Kishore Hemlani and Gurvinder Singh Sobti v. Theodore S. Nelson, Gloria B.L.Nelson, Glenn R. Nelson, Rhonda T. Nelson, Gwendolyn M. Taimanglo and Theodore D. Nelson

IN THE SUPREME COURT OF GUAM KISHORE HEMLANI and GURVINDER SINGH SOBTI Plaintiffs-Appellants vs. THEODO RE S. NELSON , GLO RIA B.L. NELSON, GLENN R. NELSON, RHONDA T. NELSON, GWENDOLYN M. TAIMANGLO and THEODORE D. NELSON Defendants-Appellees OPINION Filed: June 9, 2000 Supreme Court Case No. CVA99-032 Superior Court Case No. CV1721-94 Cite as: 2000 Guam 20 Appeal from the Superior Court of Guam Argued and submitted on March 8, 2000 Hagåtña, Guam Appearing for the Plaintiffs-Appellants: Wilfred R. Mann, Esq. Berman, O Connor & Mann 111 Chalan Santo Papa Hagåtña, Guam 96910 Appearing for the Defendants-Appellees: Cesar C. Cabot, Esq. Law Offices of Cesar C. Cabot, P.C. BankPacific Bldg., 2nd Flr. 825 S. Marine Drive Tamuning, Guam 96911 Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 2 of 15 BEFORE:BEFORE: BENJAMIN J.F. CRUZ,BEFORE: BENJAMIN J.F. CRUZ, Chief Justice, PETER C. SIGU and JUNE S. MAIR, Justice Pro Tempore MAIR, J.:Ask ⌕

[1]Plaintiffs-AppellantsPlaintiffs-Appellants Kishore Hemlani and Gurvinder Singh Sobti appeal the trPlain judgmentjudgment in favor of Defendants-Appellees Theodore S. Nelson, Gloria B.L. Nelsojudgment in favo Nelson,Nelson, Rhonda T. Nelson, Gwendolyn M. Taimanglo and Theodore D. Nelson. For reasons which follow, the trial court s judgment is affirmed. I. FACTUAL AND PROCEDURAL BACKGROUNDAsk ⌕⧉ cite

[2]InIn thisIn this case we decide whether lessors of real propertyIn this case we decide whether lessors of re priorprior to signing the lease, one ofprior to signing the lease, one of the lessors acquires the undivided fee simplep did not join in the lease.Ask ⌕⧉ cite

[3]PlaiPlaintiffs-APlaintiffs-AppellantsPlaintiffs-Appellants (collectively Hemlani ) desired to incorpora Hagåtña,Hagåtña, GuamHagåtña, Guam into a development they had been contemplating.Hagåtña, Guaminto a dev AppelleesAppellees (hereinafter Nelsons ), and on or about August 31, 1992, the parties signed a ninety-nine yearyear lease, which Hemlani drafted, foryear lease, which Hemlani drafted, for Lot 1419, Hagåtña. The Nelsons month,month, with the first sixty months, ormonth, with the first sixty months, or $72,000, paid inmonth, with the Title. Lessor warrants that it is lawfully seized of Lessor warrants that it is lawfully seized of the above L inin feein fee simple; that the same is free and clear ofin fee simple; that the same is free and clear of all en record; and that it has good right to lease said property. HemlaniHemlani included a reference to CertiHemlani included a reference to CertifHemlani included a refe property. This Certificate of Titleproperty. This Certificate of Title indicated thatproperty. This Certificate of T Hill held undivided interests in the property. Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 3 of 15Ask ⌕⧉ cite

[4]Ms.Ms. Hill was noMs. Hill was not a Ms. Hill was not a signatory on the lease. She had passed away 1991.1991. S1991. She die1991. She died intestate, leaving four heirs, James D. Hill, Sr., William Peter McNeely,McNeely, and Elena Florence Thomley. The heirs quitclaimed theirMcNeely, and Elena Florence ( Ted )( Ted ) Nelson, who recorded the quitclaim dee( Ted ) Nelson, who recorded the quitclaim deeds. To probateprobate ofprobate of Ms. Hill s interest atprobate of Ms. Hill s interest at the Superior Court on October 19, yearsyears after Hemlani and the Nelsonsyears after Hemlani and the Nelsons signed the lease for Lot 1419, Ms. H solelysolely to Ted. Hemlani did not include the heirssolely to Ted. Hemlani did not include the heirs in the lease agreement, and they were not party to it.Ask ⌕⧉ cite

