
    HENRY H. CUMMING, FRANK H. BARRETT, AND GROVER C. MAXWELL, TRUSTEES, AND SARAH G. STOKES v. THE UNITED STATES.
    [No. B-184.
    Decided November 6, 1922.]
    
      On the Proofs.
    
    
      Landlord and tenant; lease; termination. — The Government enters into possession of land under a lease which contains an option for the purchase of said land, and the Government exercises the. option and notifies the landlord that the purchase price will be paid after the Attorney General has approved the title, and the conveyances have been executed, and over four months thereafter the deed is executed and delivered and the purchase money paid. Held, that the relation of landlord and tenant was not terminated until the deed passed and the purchase money was paid.
    
      Same; lease; rent.- — Where under the terms of a lease rent is payable monthly and the relation of landlord and tenant is terminated before the end of the month, no rent is due and payable for that month.
    
      The Reporter's statement of the case:
    
      Mr. II olee iSntith for the plaintiffs.
    
      Mr. W. F. Norris, with whom was Mr. Assistant Attorney General Robert II. Lovett, for the defendant.
    The following are the facts of the case as found by the court:
    I. The plaintiffs are residents of Richmond County, State of Georgia, and are citizens of the United States.
    II. On or about the 28th day of February, 1920, the owners of certain property situated in' Richmond County, Georgia, and known as the Lenwood Hotel property, conveyed the same by deed to plaintiffs, Henry H. Cumming, Frank H. Barrett, and Grover C. Maxwell, as trustees. The said trustees retained title to the property .until they conveyed it to the United States, as hereinafter set forth.
    III. The plaintiff Sarah G. Stokes was, on January 8, 1920, the owner of a certain parcel of land contiguous to the said Lenwood Hotel property, containing 156.93 acres, more or less, which she continued to own until the same was transferred to the United States, as hereinafter set forth.
    IY. On or about the 8th day of January, 1920, the authorized agent of the owners of the property concerned, acting for such owners, submitted to the United States Government, through its authorized agent, a proposition to lease the same, with an option to purchase it, which proposition is made Exhibit A to the petition herein, and is as follows:
    State oe Georgia,
    
      Richmond County:
    
    We, the undersigned, owners of the property in Eichmond County, Georgia, known as the Lenwood Hotel property, containing the hotel buildings and twenty (.20) acres of land, do offer to lease to the United States Government the above-stated property on the following, conditions:
    1. That the rent shall be at the rate of forty thousand dollars ($40,000) per annum, payable in equal monthly installments in arrears, and the payment by the Government or reimbursement to the undersigned for the amount expended by them for all taxes, general and special, assessed against the property during the occupancy by the Government, to the municipality or State and county in which said property is located.
    2. That should the United States decide to purchase the property at any time during the life of this proposed lease, or any renewal thereof, five thousand dollars ($5,000) per year of the above amount shall apply to the purchase price.
    3. This, agreement is for one year, but the right of renewal of this proposed lease shall continue until June 30, 1925, at the same rate of rental as hereinabove set forth.
    4. We further agree to grant with the lease of the property as hereinabove set forth an option to the United States Government to purchase the said property described above at and for the sum of three hundred thousand dollars ($300,000).
    Augusta, Georgia, January 8, 1920.
    Eespectfully submitted.
    (Signed) HeNry H. CummiNG, Authorized Agent for Owners of the Lenwood Property
    
    
      and for Miss Sarah G. Stokes.
    
    V. On January 17, 1920, the United States, acting through Assistant Secretary of the Treasury J. H. Moyle, accepted the said proposal made by plaintiffs’ agent with certain additions and conditions, as will more fully appear from tbe communication of the Assistant Secretary to the said agent of plaintiffs dated January 17, 1920, a copy of which is made Exhibit B to the petition herein, and is as follows:
    Treasury Department,
    Office of Assistant Secretary,
    Washington, D. <7., January 17, 1920. Mr. Henry H. Cumming,
    
      Authorized, agent for the, owners
    
    
      of the Lenwood Hotel property and for Miss Sarah G. Stokes, Augusta, Georgia.
    
