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CHAPTER V

WAR-TIME IMPOSSIBILITY OF PERFORMANCE

OF CONTRACT

Reprinted from Law Quarterly Review, xxxv. 84 (January, 1919).

THE object of these remarks is to take stock of the recent and numerous cases upon supervening Impossibility of Performance of Contract, to ascertain where we have got to, and whither we are going.

For this purpose it is useful to know where we stood at the outbreak of war, and it is proposed, taking Taylor v. Caldwelli (1863) as our principal starting-point, to consider how far we had travelled before the outbreak of the greatest and most disturbing war with which the Common Law of England has ever been called upon to deal.

In that case, the Surrey Music Hall, Newington, Surrey, of which the defendant had agreed to give the plaintiff the use for a series of concerts to be given by the latter, was destroyed by an accidental fire before the date of the first concert, and thus the defendant was unable to carry out his agreement. The agreement, which was in writing, contained no express reference to the destruction of the premises, though expressed to be made ‘God's will permitting. The plaintiff claimed damages for breach of the agreement. Blackburn J. (as he then was) after admitting that 'where there is a positive contract to do a thing, not in itself unlawful, the contractor must perform it or pay damages for not doing it, although in consequence of unforeseen accidents the performance of his contract has become unexpectedly burthensome or even impossible,' fortifies himself by reference to the Digest and Pothier's Traité des Obligations, and concludes a review of the English authorities by extracting the following principle:

13 B. and S. 826.

'In contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance.' Thus the first serious breach was made after 200 years in the defences of Paradine v. Jane1.

Four years later Taylor v. Caldwell was followed in another case of a contract de certo corpore, where A contracted to erect machinery in buildings belonging to B, payment to be made on completion, and, the buildings being burnt down before the work was completed, the contract was held to be discharged, and A was unable to recover payment for the work already donea. Lord Parker pointed out the difference between these two cases, namely that in Taylor v. Caldwell a condition precedent was implied, whereas in Appleby v. Myers the Court implied a condition subsequent.

Some years elapsed before any further extension of the Taylor v. Caldwell principle was made. Howell v. Coupland4 is a case of the actual perishing of the thing, a potato crop, which was not in existence at the time of the contract. In Robinson v. Davison5 (a case of a contract to play the piano), Mrs Davison did not perish before her concert, but became incapacitated by illness from performing. Taylor v. Caldwell was prayed in aid, unnecessarily, it is submitted, because contracts for personal services are governed by a rule which was laid down long before Taylor v. Caldwell, and may, indeed, be said to be partly responsible for Taylor v. Caldwell. Still, Robinson v. Davison is interesting as showing a readiness to extend the legal effect of the perishing of a person or thing to cover the case of a person or thing ceasing to exist in the state contemplated by the contract. Mrs Davison continued as a woman, but was no longer a piano-playing woman. Nickoll v. Ashton illustrates this extension in the case of a thing. The defendants had sold to the plaintiffs a cargo of Egyptian cotton-seed 'to be shipped

1 (1647) Aleyn 26. ? Appleby v. Myers (1867) L. R. 2 C. P. 651. 3 [1916] 2 A. C. at p. 423. 4 (1874) L. R. 9 Q. B. 462; 1 Q. B. D. 258. 5 (1871) L. R. 6 Ex. 269. 6 (1901) 2 K. B. 126 (C. A.).

by the steamship Orlando at Alexandria... during the month of January 1900.' The Orlando was stranded in December 1899, and, although she existed in January 1900, she did not exist as a cargo-carrying ship. The Court of Appeal held by a majority that the contract was subject to the condition that the parties should be excused if before breach the Orlando should cease to exist as a cargo-carrying ship without the defendants' default, and so the plaintiffs failed in their action for damages for failure to ship the cargo under the contract.

So far then we find the discharging effect of supervening impossibility of performance confined to the perishing of a person or of a thing which is the subject-matter of the contract, or stands in essential relationship to it, as did the Orlando in the cotton-seed case. It remained for King Edward VII to afford the occasion for the next extension of the doctrine. Amongst the group of Coronation Seat cases to which the illness of that monarch in June 1902 gave rise, Krell v. Henry1 is perhaps the most important. The defendant had agreed to hire a flat in Pall Mall for two days, the 26th and 27th of June, and had paid a deposit. The letters exchanged between the parties contained no reference to the procession, but it was obvious from all the surrounding circumstances (including previous conversation with the plaintiff's house-keeper) that the flat was hired for the purpose of viewing the procession. When the King's illness made it impossible for the procession to take place on those days, the defendant declined to pay the balance of the rent, and made a counter-claim (abandoned in the Court of Appeal) for the deposit already paid. That Court held that the Coronation procession was the foundation of the contract, just as the continued existence of the Surrey Music Hall was the foundation of the contract in Taylor v. Caldwell, and that its non-happening without the defendant's default excused him from the performance of the contract. But this doctrine must not be thought to cover the case where the event, which failed to happen, e.g. the Royal Naval Review at Spithead on June 28, 1902, was not the foundation of the contract. The review was merely the motive which induced the defendant to charter the plaintiff's vessel ‘for the purpose of viewing the naval review'(which was cancelled), and for a day's cruise round the Fleet'(which remained anchored at Spithead).