[5]HemlaniHemlani was unable to develop theHemlani was unable to develop the property, allegedlybecause whenwhen they discovered Ms. Hill s interest onwhen they discovered Ms. Hill s interest on the when they causedcaused Hemlani to file a complaint for breach of contract and breach of warrantycaused Hemlani to file a com NovemNovemberNovember 23, 1994. Bench trial yielded judgment for the Nelsons on both causes of Nov Hemlani v. Nelson, CV1721-94 (Super. Ct. Guam Feb. 22, 1999).Ask ⌕⧉ cite

[6]HemlaniHemlani appeals the judgment, asserting thatHemlani appeals the judgment, asserting that it was e waswas nowas no brwas no breach of the lease agreement s warranty provisions. Hemlani argues that Ms. undividedundivided interest was a not aundivided interest was a not a mereundivided interest was a not a mere enc exceptionexception to theexception to the lessor s warranty against encumbrances. Instead, Hemlani contends that interestinterest was a defect ininterest was a defect in record title causing a breach of covenant of seisin. We agree that Ms. Hill s undivided interest in Lot 1419 is not a merethat Ms. Hill s undivided interest in Lot 1419 is not a dodo not agree thatdo not agree that Ms. Hill sdo not agree that Ms. Hill s interest constituted a breach of the coven judgment of the trial court is affirmed. Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 4 of 15 II. ANALYSISAsk ⌕⧉ cite

[7]WeWe haveWe have jurisdiction over the appeal of a final judgment of the Superior CourtWe have jurisd 7 GCA, §§ 3107 and 3108.Ask ⌕⧉ cite

[8]AA trial court sA trial court s application of law is reviewed de novo. Coffey v. Gov't of Guam, 1997, 1997 14,14, ¶ 6. A trial court s findings of fact shall not be set14, ¶ 6. A trial court s findings of fact shall no erroneous. Yang v. Hong, 1998 Guam 9, ¶ 4. A. Ms. Hill s undivided interest in Lot 1419 was not an encumbrance of recordAsk ⌕⧉ cite

[9]UnderUnder its application of law, the trial courtUnder its application of law, the trial court concluded tha designateddesignated on the Certificate of Title,designated on the Certificate of Title, was an encumbrance of reco ledled to the court s finding that Ms. Hill s interest did not constitute a breach of the lease agreement. We disagree.Ask ⌕⧉ cite

[10]The parties failed to provide the court with a copy of the Certificate ofThe parties failed to provide the cou Nevertheless,Nevertheless, it is undisputed that Ms.Nevertheless, it is undisputed that Ms. Hill had an interest desig we begin our analysis by analyzing that interest.Ask ⌕⧉ cite

[11]UnderUnder Guam law, ownership of realUnder Guam law, ownership of real propertyUnder Guam law, common,common, partnershipcommon, partnership interest, or community property interest. Title §21 GCA § 1214Guam Code Annotatedstatute — binding Guam s Land Title Registration Law, [i]nGuam s Land Title Registration Law, [i]n all casesGuam s Land Title tenants in common to an estate in registered land, such persons may receive onetenants in common to an estate in 1 The Pla intiffs-Appellants so ught our rev iew of the trial co urt s findings of fact co ncerning wh ether Ms . Hill s interest may have been subject to otherinterest may have been subject to other outstanding claims at probate. However, as the record su aa copy of C ertificatea copy of C ertificate of Title N o. 9058 8, and as ne ither partya copy of C ertificate of Title N o. 9058 8, and as ne ither LotLot 1419, we take the facts asLot 1419, we take the facts as they have beenLot 1419, we take the facts as they have been adjudicated or Feb. 22, 1999) and In the M atter of the E state of Ma rgaret H ill, PR0175-94 (Super. Ct. Guam July 5, 1996 ). Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 5 of 15 entirety,entirety, or each may receive a separate certificate for his undividedentirety, or each may receive a separate (1994).(1994). As Ms. Hill s interest was designated with the other owners(1994). As Ms. Hill s interest was des ofof Title, we can concludeof Title, we can conclude that her interest was an undivided interestof Title, we can co 1419.Ask ⌕⧉ cite