    Sir: Pursuant to authority contained in the act of Congress approved March 3, 1919, your proposal of January 8,1920, to lease to the United States for sanitorium purposes the property in Augusta, Richmond County, Georgia, known as the Lenwood Hotel property, containing the hotel buildings and 20 acres of land, more or less, and also a parcel of land adjacent and contiguous thereto, containing 156.93 acres, more or less, the property of Miss Sarah G. Stokes, of Augusta, Georgia, as per plat made by George W. Summers, C. E., Augusta, Ga., September, 1917, attached to your proposal, is hereby accepted subject to the iollowing conditions:
    1. That the property hereby rented shall include all lands, buildings, improvements, fixed equipment (including telephone wiring and instruments inside the switchboard), and machinery.
    2. That you shall make all changes and alterations to the property necessary in the opinion of the Surgeon General, U. S. Public Health Service, to fit it for the use of that service, at a cost not to exceed $75,000, and promptly make all repairs which are required of you by the Surgeon General, such work to be done according to plans and specifications prepared by the Bureau of the Public Health Service and under the supervision of a representative of that bureau whose approval shall be deemed conclusive evidence that such work has been performed in accordance with said plans and specifications.
    3. That the term of occupancy shall be until June 30,1920, renewable annually at the option of the United States on the same terms and conditions and at the same rental, no renewal, however, to extend beyond June 30, 1925, nor to extend beyond one fiscal year. In the event the United States avails itself of the privilege of renewal, written notice thereof shall be given you at least 60 days prior to the termination of the existing agreement, under which the property is held.
    4. That the United States shall have the right to terminate this agreement, or any renewal thereof, and surrender possession of said property at any time upon six months’ written notice of such intention; and that, if any of the buildings on said premises shall be damaged by fire or other casualty to an extent not exceeding $250,000, or shall from any cause not the fault of the United States, become un-tenantable, or unfit for occupancy, in the opinion of the Surgeon General of the Public Health Service, you shall repair the same as soon as practicable, if required by the department so to do; and the rent of such premises, or such part thereof as shall be so rendered untenantable or unfit for occupancy, shall cease and remain abated for the whole period during which the occupancy thereof shall be prevented by such cause; or, if the amount of said damage exceed in value $250,000, this agreement may be cancelled upon five days’ written notice by either party hereto.
    5. That the rent to be paid you by the United States for such use and occupancy of said property shall be (a) $46,500 per annum, payable in equal month installments in arrears, and (b) reimbursement to you of any amounts expended by you in complying with the conditions of paragraph 2 hereof, reimbursement hereunder to be made at the end of each calendar month, or as soon thereafter as practicable, for work satisfactorily performed during such period and approved by the representative of the bureau, provided that if such reimbursement is not made within 25 days after filing with the Surgeon General a statement of the itemized expenditures for any period approved by the bureau representative, you shall be relieved from the obligation of any further work in connection therewith, until full reimbursement of previous expenditures has been made to you, and such discontinuance of work shall not be considered as any failure on yQur part to carry out the terms of paragraph 2 hereof.
    6. That should the United States decide to purchase the property at any time during the life of this agreement or any renewal thereof there shall apply out of "the rent already paid by the United States a prorated sum on the basis of $10,000 per year, which shall be applied to the reduction of the purchase price, less such sums as may have been paid by you for paving or extension of water or sewerage service during the term of this agreement or any renewal thereof.
    
      7. In the event the United States avails itself of the privilege of purchase of the property hereby granted, the purchase price shall be $379,800, subject to the deductions set forth in paragraph 6 hereof.
    8. That the United States shall pay for all gas, water, and electricity used during its occupancy of the premises.
    9. That the United States will not suffer or commute any damage to the premises, buildings, fixtures, or furnishings, and that upon termination of this occupancy the United States shall return all of said property in the same shape and condition as at the time the Government took possession thereof, ordinary wear and tear and damage by fire or other casualty excepted.
    10. That the United States will not incur any debt or create any charge against said property for work done or material furnished for which you could become liable or which might attach as a lien upon the property hereby leased.
    11. That no Member of or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part in this agreement, or to any benefit to arise therefrom; and
    12. That you shall retain the original of this acceptance and write upon the accompanying copy hereof, date, and sign your unqualified assent to all of its terms and conditions, and deliver such assent to this department.
    Respectfully,
    J. W. Moyle, Assistant Secretary.
    
