Aldan-Pierce v. Mafnas

FOR PUBLICATION IB THE SUPRE:� COURT 0� THE COMMONWEALTH OF THE NORTHERN MARI��A ISLANDS MARIAN ALDAN-PIERCE, ) APPEAL NO. 89-003 ) CIVIL ACTION �0. 86-86 Plaintiff/Appellee, ) ) vs. ) OPINION ) LEOCADIO C. MAFNAS, ) ) Defendant/Appellant. ) ____ ) Argued and Submitted July 30, 1990 Counsel for Defendant/Appellant: Theodore R. Mitchell, Esq. P.O. Box 2020 saipan, MP 96950 counsel for Plaintiff/Appellee: Donald c. Williams, Esq. Marcia K. Schultz, Esq. carlsmith, Ball, Wichman, Murray, Case, Mukai & Ichiki P.O. Box 241 CHRB saipan, MP 96950 Counsel for amicus curiae Steven L. Mayer, Esq. Saipan Bankers Association:1 Kent Walker, Esq. Howard, Rice, Nemerovski, Canaday, Robertson & .E'alk Three Embarcadero Center 7th Floor San Francisco, CA 94111 BEFORE: DELA CRUZ, Chief Justice, VILLAGOMEZ and BORJA, Justices. DELA CRUZ, Chief Justice: We are presented in this appeal with the issue of whether the 1The Saipan Bankers Association filed a brief urging affirmance of the trial court decision. 128 exercise of an option agreement ("option") to purchase real property in the Commonwealth violated the land alienation restriction of Article XII of the NMI Constitution ("Article XII'') if persons who are not of Northern Marianas descent thereby acquired an equitable fee interest in the land.2 The defendant, Leocadio C. Mafnas ( "Mafnas"), appeals a summary judgment order compelling specific performance· of the option. Aldan-Pierce v. Mafnas, Civil Action No. 86-86 (N.M.I. Tr. Ct. Oct. 15, 1986) (judgment). Finding no genuine issue of mat erial fact, the Commonwealth Trial court3 concluded that the option did not violate Article XII and was, therefore, enforceable. 4 Aldan-Pierce v. Mafnas, 2 CR 855 (C.T.C. 1986). A. Procedural and Factual Background Mafnas, a person of Northern Marianas descent, owns in fee simple Lot 008 B 25, situated at San Roque, Saipan. This property contains an area of 8,708 square meters. lofafnas and Antonia c. Villagomez ("Villagomez") --who is also of Northern Marianas descent--executed the option on September 15, 2Article XII--the pertinent portions of which are set forth in part IV, infra--restricts acquisition of permanent and long-term interests in real property within the Commonwealth to persons of Northern Marianas descent. 3Since renamed the "Superior Court of the Commonwealth of the Northern Mariana Islands11 pursuant to the Commonwealth Judicial Reorganization Act of 1989 , 1 CMC § 3101-3404. See 1 CMC § J201. 4The court also considered and rejected claims of undue influence and unconscionability that have not been raised in this appeal. 129 1984. Mafnas agreed to sell "a certain portion of Lot No. 008 B 17"5 to Villagomez or her designee by warranty deed. The option, which became effective upon execution, was to remain in effect until July 7, 1985. The option consideration of $500 was paid to Mafnas by Brian McMahon ("McMahon") , who is not of Northern Marianas descent. As directed by Randall T. Fennell ("Fennell") --who is also not of Northern Marianas descent--Villagomez6 timely exercised the option by notifying Mafnas in writing that she r;�ished to purchase the property. This notice (dated July 6, 1985) requires Z.Iafnas to obtain a certificate of title to the property and to deliver it and a \varranty deed to Villagomez, at 'llhich time the purchase price of $ 10 per square meter would be paid. Mafnas refused to comply. Villagomez subsequently assigned her interest under the option to Marian Aldan-Pierce ("Aldan-Pierce") , who filed the present action for specific performance on March 4, 1986. In his answer to Aldan-Pierce 's complaint, Mafnas alleged, inter alia, that Villagomez acted as Fennell and McMahon's agent-- and that Fennell engaged her as his agent to acquire for himself and McMahon a permanent and long-term interest in real property in violation of Article XII. 5The portion which Mafnas owns is Lot 008 B 25. bvillagomez was, at the time, employed by Fennell as his secretary. Fennell and McMahon are attorneys. 