[12]HavingHaving concludeHaving concluded that MsHaving concluded that Ms. Hill held an undivided int next determine the estate she possessed. The Land Title Registration Law provides: NoNo mortgage, lien, charge,No mortgage, lien, charge, or lesser estate than fee simpleNo mortgage, lien, thethe fee simple to the same land is first registered. It shall not be an othe fee simple to the same lan bringingbringing land under this Law, that the estate or interest ofbringing land under this Law, that the es anyany outstanding lesser estate, mortgage, lien,any outstanding lesser estate, mortgage, lien, or charge; bu mortgage,mortgage, lien, or charge shall be noted upon the certificate of titlemortgage, lien, or charge shall thereof,thereof, and the title or interest thereof, and the title or interest certified thereof, and the ti mortgages, liens, and charges as are so noted, except as herein provided TitleTitle §21 GCA § 29107Guam Code Annotatedstatute — binding, (1994). AsTitle §21 GCA § 29107Guam Code Annotatedstatute — binding, (1994). As there were no outstanding lesser estatesT 1419,1419, all interests noted on the 1419, all interests noted on the Certificat1419, all interests noted on the C Ms. Hill s undivided interest as tenant in common, therefore, was in a fee simple estate.Ask ⌕⧉ cite

[13]ByBy contrast,By contrast, Guam law provides that an encumbrance includes taxes, assessments,By cont liensliens upon real property. liens upon real property. Titleliens upon real property. Title §21 GCA § 4211Guam Code Annotatedstatute — binding, (199 sectionsection 4211 was adopted from California; in this case California Civsection 4211 was adopted from Ca authorityauthority applying section 1114 defines an encumbrance as any right to, or interest in, land which maymay subsist in another to the diminution of its value, but consistent with the pmay subsist in another to the EvansEvans v. Fraught, 231 C, 231 Cal, ⟂231 Cal. App. 2d 698Persuasive authoritynon-Guam — not binding under the reception rule, 706, 42 Cal. Rptr. 133, 137 (Cal. Dist. Ct. App (citations(citations omitted). Additionally, an encumbranc(citations omitted). Additionally, an encumbrance is oror impairs [a propertor impairs [a property sor impairs [a property s] use or impedes its transfer. Id. The statutestatute is inclusive. 1119 Delaware v. Continental Land Title Co.,, ⟂16 Cal. App. 4Persuasive authoritynon-Guam — not binding under the reception ruleth, ⟂16 Cal. App. 4th 992Persuasive authoritynon-Guam — not binding under the reception rule Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 6 of 15 Cal.Cal. Rptr. 2d 438, 443 n. 4 (Cal. Ct. App. 1993). Thus, courts have found covenants restricting the useuse of property, restrictions on construction, reservations of right of way, eause of property, restrictions on constru leases,leases, deedsleases, deeds of trust, and pendency of condemnation proceedings to be encumbrances. Evans Cal.Cal. App. 2d at 706, 42 Cal. Rptr. at 137 (ciCal. App. 2d at 706, 42 Cal. Rptr. at 137 (citCal. App. inheritanceinheritance taxes on land conveyed to Native Americans have also been fouinheritance taxes encumbrance.encumbrance. Kirkwood v.Kirkwood v. Arenas, ⟂243 F.2d 863Persuasive authoritynon-Guam — not binding under the reception rule, 869 (9th Cir. 1957), ⟂243 F.2d 863Persuasive authoritynon-Guam — not binding under the reception rule, 8 has been found where land transferredhas been found where land transferred was subject to a conditional usehas only to senior citizens. 1119 Delaware ⟂16 Cal. App. 4Persuasive authoritynon-Guam — not binding under the reception ruleth at 999, 20 Cal. Rptr. 2d at 444.Ask ⌕⧉ cite

[14]ItIt is apparent that Ms. Hill s undivided interest in feIt is apparent that Ms. Hill s undivided interest interestsinterests found in California case law. Her interest is the largest interests found in California case law subsissubsistsubsist in anothesubsist in another estate to the diminution of the value of the other estate as do (encu(encumbering(encumbering the mortgagor s interest), a covenant (encumbering the covenantor s interest) easementeasement (encumbering theeasement (encumbering the subservient estate), or the like. Her undivided in clearly not an encumbrance. Therefore, the trialclearly not an encumbrance. Therefore, the trial court s conclusio encumbrance was error. B. The Nelsons neither breached the covenant of seisin or covenant of right to conveyAsk ⌕⧉ cite

