Buck v. J. M. McEntee & Sons
1954 OK 286, 275 P.2d 984, 1954 Okla. LEXIS 656 (1954)
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Rule of Law:
A lessee who assigns a lease remains liable under the express covenant to pay rent, even if the lessor consents to the assignment and accepts rent from the assignee, unless the lessor expressly agrees to release the original lessee.
Facts:
- On September 30, 1950, J. E. Buck entered into a written lease with J. M. McEntee and Sons to rent a property for a restaurant for a three-year term.
- The lease obligated Buck to pay $150 per month and gave McEntee a lien on the restaurant's fixtures to secure the rent.
- The lease contained a provision stating that Buck could not assign the lease without the written consent of McEntee.
- On December 7, 1951, Buck assigned the lease to Mrs. Arahvilla Malone with the express written consent of McEntee.
- Malone took possession of the property on January 1, 1952, and paid rent directly to McEntee for several months.
- Malone defaulted on rent payments after June 1952.
- On March 1, 1953, Malone surrendered possession of the premises back to Buck, who has held possession ever since.
Procedural Posture:
- J. M. McEntee and Sons (plaintiff) filed an action in the trial court against J. E. Buck (defendant) to recover unpaid rent and foreclose a lien.
- Buck filed a pre-trial motion asking the court to require McEntee to elect between remedies, which the trial court overruled.
- The case was tried to the court, which rendered a judgment in favor of McEntee for the full amount of rent claimed.
- Buck (appellant) appealed the trial court's judgment to the Supreme Court of Oklahoma.
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Issue:
Does a lessor's consent to a lease assignment and subsequent acceptance of rent from the assignee, without more, impliedly release the original lessee from their contractual obligation to pay rent?
Opinions:
Majority - Davison, J.
No. A lessor's consent to an assignment and acceptance of rent from the assignee does not release the original lessee from the covenant to pay rent without an express agreement to that effect. The court distinguished between privity of estate and privity of contract. While the assignment of the lease with the lessor's consent destroys the privity of estate between the lessor and the original lessee, the privity of contract remains intact. The original lessee's express covenant to pay rent is a contractual obligation that persists notwithstanding the assignment. The court found no evidence that McEntee had agreed to accept Malone as the sole tenant and release Buck from his obligation. Citing precedents such as Leckie v. Dunbar and Staner v. McGrath, the court affirmed that collecting rent from an assignee does not, by itself, constitute a release of the original lessee.
Analysis:
This decision reaffirms the enduring nature of contractual obligations in property law, specifically in the context of lease assignments. It clarifies that a landlord does not waive their rights against the original tenant merely by consenting to an assignment and accepting rent from the new tenant. The ruling provides significant protection for lessors, ensuring they retain their original contractual counterparty as a guarantor of the rent obligation. For lessees, it serves as a critical reminder that an assignment does not equal a release; they must secure an express release or novation from the lessor to be fully relieved of their lease obligations.
