Opinion ID: 2586150
Heading Depth: 3
Heading Rank: 3

Heading: Estate's Claim Under Oral Leases.

Text: Specifically, Gene suggests that the Estate's argument that the oral leases continued until a notice of termination was served is contrary to the general principle that if a tenant abandons, surrenders, or repudiates a lease a landlord has an obligation to mitigate damages, including reletting the premises. Kansas follows the minority position, imposing upon a landlord the duty to make reasonable effort to secure a new tenant if a tenant surrenders possession of leased property. Gordon, Executor v. Consolidated Sun Ray, Inc., 195 Kan. 341, Syl. ¶ 3, 404 P.2d 949 (1965). See Annot., Landlord's Duty on Tenant's Failure to Occupy, or Abandonment of, Premises, to Mitigate Damages by Accepting or Procuring Another Tenant, 75 A.L.R.5th 1. On several occasions, this court has recognized that when a farm tenant abandons leased property the landlord and tenant relationship is terminated. E.g., Christenson v. Ohrman, 159 Kan. 565, 569, 156 P.2d 848 (1945) (surrender of farm land terminates relation of landlord and tenant but does not terminate relationship of debtor and creditor); McAllister v. Miller, 130 Kan. 77, 79-80, 285 P. 532 (1930) (recognizing surrender of leased premises as termination of tenancy). Additionally, Gene argues the landlords could rescind the contracts. In his trial brief before the district court, Gene argued: The common sense approach to enforcement of the farm tenancy lease indicates that if there is any abandonment, in any way, as recited herein, that the landlord has a right to rescind the lease and go upon the property in an effort to mitigate his damages. Gene then claimed there had been abandonment, stating: The death of David Sauder amounted to abandonment. Kansas law clearly states that a tenant who abandons the lease, for whatever reason, can not recover the crop he did not plant or harvest. . . . The lease is forfeited and rescinded. Jinnings v. Amend, 101 Kan. 130, 165 P. 845 (1917), provides support for this argument. In Jinnings, the court considered the effect of the tenant's incarceration upon his obligations to pay rent pursuant to a sharecrop agreement. The court concluded the lease could be terminated based upon the tenant's failure to farm the property. The court noted: There is nothing peculiar about a lease that takes it out of the operation of the rules of fair dealing that govern in other contractual relations. Here the essence of the arrangement was that the defendants were to furnish the land and certain implements, material, and money, and the plaintiff was to furnish his care, skill, and labor, and the proceeds were to be divided. Although the contract may be said to have created an estate in the land, it was essentially executory  its provisions were mutually dependent. The plaintiff was not in control of the land, to use it at his pleasure. He was bound to handle it in a stated way, and to perform certain acts with regard to it, and these obligations were as important as any other part of the contract. 101 Kan. at 132, 165 P. 845. The court then rejected an argument that the lease could not be terminated before the end of its term, stating: [I]t can not be doubted that if [the tenant] had completely abandoned the place, or had utterly refused compliance with the agreement, the owners would not have been required to permit the land to remain idle for several years. 101 Kan. at 133, 165 P. 845. Instead, the court concluded, the landowner had the right to rescind the contract based upon the tenant's anticipatory breach of contract. 101 Kan. at 133-34, 165 P. 845; see 1 Black on Rescission and Cancellation § 210 (2d ed.1929). The court found the implied covenant to plant the crops, from which income for both parties would be derived, to be a material provision. In fact, the court referred to the covenant as the essence of the arrangement. Jinnings, 101 Kan. at 132, 165 P. 845. It follows that the failure to plant the crops defeats the object of the parties in making the agreement; see also Hoffpauir v. Hoffpauir, 280 So.2d 855 (La. App.1973) (failure to cultivate is breach justifying termination of 10-year lease). Compare Kohn v. Babb, 204 Kan. 245, 250-51, 461 P.2d 775 (1969) (failure to include government payment in farm accounting not material and not sufficiently substantial to defeat object of farm lease). A similar analysis applies in this case. Here, the district court determined there had been a physical abandonment of the tenancies. There was, however, no finding that the tenant intended to abandon the properties. Therefore, as in Jinnings, the district court's findings are more in the nature of a surrender of the tenancies and a termination of the leases arising because the lessee failed to perform an action required under the leases. See Rook v. James E. Russell Petroleum, Inc., 235 Kan. 6, 16, 679 P.2d 158 (1984) (noting three situations that are often confused, only one of which is truly abandonment: [1] a termination of a lease arising because the lease requires action by the lessee which the lessee fails to perform; [2] true abandonment arising because the lessee consciously