First American National Bank v. Chicken System of America, Inc.
Court of Appeals of Tennessee
616 S.W.2d 156 (1980)
First American National Bank (plaintiff) leased property to Chicken System of America (defendant) in 1968 under a lease barring assignment without written consent. In 1969, Performance Systems, Inc. (PSI) (defendant) bought Chicken System's store and took over the property despite First American's objection to the sublease, paying rent until defaulting and vacating in November 1970. First American re-leased the property to a pizza company in September 1972 at a lower rent, and a prior lawsuit already established PSI was liable for rent up to that 1972 re-lease because its earlier abandonment hadn't ended its privity of estate with First American. In this second suit, First American sought the rent deficiency arising after the 1972 pizza-company lease began; the trial court found for First American, and PSI appealed.
Whether a lease assignee who has abandoned the property remains liable for rent once its right to possess the property has been terminated, where the assignee never affirmatively assumed the lease.