3PLR – JOHNSTONE V. MILLING

POLICY, PRACTICE AND PUBLISHING, LAW REPORTS  3PLR

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JOHNSTONE

V.

MILLING

[COURT OF APPEAL.]

1886 Jan. 13 

CITATION

16 Q.B.D. 460

 

BEFORE THEIR LORDSHIPS:

LORD ESHER, M.R.

COTTON and BOWEN, L.JJ.

 

REPRESENTATION

Foote, for the plaintiff

Brooke Little, for the defendant

Solicitors for plaintiff: Prior, Church, & Adams.

Solicitors for defendant: Darley & Cumberland.

 

MAIN ISSUES

COMMERCIAL AND BUSINESS LAW:- CONTRACT – Breach of, by Repudiation before Time for Performance – Declaration of Inability to perform – Election, Breach at – Landlord and Tenant – Lease, Covenant to rebuild in

REAL ESTATE:- 21 year Lease – Covenant to rebuild after initial 4 years of term – determination of lease before end of 4 years – Effect  thereof on covenant

 

HISTORY AND SUMMARY OF FACTS

In a lease of premises for a term of twenty-one years determinable by the lessee at the end of the first four years by a six months’ notice, the lessor covenanted to rebuild the premises after the expiration of the first four years of the term upon a six months’ notice from the lessee requiring him to do so. Before the expiration of the first four years of the term the lessor on many occasions told the lessee that he would be unable to procure the money for rebuilding the premises. The lessee in consequence of this statement by the lessor gave the requisite notice under the provisions of the lease to determine the term at the end of the first four years. After the determination of the lease he continued to occupy the premises for some months, paying rent to the lessor’s mortgagees, on the chance, as he stated, of the lessor’s procuring the money to rebuild. The lessor being, however, unable to rebuild the premises, the lessee claimed damages against him for breach of the contract to do so:-

 

Held, that, the covenant to rebuild never having been actually broken, because the lessee had before the time for its performance determined the term, he could not recover unless there had been a breach of contract by anticipation within the doctrine of Hochster v. De la Tour (2 E. & B. 678; 22 L. J. (Q.B.) 455) and Frost v. Knight (Law Rep. 7 Ex. 111) by reason of a wrongful repudiation of his covenant by the lessor before the time for performance; that what had been said by the lessor did not under the circumstances of the case amount to such a repudiation; and that, if it did, such repudiation before the time of performance arrived would not amount to a breach of the contract, unless the lessee elected to treat it as putting an end to the contract except for the purposes of an action for such breach, and the lessee had not under the circumstances so elected; and that he could not therefore maintain his claim.

 

Quare: whether the doctrine of Hochster v. De la Tour (2 E. & B. 678; 22 L. J. (Q.B.) 455), can be applicable to the case of a lease or other contract containing various stipulations where the whole contract cannot be treated as put an end to upon the wrongful repudiation of one of the stipulations of the contract by the promisor.

 

APPEAL from the order of the Queen’s Bench Division directing that judgment should be entered for the defendant on the counter-claim for damages to be ascertained by a reference.

 

The defendant in the action set up a counter-claim for damages for breach of a covenant contained in a lease by which the plaintiff covenanted with the defendant to rebuild the demised premises. The reply stated, among other things, that the plaintiff had not received any notice to rebuild from the defendant as required by the terms of the covenant, and also that the lease was surrendered by the defendant before the time at which the obligation to rebuild would have arisen.

 

The action was, after issue joined, remitted to the county court for trial.

 

The facts with regard to the claim are immaterial to this report.

 

The facts with regard to the counter-claim appeared at the trial to be as follows:- In June, 1881, premises, of which the plaintiff was owner subject to certain mortgages, were demised to the defendant by the plaintiff and his mortgagees for the term of twenty-one years from the 12th day of May, 1880, subject to a proviso for sooner determination of the same, the rent being by the terms of the lease made payable to the plaintiff, until the mortgagees gave notice to the lessee in writing to pay it to them, and, upon such notice being given, to the mortgagees. The lease contained a covenant by the plaintiff that after the expiration of the first four years of the term the plaintiff would, on receipt from the lessee of six calendar months’ notice in writing requiring him so to do, forthwith proceed to rebuild the premises within the period and in the manner specified by the covenant. It was provided that the lessee might at the end of the first four, seven, or fourteen years of the lease determine the same by giving to the person or persons for the time being in the receipt of the rent six calendar months’ notice in writing of his intention so to do.

