FSM 3 Intrm. 370-384

Only national courts are given jurisdiction by article XI, section 6(b) of the Constitution and the concurrent jurisdiction referred to there is between the trial division of the FSM Supreme Court, and any other national courts which may be established in the future. Bank of Guam v. Semes, 3 FSM Intrm. 370, 377 (Pon. 1988).

State courts do not normally look to the national Constitution as a source of jurisdictional authority, but instead typically rely upon state constitutions and state law for their authorization to act, so in considering whether a state court may exercise jurisdiction in a case the proper question is not whether the national Constitution authorizes, but whether it bars state court jurisdiction. Bank of Guam v. Semes, 3 FSM Intrm. 370, 377 (Pon. 1988).

In interpreting the Constitution, each provision should be interpreted against the background of all other provisions on the Constitution, and an effort should be made to reconcile all provisions so that none is deprived of meaning. Bank of Guam v. Semes, 3 FSM Intrm. 370, 378 (Pon. 1988).

Lack of mention of state and local courts in FSM Constitution art. XI, section 6(b) reveals that national courts are to play the primary role in handling the kinds of cases, identified in that section, but nothing in article XI, section 6(b) may be read as absolutely preventing state courts from exercising jurisdiction over those kinds of cases. Bank of Guam v. Semes, 3 FSM Intrm. 370, 379 (Pon. 1988).

Parties to a dispute in which there is diversity have a constitutional right to invoke the jurisdiction of a national court, but if all parties agree, and if state law permits, a state court may hear and decide the kinds of cases described in article XI, section 6(b) of the Constitution. Bank of Guam v. Semes, 3 FSM Intrm. 370, 379 (Pon. 1988).

Failure to mention national courts in section 25 of the Pohnpei State Real Property Mortgage Act should not be read as an attempt to deprive litigants of access to the FSM Supreme Court's Trial Division. Bank of Guam Semes, 3 FSM Intrm. 370, 380 (Pon. 1988).

FSM Supreme Court's Trial Division does not lose jurisdiction over a case merely because land issues are involved, but if such issues are presented, certification procedures may be employed to avoid encroachment upon state decisionmaking prerogatives. Bank of Guam v. Semes, 3 FSM Intrm. 370, 381 (Pon. 1988).

A lawsuit to enforce a mortgage is an attempt to enforce a type of lien against a delinquent debtor. Such a case bears a relationship to the power "to regulate...bankruptcy and insolvency," which the Constitution in art. IX, § 2(g), places in the national Congress. Bank of Guam v. Semes, 3 FSM Intrm. 370, 381 (Pon. 1988).

The motion to dismiss of defendant Herman Semes requires careful consideration of this Court's jurisdiction on grounds of diversity of citizenship between opposing parties under article XI, section 6(b) of the Constitution. The principal issue is whether this Court may decline to exercise diversity jurisdiction, either in deference to a state statute providing for state court jurisdiction, or because land interests may be affected by the Court's actions in the case.

property mortgage covering land and a house in Pohnpei. The mortgage allegedly was executed by defendant Semes, as part of financial arrangements whereby Island Hardware, Inc., a company of which Mr. Semes was the principal owner, obtained, and subsequently refinanced, a loan from the Bank of Guam.1 The foreclosure action is based upon the Pohnpei State Real Property Mortgage Act, D.L. No. 4L-152-78, as amended in 1980 by S.L. No. 2L-44-80.

The Bank of Guam is a corporation chartered in the Territory of Guam. Defendant Herman Semes is a resident and citizen of Pohnpei State and the Federated States of Micronesia. The bank seeks to invoke this Court's jurisdiction under article XI, section 6(b) of the Constitution of the Federated States of Micronesia based upon diversity of citizenship of the parties.

Mr. Semes' motion asks that the case be dismissed. He sees this Court's constitutional jurisdiction under article XI, section 6(b) as normally concurrent with state court jurisdiction, but precluded in this case by section 25 of the Pohnpei State Real Property Mortgage Act which says that, "All judicial actions for the foreclosure of a mortgage shall be brought in the Trial Division of the High Court or its successor in state Law." He views section 25 as a legitimate exercise of state power pursuant to article XI, section 6(c) of the Constitution.2 Finally, he argues that even if section 25 does not effectively preclude this Court from exercising jurisdiction in cases under the Pohnpei Real Property Mortgage Act, the Court should abstain from doing so because land cases should be handled by state, not national courts.

