For the Plaintiffs:   Snyder H. Simon, trial counselor

                                    P.O. Box 1017

                                    Tofol, Kosrae   FM   96944

                                       P.O. Box 187

                                       Tofol, Kosrae   FM   96944

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      This matter was called for trial on December 1, 2005. Plaintiff was represented by Snyder

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Simon. Defendant Vernon Youngstrom was represented by Albert Welly. Defendant Peter Nedlic did not appear at the trial. The following witnesses testified at the trial: Kerick Benjamin, Shra Benjamin and Vernon Youngstrom. The trial proceeded on Plaintiffs’ claims of breach of contract and fraud. The Kosrae Land Court and the State of Kosrae were initially also named as Defendants in the Complaint, but were dismissed by Order entered on December 20, 2004.

      After completing the trial, hearing from the parties and witnesses, I took the matter under advisement. This Memorandum of Decision sets forth my ruling and reasoning.

      Based upon the evidence presented at the trial, I find the following facts. The subject parcel 048-K-07, also called Lukaf, is located in Lelu Municipality, Kosrae State. The late Timothy Likiak was determined to be the owner of the subject parcel on October 31, 1984 by the Kosrae State Land Commission. The Determination of Ownership stated the area of the subject parcel as "958 square meters, more or less." The Determination of Ownership was not timely appealed. The Certificate of Title was issued to Timothy Likiak on June 28, 1985. Likiak Timothy was the late uncle of Plaintiff Shra Benjamin.

      Likiak Timothy sought to sell the subject parcel and approached at least two persons offering to sell them parcel 048-K-07, before approaching Defendant Youngstrom. Likiak Timothy approached Defendant Youngstrom on several occasions, offering to sell parcel 048-K-07 to him. Likiak Timothy was trying to sell the subject parcel because he was in need of cash. Following discussions with his wife, Raysileen, and with Likiak Timothy, Defendant Youngstrom agreed to buy parcel 048-K-07, for the amount of $3,000.

      On September 4, 2001, a Quitclaim Deed was executed by Timothy Likiak, selling parcel 048-K-07 to Defendant Youngstrom for the amount of $3,000. The Quitclaim Deed recited the sale of parcel 048-K-07, with a total area of 682 square meters, more or less. The Quitclaim Deed was witnessed by Mishima Kephas and Dudley Kilafwakun, and notarized. The Quitclaim Deed did not contain any conditions applicable to the transaction. The Quitclaim Deed was filed with the Registrar of the Kosrae State Land Commission on September 4, 2001 by Likiak Timothy. The Certificate of Title for parcel 048-K-07 was issued by the Kosrae Land Court to Defendant Youngstrom on July 3, 2002. The Certificate of Title recited the area of the subject parcel as 958 square meters, more or less. After Defendant Youngstrom purchased parcel 048-K-07, he allowed 2 Filipinos to live in the house for a while. Defendant Youngstrom also purchased a refrigerator for Timothy Likiak and the 2 Filipinos living there.

      On February 4, 2003, Defendant Youngstrom executed a Quitclaim Deed, selling the subject parcel to Defendant Peter Nedlic, for the amount of $3,500. The Quitclaim Deed recited the area of parcel 048-K-07 as 682 square meters, more or less. The Quitclaim Deed was witnessed by two persons and notarized. The Quitclaim Deed was filed with the Registrar of the Kosrae Land Court on February 4, 2003. The Certificate of Title for parcel 048-K-07 was issued by the Kosrae Land Court to Defendant Nedlic on February 6, 2003. The Certificate of Title recited the area of the subject parcel as 958 square meters, more or less.

      Plaintiffs do not dispute the transaction between Likiak Timothy and Defendant Youngstrom, that Likiak Timothy sold parcel 048-K-07 to Defendant Youngstrom, for the amount of $3,000. Plaintiffs testified that there was an oral understanding between Likiak Timothy and Defendant Youngstrom that also applied to the sale of parcel 048-K-07. Plaintiffs testified that the Defendant

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Youngstrom agreed to build Likiak Timothy a house, or maintain his existing house. Plaintiffs testified that Defendant Youngstrom failed to complete his promise, and that after the sale of the parcel to Defendant Youngstrom, Likiak Timothy wanted to get his land back. While Likiak Timothy was alive, Likiak Timothy asked Defendant Youngstrom to give back his land. Defendant Youngstrom agreed to sell back Likiak Timothy his land for the amount of $3,000, if paid in full. Likiak Timothy never paid Defendant Youngstrom the amount of $3,000.

