Cite as Heirs of Nena v. Sigrah, 14 FSM Intrm. 283 (Kos. S. Ct. Tr. 2006)

[14 FSM Intrm. 283]

CIVIL ACTION NO. 169-04

Trial: April 24, 2006
Decided: June 21, 2006

HEADNOTES

Property – Registered Land

Certificates of Title are prima facie evidence of ownership as therein stated against the world.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 285 (Kos. S. Ct. Tr. 2006).

Contracts

An enforceable contract requires an offer, an acceptance, consideration and definite terms.  For the agreement to be binding, it must spell out the essential commitments and agreements with respect thereto.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 285 (Kos. S. Ct. Tr. 2006).

Remedies – Restitution

When no contract exists for lack of definite terms, the court may use its equity power to fashion a remedy under the doctrine of restitution.  The doctrine of unjust enrichment also applies where there is an unenforceable contract.  It is based upon the idea that one person should not be permitted unjustly to enrich himself at the expense of another.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 285 (Kos. S. Ct. Tr. 2006).

[14 FSM Intrm. 284]

Property – Adverse Possession

The doctrine of adverse possession does not apply when the use of the land was made with the owner’s permission.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 286 (Kos. S. Ct. Tr. 2006).

Property – Adverse Possession

The doctrine of adverse possession requires continuous use of the land for at least twenty years.  An adverse possession claim must fail when the twenty years necessary for adverse possession has not passed.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 286 (Kos. S. Ct. Tr. 2006).

Property

Plaintiff landowners should not be permitted to unjustly enrich themselves through obtaining a house and other improvements built at the defendant’s expense.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 286 (Kos. S. Ct. Tr. 2006).

Remedies – Restitution

When the defendant’s expenses are equivalent to the defendant’s rental income, the defendant has not been unjustly enriched and is therefore not liable to the plaintiffs under the doctrines of restitution and unjust enrichment.  Heirs of Nena v. Sigrah, 14 FSM Intrm. 283, 286 (Kos. S. Ct. Tr. 2006).

COURT'S OPINION

ALIKSA B. ALIKSA, Chief Justice:

This matter was called for trial on April 24, 2006.  Snyder Simon represented the Plaintiff.  Defendant appeared pro se, on his own behalf.  The following witnesses testified at the trial:  Kiosy Nena, Paul Nena and Yoshiaro Nena on behalf of the Plaintiffs.  Defendant Tadasy A. Sigrah testified on his own behalf.  After completing the trial, I took the matter under advisement.  This Memorandum of Decision sets forth my ruling and reasoning.

I. Findings of Facts.

Based upon the evidence presented at trial, I find the following facts.  The Heirs of Florian Nena are the fee simple owners, as tenants in common, of parcel 040-K-06, also known as Innem, located in Tofol, Lelu Municipality, Kosrae State.  The Certificate of Title was issued to the Plaintiffs in May 1987 by the former Kosrae State Land Commission.   Paul Nena, Kiosy Nena and Yoshiaro Nena are brothers and Heirs of Florian Nena.

Sometime in the 1990s, Paul Nena agreed to let Defendant utilize the subject parcel for Defendant’s business, then called "Rain-Bow."  Paul Nena and the Defendant made a verbal agreement whereby Defendant would occupy and use parcel 040-K-06 for business purposes, for an indefinite period of time.  There was no consideration agreed upon by the parties.  There was no agreement made by Paul and the Defendant on the length of time of usage of parcel 040-K-06 by the Defendant.  There was no agreement as to rental payments.

Paul Nena’s discussions and agreement with the Defendant was made without consent of the other Heirs of Florian Nena.  Paul Nena understood that he was going to be the sole owner of the subject parcel in the future, and therefore gave consent to the Defendant to utilize the parcel, without seeking permission from his brothers and sisters.  The other Heirs of Florian Nena knew that Paul Nena

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had permitted Tadasy Sigrah to use parcel 040-K-06 without their consent, however the other Heirs did not interfere with Defendant’s usage of the parcel.

Defendant built a building on the subject property.  Defendant expended the amount of $4,000 for landfilling the parcel, and then expended the amount of $15,000 for construction of the building.  Defendant rented the building to the FSM Social Security Administration.  The FSM Social Security Administration rented the building from September 1995 through September 2001, through annual lease agreements.  During the rental period, the FSM Social Security Administration paid rent in the amount of $3,000 per year to the Defendant.

During Defendant’s possession of parcel 040-K-06, Defendant gave the following items of value to Paul Nena:  cash in the amount of $1,500, an icebox valued at $390, a car valued at $3,900 and a washing machine.  These items were accepted by Paul Nena as partial payment for the Defendant’s usage and control of the parcel.  Since September 2001, and up to the time of trial, parcel 040-K-06 and the building has been occupied by Defendant’s relatives and friends.

Defendant argues that because he had paid Paul Nena for his use of the land, and that because he has expended funds to build the house, his long term possession of parcel 040-K-06 for more than ten years has now ripened into a right of permanent possession.

