clause becomes operative and excuses the promisor from performance, the excuse has been held not merely temporary, operative only while the casualty continues, but a permanent excuse for non-performance," unless the contract provides that delay only shall be excused.40 "Shortage of cash or inability to buy at a remunerative price" cannot be regarded "as a contingency beyond the seller's control.” 41 The proper construction of words in a particular contract must depend frequently on the circumstances existing when the contract was made or then within the contemplation of the parties.42 jobbers the amount it agreed to sell to defendants, and that this product could be bought in the open market, though at a higher price." In Davis v. Columbia Coal Mining Co., 170 Mass. 391, 49 N. E. 629, a promise to sell coal with a proviso that the seller would not be responsible for "loss" of coal en route, nor for damages for delays of transportation, strikes, or causes beyond its control, was held excused by seizure of the coal by the railroad company on account of scarcity of coal produced by a general strike at the mines. The court declined to limit "strikes" to strikes at the seller's mines. See also Milliken v. Keppler, 4 N. Y. App. D. 42, 38 N. Y. S. 738. In Consolidated Coal Co. v. Jones & Adams Co., 232 Ill. 326, 83 N. E. 851, however, the Court held that the word "strikes" in a proviso referred only to strikes in the seller's own mine. See as to the effect of such clauses in relieving the lessee of a mine from paying a minimum stipulated royalty: Givens v. Providence Coal Co., 22 Ky. L. Rep. 1217, 60 S. W. 304; Bennett v. Howard, 175 Ky. 797, 195 S. W. 117, L. R. A. 1917 E. 1075; New York Coal Co. v. New Pittsburgh Coal Co., 86 Ohio St. 140, 99 N. E. 198; Dorris v. Morrisdale Coal Co., 215 Pa. 638, 64 Atl. 855; Holt v. Kelley, 224 Pa. 620, 73 Atl. 947; Robinson v. Kistler, 62 W. Va. 489, 59 S. E. 505. In regard to strikes as excusing carriers from liability, see Empire Transportation Co. v. Philadelphia, etc., Co., 77 Fed. 919, 920, 23 C. C. A. 564, 35 L. R. A. 623, and supra, § 1099. See further on the general construction and effect of such clauses: Californian Tanneries Co. v. Pacific Sheet Metal Works, 144 Fed. 886; Roessler &c. Co. v. Standard Silk Dyeing Co., 254 Fed. 777 (C. C. A.); McFarland v. Savannah River Sales Co., 247 Fed. 652, 159 C. C. A. 554; Delaware, etc., R. Co. v. Bowns, 58 N. Y. 573; Richards v. Wreschner, 174 N. Y. App. D. 484, 156 N. Y. S. 1054; Thaddeus Davids Co. v. Hoffman Co., 97 N. Y. Misc. 33, 160 N. Y. S. 973; B. P. Ducas Co. v. Bayer Co., 163 N. Y. S. 32; Smokeless Fuel Co. v. Seaton, 105 Va. 170, 52 S. E. 829. 39 Hull Coal & Coke Co. v. Empire Coal & Coke Co., 113 Fed. 256, 51 C. C. A. 213; Metropolitan Coal Co. v. Billings, 202 Mass. 457, 89 N. E. 115; New England Concrete Construction Co. v. Shepard & Morse Lumber Co., 220 Mass. 207, 107 N. E. 917. 40 As in McFarland v. Savannah River Sales Co., 247 Fed. 652, 159 C. C. A. 554. 41 Tennant's, Ltd., v. C. S. Wilson & Co., Ltd., [1917] A. C. 495, 510, per Earl Loreburn. See also Link Belt Engineering Co. v. United States, 142 Fed. 243. 42 In Standard Silk Dyeing Co. v. § 1969. Other effects of impossibility. Thus far the only question much considered under the heading of impossibility has been its effect as an excuse for not per Roessler, etc., Chemical Co., 244 Fed. 250, the court held that where a contract for the sale of prussiate of soda, a German product, providing that the sellers should not be liable for causes beyond their control, including war or insurrection, was made after war was declared between Germany and Great Britain, performance was not excused by the British orders in council which in effect placed an embargo on shipments from Germany, because in view of the actual existence of war the parties must have intended relief only in case the United States became involved in the war. The decision was reversed by the Circuit Court of Appeals. Roessler &c. Chemical Co. v. Standard Silk Dyeing Co., 254 Fed. 777, 166 C. C. A. 223; but some of the cases relied on by the lower court, though not strictly in point, may be stated in its words. "In the recent case of Thaddeus Davids Co. v. Hoffman Co., 97 N. Y. Misc. 33, 160 N. Y. S. 973, before Judge Lehman in the state Supreme Court, where the clause was found in the contract, 'Contingencies beyond your control, fire, strikes, accidents to your work or to your stock or change in the tariff will allow you to cancel this contract or any part of the same,' and where it was sought to be relieved of the obligations of the contract by the fact that war broke out in August, 1914, between Germany and Great Britain, the learned court said: 'If the words "contingencies beyond your control" stood alone, there could be little, if any, doubt, that