For its part, the bank insists that state courts have no power whatever to adjudicate diversity of citizenship cases because article XI, section 6(b) of the Constitution gives national courts exclusive jurisdiction over the kinds of cases described in that section.

The national courts, including the trial division of the Supreme Court, have concurrent original jurisdiction in cases arising under this Constitution; national law or treaties; and in disputes between a state and a citizen of another state, between citizens of different states, and between a state or a citizen thereof and a foreign state, citizen, or subject.

(Emphasis added). While there can be no doubt that the FSM Supreme Court trial division and any future national courts that may be created have concurrent original jurisdiction over section 6(b), the language is less conclusive as to whether other courts were intended to share in this "concurrent" jurisdiction. Mr. Semes contends that section 6(b) gives state courts concurrent jurisdiction with national courts. The Bank of Guam argues that section 6(b) jurisdiction is concurrent only between the FSM Supreme Court and any other national courts.

The journal of the constitutional convention reveals that the convention addressed this precise issue. Two committees at the convention submitted major proposals concerning the judiciary. The first was introduced by the Committee on Governmental Structure on October 14, 1975. SCREP No. 36, II J. of Micro. Con. Con. 823. That committee proposed a unified judiciary so encountered no need to make special provision for diversity cases. Comm. Proposal 24, II J. of Micro. Con. Con. 918, 924.

Shortly thereafter, on October 25, 1975, a second proposal was submitted, this one by the Committee on Governmental Functions. SCREP No. 49, I J. of Micro. Con. Con. 876. That committee proposed a separation of state and national courts more in conformity with the federal-state system in the United States. Comm. Proposal 30, II J. of Micro. Con. Con. 933. The committee report contemplated that the national court system would have jurisdiction concurrent with state courts in diversity cases. SCREP No. 49, supra, at 879.

The two committees then began meeting in an effort to resolve their differences. On October 31, they produced a joint report announcing what was styled joint amendment No. 10 to the Governmental Structure Committee's proposal No. 24, but actually was an amalgam of the two earlier proposals.

Section 6(b). The national courts, trial division of the Supreme Court, and state and local courts have concurrent original jurisdiction in cases arising under this Constitution, cases involving national law or treaties,and in disputes between a state and a citizen of another state, between citizens of different states, and between a state or a citizen thereof, and a foreign state, citizen, or subject.

This version came up for consideration by the entire convention on November 4, 1975. A pivotal amendment was offered by delegate Johnson Toribiong. He began by pointing out that his proposal was "contained in a paper which has been distributed to all the Delegates." I J. of Micro. Con. Con. 492.

He then explained the two basic purposes of the amendment he was offering. The first purpose, to amend section 6(a), "so that only the trial division of the Supreme Court of Micronesia shall have original and exclusive jurisdiction over cases affecting officials of foreign governments, disputes between states, admiralty or maritime cases, and cases in which the national government is a party," is not directly relevant to the issues now before the Court.

Delegate Toribiong then described the amendment to section 6(b) which yielded the final version of the section as it now appears in the Constitution. Specifically, he suggested "inserting the words `including the' after `national courts,' and before `trial division'..., and deleting ... the words `and state and local courts.'" He then explained to the delegates that "the outcome of the whole process would be to give the national courts, which are the courts which may be established by national law, and the trial division of the Supreme Court concurrent jurisdiction" over the kinds of cases identified in section 6(b). He also specifically pointed out that another result would be "to remove state and local courts" from handling such cases. Id. at 492. The proposed amendment was promptly adopted.

Constitution itself, has a firm FSM stamp upon it. Delegates from all four of the current states of the Federated States of Micronesia participated in the November 4, 1975 floor discussion concerning the amendment. With the exception of Mr. Toribiong, every person who spoke has played a major governmental role within the Federated States of Micronesia after constitutional government was instituted here.3 The vote count for the amendment itself does not appear in the journal but there were 45 affirmative votes for the proposal, as amended. There was only one abstention. Nobody voted against it.

