Court Opinion

ID: 9296763
Source: CourtListenerOpinion
Date Created: 2022-11-29 17:28:01.605946+00
Date Added: 2024-06-11T17:13:21.973097
License: Public Domain

ATALIG, Justice,
concurring:
I concur with the reversal of the partial summary judgment granted in favor of Elizabeth Blanco Matsunaga (“Elizabeth”). However, I disagree with the majority’s holdings supporting the reversal.
At issue is whether, under the disputed lease (“lease”), Diamond Hotel Co., Ltd. (“Diamond”), has acquired a constitutionally-impermissible permanent or long-term property interest. The majority holds that under the lease, in particular paragraph 21 together with the initial lease term of fifty-five years in paragraph 3, Diamond acquired a long-term interest in land violative of Article XII, notwithstanding its conclusion that paragraph 21 “does not now constitute a conveyance of an interest in land.” It then, however, deems the option clause in paragraph 21 severable, despite the language in paragraph 3 and Article XII § 6, because paragraph 21 “is not an integral component of the [lease].”
I would hold that the lease does not violate Article XII and reverse the trial court’s decision. Furthermore, I would hold that the option clause is unenforceable because the undisputed facts of this case evince that it contravenes the strong public policy behind Article XII.
DISCUSSION
Article XII, § 1 prohibits the acquisition by nonNMDs of permanent or long-term interests in real property in the CNMI. “Any transaction made in violation of Section 1 shall be void ab initio.” N.M.I. Const, art. XII, § 6, cl. 1 (emphasis added). Whether Diamond acquired a permanent or long-term interest in land under the lease requires us to carefully examine the purported “interest” and, if it is an interest in land, whether there has been an “acquisition” for purposes of Article XII. See Manglona v. Kaipat, 3 N.M.I. 322, 333 (1992); Ferreira v. Borja, 1 F.3d 960, 962 (9th Cir. 1993) (citing Ferreira v. Borja, 2 N.M.I. 514, 540 (1992) (King, S.J., dissenting)), vacating and remanding 2 N.M.I. 514 (1992), opinion on remand, 4 N.M.I. 211 (1995), rev’g 3 CR 472 (N.M.I. Trial Ct. 1988).
I conclude that under the lease Diamond has not acquired a vested renewal right constituting an unconstitutional lease term extension. Hence, Article XII, §§ 1 and 6 are not implicated. At most, Diamond has a conditional option contract right under paragraph 21. However, because the public policy behind Article XII against the alienation of long-term land interests to nonNMDs is both implicated and contravened by that contract right, I conclude that paragraph 21 is unenforceable.
*222I. Diamond has not Acquired an Impermissible Long-Term Interest in Real Property under Paragraph 21
Permanent and long-term interests in real property include “freehold interests and leasehold interests of more than fifty-five years including renewal rights.” N.M.I. Const, art. XII, § 3, cl. 1 (amended 1985). “Renewal rights are an integral part of a lease and should not be permitted to constitute an extension of the time limitation.” Northern Marianas Constitutional Convention, Analysis of the Constitution of the Commonwealth of the Northern Mariana Islands [“Analysis”] 120 (Dec. 6, 1976) (concerning Article XII, § 3). “The term acquisition . . . includes [an] acquisition by sale, lease, gift, inheritance or other means.” N.M.I. Const, art. XII, § 2, cl. 1 (amended 1985). The Analysis equates the term “acquisition” with “transfer,”7 and this Court has previously concluded that only upon a transfer of an interest in land does that interest vest in the recipient. See In re Estate of Deleon Guerrero, 1 N.M.I. 301, 306-07 (1990) (because no interest in land transferred to decedent, no such interest vested in her estate at the time of her death).
Thus, for an impermissible interest in land to have been acquired by Diamond under paragraph 21, that interest must have been transferred to, and, hence, vested in, Diamond. The specific interest must have been one which “constitute[s] an extension” of the lease.8
A. Under the Lease, Elizabeth has not Conveyed a Present or Future Possessory Interest in the Property to Diamond beyond Fifty-Five Years
An effective leasehold, constituting a non-freehold estate for years,9 transfers a possessory interest in land to the lessee for a fixed term. See and compare Restatement of Property [“Property”] § 13 & cmt. a (1936);10 Restatement (Second) of Property: Landlord and Tenant [“Landlord and Tenant”] § 1.2 (1977);11 Sublett v. City of Tulsa, 405 P.2d 185, 200 (Okla. 1965). This possessory interest may be either present12 or future,13 or an aggregate of both. See *223Property § 13 cmt. a; Landlord and Tenant § 1.2 cmt. a.14 Thus, the “interest” implicated under Article XII with respect to a leasehold is a vested present or future possessory interest. This is distinguishable from a contingent possessory interest. See Everdell v. Preston, 111 F. Supp. 1498, 1501 (M.D. Fla. 1989); cf. infra note 16 and accompanying text.
