Sagamore Corporation v. Willcutt
120 Conn. 315, 180 A. 464 (1935)
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Rule of Law:
A lessee's failure to pay a rent installment, when accompanied by an express repudiation of the entire lease, constitutes a total breach of the contract, which entitles the lessor to sue immediately for damages covering the entire remaining term of the lease.
Facts:
- On October 1, 1934, the Plaintiff leased premises to the Defendant for a one-year term.
- The annual rent was $480, to be paid in $40 installments on the first day of each month in advance.
- The Defendant occupied the premises until February 1, 1935.
- On February 1, 1935, the Defendant moved out of the premises and failed to pay the rent installment due on that day.
- After moving out, the Defendant notified the Plaintiff that he would no longer comply with the terms of the lease and would pay no further rent.
Procedural Posture:
- The Plaintiff (lessor) filed a complaint against the Defendant (lessee) in a Connecticut trial court, seeking damages for breach of a lease.
- The Defendant filed a demurrer to the complaint, arguing that a landlord cannot sue for future damages before the lease term expires.
- The trial court overruled the Defendant's demurrer, thereby allowing the Plaintiff's claim for total damages to proceed.
- The Defendant appealed the trial court's ruling to the Supreme Court of Errors of Connecticut.
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Issue:
Does a lessee's failure to pay a rent installment, combined with an express repudiation of the entire lease, constitute a total breach of contract, entitling the lessor to sue immediately for damages covering the full remaining term of the lease?
Opinions:
Majority - Banks, J.
Yes. A lessee's failure to pay a rent installment combined with a repudiation of the entire contract constitutes a total breach. The court reasoned that while a lease can be viewed as a unilateral contract where the doctrine of anticipatory breach may not apply, this case involves more than just a statement about future non-performance. Here, there was a present breach—the failure to pay the rent due on February 1st. Although this failure to pay an installment is typically only a partial breach, it was accompanied by the Defendant's repudiation of the entire remaining contract. Citing the Restatement of Contracts, the court held that when a partial breach is accompanied by a repudiation of the entire contract, the promisee may treat it as a total breach. This total breach justifies an immediate action to recover damages for the entire term of the lease, calculated as the difference between the specified rent and the premises' reasonable rental value for the remainder of the term.
Analysis:
This decision is significant for modernizing lease remedies by aligning them with general contract law principles. It allows a landlord to treat a lease as a contract subject to the doctrine of total breach, rather than being bound by the traditional property law view where rent obligations accrue independently each month. This provides landlords with a more efficient remedy, enabling them to resolve the entire dispute in a single action and recover their total expected damages immediately, rather than having to sue for each missed payment as it becomes due. This ruling solidifies the dual nature of a lease as both a conveyance of property and an executory contract.
