State of Yap vs. Martin Laman

THE STATE COURT OF YAP

IN THE

TRIAL DIVISION

Cite as Yap Fresh Tuna,Inc.,v. Chiu, Chi Chang,Yap (1996)

YAP FRESH TUNA, INC.,

Applicant,

vs.

STEVE CHIU, aka CHI CHANG,

Respondent.

Civil Action No. 1996-073

ORDER AND MEMORANDUM

For the reasons set forth in the accompanying Memorandum,

IT IS HEREBY ORDERED denying the Application for Temporary Order and Motion for Preliminary Injunction.

DATE:Sept.4, 1996 /s/

Constantine Yinug, Chief Justice

MEMORANDUM

The court has received and reviewed the Application for Temporary Restraining Order and Motion for Preliminary Injunction dated August 29, 1996. The Applicant seeks a temporary restraining order on an ex parte basis pursuant to 11 YSC § 814. The Application is-supported by the Affidavit of Theo Thinnifel, in which he says that Respondent is indebted. to him,_in the sum of $631,946.69. The affidavit further alleges that Respondent is about to return to a permanent residence outside the State of Yap without settling the indebtedness due the Applicant. The Application recites as the basis for this belief that the Respondent is closing down his business in Yap.

The court has been orally advised by Theo Thinnifel that the indebtedness is owed by Ting Hong Corporation, a Taiwanese corporation doing business in Yap, and not by Steve Chiu, who is employed by Ting Hong. 11YSC § 814 applies by its terms to . any indebted person. . Since Steve Chiu does not owe the debt, he is not an "indebted person," and the statute does not apply to him. At most, Steve Chiu is the agent of Ting Hong, and there is no dispute that Applicant knew that at all relevant times he was acting on behalf of Ting Hong. As such, he is not personally liable for the indebtedness incurred by Ting Hong. See Am Jur 2d at § 327. A corporation is a legal fiction that can only act by its agents, and so long as the agent discloses that he is acting on behalf of the corporation, and acts in good faith, 11 YSC § 814 will not apply to the agent. This leads to the question whether 11 YSC § 814 applies to a corporate debtor in the first place. The court addresses this issue to provide direction to litigants in future cases. For the reasons set out below, the court concludes that it does not apply to debtor corporations.

11 YSC § 814 provides in pertinent part as follows:

§814. Settlement of indebtedness.

(a) Any indebted person residing in the State of Yap who returns or intends to return to a permanent residence outside the State of Yap for six months or more; or who leaves the State of Yap for the purpose of changing or with intent to change or establish a residency in another part of the Federated States of Micronesia, shall, prior to leaving the State of Yap, comply with the following requirements:

(1) Settle in full all personal debts within a time specified and agreed to by his creditor(s); or obtain a written moratorium signed by the creditor(s).

(b) The following persons shall be exempt from the provisions of this section:

(1) Students who are seeking further education outside the State of Yap

(2) Patients who are seeking medical treatment outside the State of Yap;

(3) Government employees traveling on government travel authorization for temporary assignment or duties, except those who are permanently reassigned or relocated.

(c) Should a debtor fail to meet the requireiriertts of this section, any creditor of said debtor may notify the Chief of Police of such failure, in which case the State Court is to issue an injunction to prohibit said debtor from traveling outside the State of Yap until all requirements of this section have been complied with bv the debtor.

Paragraph (a) speaks of literal comings and goings: of an indebted "person" residing in Yap who "returns or intends to return to a permanent residence outside the State of Yap for six months or more; or who leaves the State of Yap for the purpose of changing or with intent to change or establish a residency" elsewhere. The fair implication in context is that the language means natural persons. By way of comparison is the following on the residence of a corporation:

Residence is said to be an attribute of a natural person, and can be predicated of an artificial being only by a more or less imperfect analogy. Strictly speaking, therefore, a corporation can have no local residence or habitation. A corporation is a mere ideal existence, subsisting only in contemplation of law -- an invisible being that can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place. However, the sove&Ognty creating the corporation my give it a local habitation or residence in law, if not in fact.

