«SHIOICHI UEDA, Individually and as Special Administrator of the Estate of RITA UEDA SINGEO, Deceased, MARIA UEDA, Plaintiffs-Appellants, v. BANK OF ...»
IN THE SUPREME COURT OF GUAM
SHIOICHI UEDA, Individually and as
Special Administrator of the Estate of
RITA UEDA SINGEO, Deceased,
BANK OF GUAM, SALVADOR S.
UEDA, SHIRLEY ANN UEDA,
Supreme Court Case No.: CVA04-022
Superior Court Case No.: CV1308-99
OPINIONFiled: November 23, 2005 Cite as: 2005 Guam 23 Appeal from the Superior Court of Guam Submitted on August 17, 2005 Hagåtña, Guam
For Plaintiff-Appellants: For Defendant-Appellees:
Richard A. Pipes, Esq. Daniel J. Berman, Esq.
Law Offices of Richard A. Pipes Berman, O’Connor, Mann & Shklov BankPacific Bldg., Ste. 201 Ste. 503 Bank of Guam Bldg.
825 S. Marine Dr. 111 Chalan Santo Papa Tamuning, Guam 96911 Hagåtña, Guam 96910 Ueda v. Bank of Guam, Opinion Page 2 of 14 BEFORE: ROBERT J. TORRES, JR., Presiding Justice;1 MIGUEL S. DEMAPAN, Justice Pro Tempore, RICHARD H. BENSON, Justice Pro Tempore.
Plaintiff-Appellants Shioichi Ueda and Maria Ueda (“Uedas”) appeal from a Judgment and  grant of summary judgment by the Superior Court of Guam. Specifically, the Uedas argue that (1) the trial court erred in: (1) granting summary judgment to Defendant-Appellee, Bank of Guam, and denying their motion for partial summary judgment on the declaratory relief claim, (2) qualifying Mr.
Ron Ramos as an expert witness at trial; and (3) finding that the fair rental value of the subject property is $700.00 per month. We reject these arguments and affirm.
Shioichi Ueda and Maria Ueda executed a deed conveying Lot No. 1-R1, Block No. 3, Tract  No. 115, Mangilao, Guam (“Mangilao lot”) to their children, Salvador Ueda and Rita Ueda, as joint tenants. The deed (“Gift Deed”), recorded with the Office of the Recorder, Department of Land
Management, contained a clause which reads in pertinent part:
This grant is made subject to the following agreement, to wit, that the grantees shall not lease, sell or convey or in any manner whatsoever alienate the above described property for a period of at least five (5) years from the date thereof.
Should the grantees herein named lease, sell, convey, or in any manner whatsoever alienate the above described property before the expiration of the five (5) year period, then this grant shall be null and void and the title of the property shall revert to and be vested in the Grantors, their heirs and assigns.
TO HAVE AND TO HOLD the same, all and the singular, the abovementioned and described premises, in fee simple, together with all buildings, improvements, rights, easements, privileges thereon and thereto belonging or appertaining or held and enjoyed therewith, unto GRANTEE, the heirs, successors of and assigns, forever.
Appellant’s Excerpts of Record (“ER”), tab 1 (Complaint, Ex. A, p.2).
Rita Ueda passed away leaving Salvador Ueda as the sole title holder to the Mangilao lot.
 Salvador Ueda and his wife later executed a promissory note and mortgage on the Mangilao lot with power of sale to Bank of Guam for a secured loan of $115,500.00. Salvador Ueda defaulted on his loan payments. As a result, Bank of Guam issued a notice of sale under the mortgage and set a foreclosure sale date.
On the eve of the foreclosure sale, Shioichi and Maria Ueda filed a complaint for declaratory  judgment, preliminary and permanent injunctions and damages in the Superior Court of Guam. The Uedas argued that they were the proper title holders because Salvador Ueda’s mortgage on the Mangilao lot violated the restraint on alienation contained in the Gift Deed. Bank of Guam subsequently filed its answer and counterclaim.
Bank of Guam filed a motion for summary judgment on the Uedas’ complaint and the quiet  title counterclaim. The Uedas opposed the motion and filed a motion for partial summary judgment on the declaratory relief claim in the complaint.
The trial court granted summary judgment to Bank of Guam on the Uedas’ complaint  reasoning that the Uedas had no interest in the Mangilao lot because the restriction of alienation contained in the Gift Deed was void in violation of Title 21 GCA § 1254. The trial court denied summary judgment on the quiet title count and the Uedas’ motion for partial summary judgment.