The effect of the amendment is that only national courts are given jurisdiction by article XI, section 6(b) of the Constitution. The concurrent jurisdiction referred to there is between the trial division of the FSM Supreme Court, and any other national courts which may be established in the future.

Rejection of defendant's interpretation that section 6(b) jurisdiction is concurrent between state and national courts does not require acceptance of the bank's contention that article XI, section 6(b) deprives the state court of any power ever to exercise jurisdiction in the types of cases described there.

typically rely upon state constitutions and state law for their authorization to act. The Pohnpei Constitution directly vests in the Pohnpei Supreme Court the "judicial power of Pohnpei." Pon. Const. art. 10, § 1. Moreover, for purposes of this case, section 25 of the Pohnpei State Real Property Mortgage Act is a clear grant of state court jurisdiction over cases brought under that Act.

The presumption is that a state court has jurisdiction to act on any case which arises within that state. Given this understanding the fact that the national Constitution does not place jurisdiction in the state courts is not enough to warrant a conclusion that state courts are without jurisdiction to act in such a case. The proper question is not whether the national Constitution authorizes, but whether it bars state court jurisdiction.

It does seem likely that delegate Toribiong would have preferred an absolute prohibition against state court jurisdiction in the kinds of cases identified in section 6(b). He expressed an intention "to remove state and local courts from handling cases arising under this Constitution, treaties, and national law because if you allow them to handle those cases we will have a mess on our hands ...." I J. of Micro. Con. Con. 492. Yet, he was the only delegate to express such an intention or understanding. The words of one delegate concerning his own views can not be accepted as dispositive of the meaning of the Constitution.

Rather, it is the words of the Constitution which must prevail. Section 6(b) says only that national courts shall have concurrent jurisdiction. Nothing is said about state courts. Had the framers intended the concurrent jurisdiction of national courts to be exclusive of state court jurisdiction for such cases, presumably they would have said so, as they did in article XI, section 6(a), which vests in this Court exclusive jurisdiction over the cases mentioned there. Deletion of state and local courts from section 6(b) reveals that national courts are to play the primary role in handling the kinds of cases identified in that section. Yet, nothing in the amendment and nothing now in article XI, section 6(b) of the Constitution may be read as absolutely preventing state courts from exercising jurisdiction over those kinds of cases.

Aside from the constitutional language itself and the pertinent constitutional convention discussions, there are other sources of guidance to which, courts may turn in ascertaining the meaning of the section. For example, any part of a constitution should be interpreted and considered against the background of other provisions in the same constitution. Cf. Innocenti v. Wainit, 2 FSM Intrm. 173, 181 (App. 1986). An effort should be made to reconcile all provisions so that none is deprived of meaning. Tammow v. FSM, 2 FSM Intrm. 53, 57 (App. 1985). Acceptance of the bank's contention that state courts are precluded from jurisdiction over section 6(b) cases would raise serious doubt as to the efficacy of part of article XI, section 7,

Section 7 places in the Supreme Court appellate division jurisdiction to review "cases heard in state or local courts if they require interpretation of this Constitution, national law, or a treaty." If section 6(b) were to be interpreted as plaintiff urges, no cases requiring interpretation of the national Constitution, national law or a treaty could be heard by state or local courts. Provision for appellate review would be rendered superfluous.

Moreover, section 8 provides for certification to this Court of a "substantial question requiring the interpretation of the Constitution, national law, or a treaty" when such question is involved in "a case in a state or local court." Under plaintiff's reading of section 6(b), the existence of any such substantial question would prevent state court jurisdiction. Thus, section 8 would have no application.

On the other hand, if the three sections are read together as allowing state court jurisdiction in section 6(b) cases, but assuring for the litigants access to the national courts, and placing primary authority and responsibility for such cases in the national court, each section retains significant import. Although litigants would be entitled to demand the exercise of national court jurisdiction under section 6(b), acquiescence of all parties would permit the exercise of state court jurisdiction, with national law issues certified to the FSM Supreme Court appellate jurisdiction under article XI, section 8. Appeals from the final state court decision could be taken to the FSM Supreme Court pursuant to article XI, section 7.

