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Property Keyed to Rabin
Abernathy v. Adous
Citation:
85 Ark.App. 242.Facts
In 1992 Appellants entered a lease agreement with the original lessee, Griffith Petroleum Inc. (GPI). In 1997, GPI subleased the property under the lease to Adous. Adous paid rent monthly to GPI who in turn paid the Appellants and Fidelity National Bank, the mortgage lender for the property. In April 2001, GPI failed to pay rent to Appellants. Adous offered the rent payment directly to Appellants but they refused it. Adous sued Appellant and GPI for specific performance to accept his rent payments. Appellants later learned that GPI was insolvent and terminated the lease, ordering Adous to leave the property.
At trial, Appellants argued that Adous was a sublessee whose rights under the lease were terminated when GPI became insolvent. However, the court held that Adous was an assignee who became the lessee after GPI became insolvent. Therefore, Appellants’ forfeiture of the lease was unjust. Appellants appealed this decision.
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