A possessory interest is acquired by the transferee under a lease only where that interest has been both extinguished in the transferor and created in that transferee. See sources quoted supra notes 10-11. Only then does the landlord-tenant relationship exist. See supra note 11. Furthermore, this relationship may be subject to a condition precedent,15 as well, see Landlord and Tenant § 1.8,16 in which instance it is only upon the occurrence of the event that the relationship commences. Id. § 1.8 cmt. a. In other words, a condition precedent is one which must occur for an interest to vest. See Restatement (Second) of Contracts [“Contracts”] § 224 cmt. a (1981) (a condition precedent “qualifies a transfer of property” under a contract right); Wien Consol. Airlines, Inc. v. C.I.R., 528 F.2d 735, 737 n.4 (9th Cir. 1976) (real property law).
Under paragraph 3 of the lease, Diamond has a present possessory interest in the property for fifty-five years. Compare Lease Agreement (Nov. 13, 1986) (quoted in majority opinion, ante) with authority quoted supra note 12 and Property § 153 cmts. d, e.17 How ever, paragraph 21 vests no present right to future possession in the property beyond that fifty-five year period. Cf. Landlord and Tenant § 1.8 cmt. b. This is because until the law is changed and the option exercised, Elizabeth retains that right,18 and, upon the expiration of the fifty-five year period, the possessory rights now vested in Diamond will revert back to her. Cf. Ferguson v. District Court of Oklahoma County, 544 P.2d 498, 499 (Okla. 1975).
B. Unexercised Option to Extend Lease, Contingent upon Change in Law, does not Vest Interest in Optionee
As the majority notes, paragraph 21 is, in essence, an option contract, compare CONTRACTS § 125 cmt. c (“promise to transfer” land interest “includes an option contract”), Duty Free Shoppers Ltd. v. Sablan, 3 CR 623, 626-27 (N.M.I. Trial Ct. 1989), the main purpose of which is to render an offer irrevocable for a specified period of time. See Contracts § 25 & cmt. d; University Realty & Dev. Co. v. Omid-Gaf, Inc., 508 P.2d 747, 749 (Ariz. Ct. App. 1973).
Thus, under paragraph 21, Elizabeth may not revoke her offer to extend the lease, in anticipation of the law changing, until the expiration of the initial fifty-five year lease term. However, Diamond’s right to exercise the option is conditioned upon the law being changed, and Elizabeth is under no obligation to extend the lease term until that condition is satisfied. See supra note 15; Contracts § 225 (“Performance of a duty, subject to a condition cannot become due tmless the condition occurs . . .”).
Because Diamond may not unilaterally exercise the option in paragraph 21 prior to any pertinent change in the law, it has not acquired an impermissible long-term interest under Article XII. Rather, it has only an option contract right to a potential future possessory interest in an extension of the leasehold term. This is in accordance with previous case law in this jurisdiction noting that an interest in land is usually acquired by an optionee only *224upon the execution of the option. See Duty Free Shoppers Ltd., 3 CR at 626-27.19 Accord majority opinion, supra. Cf. Wabol v. Muna, 2 CR 963 (D.N.M.I. App. Div. 1987),20 rev’g in part 2 CR 231 (N.M.I. Trial Ct. 1984), aff'd sub nom., Wabol v. Villacrusis, 958 F.2d 1450 (9th Cir.), cert. denied sub nom., Philippine Goods, Inc. v. Wabol, 506 U.S. 1027, 113 S. Ct. 674, 121 L. Ed. 2d 598 (1992).21
II. Paragraph 21 Unenforceable under Public Policy
Diamond sought a determination below of its rights and obligations under the lease. This requires an examination of the validity and enforceability of paragraph 21. Cf. Lucky Dev. Co., Ltd. v. Tokai, U.S.A., Inc., 3 N.M.I. 79, 94 (1992) (issues involving validity of an agreement call into question whether agreement is “illegal or contrary to public policy"); CONTRACTS § 8 (breach of unenforceable contracts may not result in either specific performance or damage remedies).
A provision or term that is against public policy may be unenforceable. CONTRACTS § 178(1).22 Such a public policy may be based on either the constitution, statutes, rules or regulations, see id. §§ 179 & cmt. b, 178 cmt. a, or “the need to protect some aspect of the public welfare.” Id. § 179.23 Even where a contract provision does not by its terms squarely violate legislation, it may, nevertheless, be unenforceable if it contravenes a public policy behind such legislation. See, e.g., id. cmt. b;24 Shadis v. Beal, 685 F.2d 824, 833-34 (3d Cir.), cert. denied sub nom., O’Bannon v. Shadis, 459 U.S. 970, 103 S. Ct. 300, 74 L. Ed. 2d 282 (1982).25
*225In determining the unenforceability of the option clause under the lease, we utilize and weigh the factors enunciated in Contracts, under which we examine:
(a) the strength of that policy as manifested by legislation or judicial decisions,
(b) the likelihood that a refusal to enforce the term will further that policy,
(c) the seriousness of any misconduct involved and the extent to which it was deliberate, and