Yet another method of constitutional interpretation is to trace the provisions here to their source to ascertain the meaning placed upon those words in the jurisdiction from whence they were drawn. Jonas v. FSM, 1 FSM Intrm. 322, 327 n.1 (App. 1983). This Court has noted on numerous occasions that there are substantial similarities between the provisions concerning jurisdiction in the Constitution of the Federated States of Micronesia and the comparable parts of the United States Constitution. Federated Shipping Co. v. Ponape Transfer & Storage, Inc., 3 FSM Intrm. 256 (Pon 1987); Etpison v. Perman, 1 FSM Intrm. 405, 414 (Pon. 1984); In re Nahnsen, 1 FSM Intrm. 97, 108-09 (Pon. 1982).

It is therefore pertinent that while article III of the Constitution of the United States authorizes United States federal court jurisdiction in the kinds of cases described in article XI, section 6(b) of the FSM Constitution, those comparable provisions in the United States Constitution have not been interpreted as prohibiting state court jurisdiction. In the United States system, state courts may exercise jurisdiction in diversity and federal question cases, but only if both parties acquiesce. When a case which could be brought in a federal court is started in a state court an objecting defendant is given the right to "remove" the case to a United States federal court. 28 U.S.C. 1441; see also C. Wright, Law of Federal Courts § 38 (4th ed. 1982).

Based upon all these considerations, this Court concludes that the Constitution places in national courts the primary role in deciding diversity cases and those which arise under the Constitution, national law or treaty. Parties to such a dispute have a constitutional right to invoke the jurisdiction of a national court and may not be forced to litigate a section 6(b) case in a non-national court. However, state courts are not in all events deprived of jurisdiction. If all parties agree, and if state law permits, a state court may hear and decide the kinds of cases described in article XI, section 6(b) of the Constitution.

Mr. Semes argues that this Court should abstain in favor of state court jurisdiction in this case, for two reasons. First, he maintains that there is a Pohnpei statute which requires that result. Second, he points out that the framers of the Constitution contemplated that land cases would be decided by state and local courts, not by the national courts.

As already indicated, section 25 of the Pohnpei State Real Property Mortgage Act says that, "All judicial actions for the foreclosure of a mortgage shall be brought in the Trial Division of the High Court or its successor in State Law."

Mr. Semes contends the statutory purpose is to place in the Pohnpei State Supreme Court exclusive jurisdiction over foreclosure actions. He maintains that state enactment of the statute is authorized by article XI, section 6(c) of the Constitution, which says, "When jurisdiction is concurrent, the proper court may be prescribed by statute."

It follows from what has already been said that article XI, section 6(c) places only in the national Congress, and not in state legislatures, authority to prescribe jurisdiction. The concurrent jurisdiction provided in the Constitution is only between national courts. That being the case, the "proper court" to be prescribed by statute could not be a state court. Even before the Toribiong amendment, when the Committee on Governmental Functions contemplated that the Constitution would vest concurrent jurisdiction in both state and national courts, the Committee nevertheless intended that Congress, not state legislatures, would apportion the cases between the two court systems.

SCREP No. 49, II J. of Micro. Con. Con. 876, 879. Any lingering question was removed by the subsequent deletion of state and local courts from section 6(b). There is no reason to believe that the framers of the Constitution intended in section 6(c) to give state legislatures authority to allocate jurisdiction among national courts.

Moreover, the Court does agree with the defendant's reading of section 25. The Constitution of the Federated States of Micronesia is the supreme law of the land.4 Mr. Semes is correct that section 25 of the Pohnpei Mortgage Act represents an effort to deprive litigants from access to national courts in cases that fall within article XI, section 6(b), the state legislation would be in conflict with the Constitution and invalid to that extent.

