Jaber v. Miller

219 Ark. 59, 239 S.W.2d 760 (1951)

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Nature of the Case

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Facts

Jaber (D) rented a building for a term of five years. The instrument provided that the lease was to be canceled if the building was destroyed by fire. Before the lease expired, D closed the business which he was operating in the building and transferred the lease to Norber & Son. The transfer instrument was entitled 'Contract and Assignment,' and purported to transfer D's lease for the remainder of the lease term. In consideration of the transfer, Norber & Son paid D $700 and executed five promissory notes of $700 each, payable at five-month intervals. Norber & Son also agreed to make rental payments to the building's owner. The transfer instrument contained no provision regarding the parties' rights if the building were to be destroyed by fire. The lease was later transferred again to Miller (P). P was unable to pay the promissory notes as they were due and agreed with D to make lower monthly payments on them. The notes were re-executed to reflect this change. The building was destroyed by fire. P sued to cancel the notes, arguing that the transfer to Norber & Son was a sublease, not an assignment and that the notes, therefore, represented rent. Further, P argues that he is no longer liable on the notes because a sublease terminates with the termination of the original lease, and the lease, in this case, terminated upon destruction of the building by fire.