(d) the directness of the connection between that misconduct and the term.26
Id. § 178(3).
I conclude that the option clause gives a contractual right to Diamond contrary to a public policy against the alienation of long-term real property interests by NMDs to non-NMDs. Furthermore, I would hold that paragraph 21 is unenforceable in light of the strength of, and in the interest of the furtherance of, that policy.27 However, I would remand for trial on the issues of severability and enforceability of the remaining lease provisions.28
Article XII’s clear prohibition against the acquisition of permanent and long-term real property interests by non-NMDs is an extension of the long-standing public policy in the CNMI and Micronesia against the alienation of land to, and exploitation of NMDs by, non-NMDs. As far back in time as the German administration (1898-1914), the administering authorities in the CNMI have regulated the alienation of real property interests held by the indigenous population. It was presumed that these people were neither legally nor economically sophisticated enough to prevent the loss of their land. See, e.g., Statement of Baron Nobuaki Makino, quoted in Don A. Farrell, History of the Northern Mariana Islands 302-303 (Phyllis Koontz ed., 1991);29 see also League of Nations, Mandate for the German Possessions in the Pacific Ocean lying north of the Equator art. II (Dec. 17, 1920) (copy on microfilm with CNMI Archivist);30 Japanese Government, Annual Report to the League of Nations on the Administration of the South Sea Islands under Japanese Mandate for the Year 1932 chap. VII, §§ I at 112 (continuing *226German policy of protecting local land owners),3111(b) at 115 (requiring approval by Director of the South Seas Bureau of any acquisition of land interest from “natives”) (copy on microfilm with CNMI Archivist);32 United Nations, Trusteeship Agreement for the former Japanese Mandated Islands (1947), reprinted in CMC at A-201 et seq. (cited in Wabol, 958 F.2d at 1458, 1461); Office of the High Commissioner, Trust Territory of the Pacific Islands, Land Management Regulation No. 4, § 4 (1965) (copy on microfilm with CNMI Archivist);33 and A Bill for an Act Relating to the Establishment of the Division of Land Management (supporting statement submitted by Robert K. Shoecraft, Attorney General, and Paul L. Winsor, Assistant Commissioner for Resources and Development) (copy on microfilm with CNMI Archivist).34 See generally Howard P. Willens & Deanne C. Siemer, The Constitution of the Northern Mariana Islands: Constitutional Principles and Innovation in a Pacific Setting, 64 Geo. L.J. 1373, 1406 (1977) (quoting Hearings on H.R. Res. 549 Before the Senate Comm, on Foreign Relations, 94th Cong. 1st Sess. 164 (1975)) {cited in Wabol, 958 F.2d at 1461).
The people of the CNMI, through the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America [“Covenant”] § 805, 48 U.S.C. § 1801 note, reprinted in at CMC at B-116,35 and *227Article XII, decided to continue this public policy against the alienation of long-term property interests to nonNMDs.36 This policy, as maintained by the CNMI, incorporates a recognition of the scarcity of land and its importance in local traditions and customs. See, e.g., Analysis at 164-65 (concerning Article XII, § 1) (quoted in Guerrero v. Guerrero, 2 N.M.I. 61, 70 (1991));37 see also Commonwealth v. Bordallo, 1 N.M.I. 208, 218-19 (1990) (citing Covenant § 805 and noting importance of land ownership “in relation to the culture and traditions of’ NMDs), opinion on remand, 2 N.M.I. 226 (1991).
While the level of sophistication of NMDs has increased, so have the complexities of the legal and economic dynamics behind the purchasing and leasing of land. Thus, the public policy implicated in Article XII is still viable. Cf., e.g., PL 8-32 (codified at 2 CMC §§ 4941-4942, 4951, 4961-4963, 4971-4973, 4981-4982, 4991-4992, and amending 7 CMC § 2509) (recognizing potential exploitation of NMD land conveyors by attorneys). In this case, the provision does not violate Article XII by its terms but it does implicate this public policy. While Diamond drafted a lease which does not vest a long-term property interest in it, the lease does confer upon it a contract right which effectively, today, ties up Elizabeth’s long-term prospects for the property in anticipation of the law changing.
For example, if Elizabeth was proffered the opportunity today to, at the end of the fifty-five year lease period, lease to another party for more than that which Diamond is paying, she would be unable to accept the more lucrative offer if the provision was enforceable. Because the property is now encumbered by paragraph 21, Elizabeth’s ability to alienate her interest in the land to a third party, distribute possession of the land by the customary law of partida, or use the land as collateral is hampered.
CONCLUSION
Based on the foregoing, I would reverse the Superior Court’s grant of a partial summary judgment in favor of Elizabeth Matsunaga and remand this matter to the Superior Court for further proceedings.

