*4 SPAETH, BECK, Before BROSKY and JJ.
BROSKY, Judge: Lessee/appellant appeals here from the dismissal of its and from exceptions judgment against $292,686.83 it for trial, Following rent. a bench the Court of Common Pleas held that lessee had anticipatorily repudiated his lease and to the lessor/appellee was liable for the rent due. This *5 law, anticipa- not, as a matter that lessee did finds court it finds that Further, this court the contract. torily breach not by lease materially breached lessor who lessee. to the the leasehold delivery tendering timely a under the liability any relieved of Therefore, the lessee is is vacated. judgment and the lease of contract. action for breach case involves an This into duly entered agreement being contract a (herein- Corporation Avenue Pennsylvania appellee, Agen- Federation of Jewish lessor), appellant, and the after lessee). The (hereinafter validi- Philadelphia cies Greater Rather, se is not at issue. per of the contract ty anticipatorily not the lessee or issue whether primary for performance— to the time prior the contract breached under the lease. obligations of its relieving the lessor thus anticipatorily had the tenant The court below found the landlord of the contract and had relieved breached the date. As agreed upon on the premises to deliver the finds, the lessee did not contrary, to the this Court contract, the second issue is the lease anticipatorily breach tender a by failing the lease the lessor breached whether issue, the On this premises. of the leased timely delivery had not antici- found that if the tenant court below further constitute a breached, the landlord’s actions would patorily thus relieve the contract and would material breach of the agree the contract. We with any liability tenant of under resolution of the this dicta and make it the for our basis issue. second on questions appeal. raises four
The appellant/lessee (1) court erred as a matter are: Whether the lower They its anticipatorily lessee had breached finding that the law that the evidence The lessee contends lease with lessor. not or could finding that lessee would support fails to under the lease—the obligation sole affirmative perform tendered posses- the lessor had rent—if obligation pay such upon the date which premises of the demised sion (2) the lower court erred as a Whether was due. possession damages to the lessor when the awarding matter of law *6 obligation by lessee’s under the lease was excused the (3) unjustified agreement. lessor’s breach of the lease the court erred as a matter of in Whether lower law awarding damages to the lessor the failed to plaintiff when (4) mitigate damages. exercise its to Assum- properly the entitled the ing plaintiff damages,'whether that was to court’s calculations of erroneous. In damages lower only this we need reach the first issues raised opinion, two appellant/lessee. We find that the lessee’s actions do support finding a and the anticipatory breach that lessor’s actions constituted a material the breach of agreement parties. between the two We reverse and va- cate the judgment.
Facts 1973, In negotiated November of the lessee a lease with lessor, building the owner of an office at 1528 Walnut Street, lease, 8, 1973, The Philadelphia. dated November 1, for a term of provided years lasting May basic two from 20, reads, April 1974 to 1976. An addendum to the lease pertinent part: understand, you premises being
As the demised are now occupied by Catalytic, Inc. lease expires August whose They 1974. have indicated to us and we have advised you make effort accordingly, they every possible will 1st, to give possession Federation as close to as May possible. however,
If, they are into their new unable move quarters, it may necessary be for them to remain beyond 1, 1974, floors, on these May but no event beyond 31, 1974, August which is the of their expiration date lease. do parties not contest that 1974 is the September
date on each party’s obligations which under the lease commenced.
From May through August sought the lessor from the lessee agreement waiving right on 1 in September the event that the occupants current would consistently The lessee August to vacate unable be extension. requested grant refused purchase negotiated lessee During July, occupy its need to obviating thus building, an office space. office leased its intended new preparation in the delays
Due to the lessor requested facilities, tenant occupying August beyond extension it a three-month grant from receiving a waiver of its lease. Without termination entered into 5, 1974 the lessor lessee, August on occupant the current agreement with extension formal *7 1, 1974. commencing September months three lessor to by not tendered the property The demised fact, three In September 1 nor on on May the lessee 6, tendered until October were not building of the floors end of at the floor was tendered the fourth 1974 and October, 1974. anticipatorily had that the lessee below held
The court court concluded holding, In the lease. so the repudiated to the prior of the lessee declarations following that and 1, 1974, “an absolute constituted ending August week or a dis- perform refusal to unequivocal contract] [on do so”: inability of statement positive tinct and that “he was 24, statement (a) July On [lessee’s] of an because have no that the lease would advised effect called for as give possession May inability of Lessor lease;” in the 1974, 30, on meeting July with
(b) an inconclusive [lessee] by followed ,1, 1974, at which August on
(c) meeting with [lessee] “they an extension because grant declined to time [lessee] that any attorney’s their being advised were [sic] acknowl- would in essence given by Federation extension lease,” and validity edge of “the informing that (d) on this same date [lessor] [lessee] had floors], four no did not want [the [lessee] extension any type and would not consider it, use of release from the lease. without a liability (Emphasis original.) Finding of Fact number nine is
Further,
the trial court’s
states,
including August
to and
“Up
It
relevant here.
