Delco Appliance Corp. v. Selby

Delco Appliance Corp. v. Selby

Where a lessee with a contractual option to renew transfers that option for consideration, the transfer carries the same substantive right to renew and the assignor remains bound to effectuate the transfer and to remain liable for obligations attached to the renewal (including payment of rent); an assignee's timely written/notarial notice of renewal effectuates the renewal ipso facto and binds the lessor within the contract terms.

Citation
[1934] SCR 684
Parties
Appellant/defendant: Delco Appliance Corporation (Delco Light Company); Respondents/plaintiffs: William Dunbar Selby and Others (Selby estate)
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
15 June 1934
Procedural Posture
Appeal: Lease Dispute / On Appeal to the Supreme Court of Canada From the Court of King’s Bench, Province of Quebec (appeal Side)
Outcome
Appeal dismissed with costs; judgment of Court of King’s Bench and Superior Court affirmed.
Legal Topics
Transfer of Lease Rights, Right of Renewal, Assignment Vs Sublease, Notice Requirements for Renewal, Liability for Rent After Assignment, Droit De Créance and Service Requirements (art.1570 Et Seq.)
Source Language
English
Property Law Contract Law Lease Law Civil Procedure Quebec Civil Code Interpretation Transfer of Lease Rights Right of Renewal Assignment Vs Sublease +3 more

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Parties

Delco Appliance Corporation (Delco Light Company)

Appellant/defendant

William Dunbar Selby and Others (Selby estate)

Respondents/plaintiffs

Procedural Posture

Appeal: Lease Dispute / On Appeal to the Supreme Court of Canada From the Court of King’s Bench, Province of Quebec (appeal Side)

Legal Issues

  1. 1 Whether assignment of renewal right to assignee (Ostro) carried with it liability of original lessee for rent during renewed term
  2. 2 Whether notice of renewal given by assignee was effective against lessor without lessor's acceptance
  3. 3 Whether the transfer was a transfer of a droit de créance requiring service to be effective against the lessor

Ratio Decidendi

Where a lessee with a contractual option to renew transfers that option for consideration, the transfer carries the same substantive right to renew and the assignor remains bound to effectuate the transfer and to remain liable for obligations attached to the renewal (including payment of rent); an assignee's timely written/notarial notice of renewal effectuates the renewal ipso facto and binds the lessor within the contract terms.

Court Disposition

Appeal dismissed with costs; judgment of Court of King’s Bench and Superior Court affirmed.

Orders

  • Appeal dismissed with costs.
  • Judgment maintained for respondents for rent claimed for May–August 1932.