Hawkinson v. Johnston

• Decision Date: 11 October 1941
• Docket Number: 11943.,No. 11939,11939
• Citation: 122 F.2d 724
• Parties: HAWKINSON v. JOHNSTON. JOHNSTON v. HAWKINSON.
• Court: U.S. Court of Appeals — Eighth Circuit

122 F.2d 724 (1941)

HAWKINSON v. JOHNSTON.

JOHNSTON v. HAWKINSON.

Nos. 11939, 11943.

Circuit Court of Appeals, Eighth Circuit.

September 22, 1941.

Writ of Certiorari Denied December 15, 1941.

Rehearing Denied October 11, 1941.

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Maurice J. O'Sullivan, of Kansas City, Mo. (J. Francis O'Sullivan and John M. P. Miller, both of Kansas City, Mo., on the brief), for Axel Hawkinson.

Philip J. Close, of Kansas City, Mo. (Inghram D. Hook and Harry L. Thomas, both of Kansas City, Mo., on the brief), for George Gaston Johnston.

Before GARDNER and JOHNSEN, Circuit Judges, and COLLET, District Judge.

Writ of Certiorari Denied December 15, 1941. See 62 S.Ct. 365, 86 L.Ed. ___.

JOHNSEN, Circuit Judge.

Two principal questions are presented for determination: (1) Whether a repudiation of a lease and an abandonment of the premises, accompanied by a default in the payment of an instalment of rent, may constitute a total breach of the contract of lease, under the law of Missouri; and (2), if so, whether, for such a breach of a 99 year lease, having a remaining term of 67 years, the trial court erred in fixing the determinable or predictable period of damages, under the evidence in this case, at ten years. Some minor contentions also are raised by defendant, but we do not regard any of these as controlling, and they will therefore be referred to only briefly and incidentally.

The lease covered a vacant lot located at 1331 Walnut Street, in the city of Kansas City, Missouri. It was made in 1909, for a period of 99 years, between plaintiff's devisor, as owner, and defendant and his brother, as lessees. On the death of the owner, the lessees purchased a one-third interest in the title from one of the devisees. Plaintiff was the devisee of the other two-thirds interest. The lease provided for rent on an annual basis, payable quarterly. Plaintiff's two-thirds share of the rent for the unexpired term was $1,600 per annum. The lessees also were obligated to pay all taxes upon the property for the period of the lease.

The lessees occupied the property and apparently paid the rent and taxes to June 30, 1940. On June 14, 1940, they notified plaintiff in writing of their intention to surrender and abandon his interest in the premises on June 30, 1940. The next quarterly instalment of rent was due on July 1, 1940. Plaintiff promptly replied that a surrender would not be accepted and that he expected to hold the lessees liable for their full term. On June 25th, the lessees repeated their notice of intention to surrender on June 30th. On June 28th, plaintiff again advised the lessees that he would not accept a surrender, which he termed "inexcusable on any ground", and declared that he would enforce his legal rights against them. On June 30th, the lessees posted a notice on the property that they had surrendered and abandoned the premises to plaintiff. On July 3rd, plaintiff made demand for his share of the quarterly rent instalment due July 1st. The lessees denied liability for any further rent, and reasserted that they had surrendered and abandoned the property on June 30th.

On August 2, 1940, plaintiff brought this action against the resident co-lessee as defendant,¹ alleging that it was certain and determinable that "performance of the terms of said lease could and would have been possible for a period of not less than thirty years from and after June 30, 1940", and that during that period, except for the repudiation, plaintiff would have received his $1,600 share of the annual lease rental and the benefit of the payment of the taxes upon the property. The prayer of the petition was for damages in the amount of the difference between plaintiff's rental share under the lease, for a thirty year period, and the reasonable rental value of his undivided interest during such period, commuted to its present value on a four per cent interest basis, and for a further sum equal to the present value of the taxes which, it was claimed, the lessees would, with reasonable certainty, have been obliged to pay upon plaintiff's undivided interest during that period.