 Northern Marianas Constitutional Convention. Analysis of the Constitution of the Commonwealth of the Northern Mariana Islands [hereinafter Analysis] at 168 (Dec. 6, 1976) (concerning Article XII, § 2).

 Because our constitution and other Commonwealth law do not define the terms “acquisition,” “transfer,” “renewal right,” “interest” and “other means,” I must look to the Restatements, 7 CMC § 3401. Furthermore, as “[a] lease is both a conveyance of an estate and a contract,” In re Wolverton Assocs.. 909 F.2d 1286, 1294 (9th Cir. 1990), see also Maui Land and Pineapple Co., Inc. v. Dillingham Corp., 674 P.2d 390 (Haw. 1984), and compare majority opinion, supra, I will look to the pertinent Restatement provisions of real property and contract law. My consideration of contract law under the Restatements is confined to the creation and transfer of interests arising under contractual rights. See In re Estate of Seman, 4 N.M.I. 129, 132 n.11 (1994) (quoting Restatement (Second) OF Contracts [hereinafter Contracts] introduction at 1 (1981)).

 “A leasehold is a non-freehold “estate for years.” RESTATEMENT OF Property [hereinafter Property], introductory note to Division II at 37 (1936). The term “estate,” as used in Property, means “an interest in land which (a) is or may become possessory; and (b) is ownership measured in terms of duration.” Id. § 9. “An estate for years is an estate, the duration of which is fixed in units of a year or multiples or divisions thereof.” Id. § 19.

 Since an interest ... is a legal relation between two persons ... it follows that such a relation is necessarily personal. The transaction referred to as a “transfer” from one person to another actually consists of two steps. These are: first, the extinguishment in the transferor of the interests which are the subject matter of the transfer; and second, insofar as the interests thus extinguished are interests good against others than the transferee, the creation in the transferee of similar interests.
Id. § 13 cmt. a.

 “A landlord-tenant relationship exists only if the landlord transfers the right to possession of the leased property.” Restatement (Second) of Property: Landlord and Tenant [hereinafter Landlord and Tenant] § 1.2 (1977).

 “A present interest is an interest in land, or in a thing other than land, which includes ... a right to the immediate beneficial enjoyment of the affected thing . . . .” Property, supra note 9, § 153.