    The plaintiffs accepted the proposal made for the Government by the Assistant Secretary of the Treasury, and the United States took possession of the property as a tenant, paying the stipulated rent therefor. This lease was renewed by a formal notice to that effect on May 5, 1920, for the fiscal year ending June 30, 1921.
    VT. The United States continued in the possession of said property, and was in possession thereof on August 9, 1921, paying the stipulated rent, when it informed plaintiffs, through their agent, of its purpose to purchase the same. A copy of this notice of August 9, 1921, is made Exhibit D to the petition herein, and is as follows:
    Augusta, Ga.: P. H. S. Hosp.
    In replying quote: SA-F.
    Treasury Derartment,
    Washington, August 9, 1921.
    
    Mr. HeNry H. CummiNg,
    Agent, Augusta, Georgia.
    
    Sir : Pursuant to existing legislation, authorizing the Secretary of the Treasury to provide additional hospital facilities for persons who served in the World War and are now or hereafter may be patients of the Bureau of War Risk Insurance or of the Federal Board for Vocational Education, this department, in view of the recommendation of its consultants on hospitalization, hereby exercises the option given by you to the United States to purchase, at any time during the life of a certain lease agreement dated January 17, 1920, or any renewal thereof, the property in Augusta, Richmond County, Georgia, known as the Lenwood Hotel property, containing the hotel buildings and twenty acres of land, more or less, and also a parcel of land adjacent and continguous thereto, containing 156.98 acres, more or less, the property of Miss Sarah G. Stokes, of Augusta, Georgia, as per plat made by George W. Summers, September, 1917, including all lands, buildings, improvements, fixed equipment (including telephone wiring and instruments inside the switchboard), and machinery for the sum of $879,-800, less a prorated sum on the basis of $10,000 per annum out of the rent paid by the United States during the term of the above-cited agreement, or any renewal thereof (in total amount not to exceed $364,000), in accordance with the terms of the option as set forth in department letter of January 17, 1920, accepting your proposal to lease said premises to the United States on the terms and conditions therein stated, which terms and conditions were formally agreed to by you under the same date, as authorized agent of the owners of the Lenwood Hotel property and of Miss Sarah G. Stokes.
    It is understood that you do not claim any expenditures under that clause of the option agreement (paragraph 6) providing that the United States will include in the purchase price such sums as may have been paid by the owners of the land for paving or extension of water or sewerage service during the term of the lease agreement or any renewal thereof.
    
      This acceptance is subject to the requirements set forth in the attached printed “ Conditions ” and the “ Specifications for vendor’s survey,” which are hereby made a part hereof.
    Attention is invited to the provisions of section 7 of the emergency revenue act approved October 3, 1917, requiring conveyances, etc., to be duly stamped by the grantor.
    Please indorse upon the accompanying copy of this communication, in the space provided therefor, your unqualified assent to, all of the terms and conditions hereinabove mentioned, and promptly mail such assent to this department.
    Also attach to such assent a certified copy of your authority to transfer the land to be acquired.
    Respectfully,
    Edward Clifford, Assistant Secretary.
    
