Teitelbaum v. Direct Realty Co.
172 Misc. 48, 1939 N.Y. Misc. LEXIS 2115, 13 N.Y.S.2d 886 (1939)
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Rule of Law:
In New York, a landlord has an implied covenant of quiet enjoyment and the right to possession, but generally no implied obligation to physically oust a wrongful holdover tenant or trespasser to deliver possession to a new lessee.
Facts:
- On February 10, 1938, the plaintiff and defendant entered into a written lease agreement for a store located at 61 Main Street, Hempstead, N. Y.
- At the time the lease was made, the store was occupied by Abe and Dorothy Fergang under a lease that was set to expire on June 30, 1938.
- The plaintiff planned to take possession of the store on July 1, 1938, make necessary alterations, and open a new drug store on August 1, 1938.
- On July 1, 1938, the Fergangs refused to vacate the premises, claiming they had renewed their lease through an alleged oral agreement.
- The Fergangs continued to occupy the premises, preventing the plaintiff from taking possession as scheduled.
- The Fergangs finally vacated the premises in January 1939.
Procedural Posture:
- Defendant initiated a summary proceeding in the District Court to dispossess Abe and Dorothy Fergang from the premises.
- A jury in the District Court rendered a verdict in favor of the Fergangs in the summary proceeding.
- Defendant, as appellant, appealed the District Court's verdict to the Appellate Term.
- The Appellate Term reversed the District Court's order and directed a new trial.
- On the retrial of the summary proceeding, the Fergangs defaulted.
- The plaintiff then filed this action in the trial court (the court issuing this opinion) seeking to recover $25,000 in damages from the defendant for failure to deliver possession of the store.
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Issue:
Does a landlord have an implied obligation to physically oust a prior tenant or trespasser wrongfully holding over so that a new lessee can take possession, or is the new lessee responsible for gaining possession from the wrongdoer?
Opinions:
Majority - Lockwood, J.
No, a landlord does not have an implied obligation to physically oust a prior tenant or trespasser wrongfully holding over to enable a new lessee to take possession; instead, the lessee is responsible for pursuing legal remedies against the wrongdoer. The court found that the Fergangs wrongfully withheld possession from the plaintiff, and the defendant did not refuse to put the plaintiff in possession nor did the defendant's actions hinder possession. The defendant, in fact, took legal steps to dispossess the Fergangs, which was more than legally required. The court distinguished this case from situations where a landlord covenants to give possession but has no authority to do so, or where a prior tenant holds possession rightfully under a lease made by the landlord. Here, the Fergangs' possession was wrongful. Citing New York Law of Landlord and Tenant, the court affirmed that a landlord’s implied agreement only extends to having good title and providing a free and unencumbered lease, not to ousting a trespasser. The court emphasized that the new lessee, being clothed with title by the lease, is responsible for pursuing legal remedies to gain possession from a wrongdoer. The court referenced Gardner v. Kelellas and United Merchants’ Realty & Improvement Co. v. Roth to support the principle that it is the lessee's duty to take steps to gain possession from a wrongfully held premises.
Analysis:
This case affirms the 'American Rule' regarding a landlord's duty to deliver possession, which contrasts with the 'English Rule' that places the burden on the landlord to deliver actual physical possession. It clarifies that in New York, a landlord's implied covenant extends only to legal possession (good title) and not necessarily to actual physical possession free from wrongful holdovers or trespassers. The decision has significant implications for lease drafting, often leading new tenants to demand an express covenant from landlords to deliver actual possession, or to include clauses allowing for rent abatement or termination if possession is delayed. It also places a substantial burden on incoming tenants to be prepared for the costs and delays associated with evicting holdover occupants.