[15]AlthoughAlthough we find theAlthough we find the trial court s conclusion of law to be error, we hold that not breach the warranty provisions contained in the lease agreement with Hemlani.Ask ⌕⧉ cite

[16]WhenWhen a grantor makes a covenantWhen a grantor makes a covenant of seisin, she warrants that,, she w sheshe was lawfully seized of a good, absolute andshe was lawfully seized of a good, absolute and indefeasible esta hadhad power to convey the same. Maxwell v. Redd, ⟂496 P.2d 1320Persuasive authoritynon-Guam — not binding under the reception rule, ⟂496 P.2d 1320Persuasive authoritynon-Guam — not binding under the reception rule (Kan. 19, ⟂496 P.2d 1320Persuasive authoritynon-Guam — not binding under the reception rule (K Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 7 of 15 Additionally,Additionally, when a grantor makes a covenant of seisin, she promises that she is, she promises that sh sheshe purports to convey. SeeSee, generalSee, generally, RICHARD R. POWELL , POWELL ON REAL PROPERT 81A.06[2][ii], at81A.06[2][ii], at 81A-115 (Matthew Bender & Co. ed. 1999). Similarly, a grantor covenants tha sheshe has goodshe has good right to convey a particular estate inshe has good right to convey a particular estate convey.convey. See, generally, id. § 81A § 81A.06[2][b], at § 81A.06[2][b], at 81A-116. It follows, then, that warrant that she is seised in fee si mple unless that is the est ate she purports to convey.Ask ⌕⧉ cite

[17]As holders of fee simple interests,As holders of fee simple interests, the Nelsons canAs holders of fee sim aa lessera lesser estate. See, e.g.,See, e.g., Nicholson Corp. v. Ferguson, ⟂243 P. 195Persuasive authoritynon-Guam — not binding under the reception rule (Okla. 1925), Sun Exploratio andand Productionand Production Co. v. Benton, 728 S.W.2d 35 (Tex. 1987), Walker & Withrow, Inc.Walker & P.2dP.2d 191 (Okla. 1982),P.2d 191 (Okla. 1982), Siniard v. Davis, ⟂678 P.2d 1197Persuasive authoritynon-Guam — not binding under the reception rule (Okla. Court. App. 1984). , 67 what, exactly,what, exactly, is warranted whenwhat, exactly, is warranted when a covenantor makes the covenant here.Ask ⌕⧉ cite

[18]InIn Nicholson Corp., ⟂243 P. 195Persuasive authoritynon-Guam — not binding under the reception rule, an assignor of oil rights covenanted that it was the law, ⟂243 P. 195Persuasive authoritynon-Guam — not binding under the reception rule, an ownerowner of a lease of oil rights and interests and that it had good rightowner of a lease of oil rights and interests thethe lease and rights and interests under it. Id. at 197.. at 197. The oil field and well referred to in the lease werewere in fact on another s land. Id. at 196. The question was at 196. The question was whether the at 196 seisin and of good right to convey were enforceable given that oil and gas leases were assigned. Id. at 197. In Oklahoma, [t]he[t]he detriment c[t]he detriment caused[t]he detriment caused by a breach of a covenant of seisin, warranty, or of quiet enjoyment, in a grant ofin a grant of an estatein a grant of an estate in real property toto be: Firto be: First. The priceto be: First. The price paid to the grantor; or, if the breach is part proportionproportion of the price as theproportion of the price as the value of the property affected by thepro timetime of the grant, to the value of the whole property. Second. Interest thereon for thethe time during which the grantee derthe time during which the grantee derivthe time during exceedingexceeding six years. Third. exceeding six years. Third. Any exexceeding six years. Third. defending his possession. Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 8 of 15 Id.Id. at 198 citing §at 198 citing § 5980 C. O. S. (1921) (emphasis added).2 The Nicholson Corp. court held that co statutestatute concerns not title to real estate, but where title to an estatestatute concerns not title to real estate, bu thatthat the covenants applied to assignmentsthat the covenants applied to assignments of gas leaseholds. that the co ON REAL PROPERTY § 81A.06[2][a][iii], at 81A-115.Ask ⌕⧉ cite

[19]Here,Here, the estate that the Nelsons purported to convey was a ninety-nine-yHere, the estate that th UnderUnder such conveyance, Hemlani becomes vesteUnder such conveyance, Hemlani becomes vestedUnder NelsonsNelsons have a reversion. Hemlani argues that there was a breach ofNelsons have a reversion. Hemlani ar Ms.Ms. Hill had an undiMs. Hill had an undivideMs. Hill had an undivided 1/7 interest in Lot 1419. Howe argument is incorrect.Ask ⌕⧉ cite

[20]In Guam, [u]pon [u]pon a [u]pon a person s death, the title to such person s property, real and [u]pon a person s dea immedimmediatelyimmediately to the person or persons to whom it is devised or bequeathed by sto the p person sperson s lastperson s last will, or, in the absence of suchperson s last will, or, in the absence of such succeed to such person s estate as provided in Division 2 of this Title. TitleTitle 15Title §15 GCA § 1401Guam Code Annotatedstatute — binding, (1994) (emphasis added). Thus,Title §15 GCA § 1401Guam Code Annotatedstatute — binding, (1994) (emphasis added). and legatees by will or in accordance with intestate succession.Ask ⌕⧉ cite

[21]InIn Lathrop v. Kellogg,, ⟂158 Cal.App.2d 220Persuasive authoritynon-Guam — not binding under the reception rule, ⟂322 P.2d 572Persuasive authoritynon-Guam — not binding under the reception rule, (Cal. Ct., ⟂158 Cal.App.2d 220Persuasive authoritynon-Guam — not binding under the reception rule, ⟂322 P.2d 572Persuasive authoritynon-Guam — not binding under the reception rule, claimantsclaimants to a piece of property brought suit to quietclaimants to a piece of property brought suit to quiet t 2 The O klahoma sta tute concer ning the cove nant of seisin tracks, verbatim, Guam s statute: Detriment:Detriment: breach of covena nt oTfhseeTizhiend. e. trimentThe de triment cause d by aThe detriment caused by a b aa covena nt of seisin, , of r, of right to convey, of warranty, or of quiet enjoyment, in a grantgrant of an estate in real propergrant of an estate in real property, is grant of an estate in real property, is d grantor;grantor; or,grantor; or, if the breach is partial only, such proportion ofgrantor; or, if the breach is partial only, su thethe property affected by the breach borethe property affected by the breach bore at the time of the grantthe property whole whole pro perty;whole property; (2) Interest thereonwhole property; (2) Interest thereon for the time during whic nono benefit fro m the prop erty, not excee dinno benefit fro m the prop erty, not excee ding fivno benefit from the properly incurred by the covenantee in defending his possession. Title §20 GCA § 220Guam Code Annotatedstatute — binding 4, (1992). Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 9 of 15 waswas vested in 1916 in one Ettiewas vested in 1916 in one Ettie A. Sprague. Id. at 222, 322 P.2d at at 222, 322 onon July 2, 1937, a tax deed to the state ofon July 2, 1937, a tax deed to the state of California was recorded.on July fromfrom the state to Warren and from the state to Warren and Frank Kellogg wfrom the state to Warren and Fr deeddeed to the Kelloggs was a quitclaim deed from Ettie L. Sprague, Marian L. Sprague, John H. SpSprague,Sprague, and George P. Low to Wilbert Lee Lathrop and Mable Lathrop, husband anSprague, and G eventuallyeventually came into possession. eventually came into possession. Id. There was no record that Ettie A ofof her interest. Id. However, t However, the s However, the same Ettie A. Sprague died in 1936 (before the statestate was recorded), leaving her husband John H. Spraguestate was recorded), leaving her husband John H. Sp GeorgeGeorge P.George P. Low as heirs. Id. Ettie A. Sprague s estate was never probated. Ettie A. Sprague s e 576.Ask ⌕⧉ cite

[22]TheThe issue was whether a plaintiff in possession makes a prima facie case of case of ownercase of sufficientsufficient to withstand judgment of nonsuit. In California, once the plaintiff establishessufficient to withs thethe burden shifts to the defendant to establish that the burden shifts to the defendant to establish that title Kellogg court held that the Lathrops, the successors in interest to Ettie A. Sprague s heirs, made a primaprima facie case when they were in possession and derived titlecase when they were in possession and deriv Id. at 223, 322 at 223, 322 P.2d at 574. The at 223, 322 P.2d at 574. The appellate court s rationale was that at deat inin the heirs, subject onlyin the heirs, subject only to administration;in the heirs, subject only to administration; t that the right extends to a grantee of an heir. Id. at 225, 322 P.2d at 576.Ask ⌕⧉ cite