expressly
did not
state
to Walnut
Federation [lessee]
rental
pay
that the
would
Street Co. [lessor]
former
floors,
made therefor by
nor was a demand
for the four
added.)
(Emphasis
Co.”
Walnut Street
of Review
Scope
trial
findings
judge
It
settled that the
is well
unless there is
a trier of fact will not be disturbed
sitting as
upon
are not
findings
those
based
a determination
will also not
evidence. His Conclusions
Law
competent
trial
his decisions on an
judge
unless the
based
be disturbed
Campbell,
law. Courts v.
application
erroneous
Township
(1976);
Taylor
A.2d 425
Pa.Super.
Wilkins,
(1981).
In this the lessee contends that appeal, trial court cannot the conclusion justify relied on chal occurred. Since the lessee anticipatory breach law, must of the facts to the we lenges only application *8 can, a matter of given determine the facts as as whether law, trial court legal the conclusions that the drew justify from them. Breach
Anticipatory
The
raised is
the
set of
question
preceding
first
whether
sufficient,
law,
the
support
finding
facts is
as a matter of
the
the
anticipatory
by
of an
breach of
lessee.
the
that leases are in the
begin
We
with
observation
and are thus controlled
of
by principles
nature of contracts
DiLucia,
8,
contract law. Cusamano v.
Pa.Super.
281
421
Holmes,
(1980);
Pugh
Pa.Super.
A.2d 1120
253
384
(1978),
modified,
272, 405
A.2d 1234
aff’d. as
486 Pa.
A.2d
(1979).
Under the
of Pennsylvania,
law
conduct which constitutes
of
anticipatory repudiation
a contract
is set forth in
McClelland v. Amsterdam
322 Pa.
Casualty Company,
(1938).
429 at
McAlpine
Transmission,
Inc.,
v. Aamco Automatic
(E.D.Mich., 1978):
F.Supp. 1232 at 1253
law is
Pennsylvania
well-settled that more than a threat
non-performance
is needed before conduct can amount
to an anticipatory breach of contract. The conduct must
manifest an
and unequivocal
perform.
absolute
refusal to
§8,
Pennsylvania
414;
Law
at
Encyclopedia, Vol.
(3d
McCloskey
Co.,
& Co. v. Minweld Steel
Pursuant
to the first
theory,
the trial court relied on
Co.,
W100,Inc.,
William B. Tanner
Inc. v.
The trial court’s reliance on misplaced. The facts in the case at hand are sufficiently distinguisha ble so as to a different result. justify The lessee here never all knowledge “disavowed very existence in question. contracts” It merely voiced the opinion might the contract already be void due to a possible breach Further, by the lessor.1 and very lessee importantly, never declared that it perform would not its duties under the contract. This fact is supported by the trial finding court’s that the lessee expressly never refused to pay rent for the leased premises.
