Coles Trading Co. v. Spiegel, Inc.

In a suit by a sublessor against a sub-lessee the district court held that the sub-lessee was not obligated to perform certain of the sublessor’s covenants in the overlying lease, where the sublessee had taken “subject to the terms of” such lease, but did not assume the performance of the particular sublessor’s covenants in question ; and from such determination, the sublessor appeals.

The original or overlying lease was between J. W. Dorris and his wife as lessors and the corporation, that later changed its name to the Coles Trading Company, as lessee.

Subsequently, the Coles Trading Company sublet the premises to Spiegel, Inc., in an instrument designated as a sublease, in which it was provided that the “lessors do by these presents * * * sublease * * and sublet unto the lessee” the premises in question, “subject to the terms of, and with all the rights, privileges and benefits granted the” Coles Trading Company, lessee under the overlying lease.

One of the covenants in the overlying lease provided that if in any year during the lease property taxes should be levied against the premises in excess of a certain amount, the Coles Trading Company, lessee therein, and sublessor in…