On appeal from a judgment of the District Court for the Fifth Judicial District of the county of Union.
For the appellant, Saul Neivert.
For the respondent, Louis J. Cohen.
Before Justices Trenchard, Heher and Perskie.
The opinion of the court was delivered by
HEHER, J. The state of demand is in two counts. The first alleges a letting of certain lands and premises by plaintiff to defendant at an "agreed monthly rental of $25," payable in advance; the second asserts, in the alternative, use and occupation of the lands for the same period, and demands the "reasonable value" thereof.
The District Court judge, sitting without a jury, awarded judgment to the plaintiff on the second count. He found the "reasonable rental value" of the premises, for the period in question, to be $20 per month. From this judgment defendant appeals.
The sole question properly presented by the specification of errors is the propriety of the denial of defendant's motion for a directed verdict; and we have reached the conclusion that, in so ruling, the trial judge fell into error.
Concededly, appellant entered into possession of the lands under a memorandum in writing, bearing date August 10th, 1932, executed and delivered in the name of respondent by its secretary, providing for the sale thereof to appellant for the consideration price of $3,100, "payable $100 in repairs, and when same are completed a contract to be made with balance payable on split mortgage in the B. & L. at $8 per month beginning in August, 1933; interest of $15 per month to be paid to the B. & L. beginning Sept. 1st, 1932." Respondent therein also agreed to pay the first half of the taxes assessed for the then current year, and appellant undertook to pay the second half thereof. It was stipulated further that "if for any reason we [respondent] cannot give good title, we are to pay for the repairs up to an amount of $150."
It is the settled rule in this jurisdiction that the action for use and occupation springs out of the relation of landlord and tenant, and is therefore not maintainable when that
relationship does not exist. It is a corollary of this that one in possession of lands under a contract of sale and purchase is not liable for the use and occupation thereof. Brewer v. Adm'r of Conover, 18 N.J.L. 214; Van Valkenbergh v. Rahway Bank, 23 Id. 583; Freeman v. Headley, 33 Id. 523; McKenna v. Reade, 105 Id. 408; Donovan v. Brenning, 79 Id. 202; Kertesz v. Feldheim, 6 N.J. Mis. R. 8. An action in the nature of assumpsit for the use and occupation of lands can only arise upon a contract, express or implied. Stewart v. Fitch & Boynton, 31 N.J.L. 17; Mason v. Haurand, 79 Id. 375; same case, 82 Id. 645; Hill v. United States, 149 U.S. 593; 13 S. Ct. 1011; 37 L. Ed. 862; 66 C.J. 85. And it is axiomatic that a contract cannot arise by implication in fact where there is an express contract between the parties relating to the same subject-matter -- certainly not when the express contract is valid and enforceable. In such a situation, the express contract excludes an implied one. Voorhees v. Executors of Woodhull, 33 N.J.L. 494. While, from the fact of occupancy, a contract to pay rent will ordinarily be implied, if the character of the occupancy be such as to negative the existence of the relation of landlord and tenant, no such implication arises, and an action for use and occupation will not lie. Mason v. Haurand, supra; Chambers v. Ross, 25 Id. 293.
Here the trial judge, proceeding on the assumption that appellant held possession of the lands during the period in question under the contract of sale, ruled that, inasmuch as it was "merely a writing signed by the secretary agreeing to sell property which was not then owned" by respondent, it was not a binding obligation, and therefore an action for use and occupation is maintainable. We regard this as a finding not that the secretary was without authority in the premises, but that the transaction was a nullity, and therefore imposed no obligation upon the corporation, because the writing provided for the sale of a property "not then owned" by it. The trial judge either ...