      On April 2, 2002, Likiak Timothy executed a will in which he made a bequest of parcel 048-K-07 to the Plaintiffs. The will was witnessed by two persons and notarized. Likiak Timothy passed away in July 2003, however Plaintiffs continued to reside on the parcel after Likiak’s death. In January 2004, Defendant Youngstrom instructed the Plaintiffs to vacate the parcel. In December 2004, pursuant to Defendant Youngstrom’s instructions, the Kosrae Utility Authority disconnected the electrical power to the house occupied by the Plaintiffs on the subject parcel. Plaintiffs now claim ownership of the entire parcel 048-K-07 pursuant to the will of Likiak Timothy.

      The law regarding the validity of Certificates of Title is well established in our State and our Nation. Certificates of Title are prima facie evidence of ownership as stated against the world. A Court is required to attach a presumption of correctness to them when there are challenges to their validity. Sigrah v. Kosrae State Land Comm’n, 9 FSM Intrm. 89 (Kos. S. Ct. Tr. 1999). It is with this legal principle that the analysis of the legal issues is begun. Each is discussed in turn.

A.  Breach of Contract

      Plaintiffs present breach of contract as their first cause of action. Plaintiffs claim that Defendant Youngstrom breached his verbal agreement with Likiak Timothy by failing to build a house for Likiak Timothy. Plaintiffs argue that the verbal agreement to build Likiak Timothy a house was part of the sales transaction for parcel 048-K-07. Plaintiffs argue that the sale of the subject parcel to Defendant Youngstrom was conditional upon the verbal agreement for construction of the house for Likiak Timothy.

      This Court has carefully reviewed all the documents involved in the transaction for sale of 048-K-07. The Quitclaim Deed does not contain any promise or agreement pertaining to Defendant Youngstrom’s construction of a house for Likiak Timothy. The Certificate of Title issued to Defendant Youngstrom for parcel 048-K-07 does not contain any reference to any conditional transfer of title, nor any agreement to build a house for Likiak Timothy.

      The Kosrae State Constitution, Article II. Section 3, permits certain conveyances of land to be subject to conditions. Article II, Section 3 provides: "Section 3. Any conveyance of land from a parent or parents to a child or children, may be subject to such conditions as the parent or parents deem appropriate, provided, that such conditions are in writing at the time of conveyance and duly reflected in the certificate of title." In this transaction conveying ownership of parcel 048-K-07 from Likiak Timothy to Defendant Youngstrom, Article II, Section 3 is not applicable. Likiak Timothy is not the parent of Defendant Youngstrom, therefore the conveyance does not fall within the provisions of Section 3. Even assuming that the transaction did fall within the applicability of Section 3, the conditions would have had to be in writing at the time of conveyance and duly reflected in the Certificate of Title. It is undisputed that any claimed agreement regarding the construction of a house for Likiak Timothy by Defendant Youngstrom, was verbal and was not made in writing. There is no reference to a condition or conditional conveyance made on the Quitclaim Deed or on the Certificate of Title issued to Defendant Youngstrom.

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      A court interpreting a deed should attempt to determine the meaning of the words used rather than what the signatory or a relative later says he intended. Melander v. Kosrae, 3 FSM Intrm. 324 (Kos. S. Ct. Tr. 1988). Here, the words of the Quitclaim Deed executed by Likiak Timothy are clear: they transfer all rights, title and interest in parcel 048-K-07 to Defendant Youngstrom, in consideration of a payment of $3,000. The Plaintiffs were not present at this transaction. The Plaintiffs did not witness the Quitclaim Deed. The Plaintiffs’ claims of a verbal promise, beyond the written agreement finalized through the Quitclaim Deed are hearsay, based upon alleged statements made by the deceased grantor, Likiak Timothy. These hearsay statements are made less reliable due to Plaintiffs’ status and their potential for personal gain in this matter.

