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A. D. Juilliard & Co. v. Am. Woolen Co. - 69 R.I. 215, 32 A.2d 800 (1943)

Rule:

Notwithstanding the absence of an express agreement on the part of an assignee of the unexpired term of a lease of real property to assume and pay the rentals contracted to be paid by the original lessee, the assignee under such circumstances becomes primarily liable for the debt, and the original lessee only secondarily liable. The lessee having enjoyed and exercised his right to dispose of such leasehold estate, the assignee is held to take the estate subject to all the terms and conditions expressed in the original lease contract, and is bound to the original lessor for the performance of the obligations which were imposed upon his assignor, or, in other words, he simply stands in the shoes of the original lessee

Facts:

 Defendant American Woolen Company was one of numerous sublessees of certain warehouse property located in the city of Providence. In 1934, it received the assignment of the lease from a previous sublessee, and in 1939, it assigned the lease to yet another successor sublessee. Plaintiff A.D. Juilliard & Company was the lessor's successor in interest, and brought this action in replevin against American Woolen to recover installments of rent and taxes in the total amount of $2935.83, allegedly due under a lease for the period between September 1940 and March 1941. The trial court ruled in favor of defendant sublessee, and plaintiff sought further review.

Issue:

Was the sublessee liable for rent that accrued after it had re-assigned the lease to a new party?

Answer:

No

Conclusion:

On appeal, the Supreme Court of Rhode Island affirmed, concluding that: (1) the sublessee never agreed to assume the obligation to pay rent for the unexpired term of the lease; (2) if a lessor chose to execute a lease without adequately protecting its rights, it could not thereafter complain if, by force of law, it was deprived of a benefit that it might otherwise have secured for itself; (3) the sublessee did not "indirectly" agree to pay rent by its course of dealing with the lessor; and (4) the sublessee's assignment of the lease to the successor sublessee was in good faith, and the sublessee did not retain any control over the leased premises after the assignment.

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