FSM SUPREME COURT APPELLATE DIVISION

APPEAL CASE NO. K1-2017
(Civil Action No. 72-14)
(Land Court No. 20-13)

HEIRS OF NEIME PRESTON,		)						
)						    
Appellants,		)						    
)
vs.				)
)
HEIRS OF SISUO ALOKOA,		)
)
Appellees.		)
___________________________________	)

	OPINION

	Argued:  May 1, 2018
	Decided:  June 1, 2018

BEFORE:

Hon. Dennis K. Yamase, Chief Justice, FSM Supreme Court
Hon. Larry Wentworth, Associate Justice, FSM Supreme Court
Hon. Camillo Noket, Specially Assigned Justice, FSM Supreme Court*

*Chief Justice, Chuuk State Supreme Court, Weno, Chuuk

APPEARANCES:

For the Appellants:	Stephen V. Finnen, Esq.
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Appellees:	Yoslyn G. Sigrah, Esq.
P.O. Box 3018
Kolonia, Pohnpei FM 96941

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	HEADNOTES

Appellate Review  Standard  Civil Cases  De Novo
Issues of law, including the Kosrae Land Court’s jurisdiction and the applicable statute of limitations (to the extent it does not require factual findings) are reviewed de novo.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 578 (App. 2018).

Appellate Review  Standard  Civil Cases  De Novo; Civil Procedure  Summary Judgment
When reviewing a summary judgment, an appellate court uses the same standard that the trial court initially used when it determined the summary judgment motion  the appellate court determines de novo whether genuine issues of material fact are absent and whether the prevailing party is entitled to judgment as a matter of law.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 578 (App. 2018).

Courts; Property  Land Court
The Kosrae Land Court’s statutory jurisdiction includes all matters concerning the title of land and any interest therein.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 578 (App. 2018).

Civil Procedure; Property  Land Court
An action alleging fraud or negligence or due process violation and in which the plaintiffs seek to regain the registered title to a land parcel their predecessor once held and in which the defendants seek to retain the registered title in their predecessor’s name so that, in the future, they will become the parcel’s registered owners, is a dispute over the parcel’s title and is thus a matter concerning the title of land and the interests therein, over which the Kosrae Land Court has original jurisdiction.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 578-79 (App. 2018).

Administrative Law  Judicial Review; Appellate Review  Parties; Civil Procedure  Parties; Property  Land Court
In past practice, it was common for the Kosrae Land Commission to be named a defendant when a party had occasion to complain about one of its acts or omissions since administrative agencies were often named as defendants when a party sought judicial review of the administrative agency’s act or omission.  But there is no reason why the Land Court should be a party to such an action because the Kosrae Land Court, unlike its predecessor, is not an administrative agency; it is a court.  It is not proper to make the lower court a defendant when seeking judicial review of its actions in a higher court.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 579 (App. 2018).

Appellate Review; Appellate Review  Parties; Mandamus and Prohibition

It is not proper to make the lower court a defendant when seeking judicial review of its actions in a higher court.  Judicial review of a lower court’s acts or omissions is usually accomplished by an appeal to a higher court or, on rare occasion, by a petition for a prerogative writ, such as prohibition or mandamus.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 579 (App. 2018).

Appellate Review  Parties; Property  Land Court
When the Land Court does not own, or claim to own, any interest in a land parcel, it is not a proper party to any dispute over title to that parcel.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 579 (App. 2018).

Jurisdiction  Subject-Matter; Statutes of Limitation; Torts  Governmental Liability
A statue of limitation generally is not jurisdictional unless it is a limitations period for claims against the government.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 579 (App. 2018).

Jurisdiction  Subject-Matter; Statutes of Limitation
Raising a statute of limitation as a bar to a remedy does not deprive a court of jurisdiction to hear the cause in the first instance; the court could not adjudicate the question of proper application of the statute if it did not have subject matter jurisdiction.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 579 (App. 2018).

