## Facts

- A 99-year ground lease (executed in 1909) covered a vacant lot at 1331 Walnut Street in Kansas City, Missouri.
- The lessor’s successor (Johnston) owned a two-thirds interest; the lessees (including Hawkinson) later acquired the remaining one-third interest from another devisee.
- Rent was payable quarterly; Johnston’s two-thirds share equaled $1,600 per year. The lessees also agreed to pay all property taxes during the lease term.
- The lessees performed through June 30, 1940.
- On June 14, 1940, the lessees gave written notice they intended to surrender and abandon Johnston’s interest on June 30, 1940; the next rent installment was due July 1, 1940.
- Johnston promptly rejected any surrender and stated he would hold the lessees to the full term; he reiterated this refusal after further lessee notices.
- The lessees abandoned the premises and defaulted on rent and tax obligations with approximately 67 years remaining on the lease.

## Issues

1. Under Missouri law, can a tenant’s repudiation of a lease, abandonment, and default in rent constitute a total breach (anticipatory repudiation) permitting an immediate damages action?
2. If so, did the trial court err in limiting future damages to a ten-year predictable period rather than the full 67-year remaining term?

## Decision

- The court held that, under Missouri law, anticipatory repudiation can apply to leases and that repudiation plus abandonment and rent default may constitute a total breach.
- The court held the landlord could treat the lessees’ conduct as a total breach and sue in one action for damages, rather than suing only for installments as they came due.
- The court affirmed limiting future damages to a ten-year determinable period based on the evidentiary limits of forecasting losses over the remaining 67 years.
- The judgment was affirmed on both the appeal and cross-appeal.

## Legal Principles

- Missouri’s doctrine of anticipatory repudiation for contracts extends to leases, subject to the same conditions and qualifications recognized in Missouri contract decisions.
- An unequivocal tenant repudiation, followed by abandonment and nonpayment of rent, can amount to a total breach of the lease.
- Where a landlord rejects surrender and elects to treat the tenant’s conduct as a breach, the landlord may seek damages immediately for the breach.
- Future-loss recovery for long-term leases is limited to a reasonable period in which damages can be estimated with reasonable certainty; losses beyond that period may be too speculative.

## Conclusion

The Eighth Circuit affirmed that Missouri permits a landlord to treat a tenant’s clear repudiation, abandonment, and rent default as a total breach of a lease and to recover future damages in a single action, but only for a reasonably predictable time horizon supported by the evidence, not automatically for the entire remaining term.


Hawkinson v. Johnston, 122 F.2d 724 (8th Cir. 1941)