Story Case

The Kewanee Brewery Company, in January of 1914, contracted to furnish "W.E.Murphy, a local saloon proprietor, all the beer that he should need in his business for the year 1914, at a certain price. In June 1914, in accordance with a law passed by the state legislature, the people of Kewanee voted to make the sale of any intoxicating drinks in Kewanee illegal. Accordingly, the brewery company refused to furnish any more beer to Murphy, who intended to resell it secretly in violation of the law. He, thereupon, brought an action against the company for damages. The company contended that the contract was discharged because performance had been made impossible by law. What should be the decision of the court?

Ruling Court Case. Spalding Vs. Rosa, Volume 71 New York Reports, Page 40

Spalding was the owner and manager of the Olympia Theater in the city of St. Louis. He made a contract with Rosa, who was a booking agency in New York, by which the latter agreed to furnish the Wachtel Opera Company to give four performances per week at the St. Louis theater, for two weeks. Wachtel was the leading singer of the company. In fact, it appeared that he was the only one worth while as a singer. Immediately preceding the opening performance, Wachtel became ill, and the engagement for the whole series of performances had to be cancelled, because his place in the company could not be filled by any substitute. This action was brought by Spalding for damages.

It was insisted by Rosa that the performance of the contract was excused because of the sickness of Wachtel, making performance impossible.

Decision

The performance of a contract of personal services will be excused when the person who was to render the services dies, or becomes sick in the meantime so that he cannot perform. In this case, since Wachtel was the main attraction of the company, and since the performance could not be given without him, his intervening sickness excuses the performance of the contract.

Mr. Justice Allen, who delivered the opinion of the Court, said in part: "The sickness and inability of Wachtel occurring without the fault of the defendants constitutes a valid excuse for the non-performance of the contract. Contracts of this character, for the personal services, whether of the contracting party or of a third person, requiring skill and which can only be performed by the particular individual named, are not in their nature absolute obligations under all circumstances. Both parties must be supposed to contemplate the continuance of the ability of the person whose skilled services are the subject of the contract, as one of the conditions of the contract. Contracts for personal services are subject to this implied condition, that the person shall be able at the time appointed to perform them; and if he dies, or without fault on the part of the convenantor, becomes disabled, the obligation to perform is extinguished".

Judgment was given for Rosa.

Ruling Law. Story Case Answer

If a contract is made in reference to some subject matter, the continued existence of which must have been a condition of the parties' agreement, it is held that the destruction of the matter will discharge the contract, if it is destroyed without the fault of the one under obligation to perform. Also, when one contracts to perform some personal services which no one but himself can perform, his sickness or physical inability, without any fault on his part, discharges the contract. That was the situation in the Court Case of Spalding vs. Rosa. Impossibility arising by operation of law will also discharge a contract. Thus, in the Story Case, the obligation of the brewery company to continue to furnish beer during the remainder of that year was discharged, because of impossibility created by law.