Statutes of Limitation  Which Limitation Applies
To determine which statute of limitation to apply, a court must look to the nature of the case.  There are three ways to determine a case’s nature for statute of limitations purposes:  1) the type of interest allegedly harmed, or 2) the right sued upon, or 3) the remedy sought, rather than the theory of recovery.  What is significant for statute of limitations purposes is the primary interest that was invaded by the defendant’s wrongful conduct.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 580 (App. 2018).

Statutes of Limitation  Which Limitation Applies
When, using any of the three ways to analyze an action’s nature for statute of limitations purposes, it could not be plainer that the action is one to recover an interest in land, the twenty-year statute of limitations to recover land or an interest in land applies.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 580 (App. 2018).

Statutes of Limitation  Which Limitation Applies
As a matter of policy, if there is a substantial question or reasonable dispute as to which of two or more statutes of limitation within the jurisdiction should be applied, the doubt should be resolved in favor of the application of the statute containing the longest limitation period.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 580 n.2 (App. 2018).

Statutes of Limitation  Which Limitation Applies; Property  Registered Land
When the type of interest allegedly harmed is land ownership; when the right that the plaintiffs sue upon is their right to own a certain land parcel; when the remedy sought is to recover registered title to that land parcel that the plaintiffs contend that was lost through the defendants’ predecessor’s wrongful act; and when the primary interest that the alleged wrongdoer invaded was the plaintiffs’ predecessor’s registered ownership of that parcel, the action is one for the recovery of title to land.  The theory of recovery might be fraud, or due process violation, or negligence, or some other theory such as reformation of contract, but that theory does not change the action’s nature for statute of limitations purposes.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 580 (App. 2018).

Equity  Laches

The equitable doctrine of laches is usually invoked only when the applicable statutory limitations period has not yet run, and not only depends upon considerations of fairness, justice, and equity, but also cannot be invoked when the party raising it has failed to act properly or is said to have "unclean hands."  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 580-81 (App. 2018).

Civil Procedure  Summary Judgment; Equity  Laches
Laches is rarely subject to summary judgment, and can rarely be resolved without some preliminary evidentiary inquiry.  Generally, when a defendant asserts the laches defense, a full hearing of testimony on both sides of the issue is required.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 581 (App. 2018).

Property  Registered Land  Transfer
Under Kosrae Court Rule 13, when registered land is transferred, the owner of the parcel must surrender the certificate of title to the Registrar to transfer title.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 581 (App. 2018).

Property  Registered Land
For registered land, strict compliance with the Torrens land registration system’s procedures is a must in order to claim the system’s benefits of title good against the world.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 581 (App. 2018).

Property  Registered Land  Transfer
A landowner’s failure to surrender the his certificate of title may indicate that the landowner does not intend to transfer title to the land.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 581 (App. 2018).

Notaries; Property  Registered Land  Transfer
Kosrae Land Court Rules (and good practice) require that all documents concerning transfer of title must be notarized and submitted to the Registrar for recordation.  Signatures that are executed at different times or in different locations must be notarized separately.  The signature page of each document may consist of as many duplicate pages as necessary for proper notarization.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 581 (App. 2018).

Notaries; Property  Registered Land  Transfer
When the purported transferor’s signature and that of his witnesses were not notarized on a duplicate page, but the notarization was instead on a page separate from their signatures, and since the Registrar must not accept any document which is not properly notarized, it is doubtful that the Land Court should have accepted for filing a deed of gift in this form, even if it had been accompanied by the surrender of the old certificate of title, which it was not.  Since the deed of gift was in a doubtful form and since the transferor’s certificate of title was not surrendered with it, the Land Court should not have issued the transferee a certificate of title for that parcel.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 581 (App. 2018).

Property  Registered Land  Transfer
The hearing and notice procedure in Kosrae State Code § 11.612 is inapplicable to the transfer of already registered land.  It only governs the registration of unregistered land.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 582 (App. 2018).

Constitutional Law  Due Process; Property  Registered Land  Transfer

When the owner of registered land sells or gifts registered land, all that is needed for a valid transfer is the delivery to the Land Court of a properly notarized deed (with each needed signature properly notarized) combined with the surrender of the grantor’s old duplicate certificate of title.  Proper and strict compliance with these requirements is the due process that is sufficient (and required) for the issuance of a new certificate of title to the grantee.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 582 (App. 2018).