    The printed “ Conditions ” and the “ Specifications for vendor’s survey,” referred to in the foregoing communication, contained in paragraph 9 thereof the following instructions with reference to time of payment :
    “The Attorney General has been requested to give the United States attorney for the district in which the selected site is situated such instructions as may be necessary to procure the conveyance of said land to the United States, and said vendor should promptly apply to the United States attorney for directions as to the papers to be furnished and notify the Treasury Department when all of the United States attorney’s' requirements have been complied with. All title papers (abstracts, deeds, etc., per pars. 1, 3, 4, and 7 above) must be delivered to the United States attorney first, but the survey (per par. 2 above) must be forwarded by the vendor to the ¡Supervising Architect of the Treasury Department. When the survey has been made satisfactorily a print therof will be forwarded by the Treasury Department to the United States attorney for his use in connection with the examination of the title to the land.
    “ When the title papers are recived at this department with the Attorney General’s favorable opinion as to the validity of the title to the whole of said site, and when all the conditions of this acceptance have been satisfactorily complied with or acceptable security given for such compliance with respect to any minor item the performance of which it may be mutually agreed shall be postponed, this department will promptly take up the payment of the purchase money, as provided in the letter (or any modification thereof) accepting the proposal for the sale of the land.”
    
      VII. On August 13, 1921, the plaintiffs, through their agent, addressed a communication to the Assistant Secretary of the Treasury in reply to the said communication by the latter of August 9th, and a copy of this letter of August 13, 1921, is made Exhibit E to the petition and is as follows :
    August 13, 1921.
    Hon. Edward Clieeord,
    
      Asst. Secy, of the Treasury,
    
      Washington^ D. (J.
    
    
      In re: SA:F.
    Sir : I am in receipt of yours of Aug. 9th indicating the intention of the United, States to exercise the option contained in a certain agreement signed by me as agent of the owners of the Lenwood Hotel property and Sarah G. Stokes, dated Jan. 17, 1920, by which the United States had the right to purchase lands described in said agreement.
    I am returning herewith your copy of your letter of Aug. 9th, with my assent to the terms and conditions contained therein.
    In reference to the last paragraph of your letter I respectfully call your attention to the fact that when negotiating with the Government in January, 1920, as the agent for the Lenwood property owners and Miss Stokes I acted only with the powers of an agent to effect lease agreement and to give an option, but had neither then nor now a power of attorney to transfer the title. You will so see by an examination of the two papers constituting me an agent for the owners of the Lenwood property owners and Sarah G. Stokes, filed with my original proposal.
    I am, however, inclosing with this a letter to you from Miss Sarah G. Stokes confirming previous acts by me in this matter and stating her readiness to sign deed to the Government whenever it may wish to take over and pay for her land.
    
    As to the Lenwood1 Hotel, the title to this property is in the name of Henry H. Gumming, Frank IT. Barrett, and Grover C. Maxwell, acting as trustees for themselves and other owners of this property. As in the case of Miss Stokes, these trustees are prepared to make a deed in conformity with the agreement of Jany. 17, 1920, whenever the United States wishes to consummate its option of purchase. In conformity with section 1 of the “ Conditions,” we hold ready for the inspection of the U. S. district attorney whom you may designate all the evidences of title to the Lenwood property, and I am informed this morning by Mr. Wm. IT. Barrett, attorney for Miss Stokes, that he similarly is prepared to turn over on request of the district attorney all of Miss Stokes’s muniments of title.
    As to survey, I beg to report that about Feby., 1921, a plat showing boundaries of the Lenwood and Stokes properties was made by Nisbet Wingfield, C. E., under directions of the United States, and in July, 1921, a further map, showing boundary lines and contour, was made by Mr. Wingfield under similar instructions from the Government. These maps were sent to the Surgeon General’s office, and when last heard of by us were, I believe, in the hands of Mr. Stratton, of the construction branch of the Bureau of Public Health. These maps were, I understand, made in collaboration with or under the supervision of Mr. Flynn, representative of the Government in charge of construction and alterations now being made at Lenwood' Hotel, now known as P. H. S. Hosp. No. 62, and I believe are in conformity with the specifications for “ Vendor’s survey.”
    Respectfully,
    H. H. Cumming.
    The plaintiffs submitted their evidence of title and did complete their part of the transaction at the earliest opportunity afforded by the defendant.
    VIII. The United States continued in possession of said property up to and including December 28, 1921, and paid the stipulated rent therefor monthly in accordance with the original lease agreement at the rate of $8,815 per month up to and including November SO, 1921, the amount for the four months from August 1, 1921, to November 30, 1921, being $15,500.
    IX. The defendant did not tender to the plaintiffs the purchase price of said property, or any part thereof, until December 28, 1921, at which time defendant tendered the plaintiffs the sum of $347,027.79. The sum of $347,027.79 so tendered was accepted under protest. The said plaintiffs on receiving same reserved the right to claim additional compensation.
    X. Deducting from the contract price of $379,800 a prorated sum ,on a basis of $10,000 per annum out of rents paid by the United States, amounting from January 17, 1920, to December 28, 1921, to the sum of $19,472.21, there would remain a balance of the purchase price at the conclusion of the transaction on December 28, 1921, amounting to $360,327.79. There was paid to said plaintiffs on December 28,1921, and accepted by them under protest as above stated, the sum of $347,027.79, leaving a balance of $13,300.
    If the plaintiffs are entitled to recover, the amount of the recovery should be the sum of $13,300.
   Campbell, Chief Justice,

