One who enters into possession of land in virtue of an agreement
or understanding that he is to be a purchaser of it cannot be held
liable for use and occupation if the purchase be actually
concluded.
In July, 1863, Major Hunt, of the Corps of Engineers, entered
into negotiations with one Carpenter, owner of an island in
Narragansett Bay, for the purchase of it by the United States for
military uses, and a parol contract for the purchase and sale was
then formally concluded, the terms being approved by the Secretary
of War. The price, as stipulated, was $21,000. In August following,
the officers of the government, with the consent of Carpenter,
entered into possession of the island and began to prepare for
fortifying it.
The possession then taken they have ever since
retained. Upon examination, however, it was found and so
reported by the Attorney General that under an Act of May 1, 1820,
[
Footnote 1] an executive
department had by law no authority to purchase land on account of
the government. Consequently the verbal arrangement with Carpenter
remained unconsummated, until 1866. On the 12th of June of that
year, Congress made an appropriation for the purchase of sites then
occupied, and proposed to be occupied for sea-coast defense, and on
the 7th of August next following, the purchase money of the island
($21,000) was paid to Carpenter, and
accepted by him without
any claim for interest or rents, so far as it appeared, and he
delivered a deed for the property to the United States. In
this state of things, Carpenter now, December 7, 1867, filed a
petition in the Court of Claims claiming compensation from the
United States for the use and occupation of the island from the
time the United States officers, with his consent, took possession,
after the verbal
Page 84 U. S. 490
arrangement to purchase, until the deed was made and the
purchase money was paid -- that is, from August, 1863, to August,
1866.
The question was whether, upon the case stated, an action for
use and occupation could be sustained.
The Court of Claims, as appeared by its opinion, [
Footnote 2] considered that the law
(
i.e., the statute of 11 George II, chapter 19, § 14)
which gives the action for use and occupation always required that
some contract of demise should subsist -- in other words, that the
relation of landlord and tenant must be established; [
Footnote 3] that there was no such
relationship here. That independently of this, the claim rested on
an implied contract, but that where there was an express contract
to buy, a contract to pay rent could not arise by mere inference.
Relying on these views, and citing the English case of
Kirtland
v. Pounsett, [
Footnote 4]
it accordingly decreed a dismissal of the petition. From that
decree the claimant appealed.
Page 84 U. S. 493
MR. JUSTICE STRONG delivered the opinion of the Court.
Though it has sometimes been said that an action of debt, or
assumpsit, for the use and occupation of land can be maintained
only when the relation of landlord and tenant has existed between
the plaintiff and defendant, this is not strictly accurate if it be
meant that a demise must be in fact proved. It is true that the
statute of 11 George II, chapter 19, § 14, enacted that the action
might be sustained when a demise has been proved, but the action
existed before the statute was enacted, and the only effect of the
statute was to enlarge its sphere. Privity of contract is doubtless
essential in all cases. But when the defendant has entered and
occupied by permission of the plaintiff without any express
contract, the law implies a promise on his part to make
compensation or pay a reasonable rent for his occupation. In such a
case, the consent of the owner to the defendant's entry, followed
by such entry and by subsequent occupation, may be considered
equivalent to a demise, or at least
prima facie evidence
of a demise. This is because a demise with a corresponding
agreement to pay rent or make compensation for the use of the
property is consistent with an unexplained entry by the owner's
consent, and because it is a reasonable presumption that occupation
thus taken was intended to be paid for. No reason, however, for
such an implication exists when an express contract or an
arrangement between the parties shows that it was not intended by
them to constitute the relation of landlord and tenant, but that
the occupation was taken and held for another purpose. And this is
shown when the entry has been made in pursuance of an agreement to
purchase, whether that agreement was in writing or in parol. Such
an agreement sufficiently explains the allowed entry, U.S. without
the necessity of resorting to any implication of a contract other
than that actually made. Accordingly, it was ruled in
Kirtland
v. Pounsett, [
Footnote 5]
that an action for use and occupation cannot be maintained against
one who took possession under a
Page 84 U. S. 494
contract of sale which failed afterwards to be consummated in
consequence of the vendor's inability to make title. It is true it
appeared in that case the purchase money had been paid, and by the
use of it the vendor might have been regarded as compensated for
the defendant's occupation, yet C.J. Mansfield said: "A contract
cannot arise by implication of law under circumstances the
occurrence of which neither of the parties ever had in
contemplation." The same principle was asserted in
Rumball v.