[23]AnotherAnother quiet title action was brought in Jordan v. Fay, ⟂98 Cal. 264Persuasive authoritynon-Guam — not binding under the reception rule, ⟂33 P. 95Persuasive authoritynon-Guam — not binding under the reception rule (1893). , 98 Cal. JordanJordan v. Fay, Edward P. Fay, owner o, Edward P. Fay, owner of , Edward P. Fay, owner of 3/4 undivid leftleft his estate to his wife, Maria Kate Fay. Id. at 265, 33 P. at 95. The remaining 1/4 undivided interestinterest was community property vestinterest was community property vested in Wiinterest was comm Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 10 of 15 1872,1872, Bridget Fay died intestate,1872, Bridget Fay died intestate, leaving four1872, Bridget Fay died intestate including the defendant, Thomas J. Fay. Id. In 1880, Bridget s husband William and one of their sons,sons, Jeremiah G. Fay, conveyed their interests to Mariasons, Jeremiah G. Fay, conveyed their interests to Ma MariaMaria Kate Fay conveyed theMaria Kate Fay conveyed the whole Maria Kate Fay conveyed the whole p transaction, conveyed this interest to the plaintiff, Jordan. Id. at 266, 33 P. at 95.Ask ⌕⧉ cite

[24]JordanJordan brought suit claiming ownership ofJordan brought suit claiming ownership of the property in TheThe court agreed,The court agreed, holding that, as to the 3/4 undivided interest that Maria KateThe court agr herher her husband, her husband, she had taken the entire interest notwithstanding the fact that the estate was setsettled,settled, nor property distributed. Id. at 266, 33 P. at 96. As to the 1/4 undivided interest, under CaliforniaCalifornia law of theCalifornia law of the time, theCalifornia law of the time, the rule in intestate succe communitycommunity property without administration. Id. at 267, 33 P. at 96. The court held that William FayFay was vested in all of Bridget Fay s 1/4 undivided interest in the propeFay was vested in all of Bridget Fa subsequesubsequentsubsequent conveyance to Maria Kate Fay was of the entire 1/4 undivided interest. Id. at 26 P. at 97. Jordan was, therefore, vested of the entire parcel in fee simple absolute. Id.Ask ⌕⧉ cite

[25]ApplyingApplying LathropLathrop v. Kellogg and Jordan v. Fay to the facts of this case, at Ms. to the fact herher heirs became immediately vested of herher heirs became immediately vested of her 1/7 undividedher heirs be thethe statutory scheme for intestate succession. Upon quitting their interest in favor of Ted, he became vestedvested of their estate. Ted s estatevested of their estate. Ted s estate vested of their estate. Ted s est simple.simple. As the record indicates that the quitclaimsimple. As the record indicates that the quitclaim deeds toto the signing of the lease, Ted s undivided 2/7 interest combined with the remaining interests to vest the Lessors in all 7/7 undivided interests in fee simple in Lot 1419. Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 11 of 15Ask ⌕⧉ cite

[26]SuchSuch a conclusion is not in contraventionSuch a conclusion is not in contravention of theSuch a conclu No.No. 86-0027A, SC Civ. No.No. 86-0027A, SC Civ. No. 1069-84 (D. Guam App. Div. Jan. 29,No. 86-0027A, S PangilinanPangilinan contracted for the sale of a lot in Tamuning with Rosalia C. PaltingPangilinan contracted for th C.C. Palting on September 10, 1975. It wasC. Palting on September 10, 1975. It was understood by the parties th waswas subject to probate proceedings in the estatewas subject to probate proceedings in the estate of Paul D. Palti settledsettled until April 11, 1980, oversettled until April 11, 1980, over four years later.settled until April 11, 1980 titletitle to the lottitle to the lot in Rosalia Palting Guerrero or Marilyn Palting but in other heirs. title to the lot in Ro seekingseeking to compel Rosalia Palting Guerrero andseeking to compel Rosalia Palting Guerrero and Marilyn Pal contract and a declaration that the other heirs had no interest in the property. Id.Ask ⌕⧉ cite