delivered the opinion of the court :

The plaintiff’s, through an agent, proposed to lease certain properties to the United States, with an option to purchase at a named price. The latter made modifications in the proposal in a letter by the Assistant Secretary of the Treasury, stated more definitely the terms and conditions, and indicated a willingness to accept the proposal as modified. .The modified proposal, with its terms and conditions, was in turn duly accepted by plaintiffs. This letter provided that in the event the United States availed itself of the privilege of purchasing the property the purchase price should be $379,800, subject to the deductions set forth in another paragraph providing that out of the rent already paid by the United States “ a prorated sum on the basis of $10,000 per annum ” should be applied to the reduction of the purchase price. It also had a provision to the effect that the United States could terminate the lease or any renewal thereof and surrender possession at any time “upon six months’ written notice of such intention.” It also stated that “ the rent to be paid you by the United States for such use and occupancy of said property shall be $46,500 per annum, payable in equal monthly installments, in arrears.”

The plaintiffs having assented to this proposal, the United States went into possession of the properties under the terms of the agreement on or about January 20, 1920. In May of that year notice was given to plaintiffs’ agents that the United States desired “ to renew the lease of said property for the fiscal year ending June 30,1921, as specified in paragraph three of the acceptance,” and thereafter the United States continued in possession, paying the rent reserved in monthly installments as it accrued, and was so in possession on August 9, 1921. On this latter date the Assistant Secretary of the Treasury notified plaintiff’s agent that “ this department, in view of the recommendation of its consultants on hospitalization hereby exercises the option given by you to the United States to purchase, at any time during the life of a certain lease agreement dated January 17, 1920, or any renewal thereof,” the property mentioned “ for the sum of $379,800, less a prorated sum on the basis of $10,000 per annum out of the rent paid by the United States during the term of. the renewal thereof (in total amount not to exceed $364,000) in accordance with the terms” of the agreement mentioned. This notice further stated that the acceptance was subject to the requirements set forth in certain printed conditions, attached to the acceptance. Among these conditions was paragraph 9 thereof, stating that the Attorney General had been requested to give the United States attorney for the district in which the lands were situated such instructions as might be necessary to procure proper conveyances, and that application should be made promptly to the district attorney for directions to plaintiffs and that title papers should be delivered to him; that a survey of the properties required to be made should be forwarded to the Supervising. Architect of the Treasury Department; and that a blue print of this survey would be forwarded by the Supervising Architect to the district attorney for use in examining the title. Paragraph 9 further provided:

‘‘When the title papers are received at this department with the Attorney General’s favorable opinion as to the validity of the title of the whole of said site, and when all the conditions of this acceptance have been satisfactorily complied with, or acceptable security given for such compliance with respect to any minor item the performance of which it may be mutually agreed shall be postponed, this department wiil promptly take up the payment of the purchase money, as provided in the letter (or any modification thereof) accepting the proposal for the sale of the land.”

Without any fault of the plaintiffs the defendant failed to accept the conveyances of title until December 28, 1921, and until that date did not make any offer either to accept the title or pay the purchase price. In the meantime, however, the rent reserved, payable monthly, had been paid to plaintiffs lor each of the months of August, September, October, and November, the payments being at the end of the respective months.