Property  Registered Land  Transfer
On rare occasions, when the landowner’s old certificate has been lost, mislaid, or destroyed and the landowner wishes to transfer title, the proper practice is for the Land Court, following its practices and procedures for replacing a lost, mislaid, or destroyed certificate, to issue and deliver to the grantor a new duplicate certificate of title so that the grantor may turn around and surrender that certificate to Land Court when the deed is presented for registration.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 582 (App. 2018).

Property  Registered Land  Transfer
Whenever a landowner of registered land wishes to transfer an interest in the registered land (such as subjecting it to a lien such as a mortgage) or to transfer title, it is the landowner’s duty in requesting any transfer to submit his or her owner’s duplicate certificate for proper endorsement or cancellation.  When the landowner has not done so, the landowner’s intent might reasonably be questioned and the Land Court ought not to act.  Heirs of Preston v. Heirs of Alokoa, 21 FSM R. 572, 582 (App. 2018).

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	COURT’S OPINION

LARRY WENTWORTH, Associate Justice:

This appeal is from the Kosrae State Court’s reversal of a Kosrae Land Court summary judgment and its order of remand to that Court.  We affirm the Kosrae State Court decision and supplement its reversal of the Kosrae Land Court decision to include further instructions to the Land Court.  Our reasoning follows.

	I.  Background

This appeal involves land in Lelu, Kosrae designated as Parcel No. 032-K-05.  On April 19, 1983, the Kosrae Land Commission issued a certificate of title for Parcel No. 032-K-05, naming Sisuo Alokoa as the registered owner of that parcel.  Alokoa had nine children.  In 2005, his adopted daughter, Neime Preston, wanted to run a business, a store, on Parcel No. 032-K-05.  She needed, and obtained, financing through the FSM Development Bank.

On August 16, 2005, Alokoa signed an English-language document entitled "deed of gift."  His signature as grantor was witnessed by two of his children, Lillian B. Skilling and Iuver S. Alokoa.  On a separate page, Ruth P. Timothy certified that she notarized those three signatures. Susan T. Anson notarized Preston’s August 24, 2005 signature as grantee.  The deed, by its terms, granted "the premises, unto the Grantee, his/her heirs and assigns, forever."  Whether Alokoa knew, when he signed it, the document’s nature and contents is now disputed.  His heirs now contend that Alokoa and his witnesses understood only that the document he signed was to help Preston obtain the bank’s assistance for her business.

The deed of gift was filed at the Kosrae Land Court, the Kosrae Land Commission’s successor.  On May 17, 2006, the Land Court issued a new certificate of title for Parcel No. 032-K-05 ("locally called Pukusrik Te") naming Neime Preston as the sole owner in fee simple.  Alokoa did not surrender his certificate of title to the Land Court.  It is still with one of his children.

Sometime in 2006, another of Alokoa’s daughters asked him, while he was visiting her in Saipan, what sort of document he signed for Preston.  His reply was that it was so Preston could build her business.  Preston died on April 28, 2009.  Alokoa and some of his children continued using Parcel No. 032-K-05.

On February 14, 2013, Alokoa visited the Kosrae Land Court and discovered the certificate of title that had been issued to Preston for Parcel No. 032-K-05.  On February 17, 2013, he filed a sworn statement at the Land Court, averring that he never intended to transfer title to Preston.  Land Court staff apparently advised him that if he wanted to regain title to Parcel No. 032-K-05, he could either ask Preston’s heirs to convey Parcel No. 032-K-05 back to him or he could file a claim with the Kosrae Land Court.  He and his attorney were unsuccessful in getting the Preston heirs to convey Parcel No. 032-K-05 back to Alokoa.

On December 16, 2013, Alokoa filed a Statement of Land Claim for Relief in the Kosrae Land Court, in which he sought a judgment declaring him the true owner of Parcel No. 032-K-05, upholding his 1983 certificate of title for Parcel No. 032-K-05, and invalidating Preston’s 2006 certificate of title for that parcel.  Alokoa died February 18, 2014.

