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January 8, 1959

Alexander HIRSCH, Pauline R. Goldfein, Norman Essman, as Executor of Estate of Aimee D. Essman, Samuel W. Dorfman and The Chase National Bank, as Executors of Estate of Jacob R. Schiff, Matilda Hyman, Ella K. Dorfman, Harry Mabel and Louis Denberg, Plaintiffs,
UNITED STATES of America, Defendant

The opinion of the court was delivered by: BRUCHHAUSEN

The plaintiffs, the owners of a building located in the City of New York, instituted this action to recover the value of the use and occupation of the sixth floor of the building, claimed to have been occupied by the defendant's agent, the Director of Internal Revenue, during the period from May 21, 1952, to June 10, 1952. The action is based upon the Constitution of the United States, Article III, Section 2 and upon 28 U.S.C.A. § 1346(a)(2). That statute grants jurisdiction to this court of claims against the United States 'not exceeding $ 10,000 in amount, founded either upon the Constitution, or * * * upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.'

The defendant admits that its representative entered the premises for the purpose of levying under a tax lien upon the personal property of J. W. Geiger & Co., the lessee of the said sixth floor, but denies that it either expressly or impliedly agreed to make payment for use and occupation.

 There is no evidence of an express contract. It has been held that an implied contract, within the meaning of the said statute, must be one implied in fact rather than in law. United States v. Minnesota Mutual Investment Co., 271 U.S. 212, 46 S. Ct. 501, 70 L. Ed. 911.

 The facts are not in dispute. The issue is whether they support the claim that the defendant, by implication, agreed to pay for use and occupation.

 The facts bearing upon the relationship between the plaintiffs and their tenant, Geiger, are that the plaintiffs leased the said sixth floor to Geiger for the term commencing on October 1, 1950 and terminating on January 31, 1954, at a fixed annual rental; that Geiger defaulted in payments of such rent; that on May 1, 1952, a warrant to dispossess Geiger was duly issued; that the plaintiffs made no attempts to retake possession until June 10, 1952, when they obtained possession by causing the execution of such warrant and that the defendant's representative at no time requested the plaintiffs to withhold the execution of the warrant.

 The effect of the issuance of the warrant was to cancel the lease and to annul the relation of landlord and tenant then existing between the plaintiffs and Geiger and to permit the landlord to sue the tenant for any sums, payable by the terms of the lease. See Section 1434 of the New York Civil Practice Act. The subject lease entitles the plaintiffs to claim for rent against Geiger for the unexpired term, less the amount obtained from a new tenant during the said term.

 We now consider the relationship of the defendant, through its agent, the Director of Internal Revenue, with respect to the demised premises. It appears that prior to May 1, 1952, the defendant filed liens for taxes against the personal property of Geiger; that the plaintiffs demanded that the defendant remove such property from the premises; that on May 21, 1952, while Geiger was still in possession of the premises, the defendant caused a levy to be made upon such personal property and placed a padlock on the premises, to which only the defendant's representative had the keys; that the plaintiffs made no objection to such holding of possession or to the padlocking; that on June 9, 1952, the District Director sold the tenant's personal property at a distraint sale; that the purchasers removed the property on June 10, 1952; that the Director then removed the padlock; that the premises were used by the Director only to store the property incidental to seizure and sale; that at no time did plaintiffs demand payment from the Director for use and occupancy.

 It is abundantly clear that the plaintiffs were not in a position to deliver possession to the Director and hence could make no valid claim against him for the value thereof. While the plaintiffs had the legal right to perfect their claim to possession, they failed to take advantage of it. Until such time as they executed the warrant of dispossess, the tenant was still lawfully in possession. Grattan v. P. J. Tierney Sons, Inc., 226 App.Div. 811, 234 N.Y.S. 399, followed in Whitmarsh v. Farnell, 298 N.Y. 336, 83 N.E.2d 543.

 Furthermore, no cause of action exists for use and occupation unless there is a relationship of landlord and tenant between the owner and occupant. Lamb v. Lamb, 146 N.Y. 317, 41 N.E. 26; Preston v. Hawley, 101 N.Y. 586, 588, 5 N.E. 770.

 An agreement for use and occupation is not implied by the mere showing of occupation of the premises, without proof of some circumstances authorizing an inference that the parties intended to assume the relationship of landlord and tenant toward each other, United Security Corp. v. Suchman, 307 N.Y. 48, 119 N.E.2d 881; Castle v. Armstead, 168 App.Div. 466, 153 N.Y.S. 266, affirmed in 219 N.Y. 615, 114 N.E. 1062; Preston v. Hawley, supra. See also Miller v. Schloss, 218 N.Y. 400, 113 N.E. 337. There can be no such implication where the acts and conduct of the parties negative its existence. Stern v. Equitable Trust Co., 238 N.Y. 267, 144 N.E. 578.

 In summary, it appears that the defendant did not interfere with or take possession of the premises from the plaintiffs during the subject period of time for the simple reason that the plaintiffs were not in possession thereof. The tenant Geiger was in possession. The padlocking by the defendant violated no right of the plaintiffs. The plaintiffs were at liberty to oust the tenant and, incidentally, its personal property, if they so elected. In that event, the Marshal would have removed the padlock and deposited the personal property upon the sidewalk. The defendant, operating under its right as a tax lienor, would then be free to transport the property to a suitable place for sale in satisfaction of its lien. In its capacity as a tax lienor neither the defendant nor its representative had the right of possession of the demised premises.

 There is no proof whatsoever that the defendant or its representative, the District Collector, intended to or did enter into a relationship of landlord and tenant with the plaintiffs.

 While it is not the Court's function to trespass upon the domain of the executive branch of the Government, it may not be amiss to offer a few suggestions. It seems, in all fairness, that the Government should immediately remove seized property to its warehouse or place where it intends to conduct a sale thereof, unless the party in possession of the demised premises consents that it remain there. The ...

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