 

The defendant gave the requisite notice to determine the lease at the end of the first four years. He stated in evidence at the trial that during his tenancy he spoke to the plaintiff constantly about getting the money to rebuild the premises; that the plaintiff said he was unable to do so, but that he expected a loan society who had a second mortgage on the premises might advance money: that the plaintiff’s declaration of inability to get the money for rebuilding extended over the last two years and a-half of the defendant’s tenancy; that he made it constantly in answer to the defendant’s direct question, and at other times in conversation both before and after the expiration of the four years; and that it was in consequence of such declaration that he (the defendant) gave notice to determine the lease. The defendant further stated that he continued to occupy the premises for about three months after the determination of the lease paying rent to the mortgagees: that after the lapse of the lease the plaintiff came to him and voluntarily told him that he was utterly unable to find the money: but that he (the defendant) continued the tenancy on the chance of the plaintiff’s getting the money.

 

The county court judge found that the plaintiff had been unable to find the money to rebuild the premises; that the plaintiff both before and after the surrender of the lease told the defendant that he was unable and would be unable to find the money for rebuilding the premises; that the defendant in consequence of the plaintiff stating that he was and would be unable to find the money for rebuilding the premises surrendered the lease; and that the defendant suffered damage by such surrender. The defendant’s counsel submitted on those findings that the defendant was entitled to a verdict on the counter-claim.

 

The county court judge, however, held the contrary, and found a verdict both on the claim and on the counter-claim for the plaintiff, and entered judgment accordingly.

 

A rule nisi for a new trial was obtained by the defendant in the Queen’s Bench Division: and the Divisional Court (Huddleston, B., and Cave, J.), upon the argument of the rule made the order against which the plaintiff appealed.

 

Foote, for the plaintiff:

The conditions upon which the right to the performance of the covenant to rebuild depended never were fulfilled. The defendant never gave a notice to rebuild, and himself put an end to the term before the obligation to rebuild accrued. The defendant relies on the doctrine acted upon in the case of Frost v. Knight (1), and contends that there was in this case a breach of the contract before the time for performance arrived, on the ground that the plaintiff had renounced and expressed his intention of not performing the contract.

 

The county court judge does not find that the plaintiff renounced the contract, but only that he said that he should be unable to find the money for rebuilding. It is submitted that there was no evidence of a repudiation of the contract within the meaning of the doctrine relied on by the defendant.

(1) Law Rep. 7 Ex. 111.

 

There is nothing to shew that the plaintiff was not perfectly willing to perform the contract if he could get the means of doing so. It ought not to be assumed that it was not possible that in some way or other he might have raised the money before the time for rebuilding came. As an honest man he informed the defendant that he did not expect to be able to get the money, but that does not amount to a repudiation of the obligations of the contract. Assuming that what the plaintiff said did amount to a repudiation of the covenant and refusal to be bound by it, the doctrine relied upon has no application to the case of repudiation of one of the covenants of such a contract as a lease. Frost v. Knight (1) is the first case in which this doctrine was ever applied to an obligation dependent upon a contingency. In Hochster v. De la Tour (2) and the other previous cases on the subject the obligation to perform was certain to arise. It has been held that the breach of such a covenant as this does not entitle the lessee to throw up the lease: Surplice v. Farnsworth. (3)It is essential to the applicability of the doctrine of anticipatory breach of contract as laid down in the cases that the promisee should have elected to treat the announcement of the promisor’s intention not to perform it as a wrongful putting an end to the contract. He cannot treat the contract as still subsisting, and yet sue the promisor as for a wrongful rescission of the contract. And for this reason the doctrine in question cannot apply; to the case of such a contract as a lease, because the lessee cannot elect to treat the whole contract as put an end to. However this may be, it is submitted that the defendant in this case did not, in fact, elect to treat the contract as rescinded; he continued tenant and subsequently gave notice under the lease to determine the term. If the promisee does not elect to treat the, promisor’s announcement of intention not to perform as a wrongful putting an end to the contract, and treats the contract as still subsisting, he lets in the promisor to claim the benefit of any subsequent contingency under the contract which may prevent a breach from arising. In the present case, the lease was determined before the obligation to rebuild could arise.