130 B. The Superior Court Ruling The trial court concluded that Villagomez was Fennell and McMahon's agent, and that they had control over her to (1 ) direct her to exercise the option, (2 ) turn over their purchase money to Mafnas after he executed a warranty deed to her, and (3) record the deed showing fee simple title in her name. However , the court determined that once Villagomez subsequently leases the property to Fennell and McMahon (as they had previously agreed) the agency relati onship will ·termi nate and a lessor-lessee relationsh i p w i l l commence: The 11control" of the principal over the agent to which ( Mafnas] bases his theory vanishes upon execution of the lease. There is no substance or merit to ( Mafnas'] argument that the prior agency or fiduciary relationship · continues and supercedes the lease agreement. Al dan-Pierce v . Mafnas , 3 CR at 864. Therefore , the court ruled, the option did not violate Article XII, and was enforceable. Mafnas appeals.7 II . We review a grant of summary judgment de novo. MPLC v. Kan Paci fic Saipan, Ltd. , No. 90-014 (N . M.I. Nov. 2 1, 1990) (amended opinion) . If there i s no genuine issue of material fact, the analysis shifts to whether the substantive law was correctly 7This appeal was initially taken to the Appellate Division of the District Court for the Northern Mariana Islands, which affirmed the trial court ruling. Aldan-Pierce v. Mafnas, 3 CR 32 6 (D.N.M.I. App. Div. 1988) . Mafnas subsequently appealed to the Ninth Circuit Court of Appeals. That court granted Mafnas' motion to dismiss the appeal on March 2 9, 1990. Mafnas filed an appeal of the trial court decision with this Court on May 15, 1989. Part III, infra , d iscusses the question of our jurisdiction over this appeal. 131 applied. Id. The sole issue Mafnas raises on appeal concerns the constitutional validity of the option. He contends that when Villagomez exercised the option, Fennell and McMahon acquired a freehold (equitable fee) interest in Commonwealth real property. This , he argues , violates Article XII.8 III. Before reaching the merits , •11e must address the threshold question of our j�risdiction. Aldan-Pierce has moved to dismiss this appeal on the ground that we lack jurisdiction. She contends that only the u.s. Court of Appeals for the Ninth Circuit (" Ninth Circuit" ) has jurisdiction to hear the appeal. We note that this appeal was pending before the Ninth Circuit on May 2 , 1989, the effective date of the Commonwealth Judicial Reorganization Act of 1989 , 1 CMC §§ 3101-3404 ( " Act" ). The Act transferred to this Court appellate jurisdiction over all Commonwealth cases pending before both the Appellate Division of the District Court for the Northe�n Mariana Islands ( "Appellate Division" ) and the Ninth Circuit. 1 CMC § 3109 (b). In Wabol v. Villacrusis, No. 89-005 (N.M. I. Dec. 11, 1989), we examined the validity of 1 CMC § 3109 ( b). We concluded that the statute violated neither the Covenant to Establish a Commonwealth �afnas initially raised (but subsequently abandoned) an issue concerning imposition of a sanction by the Appellate Division of the District Court for the Northern Mariana Islands. 1 32 of the Northern Mariana Islands in Pol i t i c a l Union w i th the United States of America, reprinted . in CMC vol. 1 at B-101 and in 48 u.s.c.A. § 1681 note (West 1987) ("Covenant"), nor 48 usc § 1694b(c), the federal statute empowering the N inth circuit to hear appea l s from Appe l l ate D i v i sion rul ings. subsequent to our Wabol rul ing , the Ninth C i rcuit rendered a contrary dec i sion concerning the val id ity of 1 CMC § j109(b): (A]lthough the Act by its terms appl i e s retroact ive ly to appeals from local trial courts which were pending in the appellate division of th e district court when it w a s passed .NMI i s without power und er the Covenant t o • . divest [ th e Ninth C i rcuit] of jur isdiction over appeals properly filed from a f ina l order o f the appellate division of the district court entered b efor e passage of th e Act. WaboLv. Villacrusis, 908 F.2d 411, 419 (9th C i r. 1990) (amended opinion). We are faced with the question o f whether we should defer to this decision. For several rea s ons, we dec l ine to do so. First., we note that the appeal of th is case to the Ninth circuit was dismissed upon Mafnas 1 voluntary motion. The Appellate Div i s io n subs�quently issued a mandate- -ba sed on its earlier decision9--to the Commonwea lth s u pe r i o r court. When cha l l enged on appea l, the mandate was vacated by the N inth C i rcu it , wh ich ruled that the Appellate Division lacked j ur i sd ict i on over the appeal a fter Ma y 2, 1989 . Mafnas v. United states