The Preston heirs moved for summary judgment.  On June 26, 2014, the Land Court issued its ruling, granting the Preston heirs summary judgment.  It held that in order to transfer title to Preston, "[a]ll that the Land Court had to do was determine [the] validity and authenticity of the Deed of Gift, register it and issue title based on the expressed terms of the deed."  Ruling on Mots. for Summ. J. at 10 (Kos. L. Ct. No. 20-13, June 26, 2014).  The Land Court noted that Alokoa did not surrender his certificate of title.  Id.  It then ruled that it did not commit fraud and was not negligent for relying on the deed to issue title to Preston.  Id. at 12.  The Land Court further concluded that, because the Alokoa heirs alleged that Alokoa lost his title through a due process violation and since only governmental entities can violate due process, the Land Court itself was an indispensable and necessary party, that should have been named as a party, but was not.  Id. at 13.

Characterizing the Alokoa heirs’ action as a negligence or due process violation claim, the Land Court concluded that Alokoa’s cause of action accrued either when he signed the deed in 2005 or when Preston was issued her certificate of title in 2006 and that the six-year limitation period had therefore run out before Alokoa filed his 2013 claim, and that laches also barred Alokoa’s claim.  Id. at 14-16.  It then granted the Preston heirs summary judgment and dismissed the case.  Id. at 16.  The Land Court also questioned (but did not definitively answer) whether it had jurisdiction over the matter since it viewed itself as an indispensable party and since it ruled that the case was not a land case but an action for negligence and due process violations, causes of action generally not within the Land Court’s jurisdiction.

The Alokoa heirs appealed to the Kosrae State Court.  The State Court vacated and set aside the Land Court judgment as void.  It ruled that summary judgment was improper because there were genuine issues of material fact present and because, under Kosrae General Court Order 1998-6, summary judgment motions must be given an oral hearing, and the Land Court did not hold one.  Memo. of Decision, J., & Order of Remand at 7-9 (Kos. S. Ct. Tr. Civ. No. 72-14 Jan. 13, 2017).  It ruled that the Land Court should have held a hearing on the Preston heirs’ summary judgment motion because, in Kosrae courts, summary judgment is a hearing motion.  Id. at 9.  It remanded the matter to the Land Court for hearings and written findings and a decision "consistent with statutory and procedural requirements."  Id. at 10.

The Neime Preston heirs timely appealed to the FSM Supreme Court appellate division.

	II.  Issues Presented

The Heirs of Preston contend that the Kosrae State Court’s factual findings were clearly erroneous; that its conclusions of law were erroneous; that it abused its discretion and erred as a matter of law in remanding the matter instead of upholding the Land Court judgment; that it was an error of law to determine that summary judgment was inappropriate to determine the case’s outcome; and that it was an error of fact and law and an abuse of discretion not to rule on the statute of limitations issue and on whether the Land Court had jurisdiction over the subject matter.

	III.  Standards of Review

We review de novo issues of law, including the Kosrae Land Court’s jurisdiction over this matter and the applicable statute of limitations (to the extent it does not require factual findings).  Tilfas v. Kosrae, 21 FSM R. 81, 86 (App. 2016) (questions of when a statute of limitations starts to run and whether the statute of limitations bars a claim are questions of law to be reviewed de novo); Andrew v. Heirs of Seymour, 19 FSM R. 331, 337 (App. 2014) (jurisdictional issues are mainly questions of law reviewed de novo); Kosrae v. Skilling, 11 FSM R. 311, 315 (App. 2003) (questions of when a statute of limitations begins to run, and whether the limitations statute bars a claim, are questions of law to be reviewed de novo).

And, when reviewing a summary judgment, we use the same standard that the trial court initially used when it determined the summary judgment motion  we determine de novo whether genuine issues of material fact are absent and whether the prevailing party is entitled to judgment as a matter of law.  Sam v. FSM Dev. Bank, 20 FSM R. 409, 415 (App. 2016); Andrew, 19 FSM R. at 337.

	IV.  Analysis

A.  Land Court Jurisdiction

We will first address the Preston heirs’ claim that the Land Court lacks jurisdiction over this action since, if they prevail on this point, we would not need to proceed further.