1 [1903] 2 K. B. 740 (C. A.).

One further point was made clear in the Coronation Seat cases, and that is that the non-happening of an event which is held to be the foundation of a contract crystallizes the relations of the parties to the contract at the time when it ought to have happened and failed to happen. 'The loss must remain where it was at the time of the abandonment.' The supervening impossibility does not affect rights, e.g. to the payment of money, already acquired, and does not enable a party who has paid money under the contract to recover it?. The rule 'treats the contract as a good and subsisting contract with regard to things done and rights accrued in accordance with it up to that time; but, as the basis of the contract has failed, it excuses the parties from further responsibility under it3. In Krellv. Henry4 Vaughan Williams L.J.said of Nickollv. Ashton: “Whatever may have been the limits of the Roman law,' this case 'makes it plain that the English law applies the principle not only to cases where the performance of the contract becomes impossible by the cessation of the existence of the thing which is the subjectmatter of the contract, but also to cases where the event which renders the contract incapable of performance is the cessation or non-existence of an express condition or state of things going to the root of the contract and essential to its performance.' In Nickoll v. Ashton the reference to shipment by the Orlando is express, but we shall see later that it would now be safe to add 'or implied.' In citing this passage in Horlock's case', Lord Shaw states this view to be ‘in entire accord with that doctrine of frustration of voyage which has become fully accepted since the case of Jackson v. Union Marine Insurance Co.6, with the doctrine underlying Taylor v. Caldwell, and with sound legal principle.'

1 Herne Bay Steamboat Co. v. Hutton (1903] 2 K. B. 683 (C. A.).

2 Civil Service Co-operative Society v. General Steam Navigation Co. (1903] 2 K. B. 756 (C. A.).

3 Chandler v. Webster (1904) 1 K. B. 493 (C. A.).
4 (1903] 2 K. B. at p. 748.
5 (1916) 1 A. C. at p. 513.

8 (1874) L. R. 10 C. P. 125.

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Earl Loreburn in the passage quoted below asserts that the principles applicable in cases of maritime ventures are the same as in others, but it is believed that, historically speaking, it would be more correct to say that if the principles are the same now, it is mainly due to the maritime venture cases that this is so.

The foregoing is a very brief review of the pre-war development of the ordinary common law principles of supervening impossibility of performance of contract. Before turning, however, to the war cases, there is another current of authority deriving itself from a different source but ultimately coalescing, notably under pressure of the war cases, in the stricter common law principles; not only coalescing in them but modifying them in the way in which ever since the days of Lord Mansfield the need of catering for the business man has broadened the common law. It has only been in this way that the common law has been able to maintain its position as one of the two great branches of English law, united or 'fused' since 1873. Lord Mansfield's foresight thus avoided the mistake made by the later medieval common lawyers and by admitting the influence of a second equity (the equity of the laws merchant and maritime) secured the future of his science and a sphere of influence which has never ceased to expand. A few words from a case decided in the House of Lords in 1916 to which we shall return later1 mark this coalescence. “When this question' (supervening impossibility of performance), says Lord Loreburn, ‘arises in regard to commercial contracts, as happened in Dahl v. Nelson, Donkin & Co., Geipel v. Smith3, and Jackson v. Union Marine Insurance Co.4, the principle is the same and the language used as to “frustration of the adventure” merely adapts it to the class of case in hand. In all these three cases it was held, to use the language of Lord Blackburn, that a delay in carrying out a charter-party, caused by something for which neither party was responsible, if so great and long as to make it unreasonable to require the parties to go on with the adventure, entitled either of them, at least while the contract was executory, to consider it at an end.''

1 F. A. Tamplin Steamship Co. v. Anglo-Mexican Petroleum Products Co. (1916] 2 A. C. at p. 404. 2 (1881) 6 App. Cas. 38.

8 (1872) L. R. 7 Q. B. 404. 4 (1874) L. R. 10 C. P. 125.

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