(1) Law Rep. 7 Ex. 111.

(2) 2 E. & B. 678; 22 L. J. (Q.B.) 455.

(3) 7 M. & G. 576.

 

Brooke Little, for the defendant:

An announcement by the promisor in positive terms that he will be unable to perform the contract when the time for performance arrives is surely in substance equivalent to an announcement of intention not to perform: see per Bramwell, L.J., in In re Phoenix Bessemer Steel Co. (1) The effect, so far as the position of the promisee is concerned, ought, according to reason and justice, to be the same. The proper inference to be drawn from the plaintiff’s declaration as a matter of fact is that he announced his intention not to perform the covenant because he knew that he should not be able to do so. It is submitted that the finding of the county court judge amounts to this if fairly and reasonably interpreted with reference to the evidence. [He cited on this point Cort v. Ambergate Ry. Co. (2)] It is contended that the principle of Hochster v. De la Tour (3), and the subsequent cases that followed it, is merely that, as soon as the promisor announces that he either cannot or will not when the time comes perform the contract, the promisee may treat such announcement as an immediate breach, and take any step he can to minimise the damage. He is thereby absolved from performance of any conditions precedent to the arising of the particular obligation repudiated. So here the defendant was not bound to give notice to the lessor to do what he had already said he should not be able to do; nor was he bound to continue tenant till the time for performance arrived. The damages would have been much greater if he had continued tenant of the premises in their existing condition, and his giving notice to determine the term was really for the benefit of the lessor. It would be unreasonable that he should be bound to continue tenant when, the lessor being insolvent, he could never recover the damages that would result to him from so doing.

 

The defendant did elect to treat the plaintiff’s declaration of inability to rebuild as a breach of the covenant, for the county court judge finds that he in consequence elected to surrender the term at the end of the four years. There is no reason why the doctrine of Hochster v. De la Tour (1) should not apply to a covenant contained in a contract such as a lease which contains other covenants and stipulations. The substance of the doctrine is merely that a promise may be considered as broken by anticipation so as to enable the parties to minimise the damage. There is no reason why this doctrine should be confined to cases where the whole contract can be rescinded upon the renunciation by one party of an obligation under it.

(1) 4 Ch. D. 108, at p. 122.

(2) 17 Q. B. 127, at p. 140.

(3) 2 E. & B. 678; 22 L. J. (Q.B.) 455.

 

[LORD ESHER, M.R. Can you cite any case in which the doctrine of anticipatory breach has been applied where the whole contract could not be treated as put an end to?]

 

It is submitted that there is nothing in reason to prevent the application of the doctrine to such a case.

 

Foote, in reply. Giving the notice to determine the lease could not be evidence of an election to treat the contract as wrongfully determined by the plaintiff, because such notice could only be given under the contract. Apart from the provision in the lease entitling the defendant to give this notice he could not have given it, for the breach of the covenant to rebuild would not entitle him to throw up the lease.

 

 

MAIN JUDGMENT

LORD ESHER, M.R.