Courts strive to interpret statutes to avoid conflict with the Constitution. Truk v. Hartman, 1 FSM Intrm. 174, 181 (Truk, 1982). There is a reasonable alternative to the interpretation pressed by Mr. Semes. The legislature undoubtedly recognized that this court's jurisdiction over diversity cases under article XI, section 6(b) of the Constitution would extend to cases under the Pohnpei Mortgage Act without any positive statement to that effect by the legislature itself. The Act's silence concerning national court jurisdiction simply reflects this legislative awareness. The legislative purpose in section 25 was merely to allocate jurisdiction among those courts subject to state authority, confirming that only state courts and not municipal courts would have jurisdiction under the Act. Just as silence about state and local courts in article XI section 6(b) does not prohibit state court jurisdiction flowing from other sources, failure to mention national courts in section 25 of the Pohnpei State Real Property Mortgage Act should not be read as an attempt to deprive litigants of access to this Court.

Property Mortgage Act, we should refrain from exercising that power because land cases should be handled by state and local courts. In particular, defendant Semes notes, quite accurately, that concern was expressed at the constitutional convention to assure that the states, and not the national government, would have control over land matters.

Land plays a fundamental and unique role in the lives of Micronesians. The special importance of land here is in part traceable to its scarcity. The Federated States ofMicronesia consists of numerous relatively small islands scattered across a vast expanse of ocean. Land is also uniquely significant in Micronesia, however, because it is so thoroughly intertwined with social structures in Micronesia.

[S]tate officials generally should have greater knowledge of use, local custom and expectations concerning land and personal property. They should be better equipped than the national government to control and regulate these matters. The framers of the Constitution specifically considered this issue and felt that powers of the sort under consideration here should be state powers.

Yet, this is not dispositive. "The allocation of judicial authority is made on the basis of jurisdiction, generally without to regard to whether state, or national, `powers' will be at issue." Nahnsen, 1 FSM Intrm. at 108.

Admittedly, several statements were made by delegates to the constitutional convention indicating their impression that not only would power over land issues be vested in state legislative and executive branches, but that cases involving land would be restricted to the state courts.

No. 24 of the Committee on Governmental Structure that special land courts be set up in each state. He thought it important to "permit land and traditional matters to be brought before judges more knowledgeable and compatible with Micronesian customs and traditions." I J. of Micro. Con. Con. 390. On October 28, 1975, delegate Ismael, discussing his committee's article on the judiciary, said, "The consensus of your Joint Committees on Functions and Structure is that where ownership or interest in land is concerned, this is purely a district matter and it is under the jurisdiction of that district. The national level of our future government will not have jurisdiction over land matters." Id. at 448. See also SCREP No. 36, II J. of Micro. Con. Con. 823, 858: "There is no one `Micronesian land tenure law' which can easily be applied by a court to any case involving a land ownership dispute. For this reason, it is your Committee's belief that land issues must be resolved by the judicial system on the state level."

However, as already discussed in this opinion, it is not individual statements of delegates or even committee reports made in the course of the constitutional convention, but the actual words of the Constitution, that must control.

The only phrase concerning land in the judiciary article of the Constitution is in section 6(a), providing an exception from this Court's exclusive jurisdiction under that section for cases "where an interest in land is at issue."

Section 6(b) has no such limitation. As this court has noted previously, one distinction between the jurisdictional provisions of the FSM Constitution and those in the United States Constitution is that the grants of jurisdiction in this Constitution are self-executing. FSM Dev. Bank v.Estate of Nanpei, 2 FSM Intrm. 217, 219 n.1 (Pon. 1986). Inevitably, some of the kinds of cases identified in section 6(b) will touch upon land ownership and interests in land. The Constitution leaves no doubt that when that occurs, litigants are entitled to invoke this Court's jurisdiction and the Court is required to accept the case.

Nonetheless, the Court should respect, and retains sufficient discretion to respond to, the strong state interests in land matters. Constitutional obligations to play the primary role in making determinations of national law, and to be available for diversity cases, need not preclude national courts from assuring the primacy of the states in land matters. This Court must be sensitive to the fact that the framers of the Constitution anticipated that states, including state courts, would play the primary role in setting policy and deciding legal issues concerning ownership and interests in land.

During the constitutional convention the Committee on Governmental Functions, in SCREP No. 49, said, "Your Committee intends that cases involving primarily national issues be brought in national courts and conversely, that cases involving primarily state issues be brought in state courts." II J. of Micro. Con. Con. at 879. As already discussed, the jurisdictional provisions

ultimately approved for the Constitution differed in significant ways from the proposal made by the Committee on Governmental Functions in SCREP No. 49. Yet, there is no reason to believe that the committee, nor the convention itself, intended to depart wholly from these basic guidelines.