Di strict court for the Northern Mariana Isl ands, 919 F.2d 101 (9th cir. 1990). In its dec i s ion, the N i nth Circu it recogn ized the instant appeal taken by 9See n. 7, in fra. 133 Mafnas to this Court. Recently, the Ninth Circuit considered an appeal from our issuance of a writ of prohibition to the Superior Court10 ordering it to disregard the Appellate Division's mandate. In that decision, Mafnas v. Superior Court of the Commonwealth of the Northern Mariana Islands, No. 90-16078 {9th Cir. June 18, 1991) {19�n WESTLAW 102977), the Ninth Circuit dismissed the appeal as moot because of its earlier decision to vacate the Appellate Division's mandate; the court again recognized the instant appeal to this Court. Second, we take judicial notice of the fact that the Ninth Circuit's ruling in Wabol is the subject of a petition for reconsideration. Third, our Wabol ruling has been appealed to the Ninth Circuit pursuant to Covenant Section 403. 11 That appeal has not been decided. Although the Ninth Circuit ' s Wabol ruling notes that this Court's decision need not be accorded full faith and credit {since it is subject to review by that court) the Ninth Circuit has not yet reviewed our decision. Thus, we shall follow our decision in Wabol and consider the appeal in this case. 1 CMC § 3109 (b) . Aldan-Pierce's motion to dismiss for lack of jurisdiction is denied. 1�afnas v. Superior Court, Orig. Action No. 90-003 {N. M.I . June 28, 1990). 11covenant section 403 provides that the Ninth Circuit has jurisdiction over appeals from our decisions involving federal questions for the first fifteen years of this Court's existence. See Sablan v. Iginoef, No. 90-008 (N. M.I. Nov. 13, 1990) {order concerning transmittal of appeal to the Ninth Circuit). 134  IV. The issue confronting us relates to Covenant Section 805 ("Section 8 05"), i n addition to Article XII. In analyzing the validity of the exercise of the option, it is necessary to first examine Section 805, which requires that the Commonwealth regulate the alienation of permanent and long-term interests in real property to restrict acquisition of.such interests to persons of Northern Marianas descent. Next, we will examine Article XII to determine how Section 805 was implemented. We shall thereafter ; .nalyze the facts of this case to determine whether the trial court ruled correctly. A. Section 8 0 5 Section 8 0 5 provides, in pertinent part: Except as otherwise provided in this Article and notwithstanding the other provisions of this Covenant, or those provisions of the Constitution, treaties or laws of the United states applicable to the Northern Mariana Islands, the Government of the Northern Mariana Islands, in view of the importance of the ownership of land for the culture and traditions of the people of the Northern Mariana Islands, and in order to protect them against exploitation and to promote their economic advancement and self-su � ficiency: (a) will until twenty-five years after the termination of the Trusteeship Agreement, and may thereafter, regulate the alienation of permanent and long-term interests in real property so as to restrict the acquisition of such interests to persons of Northern Marianas descent • • • . (Emphasis added.)12 12covenant section 105 provides, inter alia, that Section 8 0 5 ••may b e modified only with the consent of the Government o f the United states and the Government of the Northern Mariana Islands. " 135  "[I]t w i l l b e ent i rely up to the Government o f the Northern Marianas and the people o f the N o rthern Mar i an a s to determine the p recaut ions wh i ch they w i l l take t o p revent the i r l a nd from being a l ienated . " Marianas Po l it i c a l S tatus Comm i s s i on, Sect i on-by- Sect i on Ana lys is of the Covenant 117 (1975) . 13 De f in i t ion o f the operative terms and phrases of Sect ion 8 05--inc l uding "long term interests in real p roperty, " "acqu i s i t i on, " and "persons of Northern Mariana I s l ands descent"--wa s l e ft to the NMI as its respons ibil ity in implementing the prov i s ion . Id . B. Article XI I The sole imp l ement ing veh i c l e for Sect ion 8 05 i s Art i cle X I I , which became operat ive when the NMI Const itut ion went into e f fect on January 9, 1978. 