Opinion ID: 504431
Heading Depth: 1
Heading Rank: 3

Heading: Consent Requirement

Text: 19 Joseph Brothers argues that even if the agreement between Woolworth and SCOA were a sublease, Woolworth breached its lease because Joseph Brothers' consent was not obtained. The trial court found, however, that as a matter of law the lease did not impose an obligation on Woolworth to obtain Joseph Brothers' consent to sublease the entire premises to SCOA for the Hills Department Store. Joseph Bros., 641 F.Supp. at 825. The lease provision at issue provides: Assigning, Mortgaging, Subletting 20 ART. 15 Except as hereinafter provided, the Tenant agrees not to assign, mortgage, pledge or encumber this lease without first obtaining the written consent of the Landlord. The Landlord agrees not to assign, mortgage, pledge or encumber this lease or any of the rents becoming due hereunder without first obtaining the written consent of Tenant, provided however, that such consent shall not be needed for an assignment of this lease in the form of Schedule C attached hereto or for a transfer of this lease to the purchaser in connection with a bonafide sale of the demised premises or the premises of which the demised premises are a part. The Tenant is hereby given the right to assign this lease to a corporation substantially all of the stock of which is owned by the Tenant, and to sublet the demised premises or any part thereof, but notwithstanding such assignment or subletting the Tenant shall continue liable for the performance of the terms, conditions and covenants of this lease. The Tenant further agrees that it will not without the written consent of the Landlord, which consent the Landlord agrees not unreasonably to withhold, sublet to a bank, super market or grocery store. 21 The last sentence was typewritten; the rest was printed. 22 Joseph Brothers argues that the word encumber in the first sentence includes subletting, so that consent is necessary. It also argues that the phrase to a corporation substantially all of the stock of which is owned by the Tenant not only modifies the right to assign, but also the right to sublet, because the phrase such assignment or subletting indicates that both are referring only to agreements with subsidiaries. To provide consistency in its argument, Joseph Brothers maintains that the consent necessary under the last sentence of the article when subletting to a bank, supermarket, or grocery store presupposes that these establishments are subsidiary entities. Therefore, under the interpretation of Joseph Brothers, all assignments and subleases require consent except assignments to subsidiaries of Woolworth and subleases to subsidiaries that are not banks, supermarkets, or grocery stores. Under this interpretation, however, subleasing is more restrictive than assigning, because Woolworth could assign its lease to a subsidiary bank or subsidiary supermarket without Joseph Brothers' consent, but could not sublet to such entities without consent. 23 Woolworth argues that, under the clear and unambiguous language of the lease, all assignments, except to subsidiaries, require consent, and all subleases, except to banks, supermarkets, or grocery stores, do not require consent. Moreover, even if encumber includes subletting, the unqualified right to sublet to other than a bank, supermarket, or grocery store is expressly granted in the lease, and therefore falls within the exceptions to the consent requirement. 24 Woolworth's interpretation is correct. As noted by the district court, the clear language of the lease decides the issue and [t]here is absolutely no language implying that consent of the landlord is required when the whole of the premises is sublet, unless the premises are subleased to a bank, supermarket, or grocery store. 641 F.Supp. at 825. Furthermore, the decisions of other courts faced with the interpretation of this same provision in other Woolworth leases are in agreement. See Coxe v. F.W. Woolworth Co., 652 F.Supp. 64, 67, 71 (M.D.La.1986) (The lease itself unambiguously grants the tenant the right to sublet except to a supermarket ; landlord's approval not necessary for sublease), aff'd, 812 F.2d 1403 (5th Cir.1987); F.W. Woolworth Co. v. Plaza North, Inc., 493 N.E.2d 1304, 1308 (Ind.Ct.App.1986) ([Article 15 of] the overlease forbids an assignment without the consent of the landlord, but does not forbid Woolworth from subleasing the premises); Fair Investors, Ltd. v. F.W. Woolworth Co. (In re Fair Investors), 85 B.R. 733, 734 (Bankr. W.D. Tex. 1987) (lease clear and unambiguous that consent not necessary before Woolworth executed subleases). See also Blair Mill Ltd. v. F.W. Woolworth Co., No. 86-2841, LEXIS slip op. at 3 (E.D.Pa. Feb. 25, 1987) (The lease also gives Woolworth the right to sublet all or part of the demised premises and no indication in the court's opinion that Woolworth had landlord's consent), aff'd, 833 F.2d 303 (3d Cir.1987). 25 Accordingly, we affirm the district court's determination that the sublease by Woolworth to SCOA did not require the consent of Joseph Brothers.