Property II, Pages 424–429

Ernst v. Conditt

Court of Appeals of Tennessee, 1964
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Facts:

Complainants leased a tract of land to Rogers for a term of one year and seven days. Rogers then built an asphalt Go-Cart track, complete with floodlights and a fence. Rogers's lease had a yearly rent, gave him the first right of refusal, required written approval to assign or sublease, and made him liable to remove any improvement made above ground.

After operating the business for a short time, Rogers began negotiating with defendant to sell the property to him. Defendant desired a two-year lease however. Rogers went to complainants' home and obtained a two-year lease that allowed subletting to defendant, but Rogers retained personally liable for the performance of all the terms of the lease.

Defendant operated the Go-Cart track for four months and then ceased paying rent. Complainants contacted defendant and he stated that he had been advised that he did not have to pay rent. A year and a half later, complainants notified him of the lease's expiration and filed a bill demanding the overdue rent and cost to remove the Go-Cart track.

Procedural History:

The Chancellor found the instrument to be an assignment and entered judgment for complainants for $6,904.58.

Issue:

Did Rogers assign or sublease the property to defendant?

Defendant's Argument:

The instrument is a sublease, not an assignment, so Rogers is liable for the payments, not defendant. This is supported by that being what complainants' written consent said it was for.

Rules:

  • LexisNexis IconWestLaw LogoGoogle Scholar LogoJustia LogoCaseMine LogoJustia LogoCaseMine LogoPage 427–428

    "If the instrument purports to transfer the lessee's estate for the entire remainder of his term it is an assignment, regardless of its form or of the parties' intention. Conversely, if the instrument purports to transfer the lessee's estate for less than the entire term—even for a day less—it is a sublease, regardless of its form or of the parties' intention."

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    "The cardinal rule to be followed in this state, in construing deeds and other written instruments, is to ascertain the intention of the parties."

Reasoning:

Even though Rogers agreed to remain liable, he did not obtain a reversion or right to re-enter. As he intentionally gave up all of his rights to the land, he created an assignment, regardless of the language used.

Holding:

Under either rule, Rogers assigned the lease to defendant. Affirmed.