The question before us arises entirely on the counter-claim. The claim therein set up is for damages for breach of a covenant in a lease whereby the landlord undertook to rebuild the premises upon notice. It is quite clear that there was no breach of the covenant in the ordinary sense of the term, because no notice to rebuild had been given, and the tenant had exercised the right given him by the lease of putting an end to the term at the expiration of the first four years, and consequently the lease was determined before the time at which the obligation to rebuild under the covenant would have accrued. The lease being so put an end to, it is quite clear that the lessee could not sue the lessor for breach of the covenant in not rebuilding after the expiration of the four years. That being so, the cause of action is thus shaped on behalf of the defendant. It is alleged that a breach of the contract was committed by the plaintiff before the end of the four years, inasmuch as he had declared that he was unable and would be unable to find the money for rebuilding when the time came. It is insisted that such declaration amounted to a declaration of his intention not to perform the contract, and was intended as a repudiation of it, or that, if it was not so intended, the expressions used by the plaintiff were such that the defendant was entitled to treat them as equivalent to a repudiation of the contract; and it is accordingly contended that there was a breach of the contract by anticipation before the time for its performance arrived, for which the defendant was entitled to damages, and that the fact that the defendant afterwards exercised his option of determining the lease is immaterial, for in so doing the defendant only acted for the benefit of the landlord in order to minimize the damages arising from his repudiation of the contract. The evidence shews, and the county court judge has found as a fact, that the lessor did a considerable time before the expiration of the four years, in answer to the questions of the lessee, repeatedly say that he was unable and would be unable to find the money for rebuilding, and the judge finds that in consequence the defendant surrendered the lease. It appears, however, from the evidence that he did not at once throw up the lease and give the premises into the hands of the plaintiff, but that he waited till the last six months of the four years and then gave the requisite notice to determine the term in accordance with the provisions of the lease. Upon these findings the county court judge decided that the defendant could not maintain his counter-claim. The case then went to the Divisional Court, which held that, either upon those findings, or on the inferences that ought to be drawn from them, the defendant had a right of action on the covenant, and therefore that the county court judge was wrong. Now on what principle can it be that the defendant had a right of action on the covenant? As I have said, it cannot be on the ground that there was a breach of the covenant in the ordinary sense of the term, because the defendant never gave any notice to rebuild, and he put an end to the term, so that the time when the covenant was to be performed never arrived.

  • 2 E. & B. 678; 32 L. J. (Q.B.) 455.

 

Accordingly the defendant has recourse to the doctrine laid down in several cases cited, the best known of which is perhaps the case of Hochster v. De la Tour. (1) In those cases the doctrine relied on has been expressed in various terms more or less accurately; but I think that in all of them the effect of the language used with regard to the doctrine of anticipatory breach of contract is that a renunciation of a contract, or, in other words, a total refusal to perform it by one party before the time for performance arrives, does not, by itself, amount to a breach of contract but may be so acted upon and adopted by the other party as a rescission of the contract as to give an immediate right of action. When one party assumes to renounce the contract, that is, by anticipation refuses to perform it, he thereby, so far as he is concerned, declares his intention then and there to rescind the contract. Such a renunciation does not of course amount to a rescission of the contract, because one party to a contract cannot by himself rescind it, but by wrongfully making such a renunciation of the contract he entitles the other party, if he pleases, to agree to the contract being put an end to, subject to the retention by him of his right to bring an action in respect of such wrongful rescission. The other party may adopt such renunciation of the contract by so acting upon it as in effect to declare that he too treats the contract as at an end, except for the purpose of bringing an action upon it for the damages sustained by him in consequence of such renunciation. He cannot, however, himself proceed with the contract on the footing that it still exists for other purposes, and also treat such renunciation as an immediate breach. If he adopts the renunciation, the contract is at an end except for the purposes of the action for such wrongful renunciation; if he does not wish to do so, he must wait for the arrival of the time when in the ordinary course a cause of action on the contract would arise. He must elect which course he will pursue. Such appears to me to be the only doctrine recognised by the law with regard to anticipatory breach of contract. We are asked, as it seems to me, by the counsel for the defendant to lay down a new principle, but I do not think we can do so consistently with the established doctrines of law on the subject. We have therefore to consider  whether the defendant can bring his case within the doctrine as to anticipatory breach of contract as already laid down. The first question is whether the plaintiff intended to repudiate the contract when he made the statements relied upon with regard to his inability to find the money for rebuilding. Did he mean to say that, whatever happened, whether he came into money or not, his intention was not to rebuild the premises? It does not seem to me that what he said naturally leads to the inference that such was his intention, and I think, having regard to the terms of his finding, that the county court judge declined to draw that inference. If he declined to do so, I think we ought not to do so, unless it is a necessary inference from what the plaintiff said. It does not appear to me that it is. If we ought not to draw that inference from what the plaintiff said, it seems to me to follow as a matter of course that the defendant was not entitled to draw it: and the result is that the defendant fails in the very first point which it is necessary for him to establish, viz., that the plaintiff at the time when he made these declarations of his inability to find the money for rebuilding intended to repudiate his liability on the contract, or that he made use of expressions entitling the defendant to suppose that he did so. That being so, his case is gone; but, assuming the contrary, then comes the question whether the defendant elected to treat the plaintiff’s statement as a wrongful repudiation of the contract. That involves first of all the question whether he could so treat it. The contract made between the plaintiff and the defendant was the whole lease. The covenant in question is a particular covenant in the lease not going to the whole consideration. If there were an actual breach of such a covenant at the time fixed for performance, such breach would not, according to the authorities, entitle the tenant to throw up his lease. That being so, I do not hesitate to say, though it is not necessary in this case to decide the point, that an anticipatory breach could not entitle him to do so, that and it does not appear to me that he could elect to rescind part of the contract. Therefore it seems to me that the defendant could not elect to put an end to the contract in consequence of what the plaintiff stated. But, whether he could do so or not, it seems to me that in fact he did not. He did not renounce the lease or give up the premises. He did not do any act which affected the existence of the contract. He made no declaration of intention to treat it as rescinded except for the purpose of bringing his action upon it. On the contrary, at the time fixed by the contract he gave the requisite notice to determine the lease. I think, therefore, that on every point necessary to establish his counter-claim the defendant fails. For these reasons, with great deference to the Divisional Court, before whom these points do not appear to have been developed so clearly as they have been before us, I think their decision cannot be supported, and that the judgment of the county court judge was correct.

