Wabol v. Villacrusis

• Decision Date: 09 July 1990
• Docket Number: No. 87-1736,87-1736
• Citation: 908 F.2d 411
• Parties: Concepcion S. WABOL, et al., Plaintiffs-Appellees, v. Victorino VILLACRUSIS, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 411

908 F.2d 411

Concepcion S. WABOL, et al., Plaintiffs-Appellees, v. Victorino VILLACRUSIS, et al., Defendants-Appellants.

No. 87-1736.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 11, 1988.

Decided Feb. 20, 1990.

As Amended July 9, 1990.

Marybeth Herald, Fitzgerald, Herald & Bergsma, Saipan, Com. of the Northern Mariana Islands, for defendants-appellants.

Theodore R. Mitchell, Saipan, Com. of the Northern Mariana Islands, Charles K. Novo-Gradac, White, Novo-Gradac and Thompson, Saipan, Com. of the Northern Mariana Islands, for plaintiffs-appellees.

Appeal from the United States District Court for the Northern Mariana Islands, Appellate Division.

Before POOLE, WIGGINS and BRUNETTI, Circuit Judges.

ORDER

The court has ordered the opinion filed February 20, 1990 [898 F.2d 1381 (9th Cir.1990) ] to be amended as follows:

1. At slip op. page 1819 four lines from the bottom [898 F.2d at 1386, 2d col., line 24], add after the cite the following parenthetical:

(holding that no full faith and credit is warranted for decision rendered by court without jurisdiction);

2. At slip op. page 1821, first line [898 F.2d at 1387, 1st col., line 16], replace the first full sentence with the following:

This court has jurisdiction over all appeals from the appellate division pursuant to section 403(b) of the Covenant, originally codified at 48 U.S.C. Sec. 1694c(b), which provides that those sections of Title 28 of the U.S. Code applicable to Guam shall be applied to NMI. 28 U.S.C. Sec. 1291 provides for Ninth Circuit jurisdiction over all appeals from the appellate division of the district court of Guam. Congress explicitly clarified section 403(b) by amending the implementing legislation in 1984 to provide that this court "shall have jurisdiction of appeals from all final decisions of the appellate division of the district court" of NMI. 48 U.S.C. Sec. 1694b(c).

3(a). At slip op. page 1822, after the first sentence of the first full paragraph [898 F.2d at 1387, 2d col., line 20], insert:

Although section 402 clearly authorizes the NMI to bestow or withdraw appellate jurisdiction on or from the district court in cases originating in the local trial courts, nothing in that section or elsewhere in the Covenant authorizes the NMI to define or limit the jurisdiction of this court or the U.S. Supreme Court. Despite appellees' assertion that "[w]hen the root is cut, the branches fall", Smallwood v. Gallardo, 275 U.S. 56, 62, 48 S.Ct. 23, 24, 72 L.Ed. 152 (1927), authority over the appellate jurisdiction of the district court does not imply authority over this court. The cases relied on by appellees support only the principle that, once jurisdiction is withdrawn from a lower court, a subsequent appeal to a higher court will not save it from that withdrawal. Here, however, the appeal was pending in this court when the Act was passed, and had been properly taken from the appellate division before that court was divested of jurisdiction.

3(b). At slip op. page 1822 [898 F.2d at 1387, 2d col., line 20], delete the words "When Congress amended the Covenant in 1984, * * * " and substitute the following:

Furthermore, when Congress amended the implementing legislation in 1984 to clarify this court's misinterpretation of section 402(c) of the Covenant in Sablan v. Santos, [634 F.2d 1153 (9th Cir.1980) ] and continue from the words "it made clear its original intent * * * " to the end of the paragraph.

4. At slip op. page 1822, footnote 12 , add to the end of the footnote the following:

Atalig does not provide support for NMI's attempt to define and limit this court's jurisdiction. This court held in Atalig that, because section 403(b) of the Covenant, implemented at Sec. 1694b(c), bestowed jurisdiction on this court over appeals from the appellate division of the district court, NMI could authorize its government to appeal from criminal cases in the appellate division. Thus, this court relied solely on the jurisdiction granted to it under the Covenant, and has never authorized NMI to unilaterally define its jurisdiction.

