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JACK JOHNSTON v. MRS. MARY KATHRYN ELLIS STINSON

JULY 13, 1983

JACK JOHNSTON
v.
MRS. MARY KATHRYN ELLIS STINSON, ET AL.



EN BANC

DAN LEE, JUSTICE, FOR THE COURT:

Jack Johnston (Johnston) appeals from a final decree of the Chancery Court of Adams County allowing only nominal damages in action for the breach of an agricultural lease by the defendants, Mrs. Mary Kathryn Ellis Stinson, Glen Ellis Stinson, and Glen A. Stinson (Stinsons). Glen A. and Mary Kathryn Ellis Stinson are husband and wife; their son is Glen Ellis Stinson. We reverse.

FACTS

 In 1977, the Stinsons owned several farms in Adams County, and that year they and Johnston reached an agreement whereby Johnston would lease a total of 600 acres on their farms for the purpose of growing and harvesting soybeans. This agreement was reduced to writing in a five-year lease, dated and executed December 27, 1977, and commencing January 1, 1978.

 It was necessary for Johnston to obtain Farmers Home Administration financing, but this agency would not approve certain provisions in the first lease, and the Stinsons and Johnston entered into a second lease prepared and approved by the Farmers Home Administration. This second lease is also dated December 27, 1977, but was not executed until March 10, 1978, and its effective date likewise begins January 1, 1978. *fn1

 In early 1978 Mr. and Mrs. Stinson also agreed to sell Johnston their farm equipment. This culminated in a sale on March 10, 1978, of tractors, combines, disks, trucks, and numerous articles of farm equipment for a total cash consideration of $75,000, of which $10,000 was paid as a down payment, and the balance evidenced and secured by a promissory note and security agreement due and payable over a five-year period.

 On July 23, 1979, the Stinsons wrote Johnston a letter with complaints about the equipment and the delinquency in interest due on the equipment note. This letter also complained of Johnston's failure to pay water and electric bills, to clean weeds around the fields and tenant houses, make proper fence repairs, and clean ditches and maintain clear roadways.

 Some time in the autumn of 1979 the Stinsons repossessed the farm equipment.

 On December 4, 1979, the Stinsons wrote Johnston a letter informing him that because of various delinquencies they were repossessing the equipment. In this letter the Stinsons also claimed Johnston had breached the land lease agreement and set out twelve reasons supporting this contention. This letter closed with the following paragraph:

 Therefore, the agricultural lease agreement entered into by you with the undersigned, effective January 1, 1978 for a five year term, is null, void and of no further effect.

 Under the land lease Johnston was obligated to pay an annual rental of $20,000 on the 15th of November of each year of the lease. He paid the 1978 rental in November, 1978, and the 1979 rental in November, 1979, and was not delinquent in the payment of the cash rent due under the land lease. In the meantime, the Stinsons entered into another five-year agricultural lease on January 8, 1980, with one Clyde Williamson. *fn2

 In February, 1980, Johnston filed a bill of complaint in the Chancery Court of Adams County in cause number 29,106 setting forth three causes of action against the Stinsons.

 (1) Breach of the land lease, for which he claimed an annual loss of $67,000 based upon an average crop yield, less average crop loss and rental, or a total of $201,000;

 (2) wrongful repossession and conversion of the farm equipment; and

 (3) breach of another land lease entered into between Glen A. Stinson and Johnston. *fn3

 Johnston took a nonsuit to his chancery action, and on April 4, 1980, filed two separate causes of action against the Stinsons in the Circuit Court of Adams County. In cause number 4853 of that court he asserted his cause of action for the wrongful

 repossession and conversion of the farm equipment. In cause number 4854 the declaration involved breach of the land lease.

 No motion was made to consolidate these causes. Instead, the Stinsons made a motion to require Johnston to elect in which cause he would proceed. The circuit judge entered an order to transfer cause number 4854 to chancery court where it became a chancery action, cause number 29,831. This is the case involved on this appeal.

 Cause number 4853, dealing with the equipment repossession, proceeded to trial in the circuit court, resulting in a judgment in favor of Johnston. Upon appeal, we reversed and rendered judgment in favor of the Stinsons, holding the Stinsons had a right to repossess the equipment because Johnston had breached the security agreement in failing to carry adequate insurance. Johnston v. Stinson, 418 So. 2d 805 (Miss. 1982).

 The bill of complaint in the instant case does not charge any eviction by the Stinsons, or that Johnston had in any way been disturbed in his possession of the land. Rather, it charged that by the letter of December 4, 1979, the Stinsons had wrongfully" cancelled "the lease.

 The bill then recites:

 As a direct and proximate result of the illegal cancellation of the lease by the defendants in total disregard to the plaintiff's rights, the plaintiff suffered the loss of the use and benefit of said lease to grow soybeans for the remainder of the five (5) year period, or a total of three (3) years and twenty-seven (27) days.

 The value of the loss of the remainder of said lease to the plaintiff was approximately sixty-seven thousand dollars ($67,000.00) per year based on an average crop yield, an average crop cost, and cash rent of the land, or a total of not less than two hundred one thousand dollars ($201,000.00).

 The bill concluded with a prayer for money damages of $201,000 against the defendants, and attorney's fees.

 The chancery trial began April 21, 1981. At the beginning of the trial the chancellor had some questions as to how Johnson planned to proceed on damages, and the record reveals the

 following colloquy between the chancellor and Johnston's counsel:

 BY THE COURT:

 Let the record show that Mr. Johnston says that the only issue in this case is the fair market value of the lease for the balance of the term and that because that is the issue then the profits are not in issue. Isn't that right? The only thing we are dealing with is the fair market value of the lease. Isn't that what this lawsuit is about?

 BY MR. FORREST JOHNSON:

 Your Honor, if I understand the suit - I think Al understands it better than I do - if Johnston breached the lease, he ain't entitled to nothing; if Stinson terminated the lease, then he is entitled to a fair market value of the lease for the remaining three years.

 BY THE COURT:

 For the remaining period of the term, right.

 BY MR. FORREST JOHNSON:

 I think it's that simple, Your Honor . . . less whatever he would have had to pay.

 After further preliminaries, the record reveals the ...


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