[27]TheThe Pangilinan v. Palting court held that, while under sectiocourt held that, while under section 14 prpropertyproperty passes immediately to heirs either by will or by statute, under subsection (b),property p immediateimmediate vesting of title at death is subject to possession by the administrator of the estate and the controlcontrol ocontrol of tcontrol of the Superior Court for administration, sale, or other distribution. Id. F similarsimilar case law interpreting the analogoussimilar case law interpreting the analogous California statutory heirs at death, it is subject to divestment by the probate court. Id.Ask ⌕⧉ cite

[28]ForFor Pangilinan, operation of sectionFor Pangilinan, operation of section 1401 meant that equitable title d ofof sale purportingof sale purporting to convey Rosalia Palting Guerrero s and Marilyn Palting'sof sale purportin toto the probate proceeding. However, as the final decree of the probateto the probate proceeding. However, a thethe lot in themthe lot in them, they had no intethe lot in them, they had no interest to convey to Pangilinan. I that Pangilinan had no interest in the lot that was purportedly conveyed to him. Id. // // Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 12 of 15Ask ⌕⧉ cite

[29]LikeLike PanPangilinan, title vests immediately in Ms. Hill s heirs subject to probate of th, title ve interests.interests. In Pangilinan, after probate, after probate Rosalia Palting, after probate Rosalia Palting Guerrer toto take any interest into take any interest in the estate of Paul D. Palting. to take any interest in the estate of Pau applicationapplication of the law of wills and intestacy, Rosalia Palting Guerrero and Marilynapplication of the law deviseesdevisees or intestate takers who succeeded to Paul D. Palting s estate.devisees or intestate takers who succ Hill sHill s intHill s intestate heirs were apparently vested of her 1/7 interest; otherwise, Ted Nelson would Hill havehave succeeded to their 1/7 undivided interest in the lease property. Thhave succeeded to their 1/7 undivid RosaliaRosalia Palting GuerRosalia Palting Guerrero and Rosalia Palting Guerrero and Marilyn Palting di succession and were not vested, Ms. Hill s heirs were takers under intestate succession.Ask ⌕⧉ cite

[30]UnderUnder theUnder the same rationale, the Lathrop v. Kellogg successors in interest successors in intere establishedestablished ownership sufficient to chalestablished ownership sufficient to challenge established ow holdingholding of Jordan v. Fay, the, the surviving spouse s conveyance, the surviving spouse s conveyance of his waswas awas a conveyance of the entire 1/4 undivided interest, which he took from his wife by intewas a con succession. In Lathrop v. Kellogg, Jordan v.Lathrop v. Kellogg, Jordan v. Fay, and Pangilinan v. Palting,, the re interestsinterests vested immediately upon death of the decedent, and their respectivinterests vested immediatel eithereither aseither as an heir under rules of intestate succession or as a devisee under a will. either as an heir under asas comparison sayas comparison say no more than the rule that an heir takes so longas comparison say no more byby intestate succession. Likewise, Appellant Ted Nelby intestate succession. Likewise, Appellant Ted Nel heirs.Ask ⌕⧉ cite

[31]TheThe conclusion that the NelsonsThe conclusion that the Nelsons were vestedThe conclusion that the Nel ofof years necessarily of years necessarily meansof years necessarily means that there was neither a breach of th to convey. Powell explains breaches of the covenant of seisin: Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 13 of 15 SinceSince the covenant guarantees that the grantor isSince the covenant guarantees that the grantor is seis ofof the land conveyed, if thatof the land conveyed, if that estate shoof the land conveyed, if that esta physicaphysicalphysical prphysical premises, a breach will have occurred. The same is true if ownersh lackinglacking in any appurtenancelacking in any appurtenance to the basic estate conveyed. lacking in any estateestate is subject to an encumbrance or servitude is not a breach of the covenestate is subject to a SuSuchSuch interests do not affect the basic seisin of the grantor. In effect, this princi of the grantor. In recognizesrecognizes that arecognizes that a personrecognizes that a person may be seised of an estate re it may be. & POWELL , POWELL ON REAL PROPERTY § 81A.06[2][a][iii], at 81A-116.Ask ⌕⧉ cite

[32]HemlaniHemlani argues that, at conveyance, the Lessors didHemlani argues that, at conveyance, the Lesso because therebecause there was a possibility that a competing claimant would bring athat a competing claimant w argueargue that hisargue that his possession was disturbed. Therefore, to proveargue that his possession was distur werewere not seised of a ninety-nine-year tenancy of years because Ms. Hill s estate in thewere not seised of a nine sstillstill subject to divestment through probate, and such state of title left the propertstill subject to divestmen appurtenance to the estate of years.Ask ⌕⧉ cite