In ascertaining the amount of purchase money that should be paid after the deeds were executed, and the Attorney General’s opinion favorable to the title had been received, which was in December (more than four months after the option had been exercised), the officials representing the United States concluded that from the gross stipulated purchase price there should be deducted not only the prorated sum on the basis of $10,000 per annum, mentioned in the agreement, but also the sum of the installments of rent for the four months mentioned, which had been paid to plaintiffs, reducing, however, this latter sum by a proportionate part of the August installment, and thus allowing plaintiffs rent up to the date in August when the option was exercised. The difference between the sum of the four installments and the amount allowed for August is $13,300, and by this amount the purchase price was reduced, in addition to the deduction on the basis of $10,000 per annum. The balance of the purchase price was tendered to plaintiffs upon the acceptance of the conveyances and was received under protest, they reserving a right to sue for the balance claimed to be due them.

The question, therefore, is whether the deduction of the sums paid during the four months was proper, and its solution depends upon the answer to the inquiry whether the relation of landlord and tenant, existing between the parties when the option was exercised, was, by its exercise, changed into one of vendor and vendee. This must in general be determined from the intention of the parties to be gathered from the contract and attendant circumstances. Doe d. Gray v. Stanion, 1 M. & W. 695; Blanchard v. McDougal, 6 Wis. 167; Hill v. Allen, 185 Mass. 25; Bostwick v. Frankfield, 74 N. Y. 207.

An important consideration is whether the party exercising the option is in possession at the time as a tenant or is let into possession upon the exercise of the option. It is said by Parke, B., in the English case cited that where the purchaser is already in possession as tenant from year to year it must depend upon the intention of the parties whether a new tenancy at will is created or not. The Wisconsin court in Blanchard v. McDougal, supra, held that the complainant was in possession as a tenant, owing fealty to the defendant as his landlord, and that the legal presumption was that such relation continued. In Hill v. Allen, supra, the facts showed a lease, with an option to purchase; the tenants refused to pay rent, claiming that they had given notice of their purpose to buy the property, and continued in possession for some months. The • Massachusetts court say that it was clearly the duty of the defendants under the terms of the option within a reasonable time after notifying the plaintiff of their intention to purchase to tender the $2,600 and demand a deed, and held that until this was done they were liable for rent. In Bostwick v. Frankfield, supra, the New York court say (p. 212) : “ The rent of the premises certainly continued until the first of June, when the contract was to be finally consummated; and as this failed, the lease continued in force afterwards. It was under the lease and nothing else that Thrall remained in possession.”

Unquestionably, when the option had been duly exercised, there arose a valid contract of sale. Boston & M. R. R. Co. v. Bartlett, 3 Cush. 224; Brown v. Slee, 103 U. S. 828; Willard v. Tayloe, 8 Wall. 551. But it was an executory contract, the performance of which depended on future contingencies. These pertained to the performance of the contract, and not to its making. Breen v. Mayne, 141 Iowa, 399, 405; Watson v. Coast, 35 W. Va. 463. The owners became bound to convey and the United States became bound to pay, subject to conditions mentioned. One of these was that before any payments would be made or become due an opinion favorable to the title should have been received from the Attorney General. Section 355, Revised Statutes, requires that such an opinion be had, and the defendant insists that this section must be read into the contract between the parties — a contention we are not disposed to question.

