Jaber v. Miller

Facts

In 1945 Defendant Jaber rented a building from the owner for a five-year term beginning March 1, 1946, and ending March 1, 1951. The lease called for rent of $200 per month and stated that the lease would terminate if the premises were destroyed by fire. Defendant had a rug shop in the building until 1949, when the stock was sold at auction and the lease transferred to Norber and Son. The instrument of transfer, whether it was an assignment or sublease, is the key issue in this case. The form of the instrument from Defendant to Norber and Son was titled “Contract and Assignment,” and stated that Defendant assigned the lease contract to Norber and Son for the remainder of the lease period. Norber and Son paid $700 in cash and executed five promissory notes for $700 each which were due in four month intervals. Norber and Son agreed to pay $200 per month and Defendant reserved the right to retake the property if Norber and Son failed to pay the rent. The instrument entitled “Cont ract and Assignment” contained no reference to fire ending the lease. Subsequently, Plaintiff Miller obtained a transfer of the lease from Norber and Son. Plaintiff was unable to pay $700 at the four month intervals and agreed with Defendant to divide the payments into monthly installments of $175 each. Plaintiff and Defendant then executed the notes in controversy, which Defendant accepted in substitution of the other unpaid notes. When the premises burned Plaintiff asserted that the Defendant’s transfer to Norber and Son was a sublease and that the notes represented rent. Plaintiff then argued, under the rule that the sublease terminates when the primary lease terminates (such as by the fire), that Plaintiff’s sublease ended with the fire.