Jack JOHNSTON v. Mrs. Mary Kathryn Ellis STINSON, et al., 434 So. 2d 715

DAN M. 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 Stin-sons 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. 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. 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. 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 Stin-sons, 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 Johnston planned to proceed on damages, and the record reveals the following colloquy between the chancellor and Johnson’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 A1 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 following development: BY THE COURT: Well, I understand there were to be some stipulations between you as to what would be at issue this morning, and I assume that those stipulations are now ready for the record. I just hadn’t gotten into them yet when I asked if the complainant was ready, but— BY MR. ZUCCARO: Your Honor, I think if I may do a stipulation subject to Counsel’s interruption — ?

Counsel for the defendants then stated that the Stinsons as cross-complainants would not present proof on the counterclaim as to certain items furnished Johnston, and which had been adjudicated in the circuit court, but reserved all rights of the cross-complainants incorporated in their answer and cross-complaint. Counsel for the defendants then concluded with the following: It is further stipulated between the parties Complainant and all Defendants that the Complainant, Mr.

Jack Johnston, would proceed in this hearing not on loss of profits but in the difference between the fair market value of the lease for the three years between the Stinsons and whoever they may lease to or may have leased to or could have leased to, less and except the amount obligation by Mr. Jack Johnston as rental to he paid under the terms of his lease or leases. Trial proceeded with Johnston putting on proof with reference to who had breached the land lease contract. The two contracts between the Stinsons and Johnston, as well as the Stinson land lease contract with Williamson, were introduced.

No proof independent of the written instruments was offered as to the value of either contract. The only issues before the chancery court were whether the Johnston lease was breached and if so the amount of damages flowing from the breach. The chancellor found as a fact that the lease was breached by the Stinsons and because the Stinsons have not cross-appealed from this finding such is not at issue before this Court. Therefore, the only issue on appeal is the correctness of the award of nominal damages for the Stinsons’ breach of the lease. In Pearl River Valley Water Supply District v.

Wood, 252 Miss. 580, 172 So.2d 196 (1965), this Court addressed the effect of a stipulation which related to the measure of damages in an eminent domain proceeding: This contractual stipulation was agreed upon, reduced to writing and with the approval of the circuit court was introduced in evidence of their contractual agreement which was and is binding on them. The appellant cannot now contend that March 19,1959 is the day the project became a reality insofar as the taking of appellee’s land and her due compensation therefor are concerned.

The stipulation fixes the effective date of the taking as June 1, 1964, and all rules of evidence pertaining to eminent domain proceedings in trials de novo shall be followed and based on this date, June 1, 1964. The appellant is estopped to assert now that he should be permitted to exclude any enhancement in value to appellee’s property due to the reservoir project, pri- or to June 1,1964, the exact day which he agreed is the effective date of the taking.

It follows, therefore, that whatever enhancement in the value of appellee’s land had already accrued on or before June 1, 1964 was admissible for consideration by the jury.... (252 Miss, at 594, 172 So.2d at 202) Therefore, if the appellant had not agreed and stipulated that June 1, 1964 was the date of the taking, a day almost two years subsequent to the date of the institution of the eminent domain suit on October 18, 1962, the latter date would have been constituted the day of this taking, but certainly not March 19, 1959, the date of the publication of the District’s authorization and contemplated condemnation. (252 Miss. at 596, 172 So.2d at 203) See also, Penrod Drilling Co. v.

Aubrey Wayne Bounds, 433 So.2d 916 (Miss.1983). The parties stipulated that the measure of Johnston’s damages would be determined by the difference between the fair market value of the lease less the amount Johnston would have had to pay as rental under the terms of his lease. Pursuant to Woods, the parties are bound by their agreement. Furthermore, 83 C.J.S. Stipulations § 26(b) (1953) states in part: Verdict.

General rules as to the construction, operation, and effect of stipulations also apply with respect to stipulations concerning the verdict, such as a stipulation that the jury might separate after rendering a sealed verdict. A stipulation for a sealed verdict does not operate to dispense with the attendance of the jurors when it is opened and read in court or deprive the court of the right to have the jury polled. Also, a stipulation that should the jury agree that night, they might return a sealed verdict to the clerk and disperse, cannot be construed to extend to a verdict found on the next day.