18A Am Jur 2d, Corporations § 305. The kind of change of residence that 11 YSC.§ 814 anticipates is the kind which flows from an:individual's personal decision to pull up stakes and leave Yap to travel physically to another locale and to reside there: A corporation, "a mere ideal existence" is not capable either of this species of intent or the ability to travel in this literal sense. A corporation's residence is ultimately that assigned to it in law. And, paragraph (c) contemplates that the Chief of Police and his agents when authorized by a duly entered injunction, may prevent a debtor physically from leaving Yap. To require the Chief . of Police to prevent "a mere ideal existence" from leaving Yap asks him to engage in metaphysical activity.

In construing whether a corporate debtor is included in the general term "debtor" as used in 11 YSC § 814, analysis of paragraph (b) is useful. Paragraph (b) provides specific examples of". certain types of debtors who are exempt from the statute. These include students (subparagraph (1)), patients seeking treatment outside Yap (subparagraph (2)). and government employees traveling outside Yap (subparagraph (3)). All of these are natural persons. The statutory principle of ejusdem generis (Latin, literally "of the Same kind") is that where general words follow an enumeration of persons or things which are described specifically, the general words are not be construed their widest extent, but are to be held as applying only, to persons or things of the same general kind or class as those specifically named. See Black. s Law Dictionary. In this case, the general term . indebted person. in paragraph (a) precedes specific examples of types of indebtors which, but for their specific exclusion by paragraph (b), would be subject to the statute. All three named, students, patients, and government employees, are natural persons. Including corporations within the meaning of "indebted person" would require construing "indebted person" to include an entity other than natural persons, a more expansive construction -- i.e., to a wider extent than admitted by the specific examples set out in the statute.

For these reasons, the court concludes that 11 YSC 814 does not apply to corporate debtors.

DONE THIS 4th DAY OF SEPTEMBER, 1996.

