116 N.J.L. 586, 186 A. 29.
Johnson, pp. 313-315
Facts: The defendant leased a storefront to the plaintiff.† However, on the day the plaintiff was supposed to take possession, the previous tenant was still wrongfully occupying the storefront and didnít leave until about three weeks later after the landlord went to court to have the old tenant removed.† The plaintiff sued for breach of the duty to put him in possession on the first day of the lease based on theories of both an express duty and an implied covenant.† The trial court found for the plaintiff, and the defendant moved for a nonsuit and a directed verdict.
Issue: Did the lease contract impose a duty on the lessor to put the lessee in possession of the storefront on the first day of the lease term?
Rule: When the term of a lease is set to begin at some point in the future, the lessor has a implied duty to make sure the premises are available for the new tenantís immediate legal and actual possession on the first day of the lease.
Analysis: The basic idea is when parties bargain over the lease, theyíre not merely bargaining for the right to sue to eject someone who is there wrongfully, but to actually be able to move in.† I think this might be a good Coase Theorem problem, because itís probably a little cheaper to bargain just for the right to sue than for the right to actually possess.† The cost of ejecting the previous tenant (or maybe eventually ejecting the lessee) is probably built into the cost of the lease if that responsibility rests on the landlord.
Conclusion: The defendantís motions are denied and the verdict is upheld.