Bank of Guam filed an additional motion for summary judgment on its counterclaims to quiet  title and wrongful injunction. The trial court granted summary judgment in favor of Bank of Guam on its counterclaims, but denied summary judgment on the damages.
A bench trial commenced before the trial court. During trial, Bank of Guam sought to qualify  Mr. Ron Ramos as an expert witness to testify on the valuation of Guam real property. Over the
in his estimation, the rental value for the Mangilao lot and house would range from $975.00 per month to $1400.00 per month.
The trial court issued its Findings of Fact and Conclusions of Law on the damages issue and  concluded the fair rental value of the Mangilao lot was $700.00.
The trial court subsequently issued a Decision and Order and entered a Judgment on the  docket. This appeal followed.
This court has jurisdiction over an appeal from a final judgment pursuant to 48 U.S.C. 1424a)(2) (Westlaw through Pub. L. 109-96 (2005)) and Title 7 GCA §§ 3107, 3108(a) (Westlaw through Guam Pub. L. 28-063 (2005)).
A trial court’s grant of summary judgment is reviewed de novo. Guam Hous. & Urban  Renewal Auth. v. Pac. Superior Ents. Corp., 2004 Guam 22 14. A trial court’s decision on the admissibility of expert testimony is reviewed for an abuse of discretion. In re N.A., 2001 Guam 7 19. “The fair market value of property at a given time is a question of fact.” Guam Bar Ethics Comm. v. Maquera, 2001 Guam 20 22. A trial court’s findings of fact are reviewed for clear error.
Guam Imaging Consultants, Inc. v. Guam Mem’l Hosp. Auth., 2004 Guam 15 15.2
A. Restraint on Alienation The Uedas argue that the trial court erred in holding that the restriction on alienation  contained in the Gift Deed was void under Title 21 GCA § 1254. Section 1254 provides
“[c]onditions restraining alienation, when repugnant to the interest created, are void.” Title 21 GCA § 1254 (Westlaw through Guam Pub. L. 28-063 (2005)). We will conduct a three-part analysis when evaluating the validity of a restraint on alienation under section 1254: (1) characterizing the type of interest conveyed; (2) identifying the type of restraint created; and (3) determining whether the restraint is repugnant to the interest.
First, neither party disputes that Shioichi and Maria Ueda conveyed a fee simple to Salvador  and Rita. Furthermore, the Gift Deed conveyed a fee simple defeasible because it made the grant of fee simple subject to a restriction.3 The Uedas therefore conveyed either a fee simple determinable4 or fee simple subject to condition subsequent5. Although there is a constructional preference in favor of an estate subject to condition subsequent, Mountain Brow Lodge No. 82 v.
Toscano, 64 Cal. Rptr. 816, 818 n.2 (Ct. App. 1967), this distinction would have no affect on the outcome in the instant case. For purposes of our analysis, it is sufficient to observe the undisputed fact that the Uedas conveyed a fee simple.
Secondly, the Gift Deed created a forfeiture restraint.
 “Terms of a donative transfer of an interest in property which seek to terminate, or to subject to termination, that interest, in whole or in part, in the event of a later 3 “An estate in fee simple defeasible is an estate in fee simple which is subject to a special limitation (defined in § 23), a condition subsequent (defined in § 24), an executory limitation (defined in § 25) or a combination of such restrictions.” Restatement (First) of Property § 16 (1936).
4 “An estate in fee simple determinable is created by any limitation which, in an otherwise effective conveyance of land, (a) creates an estate in fee simple; and (b) provides that the estate shall automatically expire upon the occurrence of a stated event.” Restatement (First) of Property § 44 (1936).