1 We now examine each of the o r ig i n a l p rov i s i ons 4 of Art i cle X I I. Sec t i on 1 prov ides: The acqu i sit i on of permanent and long-term interests in real property w ithin the Commonwea lth sha l l be restricted to persons o f Northern Marianas descent . Sec t i on 2 provides: The term acqu i s it ion u sed in sec t i on 1 includes acqu i s ition by sa le, lease, g i ft, inheri tance or other means . A t ran s fer to a spouse by inheritance is not an acqui s it ion under this sec t ion . A trans fer to a mortgagee by means o f a forec l o sure on a mortgage i s not an acqu i s i t i on i f the mortgagee does not hold the permanent or l ong-term interests in rea l p roperty for 13 The Mar ianas Po l it ical S ta tu s Comm i s s i on negot i ated the Covenant . 14 Cert a in p rov i s ions o f Art i c l e XI I were amended in 1985, a fter the opt i on at i s sue was exerc i sed . None o f the amendments have bearing upon our ana l ys i s . 136  more than five years. 15 Section J_provides: The term permanent and long-term interests in real property used in section 1 includes freehold interests and leasehold interests of more than forty years16 including renewal rights. Section 4 provides: A person of Northern Marianas descent is a person who is a citizen or national of the United States and who is of at least one-quarter Northern Marianas Chamorro or Northern Marianas Carolinian blood or a combination thereof or an adopted child of a person of Northern Marianas descent if adopted under the age of eighteen years. For purposes of determining Northern Marianas descent, a person shall be considered to be a full­ blooded Northern Marianas Chamorro or Northern Marianas carolinian if that person was born or domiciled in the Northern Mariana Islands by 1950 and was a citizen of the Trust Territory of the Pacific Islands before the termination of the Trusteeship with respect to the Commonwealth. Section 5 sets forth requirements for corporations to qualify as a "person of Northern Marianas rlescent." Article XII, § 6 provides, in pertinent part, that "fa]ny transaction in violation of section 1 shall be void ab initio." Clearly, under Article XII only persons of Northern Marianas descent may acquire permanent and long-term interests in real property in the Commonwealth. The only exceptions are (a) transfers to a spouse (who is not of Northern Marianas descent) by inheritance in certain circumstances, and (b) transfers to a mortgagee (such as a bank or lending institution) by foreclosure on a mortgage if the mortgagee does not hold an interest in the 15Extended to ten years by amendment adopted in 1985. 16Extended to fifty-five years by amendment adopted in 1985. 137 property for more than a specified period. Article X II, § 2. In analyz ing the option at issue, we will consider the intent and purpose of Section 805 and Article XII.1 7 v. The parties agree that there is no genuine issue of material fact concerning the constitutional validity (or invalidity ) of the exercise of the option. We concur. A review of the affidavits and documents supporting and opposing Aldan Pierce's motion for summary judgment confirms that the material facts are not in dispute. A. The Options The idea of an option to purchase or lease the San Roque property was apparently conceived before August 1, 1980, by Fennell and other persons who are also not of Northern Marianas descent. Declaration of Randall T. Fennell (August 27, 1986 ) (hereafter "Fennell Affidavit " ) . The record reveals that no fewer than five options preceeded the option at issue in this appeal. The first, dated August 1, 1980, was negotiated by one Howard Luke. Fennell Affidavit at 1. This option, executed by Mafnas, as " Owner" , and Luke and Fennell, as " Buyers" , states, in part: 2. Agreement to Sell or Lease. owner agrees to convey in fee simple absolute said property, and all of . it, or any portion thereof required by Buyers, to Buyers, 1 7we note that Aldan-Pierce does not challenge the validity of either provision under the u.s. Constitution. Cf. Wabol v. Muna, 2 CR 963 (D.N.M.I. App. Div. 1987 ) , in which the Appellate Division considered and rejected constitutional challenges to both provisions. 