Ernst v. Conditt

Facts

On June 18, 1960, Ernst and his wife Emily leased land in Davidson County, Tennessee, to Rogers for one year and seven days. Rent was $350 per month, or 15% of gross receipts if that was larger. The lease barred Rogers from assigning or subletting without the owners' written approval, and it kept him liable on the lease if he did either. It also required him to move all improvements above ground at the end of the term. Rogers built a go-cart track with an asphalt surface, a fence and floodlights. In July 1960 he negotiated to sell the business to Conditt. Conditt wanted a two-year lease, so the two men went to the Ernsts and negotiated an amendment extending the term to July 31, 1962. In the amendment the Ernsts consented to subletting the premises to Conditt, on the express condition that Rogers stay personally liable on the lease. On August 4, 1960, Rogers signed a statement that he sublet the premises to Conditt and would remain individually liable, and Conditt accepted it in writing. Conditt ran the track from August until November 1960 and paid the rent for August, September and October 1960 directly to the Ernsts. His last payment, of $350, came in June, 1961. He stayed in possession until the lease expired. In July 1962 the Ernsts' lawyers demanded the past due rent and removal of the improvements, and he did not reply.

Issues

1. Was the transfer of the lease from Rogers to Conditt an assignment or a sublease, when the papers used the words "sublet" and "subletting" and Rogers promised to stay personally liable?
2. Did Rogers's promise to remain liable to the Ernsts leave him a reversionary interest or a right to re-enter, so that the transfer counted as a sublease?

Holding

The transfer from Rogers to Conditt was an assignment under either the common law test or the intention test. The word "sublet" did not control, and Rogers's promise to stay liable gave him no reversion or right to re-enter. Conditt was directly liable to the Ernsts.