Wright. [
Footnote 6] And
in the later case of
Winterbottom v. Ingham, [
Footnote 7] the same doctrine was
declared, though the purchase money had not been paid, and the
reason given was, that when the defendant was let into possession,
both parties understood that he made no promise to pay rent. The
holding was in the expectation that title would be made and the
purchase completed. There are other decisions to the same effect.
It is true that in
Howard v. Shaw, [
Footnote 8] it was held that after a contract of
sale had been rescinded, an action for use and occupation might be
maintained against a defendant who had remained in possession with
the consent of the owner, but without any title or contract for the
purchase of the land, and that a recovery might be had for the
possession retained after the contract of purchase was terminated.
But he was not held liable for rent during the time the contract
subsisted, and he could not have been for the obvious reason that
the contract was inconsistent with any understanding that rent was
to be paid. And no case can be found, it is believed, in which one
who entered in virtue of an agreement or understanding that he was
to be a purchaser, has been held liable in an action for the use
and occupation of the land if the purchase was actually
concluded.
It is contended, however, on behalf of the present plaintiff
that the contract of purchase under which, or in the expectation of
the completion of which the United States entered, and under which
they continued to hold until the
Page 84 U. S. 495
deed was made and the purchase money was paid, was invalid; that
until the Act of Congress of 1866 was passed, no executive
department had authority to purchase the island, and that therefore
there was no legal contract for the purchase in existence until the
deed was made and the price paid. But if this be conceded, it can
make no difference. Let it be that neither party could have
enforced the parol arrangement, it is still true that it was
utterly inconsistent with any understanding that the parties
contemplated the one was to pay and the other was to receive rent
for the occupation of the property. The understanding of the
parties is the material thing. Unless it was in their contemplation
that compensation, other than the price stipulated to be paid for
the transfer of the title, should be made, as C.J. Mansfield said
in
Kirtland v. Pounsett, a contract to pay rent cannot
arise by implication of law.
The plain common sense of the case is that if the plaintiff was
entitled to anything beyond what he has received, it was to
interest on the purchase money from the time the possession was
taken until the price of the sale was paid. That he should have
demanded before he delivered his deed. Not having done so, but
having accepted the principal and consummated the sale, he cannot
now assert that the relation in which his vendee stood to him was
that of a tenant to a landlord, and recover interest in the shape
of damages for the breach of an implied promise to pay rent for the
use and occupation of the island. There is no room in the facts
found by the Court of Claims for the implication of any such
promise.
Judgment affirmed.
[
Footnote 1]
3 Stat. at Large 568.
[
Footnote 2]
6 Court of Claims 162.
[
Footnote 3]
It having been held in
Brett v. Read, 1 W. Jones 329
that where there had been an actual lease, action for use and
occupation would not lie, the statute of 11 George II, chapter 19,
§ 14, enacted that:
"It should be lawful for a landlord, where the agreement was not
by deed, to recover a reasonable satisfaction for the lands,
tenements, or hereditaments held or occupied by the defendant, in
an action on the case for the use and occupation of what was so
held or enjoyed; and if, on the trial of such action, any parol
demise, or any agreement (not being by deed) whereon a certain rent
was reserved, should appear, the plaintiff in such action should
not therefore be nonsuited, but might make use thereof as an
evidence of the quantum of damages to be recovered."
-- REP.
[
Footnote 4]
2 Taunton 145.
[
Footnote 5]
2 Taunton 145.
[
Footnote 6]
1 Carrington & Payne 589.
[
Footnote 7]
7 Adolphus & Ellis' New Series 611.
[
Footnote 8]
8 Meeson & Welsby 118.