The Preston heirs state that the Kosrae State Court failed to rule on their lack of Land Court jurisdiction arguments, and that if the State Court had ruled in their favor, there then would have been no case for it to remand to the Land Court.  We think that the State Court implicitly held that the Land Court had jurisdiction over this case or it would not have remanded it.  Be that as it may, we now explicitly hold that the Land Court not only has jurisdiction over this case, but is the court with original jurisdiction over the matter.

The Preston heirs’ contention that the Land Court lacks jurisdiction is based on two arguments  1) that this case is an action for fraud or negligence or due process violation and the Land Court does not have jurisdiction over those types of lawsuits, and 2) that the Land Court is a necessary and indispensable party to the action and the Land Court does not have jurisdiction over cases in which it is a defendant.

The Kosrae Land Court and its jurisdiction are created by a Kosrae state statute, which provides that "[t]he jurisdiction of the Land Court shall . . . include all matters concerning the title of land and any interest therein."  Kos. S.C. § 11.604.  Through this action, the Alokoa heirs seek to regain the registered title to Parcel No. 032-K-05 that Alokoa once held.  The Preston heirs, by defending, seek to retain the registered title in Neime Preston’s name so that, in the future, they will become the registered owners of Parcel No. 032-K-05.  This is a dispute over title to Parcel No. 032-K-05.  This is a matter concerning the title of land and the interests therein.  The Land Court has original jurisdiction over all matters concerning land titles.  The Land Court thus has original jurisdiction over this case.

The Preston heirs also contend that the Land Court should have been made a party to the action since in other suits against the Land Court’s predecessor, the Kosrae Land Commission, the Land Commission had been made a party when the plaintiff alleged that the Land Commission had been negligent and the six-year statute of limitations had been applied.  They assert that, if the court were to follow that line of reasoning in this case, the Land Court would not have jurisdiction since the six-year statute of limitations has run out and since it would be improper for the Land Court to make undue corrections to certificates of title it had already issued.

We see no reason why the Land Court should be a party to this action.  Admittedly, in past practice, it was common for the Kosrae Land Commission to be named a defendant when a party had occasion to complain about one of its acts or omissions.  Administrative agencies were often named as defendants when a party sought judicial review of the administrative agency’s act or omission.  But the Kosrae Land Court, unlike its predecessor, the Kosrae Land Commission, is not an administrative agency.  It is a court.  It is not proper to make the lower court a defendant when seeking judicial review of its actions in a higher court.  Judicial review of a lower court’s acts or omissions is usually accomplished by an appeal to a higher court or, on rare occasion, by a petition for a prerogative writ, such as prohibition or mandamus.

In the present case, it is obvious that making the Land Court a party would serve no purpose.  It would be pointless.  No judgment against the Land Court, no matter how favorable to the Alokoa heirs, could give them the relief they seek  ownership of Parcel No. 032-K-05.  That can only be accomplished by an action against the Preston heirs.  The Land Court does not own, or claim to own, any interest in Parcel 032-K-05.  It is not a proper party to any dispute over title to that parcel.

Nor can the statute of limitations affect the Land Court’s jurisdiction.  "[A] statue of limitation generally is not jurisdictional unless it is a limitations period for claims against the government."  51 Am. Jur. 2d Limitation of Actions § 20 (rev. ed. 2000) (footnote omitted).  "Raising a statute of limitation as a bar to a remedy does not deprive a court of jurisdiction to hear the cause in the first instance; the court could not adjudicate the question of proper application of the statute if it did not have subject matter jurisdiction."  Id. § 21.  That brings us to the proper application of the statutes of limitation to this matter.

B.  Statutes of Limitation and Laches

The Preston heirs also assert that the Kosrae State Court failed to rule on their statute of limitations arguments, and that if it had ruled in their favor on that, then there would have been no case for it to remand to the Land Court.  For that reason, we think the State Court implicitly ruled that Alokoa’s case fell within the limitations period.  Otherwise, the State Court would not have remanded it.  We now explicitly hold, for the following reasons, that the limitation statutes do not bar this action.

