Kendall v. Ernest Pestana,
Inc. case brief summary
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709 P.2d 837
CASE SYNOPSIS: Appellants,
proposed assignees to a lease, appealed from the Superior Court of
Santa Clara County (California) which sustained a demurrer to the
complaint which sought declaratory and injunctive relief for
appellee's refusal to assign a lease.
FACTS: The city of San Jose, California leased space to two people who assigned their interest to respondent. Prior to the assignment they subleased the space. The person subleasing sold his business to appellants, who agreed to be bound by the lease. The lease provided that written consent of the lessor was required before the lessee could assign his interest. Thus, the person subleasing requested consent from respondent, who refused. The proposed assignees, appellants, brought suit for injunctive relief and sought a declaration that the refusal to consent was unreasonable and an unlawful restraint on alienation. The trial court sustained a demurrer to the complaint and appeal followed.
ISSUE:
May a commercial lessor unreasonably withhold his consent to an assignment of a lease even when nothing in the lease indicates that his consent will not be unreasonably withheld?
HOLDING:
The court found that where the commercial lease provided for assignment only with the prior consent of the lessor, the consent could be withheld only where the lessor had a commercially reasonable objection to the assignee or the proposed use.
CONCLUSION: On appeal, the court reversed the order sustaining the demurrer to the complaint, finding where the commercial lease provided for assignment only with the prior consent of the lessor, the consent could be withheld only where the lessor had a commercially reasonable objection to the assignee or the proposed use.
FACTS: The city of San Jose, California leased space to two people who assigned their interest to respondent. Prior to the assignment they subleased the space. The person subleasing sold his business to appellants, who agreed to be bound by the lease. The lease provided that written consent of the lessor was required before the lessee could assign his interest. Thus, the person subleasing requested consent from respondent, who refused. The proposed assignees, appellants, brought suit for injunctive relief and sought a declaration that the refusal to consent was unreasonable and an unlawful restraint on alienation. The trial court sustained a demurrer to the complaint and appeal followed.
ISSUE:
May a commercial lessor unreasonably withhold his consent to an assignment of a lease even when nothing in the lease indicates that his consent will not be unreasonably withheld?
HOLDING:
The court found that where the commercial lease provided for assignment only with the prior consent of the lessor, the consent could be withheld only where the lessor had a commercially reasonable objection to the assignee or the proposed use.
CONCLUSION: On appeal, the court reversed the order sustaining the demurrer to the complaint, finding where the commercial lease provided for assignment only with the prior consent of the lessor, the consent could be withheld only where the lessor had a commercially reasonable objection to the assignee or the proposed use.
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