1 38  or their designee pursuant to the terms of this agreement, provided, however, that if at any time from the execution of this agreement it is not legal under the laws and Constitution of the Commonwealth of the Northern Mariana Islands for Buyers to hold in fee interest, then Owner agrees to convey said property in fee simple to any person designated by Buyers who has the legal capacity to own said property in fee simple absolute, or to lease said property to Buyers for as long a term as is legally permissible. 18 This option expired, unexercised, on April 30 , 198 1. A second option was executed on May 1, 198 1 , by Mafnas, as "Owner", and McMahon and Fennell, as "Buyers. " It is essentially the same as the first option, containing a paragraph identical to the provision quoted above. This option expired, unexercised, on October 3 1 , 19 8 1 . I A third option was executed on April 7, 19 8 2 , again by Mafnas, as "Owner", and McMahon and Fennell, as "Buyers. " Except for the dates, it is essentially the same as the first and second options. This option expired, unexercised, on June 7 , 19 82. A fourth option was executed on July 1 3 , 1983, by Mafnas, as "Owner, " and Fennell as "Buyer. '' This option was for a forty-year lease. 19 It expired, unexercised, on July 12 , 1 9 8 4. A fifth option--again, to lease the property--was executed by Mafnas, as "Owner, " and Villagomez, as "Buyer, " on July 7 , 1984, before the fourth option had expired. Other than a difference in 1SWe note that Article XII would clearly have been violated if Mafnas had conveyed his fee interest in the property to Luke and Fennell under this option. 19we note that had.Mafnas leased the property to Fennell under this option, Article XII would not have been violated. 139 consideration and a reduction in the area to be leased, this option was essentially the same as the fourth option. It expired, unexercised, on July 7, 19.8 5 . A sixth option--executed on September 15 , 19 8 4 , before the fifth option expired--is the option the exercise of which is at issue. This option enabled Vill agomez to purchase Mafnas' fee interest to the entire property. As noted above, Villagomez exercised the option on July 6, 19 8 5 , a day before it was to expire. According to the option, Villagomez may assign all or any part of her rights, duties, and obligations. She assigned her rights to Aldan-Pierce on January 13, 19 8 6 , "for $10.00 • . • and other good II and valuable consideration Excerpts of Record at 8. B. The Affidavits According to Vill agomez: 2. In 19 8 4 , I was approached by Hr. Brian McMahon and Mr. Randall Fennel l, who asked if I wou ld be interested in holding title to property in san Roque owned by Leocadio Mafnas. 3. Under my agreement with Mr. Fenne l l and Mr. McMahon, they wou ld provide the money for an option agreement between me and Mr. Mafnas. If the option was exercised, they would provide the money to purchase the property. I, in return, would grant them a lease for the maximum term permitted by law for minimal consideration. Affidavit of Antonia c. Vil l agomez (July 25 , 19 86) (hereafter "Villagomez Affidavit "). According to Fennel l, he and Mafnas (who was advised by a "Mr. 140 Magofna") negotiated the option at issue. Fennell Affidavit at 2. Fennell also stated that he and McMahon had an oral agreement with Villagomez (and subsequently with Aldan-Pierce) to "provide the money for the land purchase in return for a lease for the maximum iength allowed by law. " Id. "Ms. Villagomez left negotiation of the options to Mr. McMahon and I. 11 Id. McMahon echoed Fennell's statement regarding their agreement with Villagomez. Declaration of Brian T. McMahon (Aug. 27, 1986) (hereafter "McMahon Affidavit") . According to Mafnas, "both Mr. Fennell and Mr. McMahon[ ] made it clear to me that the • . . Option Agreement, although it was to be executed by Antonia c. Villagomez, was for the sole benefit of Mr. Fennell and Mr. McMahon. " Affidavit of Leocadio c. Mafnas (hereafter "Mafnas Affidavit") at 2 (Oct. 7, 1986). He further stated that Mcr1ahon personally paid him the $500 consideration for the option. IQ. 20 "I am not, nor have I ever been, a 'passive agent, engaged and controlled by Attorney Fennell • • • ' as alleged [by Mafnas ] • " Declaration of Marian Aldan-Pierce (Aug. 27, 1986) (hereafter "Aldan-Pierce Affidavit") . She also stated: 6. I have agreed with Randall Fennell and Brian McMahon that, if I prevail in this action, I will lease them the subject property for the maximum length provided by law. They in return have agreed to provide the funds to exercise the option. I will retain the fee ownership. 