1.  Applicable Statute of Limitation

The Preston heirs contend that, since the Alokoa heirs allege that Alokoa was wrongfully deprived of title to Parcel No. 032-K-05 through fraud, or through a violation of his due process rights, or through negligence, the applicable statute of limitations is that for a fraud cause of action or a due process violation cause of action.  That would be the six-year catchall limitations period1 in Kosrae Code § 6.2506.  We cannot agree.

To determine which statute of limitation to apply, we must look to the nature of the case.  There are three ways to determine a case’s nature for statute of limitations purposes.

The nature of an action for the purposes of a statute of limitations is determined by [1] the type of interest allegedly harmed, [or 2] the right sued upon, or [3] the remedy sought, rather than the theory of recovery.  What is significant for statute of limitations purposes is the primary interest that was invaded by the defendant’s wrongful conduct.

51 Am. Jur. 2d Limitation of Actions § 91, at 509 (rev. ed. 2000) (footnotes omitted) (numbering alterations added).  This is an action to recover an interest in land.  That is true under any of the three ways to analyze an action’s nature for statute of limitations purposes.  It could not be plainer.2

The type of interest allegedly harmed here is land ownership.  The right that the Alokoa heirs sue upon is their right to own Parcel No. 032-K-05.  And looking to the remedy sought  the remedy that Alokoa sought and that the Alokoa heirs now seek  is to recover registered title to Parcel No. 032-K-05.  The Alokoa heirs seek to recover land that they contend that Alokoa lost through Preston’s wrongful act.  And, the primary interest that Preston invaded, by her alleged wrongful conduct, was Alokoa’s registered ownership, good against the world, of Parcel No. 032-K-05.  The Alokoa heirs’ theory of recovery might be fraud, or due process violation, or negligence, or some other theory such as reformation of contract, but that theory does not change the action’s nature.

The statute of limitations to recover land or an interest in land is twenty years.  Kos. S.C. § 6.2503(1)(b).  Regardless of when Alokoa’s cause of action accrued, his 2013 Land Court filing is clearly within the twenty-year limitations period.  Thus, we need not consider arguments over when the cause of action accrued.

2.  Laches

We make no ruling on the Preston heirs’ laches defense.  The equitable doctrine of laches is usually invoked only when the applicable statutory limitations period has not yet run, and not only depends upon considerations of fairness, justice, and equity, Andon v. Shrew, 15 FSM R. 315, 322 (Kos. S. Ct. Tr. 2007), but also cannot be invoked when the party raising it has failed to act properly or is said to have "unclean hands," Kosrae v. Skilling, 11 FSM R. 311, 318 (App. 2003).

The State Court did not err when it voided the Land Court decision and did not otherwise address the laches defense.  We decline to rule on it as well.  The Land Court summary judgment relied on laches without any hearing, let alone an evidentiary hearing.  "Laches is rarely subject to summary judgment, and can rarely be resolved without some preliminary evidentiary inquiry."  Waddell v. Small Tube Prods., Inc., 799 F.2d 69, 74 n.2 (3d Cir. 1986) (citation omitted).  Generally, "[w]here a defendant asserts the laches defense, a full hearing of testimony on both sides of the issue is required."  27A Am. Jur. 2d Equity § 201 (1996).  Since there was no evidentiary inquiry in the Land Court, the State Court could remand it for one.  This case would seem to require one.

C.  Summary Judgment and Due Process

The Preston heirs contend that the State Court erred when it ruled that this matter was unsuitable for summary judgment.  They contend that summary judgment in their favor was proper on Land Court jurisdictional grounds, on the statute of limitations, on laches, and because the documentary record, as evidenced by the deed of gift and Preston’s certificate of tile, is conclusive.  As discussed above, we reverse the Land Court’s ruling on subject matter jurisdiction (including whether the Land Court should be a party) and on the statute of limitations, and we affirm the State Court’s decision to void the Land Court’s decision on laches.

