13 Mass. App. Ct. 273 | Mass. App. Ct. | 1982
The plaintiff landlord, Net, brought an action against the defendant tenant, Giannini, and his assignee of the lease, Upper Cut, Ltd., to recover rent and costs of alterations to the premises claimed to be due under the lease. Upper Cut failed to appear and to answer and was defaulted.
“In determining whether the facts are sufficient to show a release of the lessee there are two possible approaches. Apart from showing an express release, the lessee may show that the lessor accepted a surrender of the old lease, or he may show that the lessor or the assignee with the consent of the lessor and without consent of the lessee materially varied the obligations under the lease so as to discharge the lessee on principles analogous to those of suretyship.” Walker v. Rednalloh Co., 299 Mass. 591, 594 (1938). We recite the facts as they appear from the parties’ pleadings, affidavits, and exhibits. On May 22, 1969, Giannini entered into a lease with Net’s predecessor in title by which Giannini became the lessee of premises located in Brookline for a term of five years commencing on August 1, 1969. This term was extended to July 31, 1979, by an amendment, the first, to the lease. The lease provided that the “[tjenant shall not assign this Lease . . . without, on each occasion, obtaining the prior written consent of the Landlord .... Tenant shall remain primarily liable upon all the terms, covenants and conditions hereof and will bind any assignee ... to the terms and provisions of this Lease.”
In May of 1977, with a little over two years left on his lease, Giannini asked Net to consent to an assignment of the lease to Upper Cut. However, Upper Cut would not accept an assignment unless the term of the lease could be extended for an additional three years, giving it the right to occupy
On August 8, 1977, Net and Upper Cut executed a document designated as “Second Amendment of Lease” which provided that “[w]hereas” Net’s predecessor in title and Giannini had entered into a lease agreement on May 27, 1969, “and whereas” Net and Giannini had amended the lease on March 8, 1974, and “[w]hereas, simultaneous with this Second Amendment of Lease,” Giannini and Upper Cut “have entered into an Assumption and Assignment of Lease Agreement,” and “[w]hereas, the parties agree to amend the terms of said Lease,” then “[effective June 10, 1977, Article II of said Lease shall be amended to provide that the term shall end on the last day of July, 1982.”
It appears from the summary process pleadings (see n. 1), that Upper Cut soon fell behind in its rent payments to Net, and that on March 31, 1978, Net made written demand on Giannini for the money owed to it by Upper Cut. Net obtained a judgment against Upper Cut for possession and for
1. Release From the Suretyship Relationship.
“The mere assignment of a lease with the consent of the lessor who takes a covenant from the assignee to pay rent or thereafter collects rent from the assignee does not relieve the original lessee from his contract to pay rent expressed in the covenants of the lease.” Hamlen v. Rednalloh Co., 291 Mass. 119, 122 (1935). Connolly v. Rogers, 292 Mass. 140, 143 (1935). Rather, the effect of the assignment was, “as between assignee and lessee, the creation of the relationship of principal and surety as to the debts for rent thereafter coming due under the lease.” Hamlen v. Rednalloh Co., 291 Mass. at 124. See also Walker v. Rednalloh Co., 299 Mass. at 594. There is nothing that appears in the various documents or from the circumstances of their making which can be construed as defeating a suretyship relationship between Giannini and Upper Cut as matter of law. Surety-ship defenses against the landlord can be waived by a tenant, and the present lease expressly provides that, in the event Net consents to an assignment of the lease, Giannini “shall remain primarily liable” on the lease. See Schwartz, Lease Drafting in Massachusetts § 9.9, at 433 & n. 10 (1961).
. Giannini claims that he was released from the relationship with Upper Gut by reason of the second amendment which materially varied the term of the lease, without his consent, as demonstrated by the language of the assignment. Under the first amendment to the lease, Giannini was bound
According to Giannini’s reading of the assignment, he became Upper Cut’s surety, but only through July 31 of 1979, rather than of 1982. However, because Net was able to mitigate its damages as of February 1, 1979, it only looks to Giannini for payment of rent that was owed during the period to which Giannini claims his surety obligation was limited. Thus, even if the second amendment was a departure from the terms of the assignment and the lease, it has not caused him a loss sufficient to discharge him from the surety relationship as matter of law. Cf. Lynn Five Cents Sav. Bank v. Portnoy, 306 Mass. 436, 440 (1940) (“The mortgagor, as surety, is released only to the extent that the value of the security has been lessened by the conduct of the mortgagee [allowing a grant of an easement over the mortgaged premises]. . . . This we think is in accord with the general rule that a surety is released only to the extent that the security has been impaired by the action of the creditor”).
2. Surrender of the Lease.
Giannini seeks to avoid altogether a suretyship relationship with Upper Cut by claiming that the second amendment to the lease is a new five-year lease between Net and Upper Cut. As such, his argument continues, the second amendment constitutes a novation or surrender, discharging him from all obligation to Net as of its effective date, June
3. Conclusion.
The documents and the parties’ affidavits leave open the factual dispute whether Net, in consenting to the assignment and in executing the second amendment to the lease, intended to release and discharge Giannini from his obligations under the lease. See Tudor Press, Inc. v. University Distrib. Co., 292 Mass. at 340-341; Walker v. Rednalloh Co., 299 Mass. at 594. It follows from what we have said that it was error to allow Giannini’s motion for summary judgment.
The order allowing the motion for summary judgment and the judgment are reversed.
So ordered.
Prior to the commencement of this suit, Net brought an action in summary process against Upper Cut and obtained judgment for possession
In his affidavit, Giannini denies that the assignment and second amendment were simultaneously executed, and he states that he neither saw the second amendment nor knew of its contents. Net’s president claims by affidavit that Giannini “was fully aware of this condition and approved of the transaction.”
The lease provides that the “[tjenant also agrees (i) to indemnify and save Landlord harmless from and against . . . the cost of putting the Premises in good order or preparing the same for rental.”