      Plaintiffs, on this breach of contract claim, raise an issue of first impression with this Court: their standing to bring this claim. Plaintiffs were not parties to the contract between the late Likiak Timothy and Defendant Youngstrom. Plaintiffs were not present or witnesses to the transaction which took place between Likiak Timothy and Defendant Youngstrom. Nonetheless, Plaintiffs claim a breach of contract, and seek invalidation of that written contract made between Likiak Timothy and Defendant Youngstrom. As Plaintiffs were not parties to the contract, their status on the breach of contract claim is viewed as similar to that of third party beneficiaries.

      The standing of third party beneficiaries in contract claims has been addressed by the courts of our Nation. A third party beneficiary can only recover if he or she is an intended beneficiary of a contract. Pohnpei Comty. Action Agency v. Christian, 10 FSM Intrm 623 (Pon. 2002). Therefore, where a contract is made especially for the benefit of a third person, he or she may enforce it directly against the promisor. Mailo v. Penta Ocean Inc., 8 FSM Intrm 139 (Chk.1997). The determining factor in a third party beneficiary claim is the parties’ intent, which is a question of the construction of the contract as determined by the contract’s terms as a whole. Adams v. Island Homes Constr. Inc., 11 FSM Intrm. 218 (Pon. 2002).

      Therefore, a review of the written contract made between Likiak Timothy and Defendant Youngstrom must be completed. The Quitclaim Deed, executed by Timothy Likiak and Vernon Youngstrom on September 4, 2001 references the sale of a parcel of land for a certain sum of money. The Quitclaim Deed conveys all of Likiak Timothy’s rights, title and interest in parcel 048-K-07 to Vernon Youngstrom, his children and all his future heirs. There is no reference made to the Plaintiffs, or either of them. There is no reference to reservation of any rights for the Plaintiffs. A review of the Quitclaim Deed, its terms as a whole, clearly indicates the parties’ intent: the sale of all rights, title and interest in parcel 048-K-07, in consideration for the payment of $3000.00. The Quitclaim Deed, as the contract for the transaction, was not made especially for the benefit of third persons, the Plaintiffs. As the Plaintiffs were not the intended beneficiaries on the contract, and do not satisfy the requirements of third party beneficiaries, the Plaintiffs cannot recover on the breach of contract claim.

      For the reasons stated above, Plaintiffs’ breach of contract claim fails as without merit. Based upon the evidence presented at the trial, as matter of law, the Defendants are entitled to judgment on the Plaintiffs’ first cause of action.

B.  Fraud.

      Plaintiffs present fraud as their second, third, and fourth causes of action. Plaintiffs claim that Defendant Youngstrom is liable for fraud as he now claims ownership of all 958 square meters of parcel 048-K-07, instead of the 682 square meters specified on the Quitclaim Deed executed on September 4, 2001. Plaintiffs further claim that Defendant Youngstrom is liable for fraud by his representation to Defendant Nedlic that he owns all 958 square meters of parcel 048-K-07, instead of the 682 square meters specified on the Quitclaim Deed executed on February 4, 2003. Finally, Plaintiffs claim that

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Defendant Youngstrom is liable for fraud by causing the Kosrae Land Court to register parcel 048-K-07 in his name, while he knew Likiak Timothy’s will and his intent to void the Quitclaim Deed executed on September 4, 2001.

      The elements of the tort of fraud are:  1. misrepresentation by the defendant, 2. defendant’s knowledge that the statements were untrue, 3. intent to cause the plaintiff to rely upon the misrepresentations, 4. actual reliance by the plaintiff, 5. justifiable reliance, and 6. damages. Kaminanga v. FSM College of Micronesia, 8 FSM Intrm. 438 (Chk. 1998). It is pursuant to this standard that the Court considers the evidence presented at trial and the Plaintiffs’ causes of action based upon fraud.