The documentary record, however, is not as conclusive as the Preston heirs wish.  More than one aspect of that transaction should have given the Land Court pause when the deed of gift was filed.  Under Land Court Rule 13, when registered land is transferred, "[t]he owner of the parcel must surrender the Certificate of Title to the Registrar for title transfer."  Kos. L. Ct. R. 13.A.  For registered land, strict compliance with the Torrens land registration system’s procedures is a must in order to claim the system’s benefits of title good against the world.  See In re Engichy, 11 FSM R. 520, 531 (Chk. 2003).  But Alokoa never surrendered his certificate of title.  Despite this, the Land Court transferred title and issued the grantee (Preston) a certificate.  A landowner’s failure to surrender the old certificate of title may indicate that the landowner does not intend to transfer title to the land.

Another aspect that should have worried the Land Court is that the notarization of Alokoa’s signature and that of his witnesses was not on the same page as their signatures.  The Land Court Rules (and good practice) require that "[a]ll documents . . . concerning transfer of title shall be notarized and submitted to the Registrar for recordation. . . . Signatures which are executed at different times or in different locations must be notarized separately.  The signature page of each document may consist of as many duplicate pages as necessary for proper notarization."  Kos. L. Ct. R. 13.B.  Alokoa’s signature and that of his witnesses were not notarized on a duplicate page.  The notarization was instead on a page separate from Alokoa’s and his witnesses’ signatures.  Since "[t]he Registrar shall not accept any document which is not properly notarized," Kos. L. Ct. R. 13.C, it is doubtful that the Land Court should have accepted for filing the deed of gift in this form, even if it had been accompanied by the surrender of Alokoa’s certificate of title.  But it was not accompanied by the surrender of Alokoa’s certificate of title.  Since the deed of gift was in a doubtful form and since Alokoa’s certificate of title was not surrendered with it, the Land Court should not have issued Preston a certificate of title for Parcel No. 032-K-05.

The Alokoa heirs contend that Alokoa’s due process rights were violated because the Land Court did not follow the hearing and notice procedures in Kosrae State Code § 11.612 before issuing the certificate of title to Preston.  That statutory provision is inapplicable to this case.  It only governs the registration of unregistered land.  Parcel No. 032-K-05 is land that had already been registered.

When the owner of registered land sells or gifts registered land, all that is needed for a valid transfer is the delivery to the Land Court of a properly notarized deed (with each needed signature properly notarized) combined with the surrender of the grantor’s old duplicate certificate of title.  Proper and strict compliance with those requirements is the due process that is sufficient (and required) for the issuance of a new certificate of title to the grantee.  On rare occasions, the landowner’s old certificate may have been lost, mislaid, or destroyed.  The proper practice, then, would be for the Land Court, following its practices and procedures for replacing a lost, mislaid, or destroyed certificate, to issue and deliver to the grantor a new duplicate certificate of title so that the grantor may turn around and surrender the certificate to Land Court when the deed is presented for registration.  See In re Engichy, 12 FSM R. 58, 70 (Chk. 2003) (if the owner is unable to physically submit the certificate because it has been lost or destroyed, there is a method whereby he may obtain a new duplicate certificate for submission).  Whenever a landowner of registered land wishes to transfer an interest in the registered land (such as subjecting it to a lien such as a mortgage) or to transfer title, it is the landowner’s duty in requesting any transfer to submit his or her owner’s duplicate certificate for proper endorsement or cancellation.  Id.  When the landowner has not done so, the landowner’s intent might reasonably be questioned and the Land Court ought not to act.

Accordingly, we affirm the State Court’s decision that summary judgment was inappropriate, that genuine issues were in dispute, that there were problems with the documents that the summary judgment was based upon, and that the matter should be remanded to the Land Court for evidentiary hearings and resolution of whether Sisuo Alokoa transferred Parcel No. 032-K-05 to Neime Preston.

	V.  Conclusion

Accordingly, we affirm the Kosrae State Court decision and remand this case to the Kosrae State Court for it to implement its order of remand to the Kosrae Land Court, subject to our further instructions to the Kosrae Land Court concerning its jurisdiction, the twenty-year statute of limitations, laches, and the defects in its issuance of a certificate of title to Neime Preston without all the required procedures.

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