[33]AnalysisAnalysis here begins bydiscussing Ms. Hill s interestAnalysis here begins by discussingMs. Hill s toto Ted Nelson. By statuteto Ted Nelson. By statute, to Ted Nelson. By statute, Ms. Hill s heirs took her 1/ simplesimple immediately uponsimple immediately upon her death, subject to competingsimple immediately upon hiddenhidden heirs, mortgagees, priorhidden heirs, mortgagees, prior transferees, and other thirdhidden heirs, mort 1/71/7 undivided interest in the property. In the case1/7 undivided interest in the property. In the case of a hidden heirsheirs would have would be fee simple subject to open.heirs would have would be fee simple subject to open. wouldwould have fee simple subject to an encumbrance. In the case of prior trwould have fee simple subject to thethe type of grant, the known heirs would take, ifthe type of grant, the known heirs would take, if at all, eithe casecase of other third party claimants, the known heirs would take fee simple subject to thirdcase of other thi claims.claims. Thus, the heirs interests were either some futureclaims. Thus, the heirs interests were either some feefee simple subject to open, or fee simple subject to an encumbrance unless Ms. HillMs. Hill hMs. Hill had Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion Page 14 of 15 conveyance taking the property out of what would be, at her death, her intestate estate.Ask ⌕⧉ cite

[34]ItIt follows that,It follows that, upon quitting their interests, Ted Nelson took title to the heirs It follows that, toto possible competing claims. However,to possible competing claims. However, as there were no competing cla havehave found that, upon ahave found that, upon applicahave found that, upon application of the rules of intes entireentire 1/7 undivided interest.entire 1/7 undivided interest. Therefore, afterentire 1/7 undivided interest. The succeeded in interest to the intestate heirs.Ask ⌕⧉ cite

[35]ItIt is of no consequence that the Lessors did not conclusivelyIt is of no consequence that the Lessors di whether or not they were vestedwhether or not they were vested in fee simple or not vested at all. The dispositiv tooktook the heirs itook the heirs inttook the heirs interest prior to conveyance of the tenancy at years to H probateprobate court sprobate court s judgment that the 1/7 undividedprobate court s judgment that the 1/7 undivide he took what the heirs had taken under intestacy.Ask ⌕⧉ cite

[36]HemlaniHemlani testifiedHemlani testified thaHemlani testified that he was unable to develop the p existenceexistence ofexistence of Ms. Hill s undivided interest. The ability to incorporate the property into his pl developmentdevelopment and mortgdevelopment and mortgagedevelopment and mortgage it must be the ap However,However, again, Ms. Hill in fact had no interest in the property. Ms. Hill s heirs took title by intestacy;intestacy; Ted Nelson acquired their interests prior to lease execution; and, uintestacy; Ted Nelson acquiringacquiring 7/7 undividedacquiring 7/7 undivided interestsacquiring 7/7 undivided interests in the ninety-n allall appurtenances to theall appurtenances to the leasehold. all appurtenances to the leasehold. Under Hemlani s in ofof an estateof an estate until either recordation of an interest or entry of probate judgment. However,of an estate u wouldwould mean that no conveyance ofwould mean that no conveyance of an estate could bewould mean that no rulerule is patentlyerroneous and wouldrule is patentlyerroneous and would have transferors relyrule is patentlyerro issuanceissuance of a certificate oissuance of a certificate of tiissuance of a certificate of title to effect a transfer Kishore Hemlani et al v. Theodore S. Nelson et al, Opinion is to give evidence of chain of title. Page 15 of 15 III. CONCLUSIONAsk ⌕⧉ cite

[37]TheThe Nelsons had fee simple title to the estate of years they purported to conThe Nelsons had fee s vestedvested in fee simple, theyvested in fee simple, they did not breach thevested in fee simple, they did not breac of right to convey. of right to convey. Not breaching any ofof right to convey. Not breaching any of these covena with Hemlani. Accordingly, the judgment of the trial court is AFFIRMED. PETER C. SIGUENZA Associate Justice JUNE S. MAIR Justice Pro Tempore BENJAMIN J. F. CRUZ Chief JusticeAsk ⌕⧉ cite