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Branmar Theatre Co. v. Branmar, Inc.

Delaware Court of Chancery

264 A.2d 526 (1970)

Facts

Branmar Theatre Co. (Branmar Theatre) (plaintiff) was a corporation that entered into a lease agreement with Branmar, Inc. (Branmar) (defendant). Branmar’s principal, Joseph Luria, negotiated the lease with the Rappaport family, which owned all the capital stock of Branmar Theatre. Under the lease, (1) Branmar agreed to construct a building for the operation of a movie theater, and (2) Branmar Theatre agreed to pay Branmar a fixed amount of rent plus a certain percentage of Branmar Theatre’s receipts from admissions and concessions. Luria satisfied himself that the Rappaports were successful theater operators. The 16-page lease contained a non-assignment clause prohibiting Branmar Theatre from assigning the lease to anyone without Branmar’s prior written consent. Subsequently, Muriel and Reba Schwartz, who were also theater operators, expressed a wish to manage the movie theater for the Rappaports. Branmar rejected an assignment of the lease to the Schwartzes per the non-assignment clause. Thereafter, the Rappaports sold their shares of Branmar Theatre to the Schwartzes. Branmar considered this change in control of Branmar Theatre to constitute a breach of the lease agreement and the lease to be void. Branmar Theatre sued Branmar, seeking a declaratory judgment that the lease was valid and could not be canceled under the circumstances.

Rule of Law

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Issue

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Holding and Reasoning (Short, J.)

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