they covered the conditions arising from the state of war beginning on August 1, 1914. It is true that probably these parties did not contemplate the probability or possibility of a world war arising which would interfere with the importation of the products of foreign nations, but the question in this case is not what contingencies did the parties contemplate might arise, but what meaning did they intend to give the words "contingencies beyond your control"? And if these words stood alone, they would cover all contingencies arising thereafter beyond the defendant's control which became the proximate cause of the inability of the defendant to comply with its contract.' In this case the contract was made before the commencement of the war. The same is true of Ducas v. Bayer, 163 N. Y. S. 32. "Judge Weeks in Richards v. Wreschner, 174 N. Y. App. Div. 484, 156 N. Y. S. 1054, said: 'The claim of the defendants that they are excused from performance because of the interference with the source of supply or with the opportunity for shipment by reason of the existence of a state of war between Germany and Belgium, and also because of the subsequent illegality of shipment by reason of the proclamation of the German government prohibiting the exportation of merchandise contracted for, cannot be sustained. It is well settled that impossibility due to a foreign war is no excuse.' "Judge Wolverton, in Balfour r Portland Co., 167 Fed. 1010, where a provision of the carrier's contract exempted it from 'loss or damage occasioned by arrest or restraint of princes, rulers or people,' had a somewhat similar question before him, and he used this language: 'It can hardly be disputed that the respondent entered into the contract with full knowledge of the existence of war conditions, and with the intention of carrying the flour notwithstanding forming an impossible promise, but impossibility may have other consequences. 1. The impossibility of A to perform his promise may excuse B from the performance of his. This subject has been already sufficiently adverted to.48 2. The impossibility of performing a condition may not only preclude recovery upon the promise qualified by the condition, a topic which also has been dealt with previously-44 but may discharge a contract altogether. of 3. There is a quasi-contractual obligation to pay the value any partial performance which has been received, whether by the party whose performance has become impossible, or by the other party. 4. There is a quasi-contractual obligation owing by the party whose performance has become impossible if he has derived any advantage from the non-performance of his impossible promise, to pay the other party the net value of that advantage. § 1970. Effect of impossibility of performing a condition precedent or concurrent in discharging contract. No liability can arise on a promise subject to a condition precedent until the condition is performed, and if by lapse of time or for any other reason the condition cannot be performed no liability can ever arise upon the promise. In other words, it will be discharged. If the condition by its terms was performable by a party to the contract, and he is also under an these conditions. . . . Now, having entered into such a contract with that intent and purpose in view, what is the significance and intendment of the clause referred to? It can hardly be contended that such intendment and signification should be the same as where the contract was made prior to the time that any such war conditions arose, or not in anticipation thereof. If it can bear such a construction, the contract has made it optional with the respondent to carry or not as it might see fit from motives of its own, re obligation to perform it, his failure to do so will subject him to liability, unless his failure to perform had some legal excuse, and will also free the other party to the contract. Sometimes, however, there is no legal obligation to perform the condition, the matter being optional with a party to the contract, or dependent upon chance or the will of a third person. Thus in case of an option under seal or for consideration, which by its terms must be accepted by tender of the price or otherwise before a certain date, a failure to comply with this condition prior to the date fixed will discharge the contract altogether.45 Concurrent conditions are in legal effect mutual conditions precedent. Therefore, if each party fails to comply with the condition qualifying the other's promise, neither can acquire a right upon it, and if by lapse of the time fixed by the contract, or of an unreasonable time if no time was fixed, the conditions become impossible of performance, the contract is discharged. 