(1) 2 E. & B. 678; 22 L. J. (Q.B.) 455.

 

COTTON, L.J.

In this case the defendant set up a counterclaim in respect of the alleged breach of a covenant in a lease of premises by the plaintiff to the defendant. The county court judge at the trial arrived at certain findings, upon which he gave judgment in favour of the plaintiff, but which in the opinion of the Divisional Court entitled the defendant to judgment. By the terms of the lease the obligation of the landlord on the covenant to rebuild the premises could not arise till after the expiration of four years, at which period, under the provisions of the lease, the lessee might, and in fact did, determine the term by six months’ notice. Under these circumstances, if an action were brought against the landlord for breach of covenant in respect merely of his not rebuilding after the expiration of four years, it would be impossible to maintain that there was such a breach of covenant, for the covenant clearly is only to rebuild if the defendant continued tenant, and the defendant had himself put an end to the tenancy. But it is said that, before the defendant gave the notice to determine the tenancy and before the end of the four years, matters happened which were sufficient to entitle the defendant to maintain an action on the covenant to rebuild. The county court judge finds that both before and after the surrender of the lease (meaning, as I understand, by the term “surrender” the notice to determine the lease), the plaintiff told the defendant that he was unable and would be unable to find the money for rebuilding the premises.

 

The Divisional Court thought that this declaration amounted to such a repudiation of the contract by the plaintiff before the time for performance had arrived as to entitle the defendant in accordance with the doctrine laid down in the case of Hochster v. De la Tour (1) to bring an action for breach of the contract. That doctrine seems to be that, where a party to a contract has made statements before the time for performance has arrived importing a refusal to perform or be bound by the contract, the other party, if he chooses, may elect to act upon such statements as a renunciation of the entire contract, and may thereupon treat the same as a breach of the contract and bring his action. If he so elects, his election relieves the other party from any further obligation under the contract and enables both parties to make arrangements for the future on the footing that the contract has been once for all broken and is at an end. The law is thus stated by Cockburn, C.J., in the case of Frost v. Knight (2): “The law with reference to a contract to be performed at a future time, where the party bound to performance announces prior to the time his intention not to perform it, as established by the cases of Hochster v. De la Tour (1) and Danube and Black Sea Company v. Xenos (3) on the one hand, and Avery v. Bowden (4), Reid v. Hoskins (5), and Barwick v. Buba (6), on the other, may be thus stated. The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed, and then hold the other party responsible for all the consequences of non-performance: but in that case he keeps the contract alive for the benefit of the other party as well as his own: he remains subject to all the obligations and liabilities under it, and enables the other party not only to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify him in declining to complete it: on the other hand, the promisee may, if he thinks proper, treat the repudiation of the other party as a wrongful putting an end to the contract, and may at once bring his action as on a breach of it; and in such action he will be entitled to such damages as would have arisen from non-performance of the contract at the appointed time, subject, however, to abatement in respect of any circumstances which may have afforded him the means of mitigating his loss.” That expression of the law was cited with approval by Keating, J., in the case of Roper v. Johnson. (1) It must be taken therefore that the law is that, when one party has done an act which amounts to a wrongful renunciation of the contract and the other has acted upon it as such, there is a cause of action in respect thereof, but, when the other has not done so, then both the parties, as well he who has attempted to renounce the contract as he who asserts its existence, are entitled to the benefit of its provisions.

