2d 1345 (7th Cir. 1987). A party cannot circumvent summary judgment by later refuting what he or she initially admitted.
This is not a situation where a party to the Agreement is attempting to clarify or explain an ambiguous provision in the Agreement. What we have is a situation where parties to the Agreement are attempting to dispute what is clearly and unambiguously stated in the Agreement. This cannot, and should not, be allowed. Otherwise, the rule for summary judgment would be meaningless.
In Aldan-Pierce v. Mafnas, supra. at 34, n. 45, we noted that, "a trust may be rebutted by clear evidence that the money used to purchase the property was a valid gift, loan, or payment to discharge a debt or other obligation." In this case, we have no such clear evidence. Article Four of the Agreement shows that Diana was not to obtain title as a gift or loan, or to discharge a debt or other obligation. She acquired title because she was a person of NMI descent. She acquired title with covenants that she will relinquish her title upon the happening of certain events. *530And if those specific events did not occur, her title was encumbered with the obligation to purchase any improvements placed on the premises by any lessee.
The exceptions to a resulting trust, as cited in Restatement fSecond] of Trusts § 440, do not apply. These exceptions arise if the payor: (1) manifests an intention that no trust should arise (§ 441) , (2) purchases the property in the name of a relative "or other natural object of bounty" (§ 442) , or (3) purchases the property to accomplish an illegal purpose (§ 444). See also Aldan-Pierce v. Mafnas. supra. at 23. There is no manifestation of an intention that no trust should
arise. The Agreement makes it clear that a trust was contemplated. Agreement, Articles Four and Five. Diana is to purchase the property and then lease it to the partnership with a provision that if the law changes, the partnership obtains fee simple title at no additional consideration. She must purchase the improvements, if there is no change in the law, at the end of the lease term. Finally, she must transfer her interest if she ever decides to leave the partnership. It is clear that Diana's co-partners (who are not of NMI descent) have, through Diana's deed, acquired an equitable interest of indeterminate duration. This is not a situation where the non-NMI descent would be obtaining a constitutionally permissible interest. If the NMI descent was purchasing land with money totally provided by a non-NMI descent but it is clear that the intent in the transaction was that the *531non-NMI descent would only obtain a 55 year lease, or less, and the fee interest would be in the NMI descent, then the constitutional prohibition would not be violated.2
The Grizzards did not provide the funds for the purchase of the properties in the name of a relative or other natural object of bounty. Diana is not a relative of the Grizzards. There is nothing in the record establishing that she is a natural object of their bounty.
Aldan-Pierce v. Mafnas, supra, at 23-24, discussed the third exception, i.e., a purchase to accomplish an illegal purpose.
At first blush, it appears that this exception may be applicable in this case. If the partnership agreement was entered into to accomplish an illegal purpose, there can be no resulting trust under § 444.
However, in analyzing Article XII, this Court has concluded in the Aldan-Pierce case that a violation of Article XII does not *532occur until and unless a court declares a transaction to be violative of Article XII. Therefore, there can be no automatic illegal purpose under Article XII. A court must first declare a transaction to be unconstitutional.
In adopting the principles set forth in Isaacs v. De Hon, 11 F.2d 943 (9th Cir. 1926), the Aldan-Pierce Court held that
A resulting trust in real property in the Commonwealth in favor of a person who is not of Northern Marianas descent is valid, unless the equitable interest held for them in trust is declared, in a judicial proceeding, to be violative of Article XII. If the equitable interest is ruled violative of Article XII, the underlying transaction through which the person who is not of Northern Marianas descent acquired the interest becomes void ab initio. Article XII, § 6.
(Footnote omitted.) We reaffirm such analysis and holding on this exception. Only a court of competent jurisdiction can determine if an acquisition of land violates Article XII of the NMI Constitution. Prior to such judicial determination, the resulting trust is valid. This exception does not apply.
Equal Protection
Diana’s argument on this issue must fall.3 Her brief, at 58, n.47, correctly notes that this argument was made to the United States Court of Appeals for the Ninth Circuit and was rejected. *533See Wabol v. Villacrusis, 908 F.2d 411 (9th Cir. 1990).4 There is no equal protection violation under the NMI Constitution, or the United States Constitution.
CONCLUSION
Based on the above, the conveyances from the Mafnas sisters to Diana violated Article XII of the NMI Constitution. The Grizzards acquired a constitutionally impermissible interest in real property in the Commonwealth when the conveyances were made. Such conveyances were void from the date they were executed.
The grant of summary judgment is hereby AFFIRMED.
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 The partnership agreement deals with only one piece of property. However, appellant's brief, at page 14, acknowledges that the other two properties were acquired using funds from the Grizzards. Appellant states also that Diana used the real estate expertise of Frank in acquiring the properties. While it may be true that she relied on Frank's expertise in the purchase of the properties, there is nothing in the record that indicates that Frank's expertise was part of the consideration accepted by the Mafnas sisters in conveying their interests. Consequently, such a fact is irrelevant as to the issue of who furnished the consideration for the purchase of the properties.

 This hypothetical was also not the situation in the Aldan-Pierce case. We stated in Aldan-Pierce that "the record in this case indicates that Fennell and McMahon intended to retain an equitable interest of indeterminate duration." Aldan-Pierce v. Mafnas, supra. at 28.
We disagree with the dissent's interpretation regarding footnote 37 in Aldan-Pierce. See, infra. pp. 22-23. Footnote 37 was inserted under the discussion of a resulting trust being rebutted in part. Aldan-Pierce was arguing that, since Fennell and McMahon disclaimed any intention to take more than a leasehold for fifty-five years, the resulting trust is rebutted. Footnote 37 was inserted to show that the exception noted in Comment f of § 441 of the Restatement (Second^ of Trusts does not apply in the Commonwealth if the disclaimer occurs after the unconstitutional act. That is, a person cannot violate the constitution now, and then later attempt to correct the violation by saying that all that was intended was a constitutionally permissible interest.

 We disagree with the Mafnas sisters that this issue may not be raised on appeal since it was not raised in the trial court. This issue falls within one of the three exceptions noted in Camacho v. Northern Marianas Retirement Fund, No. 90-007, 1 N.Mar.I. 131 (Sept. 21, 1990). The exception is that "the issue is only one of law not relying on any factual record . . . ." Id. at 135-136.

 We note that we are agreeing only with Ninth Circuit on this issue. ■ the analysis of the