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 Professor Byron Warnken and Professor Elizabeth Samuels
University of Baltimore School of Law 

Citation  Julian v. Christopher, 320 Md. 1, 575 A.2d 735 (1990). 
Parties 
 
 

Guy D. Christopher -- landlord, plaintiff at trial in District Court, appellee in Circuit Court, respondent in Court of Appeals. 

Douglas Julian and William J. Gilleland, III -- tenants, defendants at trial in District Court, appellants in Circuit Court, petitioners in Court of Appeals. 

Disposition/Mandate Sought

Christopher/landlord: in trial court, an order granting repossession of the leased premises, based on a finding of a breach of the lease by the tenant.  In Circuit Court, affirmance of the judgment below.  In Court of Appeals, affirmance of affirmance of the judgment. 

Julian and Gilleland/tenants: in trial court, denial of an order granting repossession.  In Circuit Court, reversal of the judgment below.  In Court of Appeals, reversal of affirmance of the judgment. 

Legal Theories 

Christopher/landlord at trial: Under the common law rule followed by the Maryland Court of Appeals, when a lease requires a landlord's consent for subletting, and is silent concerning acceptable bases for denying consent, then the landlord may withhold consent for any reason, even an arbitrary and capricious reason.  Therefore, Christopher's withholding consent was permissible, and the tenants' subletting of the premises constituted a breach of the lease that entitled the landlord to repossession. 

Julian and Gilleland/tenants at trial: not stated in opinion.  Presumably either (1) when a clause requires consent for subletting and is otherwise silent, then a landlord may not refuse consent unreasonably, or (2) the parties intended that under the consent clause in their lease the landlord would only refuse consent in order to prevent subletting to "someone who would tear the apartment up," or both. 

Julian and Gilleland/tenants in Circuit Court: same as at trial.  Therefore trial court erred in entering judgment in favor of Christopher. 

Christopher/landlord in Circuit Court: same as at trial.  Therefore judgment was properly entered by trial court. 

Julian and Gilleland/tenants in Court of Appeals: same as at trial.  Therefore Circuit Court erred in affirming trial court. 

Christopher/landlord in Court of Appeals: same as at trial.  Therefore Circuit Court properly affirmed District Court. 

Procedure

(a) Christopher/landlord sues in District Court for repossession of premises leased to Julian and Gilleland/tenants. 

(b) District Court judgment for Christopher/landlord. 

(c) Julian and Gilleland/tenants appeal to Circuit Court for Baltimore City. 

(d) Circuit Court affirms District Court. 

(e) Julian and Gilleland/tenants file a writ of certiorari to the Court of Appeals of Maryland, which grants the writ. 

Legally Significant 
or Key Facts 
Tenants Julian and Gilleland rented business premises from landlord Christopher.  The lease contained a "silent" consent clause, i.e., a clause that required written consent of the landlord for a sublease or assignment and that did not specify what would be acceptable bases for denial of consent.  The tenants requested permission to sublet part of the premises.  The landlord responded that he would not consent unless they paid an additional $150/month.  The tenants allowed the sublessee to take possession anyway. 
Issue(s)

(a) Under Maryland law, is a landlord prohibited from unreasonably withholding consent to a sublease or assignment when a clause in a lease requires the landlord's consent but is silent with respect to permissible reasons for refusal? 

(b) Does this new rule prohibiting a landlord from unreasonably withholding consent apply in this case in which the rule is adopted even though the lease between the parties was entered into before the adoption of this rule, when the landlord could withhold consent for any reason? 

Holding(s)

 (a) Yes.  Under Maryland law, a landlord is prohibited from unreasonably withholding consent to a sublease or assignment when a clause in a lease requires the landlord's consent but is silent with respect to permissible reasons for refusal. 

(b) Yes.  This new rule prohibiting a landlord from unreasonably withholding consent does apply in this case in which the rule is adopted even though the lease between the parties was entered into before the adoption of this rule, when the landlord could withhold consent for any reason. 

Court's Rationale 

(a) In Jacobs v. Klawans, 225 Md. 147, 169 A.2d 67 (1961), the Court followed the common law rule that when a lease specifies simply that the tenant may not sublet or assign without the landlord's consent, then the landlord may withhold consent for any reason, even if the withholding is arbitrary and unreasonable.  When that case was decided, most authorities supported the rule. 

Today, secondary authorities reject the common law rule and the modern trend of judicial decisions is also to reject the traditional rule.  Now the current Restatement (Second) of Property states that the landlord may not withhold consent unreasonably unless the parties have freely negotiated a provision giving the landlord an absolute right to withhold consent.  Powell on Real Property now states that because landlord-tenant relationships have become more impersonal, and because housing and commercial space have become more scarce, modern courts strictly construe restrictions on tenants'Ôerty.  Whereas at the time of Jacobs v. Klawans most jurisdictions followed the common law rule, the trend today is to impose a reasonableness standard.  (Louisiana, Alabama, and then eight of the next fourteen states to consider the issue have imposed such a standard.) 

Public policy requires that the landlord act reasonably when a lease clause requires consent for subletting or assigning.  If a landlord may arbitrarily withhold consent, then the tenant's right to sublet or assign is virtually nullified.  Most tenants would expect that a landlord under such a clause would be required to act reasonably and would not be free to completely deny the right to sublet or assign. 

There are two public policy reasons why the common law should be rejected.  First, public policy disfavors restraints on alienation.  In the absence of a consent clause, tenants may freely sublet or assign.  Although lease clauses restricting alienation are permitted, they are strictly construed so as to favor tenants' rights of alienation.  Secondly, in a lease as in other contracts, there is an implied covenant of good faith and fair dealing, which dictates a reasonableness standard in a lease that does not specify a standard for withholding consent. 

(b) The new rule applies to this case for two reasons.  (1) If the ruling were purely prospective it would be mere dictum.  (2) The tenants should benefit from their effort and expense in challenging the old rule.  Otherwise, there would be no incentive for a litigant to appeal from a decision upholding a precedent.  However, the new rule should not be applied to this case if the landlord carries the burden at the trial on remand of proving that he actually knew of and relied upon the common law rule of Jacobs v. Klawans. 

Dicta 

(a) Obvious examples of reasonable refusals to consent to a particular sublease are: financial irresponsibility or instability of the transferee and unsuitability or incompatibility of the transferee's intended use of the premises. 

(b) If the landlord refuses to consent to a sublease solely for the purpose of increasing the rent, the refusal is unreasonable, unless the sublease will necessitate extra expenditures by or more economic risk for the landlord. 

(c) The new Maryland rule prohibiting a landlord from unreasonably withholding consent to sublease or assign applies, beyond this case, only to cases involving leases entered into after the date of this decision. 
(Leases entered into before the date of this decision should be interpreted under the law that existed at the time the agreements were executed.  It would be unfair to upset those transactions, and the courts should protect the right of contracting parties to rely on existing law.) 

Separate Opinions  None. 
Judgment/ 
Disposition
Circuit Court judgment reversed, and case remanded to the Circuit Court for that court to vacate the judgment of and remand the case to the District Court for further proceedings.
 

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What is a Case? ] The Court Systems That Produce Case Law ] The Types of Opinions Issued ] Reading Cases: General Questions to Ask ] Components of a Brief ] Case Law and Case Briefing: An Introduction ] Elements of a Case Brief ] [ Maxi Brief ] Definition of Mini-Briefs and Others ] A Case Briefing Form ]
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