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Contracts Keyed to Barnett
Food Fair Stores, Inc. v. Blumberg
Citation:
234 Md. 521, 200 A.2d 166 (1964)Facts
In December 1949, Blumberg (lessors) entered into a lease agreement with Food Fair Stores, Inc., for a store building in Glen Burnie, Maryland, which included a provision for percentage-based rent. In 1951, Food Fair assigned the lease to its wholly-owned subsidiary, Food Fair Stores of Maryland, Inc., and notified the lessors. In 1956, as part of another corporate reorganization, the lease was reassigned from the subsidiary back to the parent company and then to another newly-formed subsidiary, Food Fair Stores, Anne Arundel, Inc., without notifying the lessors. The lease contained a provision (paragraph 12) that specified procedures and rent adjustments in case of assignment. When the lessors discovered the 1956 assignments in 1960, they demanded payment according to paragraph 12. The lessees argued that these were merely “technical” assignments within the corporate family and should not trigger the assignment provisions, or alternatively, that the lessors had waived their rights by not enforcing them after the 1951 assignment.
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