46 45 See supra, § 853. So in Bolton v. Riddle, 35 Mich. 13, where the contract between the parties bound the defendant to deliver goods on board vessels to be furnished by the plaintiff, it was held that furnishing the vessels was a condition precedent to the defendant's undertaking, and that a failure to furnish them within reasonable time discharged the defendant. 46 Pearl Mill Co. v. Ivy Tannery Co., [1919] 1 K. B. 78. In Hunt v. Livermore, 5 Pick. 395, 397, in speaking of a contract for the purchase and sale of land, the court said (indicating the necessity of action within a reasonable time), "If Hunt had in a reasonable time offered to give a good deed of the land, and had demanded payment of the money mentioned in the note, and Livermore had refused to accept the deed and to pay according to his engagement, Hunt would have had his remedy at law against Livermore for the purchase money. On the other hand, if Livermore had in a reasonable time offered to pay his note, and had demanded a deed, and Hunt had refused to accept the money and to give the deed simultaneously, Livermore would have had his remedy at law against Hunt for the damages sustained by his not conveying the land according to his agreement." In Mowry v. Kirk, 19 Ohio St. 375, 383, similarly, the court said: "We agree with the court below in the opinion that the tender actually made by Cheever was too late. The contract was of such a nature, and in respect to such a subject-matter, as to render it evident that the parties in making it contemplated a prompt, and not a dilatory, execution of it on both sides; and a week's delay, by either party, of any attempt to carry it into execution, would authorize the other in presuming and acting on the assumption that the former assented to its rescission and abandonment." In Hallet & Davis Piano Co. v. Starr Piano Co., 85 Oh. St. 196, 202, 97 N. E. 377, the court said: "This was a commercial transaction which should ordinarily be completed with considerable promptness. When more than four months had elapsed and This result is sometimes explained on the ground that mutual assent to rescission is presumed, but the explanation is an undesirable fiction. The conduct of the parties can hardly amount to an agreement of rescission unless silence and nonfeasance are sufficient to amount not only to an acceptance but also to an offer. 48 Moreover, it may be supposed that one party said to the other "I do not propose to make a tender within a reasonable time, nevertheless I do not assent to rescind the bargain." Surely such notice could not enlarge the rights of the party who gave it though clearly negativing any assent to rescission. There are decisions opposed to the view which is here expressed. They require that a defendant in order to free himself from the chance of being made liable by a tender after a reasonable time on the part of the plaintiff, must give notice.49 These decisions, however, seem opposed to principle. Mutual promises to buy and sell goods of fluctuating price on March first, neither party had done anything to complete the transaction Blanche English had the right to treat the contract as rescinded and to enter into the deal with the plaintiff in error. 'Mutual delinquency gives rise to the presumption of mutual assent to a rescission. See Parsons, Contracts, 667 et seq., and 16 Ohio St. 454.' Per Brinkerhoff, J., in Mowry v. Kirk, 19 Ohio St. 375, 383; Lewis v. White, 16 Ohio St. 444, 454.” 47 See extracts in the preceding note. 48 See supra, § 91. 49 In Jones v. Gibbons, 8 Exch. 920, to an action against the defendant on a contract to deliver a certain quantity of iron "as required," the defendant pleaded that the plaintiff did not request delivery within a reasonable time. The plaintiff made replication that as soon as the iron was required by him he requested delivery. On demurrer the plea was held bad. The Court seemed to admit that the plaintiff's right to require the iron was limited to a reasonable time, but that notice by the defendant was necessary in order to terminate the plaintiff's right. Alderson, B., said: "So soon as a reasonable time elapsed, it was competent for the defendant to say, 'I desire you to ask me to deliver the iron now or never.' Pollock, C. B. said: "The defendant reads the contract as if the condition which the law implies were part of it. No doubt, where a contract is silent as to time, the law implies that it is to be performed within a reasonable time; but there is another maxim of law, viz., that every reasonable condition is also implied; and it seems to me reasonable that the party who seeks to put an end to the contract, because the other party has not, within a reasonable time, required him to deliver the goods, should in the first instance inquire of the latter whether he means to have them." A similar view was expressed in McFadden v. Henderson, 128 Ala. 221, 29 So. 640; Cameron v. Wells, 30 Vt. 633. |