Hannan v. Dusch

Va: Supreme Court
154 Va. 356, 153 SE 824 (1930)

ELI5:

Rule of Law:

In the absence of an express covenant, a lessor does not have an implied duty to deliver actual physical possession of the demised premises to the lessee at the beginning of the term. The lessor's obligation is met by delivering the legal right to possession.

Facts:

On August 31, 1927, Dusch leased a parcel of real estate in Norfolk, Virginia, to Hannan.
The lease was for a fifteen-year term, set to begin on January 1, 1928.
The lease agreement did not contain an express covenant requiring Dusch to deliver actual possession of the property to Hannan.
On January 1, 1928, Hannan was ready and willing to take possession of the property.
A former tenant of Dusch was still occupying a portion of the property and wrongfully refused to vacate.
Hannan informed Dusch of the holdover tenant's presence.
Dusch refused to take any legal action to oust the holdover tenant and deliver actual possession to Hannan.

Procedural Posture:

Hannan, the plaintiff, filed a declaration (complaint) against Dusch, the defendant, in a Virginia trial court, seeking damages for breach of a lease.
Dusch demurred to the declaration, arguing that under the lease, he had no duty to ensure the premises were open for Hannan's entry.
The trial court sustained Dusch's demurrer and entered judgment in his favor.
Hannan, the appellant, appealed the trial court's judgment to the Supreme Court of Appeals of Virginia.

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Issue:

Does a landlord, in the absence of an express covenant, have an implied duty to deliver actual possession of the premises to a new tenant by ousting a former tenant who is wrongfully holding over?

Opinions:

Majority - Prentis, C. J.

No. In the absence of an express covenant, a landlord does not have an implied duty under law to oust a wrongdoer and deliver actual possession to a new tenant. The court adopted the 'American Rule,' which holds that the landlord's only implied covenant is to deliver the legal right of possession, meaning that no legal obstacle, such as a paramount title, will prevent the tenant from taking possession. The lease is a conveyance of a chattel real, and once delivered, the tenant possesses the title and the legal remedies to oust any wrongdoers, including a holdover tenant. The court reasoned that making the landlord responsible for the tortious acts of a third party is an unusual obligation that should not be implied, but must rest upon an express contract. Furthermore, Virginia statutes provide an adequate and summary remedy of unlawful detainer, which was available to Hannan, the lessee, as the party entitled to possession.

Concurring - Epes, J.

No. The conclusion is correct, but only because Virginia statutes, specifically the unlawful detainer law, divest the lessor of the power to evict a tortiously holding-over tenant once the new lease term begins. Because the law denies the lessor a remedy, no covenant to deliver possession should be implied. However, the 'English Rule,' which implies a landlord's duty to deliver actual possession, is the true common law rule and would be the law in Virginia if the statutes were amended to permit a lessor to evict a holdover tenant after a new lease has commenced.

Analysis:

This decision establishes the 'American Rule' as the law in Virginia regarding a landlord's duty to deliver possession. By rejecting the 'English Rule,' the court places the burden of dealing with a holdover tenant or other trespasser on the new lessee, absent an express provision in the lease to the contrary. This holding solidifies the view of a lease as a conveyance of title for a term, granting the lessee the legal tools to protect their possessory rights, rather than as a contract where the landlord guarantees delivery of a physical good. The ruling encourages prospective tenants to negotiate for an express covenant for delivery of possession if they wish to avoid the risk and expense of evicting a wrongdoer.

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