Lessee’s July statement that “he was advised that the (characterized lease would have no effect” by the trial court as an “off-hand” opinion) August and his statement that “any given extension would essence ac knowledge the validity the lease” are insufficient to constitute required high standard of conduct that is “an and unequivocal absolute perform.” Further, refusal to court will often look to words and conduct when determin ing whether it was reasonable for one party assume that another had party anticipatorily breached. The fact here that the lessee continued to meet and negotiate with the lessor regarding requested extension and that on Au gust 1, the lessee stated that it would “not consider any type of extension without a release of for the liability lease” support the conclusion the lessee’s words and conduct were not an “unequivocal” perform. refusal to
The two remaining theories upon which court below may have based finding of anticipatory breach are that lessee J.E., Murray, Contracts, Murray (2d Cf. Rev.Ed.1974): on § questions "One of the good more difficult ... is whether a faith denial liability under a contract should be treated as a sufficient basis for anticipatory repudiation an action for ... the extent that courts matter, have they suggest considered this right that there is no to sue anticipatory repudiation plaintiff where only able to show good the defendant faith denied any that he was under obligation perform.” Although Pennsylvania we find no clearly adopts decision which position, concept this it is a which deserves Pennsyl- consideration in provides analytical vania courts. It framework which could assist the trier-of-fact in difficult cases such as the one at hand or Tanner. *10 had a duty, implied-in-law contract, or based on the to the occupy premises leased and that expression its clear intent not occupy to was sufficient support to a finding anticipatory breach. Neither theory supported is in law or in fact.
A tenant has no duty, implied-in-law,to occupy the leased premises. Absent a provision or agreement to the contrary, there are two basic incidents of a tenancy: the right to possession of the leasehold by the tenant and the corresponding right to receive payments rent by the land Smulkin, lord. Oskow v. 1969). A.2d 520 (D.C.App., This proposition supported in Restatement, Second, Property, note to introductory Chapter “Tenant’s Obli gations that Inhere in the Landlord-Tenant Relationship” (1976): obligations of the tenant inherent in the landlord-
tenant relationship which arise without the aid of any express promise tenant are to pay the rent re- served, waste, not to commit and not to use the leased property for an illegal purpose.
The obligations of the tenant to pay rent reserved the lease is at the very heart of the landlord-tenant relationship.
Id. at 383-384. A tenant’s duty to occupy
premises
demised
is not implied-in-law, but is imposed only
aby
contractual
provision. See,
Pearl,
v.
Goldberg
306 Ill.
51C C.J.S. Landlord (1968). and Tenant As there duty implied-in-law is no which mandates that the lessee occupy demised premises, the question is occupy duty had the lessee a contractual
whether in the contract which provision there is no leasehold. Since must occupy, a we duty states that lessee had expressly the fact that arose out of such a determine whether This occupancy” “use and clause. lease contained a “use and negative because is answered question than “mandato- “permissive” are rather occupancy” clauses the lessee to duty upon impose and do ry” premises. *11 Minit-Man Philadelphia Corp.,
In
Dickey
(1954),
gave
at 581
this Court
at
Generally speaking, only prescribed purpose used for a certain ises are to be of the Lessee to use or obligation part no on the imports such a premises purpose; use the for that continue to use, a a not against non-complying is a covenant provision to use. covenant this rule had general on to state that opinion
That went of this state. the trial courts uniformly by been followed that, unless is otherwise Pennsylvania The rule of law clause in a lease stated, occupancy” a “use and specifically use, a covenant to against noncomplying a a provision to the facts of this case. applies use. This rule 3, 1973 lease of the November between Clause One occupy herein that “lessee will use and parties provided organization and as offices for charitable premises] [the parties agree uses.” Nowhere in the lease do the related obligation upon creates a mandatory that the use stated fact, the premises may In One indicates that lessee. Clause upon the purpose, used for other than the stated written be This lessee’s asser language supports consent of lessor. clause in the.lease occupancy” tion that the “use and than the “mandato “permissive” rather question was negative obligation not to use ry” variety, creating only in a manner. property non-complying Thus, find that we the lessee did not have a contrac tual the leased premises. The lessee’s only obligation affirmative under his to pay lease was the rent. As lessee refused or never indicated an inability to fulfill obligation, this the trial court erred as a matter of law in its finding that the lessee had anticipatorily its repudiated actions, lease. prior 1, 1974, Federation’s to September did not constitute anticipatory obligations breach un der the lease.
Material Breach of Lease Lessor This leads us to the second issue whether the lessor’s granting of a lease extension to the current consti- occupant tuted a material breach of the lease which justified the regarding lessee’s the whole transaction as at an end. We answer this in the affirmative.
The evidence shows that lessor failed to deliver the de- mised premises September 1, 1974, permissible last date for delivery specified as in the lease. argues Lessee that, absent an anticipatory itself, breach by this failure by *12 lessor to tender a timely delivery constituted a material breach of the lease and excused the lessee from its rental obligation and precluded the lessor from any recovery damages.
The questions two (1) raised are: whether 22 Clause agreement Lease operated to relieve the lessor of its to duty deliver the premises 1, on September 1974 thereby binding lease; the lessor to and, (2) whether lessor’s grant of a three-month extension to the current occupant constituted a material breach of the lease. 22
Clause of the lease agreement in pertinent states part: In the event that the herein premises demised are not ready Lessee’s occupancy at the time herein fixed for the beginning lease, of the term of this because ...
failure or refusal of the occupant of the said demised premises to ... vacate and surrender up the same ... this lease ... shall not be affected thereby ...
242 lease, stating possibil- to the the addendum Additionally, date, stated, 1 “... but September of a commencement ity occupy the lease- occupant in no the current event [would 31, 1974, expiration is the date August which beyond hold] of their lease.” it is fundamental construing agreement,
In
a
controlling, and that
parties
of the
is
the intention
from
entire instrument.
intention must be ascertained
587,
(1951);
Shoemaker,
Pa.
Further,
reading the lease
whole
they
it is clear that
parties,
determine the intent of the
a
for the tender of
1, 1974 as
fixed date
September
intended
to a
later
only
delivery
22 referred
leasehold. Clause
September
than
earlier than
May but
quiet enjoyment applies
An
implied covenant
and is breached when
regard
every
property
lease of real
acts of the lessor or
possession
impaired by
the tenant’s
Morelli,
Pa.Super.
acting
those
under him. Pollock v.
In
Theatres
(1976).
A.2d 458
Easton
v. Wells
(1979),
Pa.Super.
appeal
401 A.2d
Fargo, 265
(1982),
Pa.
Lessor’s act to possession tender of the by the in premises last allowable date as fixed the lease possible type most extreme of breach of the covenant of quiet enjoyment. above, As noted this failure express lessor’s, him, chargeable act his through negotiating an lease extended with the occupying tenant. Thus, concur trial we with the court that dicta the lessor’s three-month extension of current lease was a material lease, breach of the discharging the from obliga lessee its agreement. tions under the Since have we found lessee did not anticipatorily breach contract and breach, lessor did materially judgment against lessee must be vacated. holding lower court’s order the Federation of Jewish
Agencies damages liable for in $292,686.83, the amount of interest, plus is vacated.
SPAETH, J., BECK, files a in concurring statement which J., joins. J.,
BECK, in joins BROSKY, also the majority by J. SPAETH, Judge, concurring: I Judge
While join opinion, BROSKY’s I find it unnecessary to decide whether appellant had a premises, if occupy the there appel were such a duty, lant it, could have breached since do opportunity so was thwarted by appellee’s as lessor. conduct
During period 25 through August July appel- lee appellant and engaged discussions which appel- lee sought appellant’s agreement to a short-term extension beginning appellant’s so lease term that Catalytic, tenant, the existing remain premises could on the until its quarters completed. new were In exchange, appellant sought relief from liability under the lease. Appellant’s *14 it had not suggests in these discussions
participation
the lease.
obligation under
repudiated any
cancellation,
negotiations,
in the
point
At one
rejected by
was
by appellant
lump-sum payment
a with
discussion
805a.
In the final
between
See R.
appellee.
stated that the next
1—appellee’s agent
parties—on August
compro-
ideas for possible
additional
propose
he would
day
any
no
794a. The record contains
evidence
mise. R.
Instead, on
August
made.
proposals
further
were
such
extension of
demand for an
Catalytic’s
acceded to
appellee
lease,
having
appellant’s agree-
obtained
without
Catalytic’s
part
extension. As
of the extension
ment
to such an
floors
810a,
rented four additional
agreement,
Catalytic
R.
one-year
with three
years,
from
for a term two
appellee
appellee, by
R. 774a. Thus
options. See also
renewal
agreement,
compromise
into the extension
ended
entering
case, it
being
That
negotiations
appellant.
with
obligation may
it
appellant
repudiate any
impossible,
premises.
have had under the lease
Petition for Allowance of Granted