Sandyston v. Angerman - 134 N.J. Super. 448, 341 A.2d 682 (Super. Ct. App. Div. 1975)

Rule:

The determination of whether a given agreement is a lease or a license depends not upon what the parties to it choose to call it nor the language, but upon the legal effect of its provisions. On the one hand, an instrument is not a demise or lease, although it contains the usual words of demise, if its contents show that such was not the intention of the parties; on the other hand, the relation of landlord and tenant may exist although certain collateral matters are contained in the contract of letting.

Facts:

A trial court held that an agreement between defendant tenant and the U.S. Department of the Interior was a license, and defendant was not required to pay taxes under the Leasehold Taxing Act, N.J. Stat. Ann. § 54:4-2.3. Plaintiff municipal corporation appealed a judgment of a trial court (New Jersey), which held that the agreement between defendant tenant and the U.S. Department of the Interior was a license, and defendant was not required to pay taxes under the Leasehold Taxing Act, specifically, N. J. Stat. Ann. tit. 54, § 4-2.3. The judgment of the trial court was reversed and the cause remanded with directions to enter judgment in favor of plaintiff municipal corporation and against defendant in the amounts demanded.

Issue:

Is the subject agreement a license?

Answer:

No.

Conclusion:

By the terms of the agreement here under consideration defendant is "authorized to use" a single-family dwelling, and approximately two acres of land adjoining, situated within the confines of the Delaware Water Gap National Recreation Area and owned by the United States of America, for the period commencing September 15, 1971 and terminating September 1, 1976. According to the testimony of Mrs. Angerman, upon the execution of the agreement she and her husband moved into the dwelling and have been occupying the property as their private residence ever since. The agreement waived the payment of any cash consideration by defendant. The purpose for which such use and occupancy was granted was stated to be the "rehabilitating, restoring, and the continued maintenance and protection of the improvements." In light of the waiver of cash consideration, it is a necessary and proper inference that the performance by the Angermans of the latter services constitutes the consideration -- otherwise the agreement would be invalid as an ultra vires gift of public property for private use or benefit. This inference draws further support from paragraph I(f) of the rules and regulations forming part of the agreement, requiring "an annual work program defining rehabilitation and restoration projects" to be outlined which, initially, is to be directed toward "rendering the residence useable on a year round basis and protecting all the improvements from further deterioration". By the terms of paragraph II(c) all resulting improvements "become the property of the" government. In addition to the repair and restoration work on the dwelling defendant agreed to "assist park personnel in the detection and immediate reporting of building, forest or grass fires which may occur on the land in the vicinity," and to "make frequent checks of the other National Park Service property in the vicinity and immediately report any incidents, violations or apparent damage to a representative of the National Park Service." Both undertakings are in the nature of responsibilities of scant burden, representing little more than the verbalization of the customary vigilance and awareness of conditions in his neighborhood employed by any householder while in occupancy and during his comings and goings. No penalty is provided for nonperformance. However this may be, it is plain that the agreement granted to defendant the exclusive possession of the residence and the surrounding area. The grant is made "to use" the premises as a private residence, without any words or provisions in derogation of the right to use and occupy exclusively, other than the right of the public to use any existing and newly established roads and trails on the land. Were the grant not one of exclusive possession, there would have been no need for the government to expressly reserve to itself "the right to enter the premises at any time for inspection * * * in cooperation with" defendant.