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Keywords

statuteleaselegal counsel
trialleaseappellant

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Jacobs v. Klawans, 225 Md. 147, 169 A.2d 677

Facts

On January 2, 1953, the parties entered into a written lease for ten years, which prohibited the lessees from subletting without the lessors' written consent. In March 1959, the lessees sought to sublet but were denied consent by the lessors. After consulting legal counsel, the lessees served a notice of termination, claiming the lease was void due to nonrecordation. The lessors recorded the lease and sought rent and costs, leading to this legal dispute.

On January 2, 1953, the parties hereto entered into a written lease for a term of ten years. This agreement, in pertinent part, provided that ‘The lessees shall have no power to assign or sublet the whole or any part of the lease or premises or store fixtures without first obtaining the written consent of the lessors, their heirs and assigns * * *’ and that the ‘lessees agree to pay all state and federal documentary stamps upon this lease or transfer.’

Issue

The main legal issues were whether the lessors could arbitrarily withhold consent to sublease and whether the lease was void for nonrecordation.

Two questions are raised. The appellants claim: ‘(1) that notwithstanding the provision in the lease that the lessees shall not have the power to assign or sublet without first obtaining the written consent of the lessors, the lessors cannot, arbitrarily, withhold such consent; and (2) that the lease is null and void.

Rule

The court applied the principle that a lessor may withhold consent to sublease arbitrarily unless the lease explicitly states otherwise, and that unrecorded leases of over seven years are valid as between the parties under the amendatory statute.

Basing the decisions, for the main part, on the grounds that restraints on the alienation of property interests are justified if the objectives behind the imposition outweigh the social evils which flow from the enforcement of the restraint, or that the interference with the power of alienation is so insignificant that no appreciable harm results from the enforcement of the restraint, the lessor's right to refuse consent, even though his refusal be arbitrary and unreasonable, has generally been upheld.

Analysis

The court determined that the lessors had the right to refuse consent to the subletting, even if their refusal was arbitrary and unreasonable, as the lease contained a clear prohibition against subletting without consent. Additionally, the court found the amendatory statute constitutional, affirming that the lease was valid despite not being recorded.

We agree with the rule as it has been stated above, thinking that the right of the lessor to select a lessee of his own choosing to occupy and use his property offsets, if it does not outweigh, any evils flowing from the enforcement of the restriction on alienation, and that such restriction is in many cases, especially when the duration of the lease is short, of minor importance.

Conclusion

The court affirmed the lower court's judgment in favor of the lessors, ruling that they were entitled to the rent and the cost of documentary stamps.

Judgment affirmed, with costs.

Who won?

The lessors prevailed in the case because the court upheld their right to withhold consent to sublease and confirmed the validity of the lease despite its nonrecordation.

The trial court, was, therefore, correct in rendering judgment for the rental payments; and, as the explicitly agreed, in the lease, to pay the cost of the documentary stamps, the court was also correct in including such cost in the amount of the judgment.

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