intends to give up the lease and commits some positive act of abandonment; and [3] where there has been no act done to demonstrate an intent to abandon but the lessee intends to postpone action required by contractual covenants while keeping the lease). In this case, as in Jinnings, the oral farm leases consisted of the landlords' promise to furnish the land and the tenant's promise to furnish care, skill, and labor. The contracts were executory; the contractual provisions were mutually dependent. The tenant was not in control of the land, to use it at the tenant's pleasure. The tenant was bound to plant, care for, and harvest crops from which proceeds would be obtained and divided. The failure to plant the crops would defeat the essence of the agreement, justifying the landlord's recision of the lease. See Jinnings, 101 Kan. at 132, 165 P. 845. The Estate suggests that, even if the tenant surrenders possession and fails to plant the crops, the landlord's only remedy is to terminate the lease by giving notice before March 1. This argument is contrary to Jinnings, which did not impose a notice requirement; in fact, the Jinnings court did not discuss any Kansas statutes even though a version of K.S.A. 58-2506 has existed since 1868; see G.S. 1868, ch. 55 sec. 6. This omission does not make the Jinnings court's analysis suspect. When a tenant fails to plant crops and surrenders occupancy, K.S.A. 58-2506 does not apply. As previously discussed, the statutory notice is required only in cases of tenants occupying and cultivating farms, which means situations where the tenant has performed customary tillage practices, planted crops, and applied fertilizer, herbicides, or pest control. The fact that David had farmed the properties consistent with customary practices prior to his death and was occupying and cultivating the properties at the time of his death does not mean the leased premises continued to be occupied and cultivated after his death. The legislative purpose of K.S.A. 58-2506 is apparent. Farming, unlike other commercial lease situations, requires the tenant to expend funds and labor and finance those expenses without compensation until the crop matures and is harvested. K.S.A. 58-2406 prevents a landlord from terminating the lease and reaping the harvest after the tenant has incurred the expense but has not been compensated. K.S.A. 58-2506 requires a landlord to suffer the presence of a tenant while a crop is growing but allows the landlord to remove the tenant before the next growing season. See Bearden v. John Hancock Mut. Life Ins. Co., 635 F.Supp. 1084, 1086-87 (D.Kan.1986) (discussing legislative history of K.S.A. 58-2506 and related statutes). When a lease is terminated before planting but after the tenant, acting in conformance with customary practices, has incurred expenses in cultivating the land or applying fertilizers, herbicides, or pest control, the landlord must reimburse the tenant for the fair and reasonable value of the services furnished and the materials utilized. K.S.A 58-2506a(a); see also K.S.A. 58-2506a(b) (establishing special rule that applies to alfalfa, a perennial crop where the tenant would expect several years of return; landlord can terminate lease but must reimburse tenant for fair and reasonable value of services and expenses). While K.S.A. 58-2506 and K.S.A. 58-2506a prescribe the method for terminating an oral farming lease while the tenant is occupying and cultivating the property and thereby provide some protection to the tenant, the provisions do not force the landlord to suffer a loss of income when the tenant does not occupy and cultivate the land. The failure to timely plant crops in keeping with customary farm practices means that the tenant is no longer occupying and cultivating the premises. In Rogers v. Ostmeyer, 180 Kan. 265, 266, 302 P.2d 999 (1956), when the farm tenant moved off the leased premises and surrendered possession with the consent of the landlord, the court concluded that [s]tatutory notice to quit the premises was therefore unnecessary. See also Hannah, The Legal Status of Tenant Farmers in Kansas, 7 Kan. L.Rev. 295, 308-09 (suggesting because no Kansas statute specifically addresses the situation of a tenant's abandonment or surrender, by the application of common law the same result would likely be reached). Other jurisdictions with statutes requiring notices to terminate farm leases have recognized the right to rescind the contract without notice during the term of the sharecrop contract, especially when the tenant has abandoned, surrendered, repudiated, or materially breached the lease. See, e.g., Agrinetics, Inc. v. Stob, 90 Ill.App.3d 107, 110, 45 Ill.Dec. 363, 412 N.E.2d 714 (1980) (when sharecropping agreement is breached, the injured party may [1] treat the contract as rescinded and recover on quantum meruit so far as performed; [2] treat the contract as alive and, at the end of the term, sue and recover under the contract; or [3] treat the repudiation as putting an end to the contract and sue for the profits that would have been realized had performance not been prevented). See generally Annot., Liability for Breach of Farming Lease or Contract, 35 A.L.R.5th 285.