But the stated terms of acceptance provide for substantially the same thing that section 355 requires, and postpone any payment accordingly; and if it could be said that this section has a broader meaning than the terms of the acceptance, such a view would but emphasize the conclusion that the United States did not, and lawfully could not, agree to both purchase and pay for the lands before essential conditions had been performed. The lease and the notice of acceptance are silent as to what would become of the tenancy from year to year pending an approval of the title and a consummation of the sale. In these circumstances the holding of possession should be referred to the lease (cases, supra). It is not a reasonable inference, from the action of the parties, that the plaintiffs intended to yield their right to receive monthly installments of rent in substantial amount for an indefinite period and upon a contingency that might not happen at all. Nor is it to be assumed that the United States intended to secure to itself the benefit of a continued occupancy of the premises freed from any liability to pay rent during an uncertain period that could readily be prolonged until the end of the term. If such a result had been contemplated, the lease, or the notice accepting the option, would likely have contained some reference to it. The fact that installments of rent as they accrued were regularly paid and received after the exercise of the option furnishes a practical construction by the parties refuting the idea that the tenancy from year to year was intended, upon the mere exercise of the option, to become a tenancy, at will. Bostwick v. Frankfield, 74 N. Y. 207, 213. Upon this point it is said in Gray v. Stanion, supra, p. 701: “ But if the agreement is conditional to purchase only provided a good title should be made out, and to pay the purchase money when that should be done, and the estate conveyed, there is no room for implying any agreement to hold as tenant at will in the meantime, the effect of which would be absolutely to surrender the existing term, whilst it would be uncertain whether the purchase would be completed or not.”

As in other cases already cited above, it was held in Journe v. Hewes, 124 Calif. 244, which was an action for rent, that under a lease containing an option to purchase the relation of lessor and lessee continued until a tender or offer to pay the purchase money, and that the mere notice of an intention to purchase did not constitute the relation of vendor and vendee. As above suggested, this is not a case where under a contract of sale the United States was permitted to enter. Where possession is given voluntarily under such a contract without any provision for rent in the meantime, the owner can not hold the United States for use and occupation or for damage because of delay in accepting the title. The tenancy in such case is at will. Carpenter case, 17 Wall. 489; Merchants Exchange Co. ease, 1 C. Cls. 882. But in the instant case the United States was in possession, holding a term for years, when it elected to purchase upon certain conditions. Being already in possession, it can not be said to have entered under the contract of purchase. Referring to the distinction, it is said in Gray v. Stanion, supra, that it is the letting into possession,” and not the agreement of purchase, that creates the tenancy at will. The plaintiff could not limit the right of the United States to continue in possession during the term of the lease, whether the contract of purchase was finally consummated or not. The defendant could terminate it on six months’ notice, as provided for in the lease, or it could be terminated by merger in a greater estate. The United States did not become the owner of the property until the conveyances of title were accepted. It had not contracted to pay for the lands until title was approved and conveyances made. In his letter exercising the option the Assistant Secretary was careful to say that when the title was satisfactory to the Attorney General and he had so advised the department, and all the conditions of the acceptance had been complied with by the plaintiffs, the department “ would promptly take up the payment of the purchase money.” The plaintiffs remained owners, retaining title, and the defendant had acquired no estate into which the term for years could merge until the sale was consummated in December. The several payments made in the meantime were properly made on account of the installments of rent reserved in the lease, and should not have been deducted from the purchase price agreed to be paid.

Because the transaction was not closed until the latter part of December, the plaintiffs contend that they should be allowed rent up to the date in December when the defendant made its payment. Another principle intervenes, however, which prevents this. The December installment of rent could not accrue under the terms of the lease before the end of the month, and prior to that time the tenant holding under the lease had succeeded to the fee, by conveyances of title by the landlords. Rent follows the reversion, and before the rent became due the reversion had passed to the United States. In these circumstances, as was said by Chief Justice Richardson in York v. Jones, 2 N. H. 454, 456, “ there is no doubt that the rent passed as incident to the reversion and became extinguished,” or, as said in another case, “ the term for years was drowned or merged in the fee-simple estate and became extinct.” Liebschutz v. Moore, 70 Ind. 142, 147. Thpre could not be a right of action until the installment of rent accrued according to the lease, and when that time arrived the plaintiffs had ceased to be owners. The court can not apportion the rent reserved.

Our conclusion is that the plaintiffs are entitled to recover as unpaid purchase money the amounts deducted on account of the rent for four months, which had been paid as stated, subtracting therefrom the amount allowed for part of August. Judgment, will accordingly be entered in their favor in the sum of $13,300. And it is so ordered.

Graham, Judge; Hay, Judge; and Downey, Judge, concur.

Booth, Judge, not sitting.  