20Although untimely filed, this affidavit was considered by the trial court when it ruled upon Aldan-Pierce's motion for summary judgment. Aldan-Pierce v. Mafnas, 2 CR at 858-59. 141 Aldan-Pierce Affidavi t at 2. At the summary judgment hearing, the tr i al court allowed Aldan-Pierce to f i le a reply memorandum to Mafnas• memorandum in opposition by the following day, but made no mention of permission to f ile supplemental affidavits. Aldan-Pierce v. Mafnas, Civil Action No. 86-86, Transcript of Proceedings at 29 (October 8, 1986). Nonetheless, after the hearing Aldan-Pierce filed three supplemental affidavits in'addition to her reply memorandum. It is not clear whether the trial court considered these post-hearing affidavits in rendering summary judgment, there be ing no reference to them in its memorandum opinion. The court apparently did not act upon Mafnas' mot ion to strike the supplemental affidav i ts. The supplemental affidavits were evidently introduced to prove that the oral agreement between Aldan-Pierce and Fennell and HcMahon did not require Aldan-Pierce to hold or convey t itle to the property pursuant to their instructions . "Under our agreement, they receive a lease, but other than that what I do w i th the t itle is my business. 11 Supplemental Affidavi t of Mar ian Aldan-Pierce (Oct. 9, 1986) (hereafter "Aldan-Pierce Supplemental Affidavit"). VI. Since the material facts are not in d ispute, we must determ ine whether the law was correctly applied below. Kan Pacif ic Saipan, Ltd. , supra. We begin by noting that Fennell and McMahon--neither of whom 142 are of Northern Mar i anas descent 2 1 - -may not lega l l y acquire "pe rmananent and l ong-term interest s in real property w i th i n the Commonwealth . " Art i c l e XI I, § 1. Persons who are not o f Northern Marianas descent are prohibited from acquir i ng such interests by "sa l e, l ease, g i ft, inheritance or other means . " Art i c l e X I I , § 2. Any transact ion v i o l ating the const i tuti onal restriction i s void ab initio--void from the beginning , as if it had never occurred. Art i c l e X I I , § 6. A. "Freehold Interests" under Art i cle XII The "permanent and long-term interests" restricted from acqu i s ition by pers ons who are not of Northern Marianas des cent " includes freehold interests and leasehold interests o f more than f ifty-five years . " Art i c l e XII, § 3.u "Freeho ld interests are a l l types of ownership or titl e - - f e e s imp l e, fee t a i l , and l i fe II estate Comm ittee on Personal R ights and Natural Resources , Report to the [F irst NMI Const itut ional] Convention, Committee Recommendat ion No . 8: Restrict ions on Land Alienation at 7 (November 11 , 1976) . 23 A " freehold" i s: An estate in land or other real property, o f uncerta in durat ion; that i s , e ither of inheritance or which may poss ibly last for the l i fe of the tenant at the l east (as d i s t inguished from a l easehold) . . . . 21 Th i s po int i s not a t i ssue . 22 As noted in part IV B, in fra, prior to 1985 th i s prov i s ion spec i f i ed maximum l easehold interests o f f orty years . 23 I f neces sary, in construing const itut i on a l prov i s i ons we will consult legi slative h i story . Camacho v. Northern Marianas Retirement Fund, No . 90-007 (N . M . I . Sept . 21, 1990) . 143  An estate to be a freehold must possess these two qualities: (1) Immobility, that is, the property must be either land or some interest issuing out of or annexed to land; and (2) indeterminate duration, for if the utmost period of time to which an estate can endure be fixed and determined, it cannot be a freehold. Black's Law Dictionary 598 (5th ed. 1979). "An equitable estate is considered, to all intents and purposes, as a legal estate." 