Hoops v. Tate

DRAPEAU, J.

Plaintiffs own a store building in Pomona which they leased to four defendants, husbands and wives.

The lease was for a term of 10 years. Defendants proposed to, and did operate a retail ladies’ ready-to-wear store on the leased premises.

Differences as to the conduct of the business arose among the parties. One of the couples sold out to the other couple, and retired from the business. No written assignment of the lease was made, nor were the premises sublet.

Plaintiffs served defendants with notice terminating the tenancy, and demanded possession of the store.

[487]

The demand being refused, plaintiffs brought this action for possession of the property, and for damages, upon two theories: First. That the transfer by two of the defendants of their interest in the business was an assignment of the lease, contrary to a covenant requiring consent of the lessors. Secondly. That the percentage feature of the lease was an essential part of it, the rent to be paid being $275 per month plus a percentage of the gross retail sales of the business, with a fair rental value of the store of $600 per month; that it was understood and agreed that all of the defendants were to work in the business, the ladies being experienced salespeople and the husbands experienced businessmen, the services, capital, and “know how” of all of them being necessary to make maximum gross sales; that this was “actually the factor’’ which induced plaintiffs to lease the property; and that this agreement was breached when two of the defendants disposed of their interest in the business to the other two. I)

The trial court found that the transfer of the interest in the business resulted in an assignment of the lease, but that no covenant in the lease had been violated. From the judgment which followed plaintiffs appeal.

Covenants against assignment do not apply to co-lessees.

(Spangler

v.

Spangler,

11 Cal.App. 321 [104 P. 995];