(1) 2 E. & B. 678; 22 L. J. (Q.B.) 455.

(2) Law Rep. 7 Ex. 111.

(3) 13 C. B. (N.S.) 825; 31 L. J. (C.P.) 284.

(4) 5 E. & B. 714; 26 L. J. (Q.B.) 3.

(5) 6 E. & B. 953; 26 L. J. (Q.B.) 5.

(6) 2 C. B. (N.S.) 563; 26 L. J. (C.P.) 280.

 

The Divisional Court in the present case treated the statements made by the plaintiff as a renunciation of the contract within the doctrine I have mentioned. I cannot say I think they were right in so doing. But, assuming that they were, I can find no case which shews that the doctrine in question applies to the renunciation of one particular covenant or stipulation in a contract such as a lease, which contains many. And, as at present advised, I am not favourably impressed with the view that the doctrine would apply to the case of a lease where the tenant cannot, in consequence of the refusal by the landlord to perform a particular covenant, put an end to the entire contract. But, however that may be, we have first to arrive at the conclusion that there was a renunciation of the contract. If the county court judge had found that there was such a renunciation, it might have been necessary to decide the other questions as to the effect of it, but all that is stated in the finding is that the plaintiff said that he was and would be unable to find the money for rebuilding. Whether such a statement amounted to a renunciation of the contract must depend on the circumstances of the case and the nature of the contract. Here the plaintiff, though not a monied man, was the owner of the property included in the lease subject to mortgages, and there might be, and seems to have been, some expectation on his part of getting the money for the purpose of rebuilding advanced on the property by the mortgagees. It seems to me that it would be a reasonable construction of his statements that they rather meant that he was afraid, and was under the impression that he would not be able to get the money than that he did not intend to perform the contract even if he could get it. The county court judge does not find that he renounced the contract, and, that being so, we ought not, I think, to put that construction on what he said. The evidence, as appearing on the judge’s notes, seems to me rather contrary to that construction, because it would seem from the defendant’s own evidence that he did not himself so understand the plaintiff’s statements, for he says that he continued the tenancy after the lease expired on the chance of the plaintiff’s getting the money. The defendant appears to have thought it on the whole the best course to act on the contract and not to treat it as at an end, but to give notice under it to determine the lease before the time arrived at which the plaintiff’s obligation to rebuild was to arise. It seems to me, therefore, that there was nothing amounting to a renunciation of the contract by the plaintiff, and that, if there were, the defendant did not adopt it but treated the contract as still existing. For these reasons, I think the decision of the Divisional Court was wrong.

  • Law Rep. 8 C. P. 167.

 

 

BOWEN, L.J.

