Chase Manhattan Bank, N. A. v. Gems-By-Gordon, Inc.
Opinion
Opinion
Poole, J.
The Chase Manhattan Bank, N.A. (Chase) seeks to impose and foreclose an equitable mortgage on real property located in Agana, Guam. The equitable mortgage is said to arise from an agreement executed in connection with a loan transaction. Both the Superior Court of the Territory of Guam and the United States District Court for the District of Guam, Appellate Division, refused to enforce the negative pledge as an equitable mortgage. We affirm.
I
The facts are not disputed. Gems-by-Gordon, Inc. (Gems) holds a sublease on property described as “the eastern portion of Lot No. 2033, Lot No. 2019 and the old Agana Dededo Road, municipality of Dededo, not presently occupied by A & W Drive In.” The term of the sublease runs from September 1,1971 through August 31, 2017. Sometime before September 1, 1976, Gems was obligated to construct and did construct an office building on the property known as the “My Way Building.” Gems leased the building to American West, Inc. The principal officer of both Gems and American West is Gordon E. Mailloux.
On August 14,1974, Mailloux executed on behalf of Gems a negative pledge on the property in favor of Chase. The pledge provides: