Farm Services, Inc. v. Oktibbeha County Bd. of Supervisors
| Docket Number: | 2002-CA-00205-SCT Linked Case(s): 2002-CA-00205-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 12-04-2003 Opinion Author: Graves, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Forfeiture of lease - Sufficiency of notice - Lease payments Judge(s) Concurring: Pittman, C.J., McRae and Smith, P.JJ., Waller, Easley and Carlson, JJ. Non Participating Judge(s): Diaz, J. Concur in Part, Dissent in Part 1: Cobb, J., Concurs in Part and Dissents in Part Without Separate Written Opinion Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 09-06-2001 Appealed from: Oktibbeha County Chancery Court Judge: James S. Gore Disposition: Terminated a lease between the Appellant and the Appellee. Case Number: 00-142 |
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| Note: | COBB, J., CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE WRITTEN OPINION. | |
| Party Name: | Attorney Name: | |||
| Appellant: | Farm Services, Inc. |
DEWITT T. HICKS, JR.
P. NELSON SMITH, JR. |
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| Appellee: | Oktibbeha County Board of Supervisors | JACKSON M. BROWN |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Forfeiture of lease - Sufficiency of notice - Lease payments |
| Summary of the Facts: | Oktibbeha County leased 10 acres of industrial park in Starkville to Riverside Oil Mill. The County entered into an expanded lease contract to provide funds to aid in promoting industry, trade and the use of in state agricultural products and to reduce unemployment by the issuance of industrial revenue bonds. Riverside Mill, with County approval, sublet the lease to Cook Industries which then sublet the lease to Farm Services with County approval. The lease was assigned to Farm Services which assumed all liabilities, responsibilities and privileges of the original lessor. After Farms Services closed its business operations, the Oktibbeha County Board of Supervisors voted to terminate the lease for default because Farm Services had failed to operate a business on the site for more than a year, failed to employ residents of the county, and failed to pay rent. The Board sued Farm Services for specific performance and declaratory judgment, seeking to terminate its lease with Farm Services for failure to operate for more than one year and for failure to employ residents. The Board also prayed for four years of taxes on building improvements which had been dismantled without County approval and damages caused by dismantling of the structure owned by the County. Farm Services removed the case to U.S. District Court which remanded the case to the chancery court. The court terminated the lease, and Farm Services appeals. |
| Summary of Opinion Analysis: | Issue 1: Forfeiture of lease Farm Services argues that the court’s decision to forfeit the lease on the basis that Farm Services dismantled a building was erroneous, because fertilizer residue caused the buildings to be in danger of explosion. The first rule of contract interpretation is to give effect to the intent of the parties, however, the words utilized are the best resources for ascertaining intent and assigning meaning with fairness and accuracy. When Farm Services was assigned the lease, it agreed to assume all of the obligations arising under the lease including the employment provision. The record shows that Farm Services has not employed residents as required since it ceased its operations. Because Farm Services breached the lease, the court did not err in forfeiting the lease. Issue 2: Sufficiency of notice Farm Services argues that the lease was terminated by the County in direct violation of the lease provision giving Farm Services a right of notice of intent to terminate the lease with 60 days right to cure. Farm Services also argues that it never received the notice. The Board’s attorney sent notice by certified mail to Farm Services, notifying its officers of the Board’s actions to terminate the lease. The letter was addressed to Farm Services at its post office box address but was returned as undeliverable. There is no evidence that the County was given another address to send the letter. The Board acted in good faith when it attempted to send written notification to the address for which other notices had been sent and not returned. In addition, Farm Services had written notice when it was served with the Bill for Specific Performance and Request for Declaratory Judgment. No evidence was presented by Farm Services that it constructed a new building in the place of the one that was dismantled after receiving that written notice. Issue 3: Lease payments Farm Services argues that it is entitled to a credit of $5,750, because the lease sets the rent at $1,000 per month, while it was paying $1,250 per month. A contract can only validly be changed or modified as to any material condition when the parties agree to a subsequent parol agreement which then would render the original written contract as modified an enforceable obligation. The actions of the County must be viewed as a written modification to the original contract, and the actions of Farm Services must be viewed as an acceptance. The County sent an annual statement to Farm Services for lease payment due of $1,250, modifying the originally agreed upon amount of $1,000. Farm Services accepted this modification by paying the increased amount, without objection, for over twenty-three years. Therefore, the chancellor did not err in determining Farm Services was not entitled to any reimbursements. |
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