 (1). . . [A] future interest is an interest in land, or in a thing other than land, which
(a) is not, but may become a present interest; and
(b) is a segment of ownership measured in terms of duration; and
(c) is neither inchoate dower nor curtesy initiate ... .
(2) . . . excluding] the interest had by the owner of a postponed right to the enjoyment of an easement, profit, rent or similar interest in the land of another.

*223
Id.

 "In order to satisfy the possession requirement of the landlord-tenant relationship, the transferred interest in the leased property must be one that the owner is legally capable of possessing now or in the future.” Landlord and Tenant, supra note 11, § 1.2 cmt. a.

 “A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.” Contracts, supra note 8, § 224 (emphasis added). This type of condition has been called a “condition precedent.” Id. cmt. e.

 See also PROPERTY, supra note 9, §§ 19 cmt. c, 26 (conditions may be placed on future possessory interests in non-freehold estate for years); CONTRACTS, supra note 8, § 226 (contracts may be conditioned “[b]y the agreement of the parties”).

 The contrast between “future interests” . . . and “present interests" . . . rests upon the postponement ... of some of the separate rights, powers or privileges which would be forthwith existent if the interests were “present.” Thus a present interest in land is characterized by a right to the possession thereof, but in the case of a future interest in land, this right to possession is postponed to await the ending of one or other interests which include, successively, the right to the possession of such land.
Property, supra note 9, § 153 cmt. e.

Whenever a right of possession “is postponed, it is necessarily true that the right to possession of such land is meanwhile in another.” Id. § 26 cmt. a.

 In Duty Free Shoppers Ltd. v. Sablan, 3 CR 623 (N.M.I. Trial Ct. 1989), the plaintiff asserted that a one-year period above the constitutional fifty-five year limit during which a non-NMD entity had the option of executing a lease was “in itself equivalent to a leasehold interest,” 3 CR at 626-27, and should be tacked on to the lease term. While the court noted that the plaintiff was paid to not otherwise lease or alienate the property within that one-year period, the defendant had received no interest or estate in the land by virtue of the unexercised option. Id.

 In Wabol v. Muna, 2 CR 963 (D.N.M.I. App. Div. 1987), rev’g in part 2 CR 231 (N.M.I. Trial Ct. 1984), aff’d sub nom., Wabol v. Villacrusis, 958 F.2d 1450 (9th Cir.), cert. denied sub nom., Philippine Goods, Inc. v. Wabol, 506 U.S. 1027, 113 S. Ct. 674, 121 L. Ed. 2d 598 (1992), the Appellate Division found that a thirty-year leasehold with an option to renew for twenty years violated Article XII. However, in that case there was no condition precedent on which the right to exercise the option stood. See Wabol, 2 CR at 970; see also Lease Agreement ¶ 3 (Aug. 18, 1978), in Complaint at Exhibit 1, Wabol, Civ. No. 84-0397 (N.M.I. Super. Ct. filed Oct. 17, 1984) (“Lessor grants to Lessee the option to extend the length of this lease for an additional term of twenty (20) years”) (emphasis added). Thus, for purposes of Article XII, the lessee “acquired” an impermissible leasehold interest. See id. Here, the exercise of the option is not solely within Diamond’s control. It is expressly conditioned upon the law changing, making any current expectation of a future lease term extension untenable.

 Cf. also El Paso Natural Gas Co. v. Kysar Ins. Agency, Inc., 605 P.2d 240, 244 (N.M. Ct. App. 1979) (only upon the exercise of an option does a lessee acquire “any equitable interest and rights in the property”); Sterike v. Masland Dev. Co., Inc., 394 N.W.2d 418, 422 (Mich. Ct. App. 1986) (“holder of an option to purchase land does not have an interest in the premises, either legal or equitable”).

 Cf. Landlord and Tenant, supra note 11, § 5.6 cmts. e, f. “Enforcement will be denied only if the factors that argue against enforcement clearly outweigh the law’s traditional interest in protecting the expectations of the parties, its abhorrence of any unjust enrichment, and any public interest in the enforcement of the particular term.” CONTRACTS, supra note 8, § 178 cmt. b. See id. § 178(2) (factors pertinent to "weighing the interest in the enforcement of a term”).