      It is undisputed that the Quitclaim Deed executed on September 4, 2001 from Likiak Timothy to Defendant Youngstrom lists the area of parcel 048-K-07 as 682 square meters, while the later Certificate of Title issued to Defendant Youngstrom lists the area as 958 square meters. It is further undisputed that the Quitclaim Deed executed on February 4, 2003 from Defendant Youngstrom to Defendant Nedlic also lists the area of the subject parcel as 682 square meters, while the later Certificate of Title issued to Defendant Nedlic lists the area as 958 square meters.

      I take judicial notice that it is the statutory duty of the Kosrae Land Court to issue Certificates of Title, pursuant to Kosrae State Code, Title 11, Chapter 6. The Defendants are not employed by the Kosrae Land Court, therefore they had no role or involvement in the issuance of the Certificates of Title issued by the Kosrae Land Court. The Kosrae Land Court is not a party to this action: it was dismissed with prejudice from this action pursuant to Order entered on December 20, 2004. Therefore, Plaintiffs’ cause of action based upon their claim of defective Certificate of Title, must fail as the issuing entity, the Kosrae Land Court, is not a party to this action.

      Plaintiffs’ argument that the Certificates of Title are defective because different areas stated in the Quitclaim Deeds for parcel 048-K-07, is now addressed. Specifically the two Quitclaim Deeds executed by Likiak Benjamin and Defendant Youngstrom both state an area of 682 square meters. The three Certificates of Title issued for the subject parcel, issued to Likiak Timothy, Defendant Youngstrom and Defendant Nedlic all state an area of 958 square meters. A similar factual event has occurred in another FSM State and has been addressed by the Court. In the case of Nakamura v. Moen Municipality, 7 FSM Intrm. 375 (Chk. S. Ct. Tr. 1996), a deed was executed to transfer title to a certain parcel of land. The total surveyed area of the parcel, as shown on the map, was more than 3 acres, yet the deed listed the area as "2.706 acres more or less." The court considered the discrepancy in the areas listed in the deed and on the map and concluded that the Land Commission justifiably relied on the deed as an expression of the intent of the parties to sell the entire parcel in question. The court rejected the party’s argument that the deed was defective and did not transfer the entire area of the subject parcel.

      Likewise here, the stated area on both deeds, 682 square meters, more of less, is less than the stated area on the three certificates of title, 958 square meters, more or less. The deeds both make reference only to the parcel 048-K-07. There is no reference to a "portion" or "part" or "subdivision" of parcel 048-K-07 in either deed. There is no language in either deed which would suggest the grantor’s intent to transfer only a portion of parcel 048-K-07 to the grantees. Based upon these facts, the clear inference drawn is that the Kosrae Land Court analyzed the deeds and determined that the grantor’s intent was to transfer the entire parcel 048-K-07 and not just a portion thereof. The Kosrae Land Court, in issuing the certificates of title to Defendants Youngstrom and Nedlic, utilized the full area of the parcel, as reflected in the Certificate of Title issued to Likiak Timothy, and as reflected in the cadastral plat map 048-K-00. Review of both quitclaim deeds shows clear reference to an entire parcel, 048-K-07, and not a portion of the parcel.

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      Deeds, in describing or identifying the land affected in the transaction, may simply reference an appropriate parcel number on the official map. William B. Stoebuck & Dale A. Whitman, The Law of Property § 11.2, at 819-20 (3d ed. 2000). The deeds executed by both Likiak Timothy and Defendant Youngstrom referenced the appropriate parcel number on the official cadastral plat map. Therefore, as in the case of Nakamura v. Moen Municipality, this Court concludes that Kosrae Land Court justifiably relied on the quitclaim deed dated September 4, 2001 as an expression of the intent of Likiak Timothy to sell the entire parcel 048-K-07 to Defendant Youngstrom. This Court also concludes that the Kosrae Land Court justifiably relied on the quitclaim deed dated February 4, 2003 as an expression of the intent of Defendant Youngstrom to sell the entire parcel 048-K-07 to Defendant Nedlic. Accordingly, neither the quitclaim deeds, nor the subsequently issued certificates of title for parcel 048-K-07 are defective. The title to the entire parcel 048-K-07, 958 square meters, was effectively and validly transferred by Likiak Timothy to Defendant Youngstrom by the Quitclaim Deed dated September 4, 2001. The title to the entire parcel 048-K-07, 958 square meters, was effectively and validly transferred by Defendant Youngstrom to Defendant Nedlic by the Quitclaim Deed dated February 4, 2003. Plaintiffs’ claims that the quitclaim deeds and the corresponding certificates of title were defective are rejected.