5 “An estate in fee simple subject to a condition subsequent is created by any limitation which, in an otherwise effective conveyance of land,
transfer constitute a forfeiture restraint on alienation (hereinafter referred to as a forfeiture restraint). A forfeiture restraint may apply to any attempted later transfer or only to some types of such transfers and may be limited or unlimited in duration.” Restatement (Second) of Property: Donative Transfers § 3.2 (1983). In the instant case, the Gift Deed contained a provision where any attempt by the grantees to alienate the property within a five year period would result in the forfeiture of their acquired interest. Therefore, the Gift Deed created a forfeiture restraint limited only as to duration.6 Finally, we must consider whether the forfeiture restraint imposed on the fee simple estate  in this case is invalid. Title 21 GCA § 1254 states that any restraint on alienation “repugnant to the interest created” is invalid. California cases, interpreting § 711 of the California Civil Code,7 have found conditions restricting the ability of an owner in fee simple to alienate their interest void.8 See Bonnell v. McLaughlin, 159 P 590, 590 (Cal. 1916) (holding that “[n]o doubt can be entertained but that this limitation or restriction upon the power of alienation, which is so important a right of ownership where a fee simple is conveyed, does violence to the interest conveyed and is therefore void.”); Murray v. Green, 28 P. 118, 120 (Cal. 1883) (“The reason why such a condition cannot be made good by agreement or consent of the parties, is that a fee simple estate and a restraint upon its alienation cannot in their nature co-exist.”) (citation omitted); Wharton v. Mollinet, 229 P.2d 861, 863 (Dist. Ct. App. 1951) (holding that “[t]he right to own property in fee simple, but with a 6 The type of restraint found in the instant case, namely a forfeiture restraint limited only as to duration, can be distinguished from restraints on alienation qualified in other ways, such as manner of alienation or the exclusion of certain groups of transferees. See Restatement (Second) of Property: Donative Transfers § 4.2 cmt. n, r, and s (1983).
7 W e find California caselaw to be persuasive authority in the interpretation of Title 21 GCA § 1254, as that section was derived from California Civil Code § 711. See People v. Superior Court (Laxamana), 2001 Guam 26 8 (stating that “[b]ecause Guam’s statute is derived from the California Code of Civil Procedure, we look to the substantial precedent developed within that state to assist in interpreting parallel Guam provisions.”).
restricted right to sell it, cannot be created either by deed or by agreement. Any such restriction of the right of alienation in an instrument conveying a title in fee simple is void, and the void provision is separable from the title created.”). Furthermore, “[t]he rule which prevails in most jurisdictions of this country... is that the ownership of land by legal title in fee carries with it as an incident of the estate the right to sell, mortgage, or otherwise alienate the property at any time; consequently, in general at least, any provision of an instrument of conveyance or of any later instrument which purports to prohibit or restrain the conveyee or owner in fee from alienating the property or to withhold from him the right or power to alienate, whether for the entire period of his life or for some lesser time is void. The ground usually assigned for the rules is that the restraint is repugnant to the fee...”.
W. W. Allen, Annotation, Validity of Restraint, Ending Not Later than Expiration of a Life or Lives in Being, On Alienation of an Estate in Fee, 42 A.L.R. 2d 1243 (1955) (footnotes omitted). Thus, any condition that seeks to prevent an owner in fee simple from exercising the right of alienation in any manner whatsoever is repugnant because “[t]he right of alienation is an inherent and inseparable quality of an estate in fee simple.” Potter v. Couch, 141 U.S. 296, 315, 11 S. Ct. 1005, 1010 (1891).
We also find section 4.2 of the Restatement of Property instructive. Section 4.2(2) states, 
in relevant part:
A forfeiture restraint imposed in a donative transfer on a present interest in property that is not described in subsection (1) is invalid if the restraint, if effective, would make it impossible for any period of time from the date such interest becomes a present interest to transfer such interest without causing a forfeiture thereof.9
Restatement (Second) of Property: Donative Transfers § 4.2 (1983) (emphasis added).
Illustration 14 of the Restatement comments is particularly pertinent to our discussion:
14. O, owning Blackacre in fee simple absolute, makes an otherwise effective transfer thereof “to S (O’s son) and his heirs, but if S or his heirs during the next ten years attempt to transfer Blackacre by any means whatsoever, the land shall go over to D (O’s daughter) and her heirs.” The forfeiture restraint on Blackacre qualified only as to duration is invalid. S has an estate in fee simple absolute.
Restatement (Second) of Property: Donative Transfers § 4.2 cmt. l, illus. 14 (1983). The comment
preceding Illustration 14 explains:
the usual purpose of a [forfeiture restraint limited only as to duration] is the protection of the transferee against his or her own indiscretions. This may be a worthy objective, but its accomplishment is not permitted at the expense of freezing, even for a limited time, the ownership of a present interest in property not described in subsection (1).
Restatement (Second) of Property: Donative Transfers 4.2, cmt. l (1983) (emphasis added).