 A court will determine that a given term is unenforceable on public policy grounds “derived either from [our] perception of the need to protect some aspect of the public welfare or from legislation that is relevant to that policy although it says nothing explicitly about unenforceability.” Contracts, supra note 8, § 178 cmt. b (citing id. § 179). Compare Landlord and Tenant, supra note 11, § 5.6 cmt. e, under which a lease provision “may be against public policy if it will materially and unreasonably obstruct achievement of a well defined statutory, regulatory, or common law policy.”

 “[E]ven though a field is a subject of legislation, a court may decide that the legislature has not entirely occupied the field and may refuse to enforce a term on grounds of a judicially developed public policy even though there is no contravention of the legislation.” CONTRACTS, supra note 8, § 179 cmt. b. Such a determination of enforceability is to be made with respect to the policy at the time of the contract and is not usually affected by subsequent factual or legal changes. Branch v. Mobil Oil Corp., 772 F. Supp. 570, 571 (W.D. Okla. 1991) (citing Sabine Corp. v. ONG Western, Inc., 725 F. Supp. 1157, 1183 (W.D. Okla. 1989)) (quoting CONTRACTS § 179 cmt. d).

 [T]he scope of the public policy doctrine is broader and more encompassing than the concept of illegality. . . . The Restatement obviously does not require that the legislation in question expressly prohibit or require an act inconsistent with the contract; it is sufficient if the legislature makes an adequate declaration of public policy which is inconsistent with the *225contract’s terms.
Shadis v. Beal, 685 F.2d 824, 833-34 (3d Cir.) (citing CONTRACTS, supra note 8, §§ 178, 179 & cmt. b) (footnote omitted), cert. denied, 459 U.S. 970, 103 S. Ct. 300, 74 L. Ed. 2d 282 (1982).

 Neither party contends, nor did the court find, that misconduct was involved on the part of Manases and/or Diamond in executing the lease.

 1 would thus rule, despite factual issues in the balancing test, because even assuming that there was no misconduct at all on the part of Diamond, the strength of the policy behind Article XII, which does not consider misconduct, overwhelms the other two factors.

 1 would decline to rule on the severability of the option provision for purposes of determining if the remaining lease provisions are enforceable because the tests implicated, unlike that under CONTRACTS, supra note 8, § 178, involve disjunctive factual issues, under any one of which enforceability is at stake, not litigated below. Compare id. §§ 183, 184, with Fountain v. Filson, 336 U.S. 681, 69 S. Ct. 754, 93 L. Ed. 971 (1949) (entry of reversal of summary judgment by appellate court deprived defendant of opportunity to dispute facts pertinent to issue on which court resolved matter), and Heirs of Fruge v. Blood Servs., 506 F.2d 841 (5th Cir. 1975) (appellate court may not extend judgment on appeal from summaiy judgment to another issue under the guise of affirmance, when effect is to preclude losing party from disputing facts material to the claim). As such, I would remand the matter for a determination on severability. See, e.g., In re Guardianship of Sorum, 273 N.W.2d 710. 712 (N.D. 1979) (cited in majority opinion, supra); Borneo Petrol, Inc. v. Epstein, 560 A.2d 655, 662 (N.J. 1989) (after concluding contract clause illegal, court remands to determine severability) {cited in majority opinion, supra).

 Arguing in support of Japan’s claim to Micronesia during 1919 peace negotiations, Japan’s chief delegate to the League of Nations stated:
[The Micronesians] still remain in a primitive state and have no ability to establish political, economic, and social organizations, in a modem sense, by themselves. . . . [TJt is necessary [for Japan] ... to continue to protect these islanders and to improve their living conditions by making her possession of these islands definite.
Statement of Baron Nobuaki Makino, quoted in Don A. Farrell. History of the Northern Mariana Islands 302-03 (Phyllis Koontz ed., 1991).

 “The Mandatory shall promote to the utmost the material and moral well-being and the social progress of the inhabitants of the territory subject to the present mandate.” League of Nations, Mandate for the German Possessions in the Pacific Ocean lying north of the Equator art. n (Dec. 17, 1920) (copy on microfilm with CNMI Archivist).