The case was tried to the court without a jury. The trial court held that the repudiation constituted a total breach of the contract of lease, and that, under the evidence, damages were determinable or predictable with reasonable certainty for a period of ten years, and that plaintiff was accordingly entitled to recover, by reason of his loss of rent, an amount equal to his share of the lease obligation for a ten year period, less the reasonable rental value of the property during such period, commuted to its present value at four per cent compound interest, and, by reason of the failure to pay taxes, a further sum equal to the taxes which the lessees with reasonable certainty would have been required to pay during such ten year period, similarly commuted to its present value. Judgment was entered against defendant in the total amount of $13,357.52, from which he has appealed generally; and plaintiff has appealed from the refusal of the trial court to fix the determinable or predictable period of damages at more than ten years.

The first and principal question is whether, under the law of Missouri, a repudiation of a lease and an abandonment of the premises, accompanied by a refusal to pay an accrued instalment of rent, can constitute a total breach of the contract of lease. The courts of Missouri do not appear to have passed upon the precise point. The general doctrine of anticipatory breach by repudiation has, however, been clearly recognized in that state.² A majority of the courts in this country that have passed upon the question have applied the doctrine of total breach to an anticipatory repudiation or other unjustified refusal to perform some material, permeating provision of a contract of lease,³ and the trial court held that, since there was nothing contrary to such a view in the expressions of the Missouri courts on the subject of anticipatory repudiation, it was proper to assume that Missouri would follow the general law.

Defendant argues, however, that, under Mo.Rev.St.1939, § 645,⁴ the court was required to apply the English common law as it existed in 1607, and that the common law of that date recognized no right of total breach by anticipatory repudiation of a contract of lease. So far as judicial precedents are concerned, the doctrine of anticipatory breach, as applied to contracts generally, probably cannot be regarded as having become a definitely settled part of the English law until the decision in Hochster v. De La Tour,⁵ in 1853. Certainly, there is nothing in the Missouri decisions, that purports to have adopted the doctrine of anticipatory breach in that state on the basis of it having been a settled part of the common law in 1607. And, as to contracts of lease, we have been cited to no case, and our research has discovered none, that authoritatively establishes that the common law, as it existed in 1607, had definitely settled that there could be no anticipatory breach of such a contract. The statement has some times been made in later authorities that such was the rule of the common law,⁶ but our reading of the early cases tends to indicate that the whole field of instalment payment contracts and their breach was for a long time in a state of varying confusion.

Some of the English common law judges regarded any recovery on a fixed obligation for the payment of money, whether payable in instalments or not, as a mere recovery of the debt itself, and so sought to adhere to the view that the action had to be in the form of debt, which could only be brought after the entire obligation had become due in accordance with its terms. To them, there could be no breach for failure to pay the debt, until the contract itself made the debt specifically due. Others seemingly recognized a distinction between the rigid action of debt and the more flexible remedy of assumpsit to recover damages for a material breach, based on the value of the whole performance to be rendered. During this pendulum period, some of the judges appear at one time to have held that any default in an instalment payment would justify an action of assumpsit for total breach.⁷

Out of this conflict and confusion, there naturally emerged a gradual crystallization, with qualifications, of the general rule as to total breach of a contract. So far as a contract of lease is concerned, within the purview of Mo.Rev.St.1939, § 645, quoted above, we certainly are not required to say, nor are we able to do so, that it was settled common law in 1607 that there could be no anticipatory repudiation of such a contract. We know that in 1827 the King's Bench recognized an anticipatory repudiation of an agreement to make a lease, as a total breach.⁸

But, even if it were possible to point to an express decision by an English court, as of 1607 or that approximate period, holding that there could be no anticipatory repudiation of a contract of lease, this would not be wholly conclusive of the question under the Missouri statute. The Missouri courts have recognized the difficulty of accurately defining the common law of such an early date from the meager precedents that are available, throughout the several courts, and have declared that, in their attempt to ascertain it, they were at liberty to "look to the decisions of other states of the Union as well as to those of the English courts", and, further, that they were not necessarily "required to adhere to the decisions of the English common law courts rendered prior to the Revolution, or subsequently".⁹ They also early made the practical construction of the Missouri statute that, "Although we adopted the common law without the qualification that it be applicable to our condition, the courts would be at liberty to declare that any portion of the common law inapplicable to our condition and circumstances, does not obtain here".¹⁰

The...