Actual practice under the Constitution has developed in essentially the way the committee anticipated. Most of the cases filed with the FSM Supreme Court trial division have involved issues of national law. Most cases involving primarily state issues have been brought in state courts.

Indeed, land issues have hardly ever been presented to this Court. In the rare circumstances where issues touching upon land ownership or use have been presented, the Court has attempted to provide an opportunity for local decisionmakers to resolve the issues of state law. In re Nahnsen, 1 FSM Intrm. 97 (Pon. 1986) (questions concerning inheritance of land and other property tendered to the Pohnpei district court for decision); Etpison v. Perman, 1 FSM Intrm. 405 (Pon. 1984) (doctrine of primary jurisdiction invoked to remand to the Pohnpei Public Lands Authority the determination as to use of public land in Pohnpei).

The policy has not been restricted to land matters. This Court has certified various kinds of state law issues to state courts for determination. Panuelo v. Pohnpei (II), 2 FSM Intrm. 244, 246 (Pon. 1986); Hadley v. Kolonia Town, 3 FSM Intrm. 101 (Pon. 1987); Edward v.Pohnpei, 3 FSM Intrm. 350 (Pon. 1988); see also Dabchur v. Yap, 3 FSM Intrm. 203 (Yap S. Ct. App. 1987).

Even within the SCREP No. 49 guidelines, it is not altogether clear that the issues in this particular case are primarily state court issues. In essence, this is a lawsuit aimed at enforcing a mortgage, which is a kind of lien, as against a delinquent debtor. The Constitution places in the national Congress the power "to regulate...bankruptcy and insolvency." FSM Const. art. IX, § 2(g).

On the other hand, it seems unlikely that difficult determinations concerning state land law will be presented. The state has already spoken on the fundamental policy questions concerning mortgages. The Pohnpei State Real Property Mortgage Act represents a policy decision by the Pohnpei state legislature that a mortgage may be cognizable as an interest in land under Pohnpei law. The Act is essentially a set of instructions as to how foreclosure may take place.

This Court is currently unaware of any questions that may arise in the course of this litigation concerning interest in, or ownership of, land. If such issues are presented, certification procedures may be employed to avoid encroachment upon state decisionmaking prerogatives.

Litigants in the kinds of cases and disputes described in article XI, section 6(b) of the constitution are entitled to demand that this Court exercise the jurisdiction bestowed by that section. Here, the Bank Of Guam asserts that right. The motion of defendant Herman Semes to dismiss must be denied.

1. The bank also seeks a declaration that its rights under the mortgage are superior to any labor and materials lien the other defendant, F.L. Moylan Company, may have in the residence located on the property covered by the mortgage. The Moylan Company is not a party to this motion to dismiss.

3. Delegate Toribiong, a member of the Committee on Governmental Functions, had consulted in advance with his own committee chairman, Hirosi Ismael (now Vice President of the FSM), and with Soukichi Fritz (now Truk State Chief Justice), chairman of the Judiciary Subcommittee of the committee on Governmental Structure. II J. of Micro. Con. Con. 493. They had agreed that the amendment represented a consensus of their two committees. Id. This information was elicited by floor leader Luke Tman of Yap, who later was named the first floor leader of the FSM Congress.

When delegate Ismael questioned whether the proposal as amended would be returned to the joint committee, delegate Falcam, the first Governor of Pohnpei and now an FSM Senator, responded that he could "see no reason why we should refer this back." Delegate Yoma (Pohnpei Lieutenant Governor at the time of his death) added, "I would like to suggest that we go ahead and vote on this. Delegate Toribiong's amendment took care of the problem in my opinion, so I think we are ready to vote on it." Delegate Wiliander (first Lieutenant Governor of Truk) concurred. Convention President Tosiwo Nakayama, soon to be the first President of the Federated States of Micronesia, then called for the vote.

4. Article II, section 1 of the Constitution provides that: "This Constitution is the expression of the sovereignty of the people and is the supreme law of the Federated States of Micronesia. An act of the Government in conflict with this Constitution is invalid to the extent of conflict."