Court Opinion

ID: 6916177
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:41:49.794393+00
Date Added: 2024-06-11T16:06:39.940399
License: Public Domain

BAZELON, Circuit Judge
(dissenting).
The lease gives the landlord a reasonable veto power over particular prospective subtenants, not the power to prevent subleasing generally.
My colleagues do not hold that the tenant’s insolvency gives the landlord the power to prevent subleasing generally. To hold that it does would be equivalent to holding that insolvency of the tenant is a breach authorizing the landlord to terminate the lease. So long as the tenant does not default, his insolvency does not affect his tenancy. One can sympathize with a landlord who has leased his property for a long term and at a comparatively low rental, when the tenant’s financial position grows shaky and the market value of the lease has increased. He would like both a better tenant and a higher rental. But he has bargained for this tenant and this rental. Unless and until the tenant breaks the lease, the landlord is bound to his bargain. The value of the unexpired portion of the lease, by liquidation through subleasing at a higher rental, may sometimes be the difference between survival and collapse of the tenant’s business. In any event, whatever may be the value of the unexpired portion of a nonde-faulted lease, it is an asset to which the tenant’s creditors are entitled.
Nor do I perceive anything else in the circumstances of this case which entitles the landlord to object to subleasing generally. Complications resulting from shared property rights in fixtures seem to me irrelevant. They would grow from the provisions of the lease and should be held to have been within the contemplation of the parties when they bargained for a right to sublease.
Reasonable objection to the particular subtenant proposed would, of course, support the landlord’s refusal to consent to the sublease. But, whatever advice the landlord may have had from his counsel as to the character of the proposed subtenant, the only objection he expressed to the tenant — that the proposed sublease would leave the insolvent tenant as the owner of the fixtures, as it was under the original lease — related to subleasing generally and not to the proposed subtenant. Such objections, in my opinion, are not a reasonable basis for withholding consent to a sublease. I would therefore reverse the District Court’s judgment.