POOLE, Circuit Judge:

In Commonwealth of Northern Mariana Islands v. Atalig, 723 F.2d 682 (9th Cir.), cert. denied, 467 U.S. 1244, 104 S.Ct. 3518, 82 L.Ed.2d 826 (1984), we held that the Sixth Amendment right to a trial by jury does not apply in the Commonwealth of the Northern Mariana Islands (NMI or Commonwealth). This case requires us to determine whether the constitutional guarantee of equal protection of the laws limits the ability of the United States and the Commonwealth to impose race-based restrictions on the acquisition of permanent and long-term interests in Commonwealth land. Plaintiffs-appellees Concepcion S. and Elias S. Wabol (collectively Wabol) brought this action in the Commonwealth Trial Court to void their lease agreement with defendants-appellants Victorino Villacrusis and Philippine Goods, Inc. (collectively PGI). Wabol alleged the agreement violated Article XII of the NMI Constitution which provides that the sale of a freehold or a leasehold exceeding forty years, including renewal rights, to a person not of Northern Mariana Islands descent, is void ab initio. PGI defended on the ground that Article XII violates the equal protection clause of the United States Constitution. The trial court upheld the restriction but reformed the lease on equitable grounds. The Appellate Division of the District Court for the Northern Mariana Islands reversed, also upholding the restriction, but concluding that section 6 of Article XII precludes reformation of a prohibited lease. The district court remanded to the trial court "to determine the terms and conditions of any obligations which may have arisen in quasi contract or as a result of a periodic tenancy" and to account for the improvements erected on the land by PGI. PGI timely appealed.

We conclude that, despite the remand, we have jurisdiction to consider this appeal. In addition, we conclude that the Commonwealth Judicial Reorganization Act of 1989, NMI Public Law No. 6-25, enacted while this appeal was pending, does not divest this court of jurisdiction to decide the appeal. On the merits, we hold that the right to acquire permanent or long-term interests in NMI real estate is not one protected by the United States Constitution. We further hold that Article XII precludes reformation of a lease which violates its provisions. Accordingly, we affirm the judgment of the district court.

I. BACKGROUND

A. Facts

In 1978, defendant Filomenia Wabol Muna and PGI entered into an agreement, approved by Wabol, to lease a parcel of NMI property for a 30 year term with an unconditional option in lessee PGI to renew for 20 additional years. Thereafter Wabol obtained full ownership of the premises in a partition action. Muna, however, continued to collect rents, and Wabol brought this suit seeking, inter alia, a judgment voiding the lease for violation of Article XII.

B. Article XII of the NMI Constitution and the Covenant

Article XII of the NMI Constitution implements section 805 of the Covenant to Establish a Commonwealth in Political Union With the United States of America, reprinted as amended in 48 U.S.C.A. Sec. 1681 note (West 1987) (Covenant). Section 805 provides that, notwithstanding federal law, the Commonwealth government shall regulate the alienation of local land to restrict the acquisition of long-term interests to persons of Northern Mariana Islands descent. ¹ The avowed motive of the drafters was "to protect [the people] against exploitation and to promote their economic advancement and self-sufficiency" and to preserve the islanders' culture and traditions, which are uniquely tied to the land. Accordingly, Article XII, section 1 provides that

[t]he acquisition of permanent and long-term interests in real property within the Commonwealth shall be restricted to persons of Northern Marianas descent.

Section 3 of that Article defines the restricted interests:

The term permanent and long-term interests in real property used in Section 1 includes freehold interests and leasehold interests of more than forty years including renewal rights. ²

Section 4 defines a person of Northern Marianas descent as one

who is a citizen or national of the United States and who is of at least one-quarter Northern Marianas Chamorro or Northern Mariana Carolinian blood or a combination thereof or an adopted child of a person of Northern Marianas decent 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. ³

Section 6 of Article XII provides in pertinent part that "[a]ny transaction made in violation of Section 1 shall be void ab initio."

C. Proceedings below

On Wabol's motion for summary judgment, the trial court ruled that: (1) the lease violated Article XII, section 1; (2) Article XII did not violate the equal protection clause; but (3) in light of Wabol's "waiver, laches and estoppel" in allowing PGI to pay rent for almost seven years and construct extensive improvements on the property, the lease was valid for the forty year allowable term. In its equal protection analysis, the court applied a relaxed rational basis standard of review, drawing an analogy to decisions dealing with classifications favoring American Indians. The parties stipulated to judgment and appealed. The appellate division of the district court agreed that the lease was invalid, also applying minimal equal protection scrutiny. However, the district court rejected the trial court's implicit conclusion that section 6 permitted reformation of a nonconforming lease, and reversed. The case was...