Where the parties by stipulation agreed on the amount of the verdict in the event that plaintiff recover judgment, recovery is not erroneously allowed in the absence of proof of damages. See also 83 C.J.S. Stipulation § 27 (1953) which states in part: Accordingly, such rules apply with respect to stipulations concerning the amount of /recovery or relief awarded. Moreover, the measure of damages which was stipulated to was a proper method for computation of damages arising from the breach of a lease.

Restatement (Second) of Property, § 10.2(b) (1977) explains this method; Landlord’s default and fair market value of lease. Since leases are not normally saleable items, there is no readily ascertainable market value for leases. A lease has a dollar value if it has built into it bargain features that are not obtainable if other similar property were leased at the time its value is being determined. The bargain feature most likely to be present that would give the lease a dollar value is the amount of the rent. This dollar value is its fair market value.

If the tenant terminates the lease as a result of the landlord’s default and is entitled to damages, he has lost the fair market value of his lease as of the date he terminates the lease. Even though the fair market value of the lease has been damaged by the default, he is not damaged by this fact unless he elects to terminate the lease, because if he continues the lease, other remedies available to him, such as rent abatement, tend to preserve the bargain feature of his original lease.

If the leased premises are under rent control, the lease has no bargain feature except to the extent the rent payable is less than the maximum rent that can be collected under the applicable rent control statute. That if the property was leased for a special use other than the normal use of such property the lease would have a greater dollar value is not a relevant factor in determining the fair market value of the lease. ILLUSTRATION: 1. L leases to T for ten years at a rental of $300 per month, the lease to begin one month later.

L defaults by leasing the property to A, who prevents T from going into possession. T elects to terminate the lease and to sue for damages. A reasonable rental value of the property is appraised at $375 per month. It is determined that the fair market value of this lease is $6,321.60. This figure represents the difference between the rental value for the remainder of the term ($375 per month for ten years) and the agreed rental value ($300 per month for ten years) discounted to its present dollar value.

Johnston offered the best evidence of his damages by introducing into evidence his lease along with the Williamson lease. The Williamson lease, which provided for an annual rental of $32,500, was offered and admitted into evidence as proof of the fair market value of the lease for the remaining unexpired portion of Johnston’s lease which was breached by the Stinsons. The Johnston lease provided for an annual cash rental of $20,000 therefore, the difference between the two leases established Johnston’s damages for the three remaining years on his lease.

Much is said about the varying terms of the Williamson and Johnston leases. While the terms of the two leases did vary in some respects, the attraetibility of the Williamson lease as opposed to the Johnston lease would only go to the mitigation or diminishment of the fair market value of the leases. Because the varying terms of the two leases would go only to mitigation of Johnston’s damages upon a breach of his lease, it was incumbent on the Stinsons to prove the facts which would operate to bring the mitigation into effect against Johnston. Men-gel Co. v. Parker, 192 Miss. 634, 7 So.2d 521 (1942).

Furthermore, the stipulation made by the attorney for appellees and agreed to by the appellant, provides for the difference between the two leases as being the measure of damages. Based on the foregoing, we hold that the chancellor erred in finding that Johnston failed to prove his damages by competent evidence and with reasonable certainty. This cause is theretofore remanded to the chancery court for a new trial on the issue of damages suffered by Johnston because of the breach, consistent with this opinion. REVERSED AND REMANDED.

PATTERSON, C.J., WALKER and BROOM, P.JJ., and ROY NOBLE LEE, BOWLING, PRATHER and ROBERTSON, JJ., concur. HAWKINS, J., dissents. . The terms of both leases are ambiguous, in that while each lease states it is for a five-year period, both also have an effective beginning date of January 1, 1978, and termination date of December 31, 1983, a period of six years. In all pleadings and throughout the trial, however, all parties recognized this is a five-year lease, and we will honor their mutual understanding. .

This lease was expressly made contingent upon the termination of the lease entered into between the Stinsons and Johnston, providing that if that lease “is not terminated then this lease shall be void and of no effect.’’ . This third cause of action is not involved in this case, or in Johnston v. Stinson, heretofore decided in this Court, and discussed infra.