II. Analysis.

The Plaintiffs are the fee simple owners of parcel 040-K-06 through the Certificate of Title issued in May 1987.  The Certificates of Title are prima facie evidence of ownership as therein stated against the world.  Sigrah v. Kosrae State Land Comm'n, 9 FSM Intrm. 89 (Kos. S. Ct. Tr. 1999); Etscheit v. Nahnken of Nett, 7 FSM Intrm 390 (Pon. 1996).  The Plaintiffs have withdrawn consent for Defendant’s continued occupancy and use of parcel 040-K-06, and have alleged trespass by the Defendant, his family and friends, who continue to occupy the parcel.

An enforceable contract requires an offer, an acceptance, consideration and definite terms.  For the agreement to be binding, it must spell out the essential commitments and agreements with respect thereto.  Kilafwakun v. Kilafwakun, 10 FSM Intrm. 189 (Kos. S. Ct. Tr. 2001).  Here Paul Nena and the Defendant made a verbal agreement whereby Defendant would occupy and use parcel 040-K-06 for business purposes, for an indefinite period of time.  The Defendant did not agree to pay Paul Nena or the Plaintiffs any money or provide anything of value for the use of the parcel.  There was no consideration agreed upon by Paul Nena and the Defendant.  There was also no agreement made by the parties on the length of time.  The essential commitments for Defendant’s use of parcel 040-K-06 were not made by the parties.  The Paul Nena and the Defendant did not agree to any definite terms and therefore the agreement is not binding.  Paul Nena and the Defendant did not make an enforceable contract.

Where no contract exists for lack of definite terms, this Court may use its equity power to fashion a remedy under the doctrine of restitution.  Jim v. Alik, 4 FSM Intrm. 198 (Kos. S. Ct. Tr. 1989).  The doctrine of unjust enrichment also applies where there is an unenforceable contract.  It is based upon the idea that one person should not be permitted unjustly to enrich himself at the expense of another.  Kilafwakun v. Kilafwakun, 10 FSM Intrm. 189 (Kos. S. Ct. Tr. 2001).  Here, the Defendant received approximately $26,000 in rental payments from the FSM Social Security Administration.  The Defendant’s receipt of these rental payments was based upon his possession and use of the parcel 040-K-06, through permission of the fee owners, the Plaintiffs.  Defendant is liable to the Plaintiffs under the equitable doctrines of restitution and unjust enrichment.

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Defendant claims that through his long-term possession of the parcel, and his investment in improvements to the parcel has ripened into a right to permanently possess parcel 040-K-06.  Defendant, without using the legal terms, appear to claim adverse possession.  The doctrine of adverse possession does not apply when the use of the land was made with the owner’s permission.  Iriarte v. Etscheit, 8 FSM Intrm. 231 (App. 1998).  Furthermore, the doctrine of adverse possession requires continuous use of the land for at least twenty years.  Kos. S.C. § 6.2503.  Here, the Defendant was granted use of parcel 040-K-06 by Paul Nena, a fee owner of the parcel.  Therefore Defendant’s use of the parcel was with the permission of the owner.  The length of Defendant’s use of parcel 040-K-06 has also been far less than the required twenty years. An adverse possession claim must fail when the twenty years necessary for adverse possession has not passed. Iriarte v. Etscheit, 8 FSM Intrm. 231 (App. 1998).  Therefore, the doctrine of adverse possession cannot apply to Defendant’s claim.  Defendant’s argument that he is now entitled to permanent possession of parcel 040-K-06 is without merit and must be rejected.  Defendant, his family and friends’ continued occupancy of parcel 040-K-06, without consent of the Plaintiff constitutes trespass.  Defendant shall be required to return possession of parcel 040-K-06 to its rightful fee simple owners, the Plaintiffs.

Plaintiffs are entitled to possess parcel 040-L-06.  However, Plaintiffs should not be permitted to unjustly enrich themselves through obtaining a house and other improvements built at the expense of the Defendant.  Accordingly, Defendant’s enrichment by the rental payments made by the FSM Social Security Administration shall be offset by the Defendant’s expenses in making the improvements to the parcel and payments already made to the Plaintiffs.  Defendant’s expenses in making improvements to the parcel total $19,000, which includes the costs of landfilling and construction of the building.   Defendant has also made payments to Paul Nena with a total value of $6,290, which consisted of cash, icebox, car and washing machine.  Defendant further testified that he provided cash to Paul Nena, and also provided maintenance of the parcel.  I accept the value of the additional cash and the maintenance of the parcel at $710.

Based upon the evidence presented, I conclude that the expenses paid by the Defendant for landfilling, construction of the building, maintenance, and the payments made to Paul Nena for usage of parcel 040-K-006, are equivalent to the amount of rental payments received by the Defendant from the FSM Social Security Administration.  Therefore, the Defendant has not been unjustly enriched through receipt of rental payments, and is therefore not liable to the Plaintiffs under the doctrines of restitution and unjust enrichment.

III. Judgment.

Judgment shall be entered in favor of the Plaintiffs.  Plaintiffs are determined to be the fee simple owners of parcel 040-K-06, held as tenants in common, as reflected on the Certificate of Title issued on May 28, 1987.  Defendant shall vacate or shall cause to be vacated parcel 040-K-06, the house and all improvements on parcel 040-K-06, within six months of entry of this decision and judgment.  Defendant is responsible to inform the occupants of the house, other improvements and parcel 040-K-06, of this Court’s decision and this order to vacate the parcel and improvements in their entirety.