31 C.J.S. Estates§ 5 (1964). An equitable interest of indeterminate duration is encompassed within a freehold interest.24 The absence of any language excluding such interests from the restriction in Article XII leads us to conclude that they are within the restriction. on its face, the option at issue provides that a person of Northern Marianas descent will acquire title to the property if it is exercised. Mafnas argues that although Villagomez' name appears on the option, she (and now Aldan-Pierce, as her assignee) will acquire only bare legal title to the property, should he transfer 24This interpretation comports with the apparent intent of Section 805 in restricting acquisition of 11 interests" in real property: [N)ormal usage of the term in American law would cover any right to use or derive profit from land for any period of time. Thus, not only ownership and leases are covered; equitable interests, of the sort possessed by the beneficiary of a trust would • • •appear to be • • • reached. Office of Transition studies and Planning, Briefing Papers for the Delegates to the Northern Marianas constitutional Convention. Briefing Paper No. 12: Restrictions on Land Alienation at 19-20 (1976). See also Sorenson v. City of Bellingham, 496 P.2d 512, 514 (Wash. 1972) ("[f]reeholders are owners of either a legal or equitable title to real estate"): 31 c.J.S. Estates§ 1 (the term "interest" as applied to property "may include both legal and equitable rights"). 144 his title. He contends that Fennell and McMahon have already acquired an equitable fee interest in the property, in violation of Article XII. This occurred, he asserts, when Villagomez--acting as an agent-trustee--acquired the equitable fee interest upon exercise of the option. Initially, we must determine whether Villagomez acquired such an interest. B. Acguistion of Equitable Fee by Optionee "An option to purchase property is a contract wherein the owner, in return for valuable consideration, agrees with another person that the latter may buy property within a specified time upon expressed terms and conditions." Mohr Park Manor, Inc. v. Mohr, 424 P.2d 10 1, 104 (Nev. 1967), appeal after remand, Mohr Park Manor, Inc. v. Bank of Nevada, 490 P.2d 2 17 (Nev. 197 1). "[S]o long as it remains unaccepted, [an option] is a unilateral writing lacking mutual elements of a contract, but when accepted by (an] optionee, an executory contract, which is mutually binding on the parties, arises." Id. at 105; see also Anderson v. Overland Park Credit Union, 643 P.2d 120 (Kan. 1982). "[W]hen the optionee has made his election and the contract has ceased to be an option and has ripened into a mutually enforceable bilateral contract, it becomes subject to specific performance.�• Bobo v. ·Bigbee, 548 P.2d 224, 229 (Okla. 1976). The optionee becomes the owner of an equitable interest in the land. Phillips v. Tetzner, 53 A.2d 129 145 (Pa. 1947) ; Commonwealth v. Gerlach, 159 A.2d 9 15 (Pa. 1960) .25 Thus, when Villagomez exercised the option, she acquired an equitable interest in the property. Phillips, supra.26 We now consider whether the record supports Mafnas• contention that Villagomez acted for Fennell and McMahon through an agency- trust relationship. c. The Agency-Trust Relationship Agency An agent is a person who agrees to act for and is subject to the control of another. Repeki v. MAC Homes (Saipan) Co., Ltd., No. 90-002 (N.M.I. Mar. 14, 199 1) quoting Restatement (Second) of Agency§§ 1, 14 (1958) .27 An agency relationship must be based on 25An equitable conversion occurs when a contract for the sale of real property becomes binding upon the parties. The purchaser is deemed to be the equitable owner of the land and the seller is considered to be the owner of the purchase price. This, because of the maxim that equity considers as done that which was agreed to be done. Harrison v. Rice, 5 10 P.2d 633, 635 (Nev. 1973) . "Equitable conversion does not occur on the date of an option contract because such a contract is not subject to specific performance on that date, but where the option has been exercised, there is a conversion." 18 C.J.S. Conversion§ 6 (1990 ) . 26An assignee of an optionee may enforce vested contract rights. Beran v. Harris, 205 P.2d 107 (Cal. Dist. Ct. App. 1949) . Thus, as Villagomez• assignee, Aldan-Pierce may enforce the vested right that arose after the option was exercised. 27Two or more persons may act jointly to engage and authorize an agent to act on their behalf. Restatement (Second) of Agency§ 20, Comment f. Common law rules expressed in the Restatements are pertinent to our analysis under 7 CMC§ 340 1, which provides that such rules "shall be the rules of decision in the courts of the Commonwealth, in the absence of written law or local customary law 146 an agreement between the parties. Repeki, supra. An c.gency relationship may exist "although the parties did not call it agency and