 With regard to the land system, no detailed Regulations have as yet been enacted, but rights already acquired on land in accordance with old customs or German Laws are generally recognized irrespective of whether their owners are natives or not and owners are free to dispose of their land in whatever way the choose. However, a policy adopted under the German regime to protect native land-owners is still followed, placing restrictions upon the disposal of land, the property of natives, until a definite land system will be established.
Japanese Government, Annual Report to the League of Nations on the Administration of the South Sea Islands under Japanese Mandate for the Year 1932 chap. VII, § I (copy on microfilm with CNMI Archivist) (emphasis added).

 Private land, the property of natives, is dealt with in law in a different way from such as is the property of persons other than natives . . . . [I]t is prohibited to sell, or transfer it to, or to enter into agreements making it the object of security with parties other than the Government, unless sanctioned by the Director of the South Seas Bureau . . . . [and] unless sanctioned .... no agreement (except between natives) between Japanese or foreigners and natives concerning land, such as the grant of a lease, other than an agreement entered into for the purpose of selling, transferring or making it the object of security, is valid. . . . This system is aimed in the interest of natives at the prevention of the undue decrease of land owned by them as well as of any loss accruing to them from their lack of economic and legal knowledge when they may chance to deal in land with persons other than natives.
Id. § n(b) at 115-16 (citing appended regulations concerning land owned by natives and contracts concluded with natives). While this language is patently ambiguous, a full reading thereof and other primary sources from this period show that the Japanese policy was to proscribe the alienation of land held by natives with respect to non-natives, unless sanctioned by the Director. See, e.g., supra note 31.

 [N]o acquisition of interest in real property by persons who are not citizens of the Trust Territory, or by a foreign corporation or any corporation or association in which an alien owns any interest, shall be valid without the prior written approval of the High Commissioner.
Office of the High Commissioner, Trust Territory of the Pacific Islands, Office of Land Management Regulation No. 4 § 4 (1965) (copy on microfilm with CNMI Archivist).

 The Division [of Land Management] shall direct itself toward economic development through the optimum use of land-based resources which shall entail development and supervision of comprehensive land management programs to assure that maximum returns in economic and financial benefits will accrue to Micronesians and their Government. Program emphasis of a high order will be placed on land tenure problems and land utilization. It is recognized that skilled land management and subsequent development is vital to the economic well being of Micronesia.
A Bill for an Act Relating to the Establishment of the Division of Land Management (supporting statement submitted jointly by Robert K. Shoecraft, Attorney General, and Paul L. Winsor, Assistant Commissioner for Resources and Development) (copy on microfilm with CNMI Archivist).

 [T]he Government of the Northern Mariana Islands, in view of the importance of the ownership of land for the culture and traditions of the people of the Northern Mariana Islands, and in order to protect them against exploitation and to promote their economic advancement and self-sufficiency:
(a) will until twenty-five years after the *227termination of the Trusteeship Agreement, and may thereafter, regulate the alienation of permanent and long-term interests in real property so as to restrict the acquisition of such interests to persons of Northern Mariana Islands descent. .
Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America § 805, 48 U.S.C. § 1801 note, reprinted in CMC at B-l 16.

 See, e.g., Howard P. Willens & Deanne C. Siemer, The Constitution of the Northern Mariana Islands: Constitutional Principles and Innovation in a Pacific Setting, 64 GEO. L.J. 1373, 1406 (1977) (quoting Hearings on H.R. Res. 549 Before the Senate Comm, on Foreign Relations, 94th Cong. 1st Sess. 164 (1975)).

 The Convention’s purpose in implementing the restrictions on land alienation is to protect the culture and traditions of the people of the Northern Mariana Islands, to promote the political growth needed in the first critical years of the Commonwealth, to accomplish the political union with the United States with a minimum of cultural and economic dislocation, and to provide . . . stability. . . .
. . . Land is one of the principal sources of social stability. It gives root to the pride, confidence and identity as a people that will permit the cooperative action necessary to a successful Commonwealth. If the land passes out of the hands of the people of the Northern Mariana Islands, these unique social and economic benefits will be lost.
Land is the only significant asset that the people of the Commonwealth have. ... [It] is the basis of family organization in the islands. It traditionally passes from generation to generation creating family identity and contributing to the economic well-being of family members.
Analysis, supra note 7, at 164-65 (concerning Article XII, § 1) {quoted in Guerrero v. Guerrero, 2 N.M.I. 61, 70 (1991)).