I am of the same opinion. The question which we have to decide arises with regard to the defendant’s counterclaim. The claim made by the defendant is upon a covenant by which the plaintiff undertook, after the expiration of four year from the commencement of the term, to rebuild the premises upon notice from the defendant to do so. The defendant says that before the time had arrived for the performance by the plaintiff of this obligation he repudiated his liability on the contract, and so conferred an immediate right of action on the defendant. We have, therefore, to consider upon what principles and under what circumstances it must be held that a promisee, who finds himself confronted with a declaration of intention by the promisor not to carry out the contract when, the time for performance arrives, may treat the contract as broken, and sue for the breach thereof. It would seem on principle that the declaration of such intention by the promisor is not in itself and unless acted on by the promisee a breach of the contract; and that it only becomes a breach when it is converted by force of what follows it into a wrongful renunciation of the contract. Its real operation appears to be to give the promisee the right of electing either to treat the declaration as brutum fulmen, and holding fast to the contract to wait till the time for its performance has arrived, or to act upon it, and treat it as a final assertion by the promisor that he is no longer bound by the contract, and a wrongful renunciation of the contractual relation into which he has entered. But such declaration only becomes a wrongful act if the promisee elects to treat it as such. If he does so elect, it becomes a breach of contract, and he can recover upon it as such. Upon looking to the reason of the thing it seems obvious that in the latter case the rights of the parties under the contract must be regarded as culminating at the time of the wrongful renunciation of the contract, which must then be regarded as ceasing to exist except for the purpose of the promisee’s maintaining his action upon it; it would be unjust and inconsistent with all fairness that the promisee should be entitled to bring his action as upon a wrongful renunciation of the contract, and yet to treat the contract as still open and existing with regard to the future. Such being the reason of the thing, the authorities seem all to be the same way. In Hochster v. De la Tour (1), Lord Campbell thus expresses the doctrine: “But it is surely much more rational and more for the benefit of both parties that, after the renunciation of the agreement by the defendant, the plaintiff should be at liberty to consider himself absolved from any future performance of it, retaining his right to sue for any damage he has suffered from the breach of it.” In the passage cited by my Brother Cotton from Frost v. Knight (2), Cockburn, C.J., points out that there are these two alternatives open to the promisee, and that it is a condition essential to his right to sue upon a repudiation of the contract before the time for performance as upon a breach that he should thenceforth treat the contract as at an end except for the purpose of being sued upon. Such being the doctrine on the subject, the question arises whether it is applicable to the case of a lease.

(1) 2 E. & B. 678; 22 L. J. (Q.B.) 455.

(2) Law Rep. 7 Ex. 111.

 

It has been decided in Surplice v. Farnsworth (1) that a tenant could not throw up his tenancy on the breach of a stipulation that the landlord should put the premises in repair. No one ever yet heard of an attempt to put an end to a lease in respect of a breach of covenant except in cases where the, term was made dependent upon the performance of the covenant as a condition. No case has been cited in which it has been sought to apply the doctrine of Hochster v. De la Tour (2) to such a case as this, or to any case where the promisee sought to keep open the contract after the alleged repudiation by the promisor, and also to sue for damages for such repudiation as for a breach. It is not necessary to decide the point, but I very much doubt whether the doctrine of Hochster v. De la Tour (2) is applicable in such a case as this between lessor and lessee. Apart, however, from this question, I think that the Court below were wrong with regard to the inferences of fact which they drew.

 

The claim being for wrongful repudiation of the contract it was necessary that the plaintiff’s language should amount to a declaration of intention not to carry out the contract, or that it should be such that the defendant was justified in inferring from it such intention. We must construe the language used by the light of the contract and the circumstances of the case in order to see whether there was in this case any such renunciation of the contract. It seems to me that the county court judge was of the contrary opinion, and, looking to the whole history of the transaction, I cannot say that he was wrong. Unless the language of the plaintiff can only reasonably be construed as importing such renunciation, I think the Court below ought not to have disregarded the finding, and treated what the plaintiff said as amounting to a renunciation of the contract within the doctrine to which I have alluded. Further, assuming that there was evidence to support a finding that what, the plaintiff said was a renunciation of the contract, there does not seem to me to be a tittle of evidence to shew that the defendant ever elected to treat it as such, and all reason and authority, as I have said, appear to me to shew that he must so elect to treat it, in order that it may constitute a breach of the contract. It appears to me, therefore, that the case for the defendant entirely fails. For these reasons I think that the appeal should be allowed.

(1) 7 M. & G. 576.

(2) 2 E. & B. 678; 22 L. J. (Q.B.) 455.

 

Appeal allowed.

 

  1. L.

 

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