      The Plaintiffs claim that Defendant Youngstrom made misrepresentations to the Land Court and to Defendant Nedlic regarding his ownership of the entire 958 square meters of the subject parcel. Plaintiffs claim that Defendant Youngstrom made these misrepresentations with intent to cause the Land Court to rely upon them and issue the Certificate of Title to him. Plaintiffs claim that Defendant Youngstrom made these misrepresentations with intent to cause Defendant Nedlic to rely upon them. Plaintiffs have not, however, presented evidence of any misrepresentations made by Defendant Youngstrom to them, with intent to cause the Plaintiffs to rely upon them. Therefore, several elements of the tort of fraud have not been satisfied, as no evidence has been presented on those elements. Accordingly based upon Plaintiffs’ failure to present evidence to sustain their burden of proof on the second and third causes of action, these causes of action must fail. Plaintiffs cannot recover on these two claims of fraud.

      Plaintiffs claim that Defendant Youngstrom also committed fraud by causing the Kosrae Land Court to register parcel 048-K-07 in his name, while he knew of Likiak Timothy’s will and his intent to void the Quitclaim Deed. Likiak Timothy’s will was executed on April 2, 2002. The Land Court issued the Certificate of Title for parcel 048-K-07 to Defendant Youngstrom on July 3, 2002. The Kosrae Land Court’s issuance of the Certificate of Title to Defendant Youngstrom was based upon the Quitclaim Deed filed at the Kosrae State Land Commission on September 4, 2001. The Quitclaim Deed satisfied the requirements for transfer of title for parcel 048-K-07, was signed by Likiak Timothy, witnessed and notarized. The Land Court properly filed and accepted this document as valid evidence of the owner’s intent to transfer title to the parcel to Defendant Youngstrom.

      The timing of issuance of the Certificate of Title to Defendant Youngstrom is an administrative matter only. A deed is effective when it is delivered. Stoebuck & Whitman, supra, § 11.3, at 828. The actual transfer of title to parcel 048-K-07 had taken place with the execution of the Quitclaim Deed by Likiak Timothy, and its delivery to Defendant Youngstrom. The execution and delivery of the Quitclaim Deed took place on September 4, 2001.

      Likiak Timothy, by virtue of the Quitclaim Deed that he executed and delivered on September 4, 2001, no longer owned parcel 048-K-07 on April 4, 2002, the date that he executed his will. His transfer of title for parcel 048-K-07 to Defendant Youngstrom had been completed and therefore Likiak Timothy, on April 4, 2002, was no longer the owner of parcel 048-K-07 and had no rights, interest or title to the parcel. Therefore, Likiak Timothy could not bequeath parcel 048-K-07 in his will. Jack v. Paulino, 10 FSM Intrm. 335 (Kos. S. Ct. Tr. 2001) (a person who has transferred title to a parcel of land to another person is no longer the fee owner of that parcel). Likiak Timothy’s stated bequest of

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parcel 048-K-07 to the Plaintiffs in his will is void and unenforceable.

      For the reasons stated above, Plaintiffs’ fraud claims are rejected as without merit. Based upon the evidence presented at the trial, as matter of law, the Defendants are entitled to judgment on the Plaintiffs’ second, third and fourth causes of action.

      Judgment is entered in favor of the Defendants and against the Plaintiffs on all four causes of action. Defendant Peter A. Nedlic is the registered fee simple owner and title holder of the entire parcel 048-K-07, containing 958 square meters, more or less. The Amended Complaint is dismissed with prejudice.

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