Received and file this 4th day of Sept., 1996

/s/

Clerk of Court

Yap State


	THE STATE COURT OF YAP IN THE TRIAL DIVISION *Cite as Yap Fresh Tuna,Inc.,v. Chiu, Chi Chang,Yap (1996)* *YAP FRESH TUNA, INC.,* Applicant, vs. STEVE CHIU, aka CHI CHANG, Respondent. Civil Action No. 1996-073 ORDER AND MEMORANDUM For the reasons set forth in the accompanying Memorandum, IT IS HEREBY ORDERED denying the Application for Temporary Order and Motion for Preliminary Injunction. DATE:Sept.4, 1996 /s/ Constantine Yinug, Chief Justice MEMORANDUM The court has received and reviewed the Application for Temporary Restraining Order and Motion for Preliminary Injunction dated August 29, 1996. The Applicant seeks a temporary restraining order on an ex parte basis pursuant to 11 YSC § 814. The Application is-supported by the Affidavit of Theo Thinnifel, in which he says that Respondent is indebted. to him,_in the sum of $631,946.69. The affidavit further alleges that Respondent is about to return to a permanent residence outside the State of Yap without settling the indebtedness due the Applicant. The Application recites as the basis for this belief that the Respondent is closing down his business in Yap. The court has been orally advised by Theo Thinnifel that the indebtedness is owed by Ting Hong Corporation, a Taiwanese corporation doing business in Yap, and not by Steve Chiu, who is employed by Ting Hong. 11YSC § 814 applies by its terms to . any indebted person. . Since Steve Chiu does not owe the debt, he is not an "indebted person," and the statute does not apply to him. At most, Steve Chiu is the agent of Ting Hong, and there is no dispute that Applicant knew that at all relevant times he was acting on behalf of Ting Hong. As such, he is not personally liable for the indebtedness incurred by Ting Hong. See Am Jur 2d at § 327. A corporation is a legal fiction that can only act by its agents, and so long as the agent discloses that he is acting on behalf of the corporation, and acts in good faith, 11 YSC § 814 will not apply to the agent. This leads to the question whether 11 YSC § 814 applies to a corporate debtor in the first place. The court addresses this issue to provide direction to litigants in future cases. For the reasons set out below, the court concludes that it does not apply to debtor corporations. 11 YSC § 814 provides in pertinent part as follows: §814. Settlement of indebtedness. (a) Any indebted person residing in the State of Yap who returns or intends to return to a permanent residence outside the State of Yap for six months or more; or who leaves the State of Yap for the purpose of changing or with intent to change or establish a residency in another part of the Federated States of Micronesia, shall, prior to leaving the State of Yap, comply with the following requirements: (1) Settle in full all personal debts within a time specified and agreed to by his creditor(s); or obtain a written moratorium signed by the creditor(s). (b) The following persons shall be exempt from the provisions of this section: (1) Students who are seeking further education outside the State of Yap (2) Patients who are seeking medical treatment outside the State of Yap; (3) Government employees traveling on government travel authorization for temporary assignment or duties, except those who are permanently reassigned or relocated. (c) Should a debtor fail to meet the requireiriertts of this section, any creditor of said debtor may notify the Chief of Police of such failure, in which case the State Court is to issue an injunction to prohibit said debtor from traveling outside the State of Yap until all requirements of this section have been complied with bv the debtor. Paragraph (a) speaks of literal comings and goings: of an indebted "person" residing in Yap who "returns or intends to return to a permanent residence outside the State of Yap for six months or more; or who leaves the State of Yap for the purpose of changing or with intent to change or establish a residency" elsewhere. The fair implication in context is that the language means natural persons. By way of comparison is the following on the residence of a corporation: Residence is said to be an attribute of a natural person, and can be predicated of an artificial being only by a more or less imperfect analogy. Strictly speaking, therefore, a corporation can have no local residence or habitation. A corporation is a mere ideal existence, subsisting only in contemplation of law -- an invisible being that can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place. However, the sove&Ognty creating the corporation my give it a local habitation or residence in law, if not in fact. 18A Am Jur 2d, Corporations § 305. The kind of change of residence that 11 YSC.§ 814 anticipates is the kind which flows from an:individual's personal decision to pull up stakes and leave Yap to travel physically to another locale and to reside there: A corporation, "a mere ideal existence" is not capable either of this species of intent or the ability to travel in this literal sense. A corporation's residence is ultimately that assigned to it in law. And, paragraph (c) contemplates that the Chief of Police and his agents when authorized by a duly entered injunction, may prevent a debtor physically from leaving Yap. To require the Chief . of Police to prevent "a mere ideal existence" from leaving Yap asks him to engage in metaphysical activity. In construing whether a corporate debtor is included in the general term "debtor" as used in 11 YSC § 814, analysis of paragraph (b) is useful. Paragraph (b) provides specific examples of". certain types of debtors who are exempt from the statute. These include students (subparagraph (1)), patients seeking treatment outside Yap (subparagraph (2)). and government employees traveling outside Yap (subparagraph (3)). All of these are natural persons. The statutory principle of ejusdem generis (Latin, literally "of the Same kind") is that where general words follow an enumeration of persons or things which are described specifically, the general words are not be construed their widest extent, but are to be held as applying only, to persons or things of the same general kind or class as those specifically named. See Black. s Law Dictionary. In this case, the general term . indebted person. in paragraph (a) precedes specific examples of types of indebtors which, but for their specific exclusion by paragraph (b), would be subject to the statute. All three named, students, patients, and government employees, are natural persons. Including corporations within the meaning of "indebted person" would require construing "indebted person" to include an entity other than natural persons, a more expansive construction -- i.e., to a wider extent than admitted by the specific examples set out in the statute. For these reasons, the court concludes that 11 YSC 814 does not apply to corporate debtors. DONE THIS 4th DAY OF SEPTEMBER, 1996. Received and file this 4th day of Sept., 1996 /s/ Clerk of Court Yap State