Exceptions To The Rule

The exceptions to the rule must be distinguished from the cases in which the act of God is said to excuse from nonperformance of a contract. There are, as we have seen, certain contracts into which the act of God is introduced as an express, or, by custom, an implied, condition subsequent absolving the promisor; but there are forms of impossibility which are said to excuse from performance because "they are not within the contract" - that is to say, that neither party can reasonably be supposed to have contemplated their occurrence, so that the promisor neither accepts them specifically nor promises unconditionally in respect of them.74

72Jones v. U. S., 96 U. S. 24, 24 L. Ed. 644. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

73Paradine v. Jane, Aleyn, 26. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

74Baily v. De Crespigny, L. R. 4 Q. B. at page 185. If the Impossibility is caused by the act of the promisor, it does not excuse failure to perform. Ante, p. 562. The exceptions do not apply where a person has an option to perform his contract in either of two ways, and it becomes impossible of performance in one of the ways only. In such a case he must perform in the other way. State v. Worthington's Ex'rs, 7 Ohio, 171, pt. 1; Drake v. White, 117 Mass. 10; Jacquinet v. Boutron, 19 La. Ann. 30; Board of Education v. Townsend, 63 Ohio St. 514, 59 N. E. 223, 52 L. R. A. 868. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

Same - Legal Impossibility

Legal impossibility arising from a change in the law 75 or from the exercise of governmental authority76 exonerates the promisor.77 It was so held in an action on a covenant in a lease from the defendant to the plaintiff, by which the defendant agreed that neither he "nor his assigns" would, during the term, erect any but ornamental buildings on adjoining land, which had been retained by the defendant, but which was afterwards taken by a railroad company under legislative authority, and used for the erection of a station. "The legislature," it was said, "by compelling him to part with his land to a railway company, whom he could not bind by any stipulation, as he could an assignee chosen by himself, has created a new kind of assign, such as was not in the contemplation of the parties when the contract was entered into. To hold the defendant responsible for the acts of such an assignee is to make an entirely new contract for the parties." 78 This exception does not apply to the full extent where the impossibility created by a change in the law is only temporary. In such a case liability to perform is only suspended, and the promise must be performed when the impossibility ceases.79

75 Otherwise If Impossibility is created by foreign law. Bunker v. Hodgson, 3 Maule & S. 267; Tweedie Trading Co. v. James P. McDonald Co. (D. C.) 114 Fed. 985. Cf. O'Neil v. Armstrong, [1895] 2 Q. B. 70. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

76 Adler v. Miles, 69 Misc. Rep. 601, 126 N. Y. Supp. 135. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

77 Baily v. De Crespigny, L. R. 4 Q. B. 180; Cordes v. Miller, 39 Mich. 581, 33 Am. Rep. 430; Semmes v. Insurance Co., 13 Wall. 15S, 20 L. Ed. 490; Brick Presbyterian Church v. City of New York, 5 Cow. (N. Y.) 538; Jones v. Judd, 4 N. Y. 411; Mississippi & T. R. Co. v. Green, 9 Heisk. (Tenn.) 588; American Mercantile Exchange v. Blunt, 102 Me. 128, 66 Atl. 212, 10 L. R. A. (N. S.) 414, 120 Am. St. Rep. 463, 10 Ann. Cas. 1022. And see Buffalo E. S. R. Co. v. Railroad Co., Ill N. Y. 132, 19 N. E. 63, 2 L. R. A. 284. A railroad company is relieved from further performance of a contract to give free transportation to certain persons in consideration of the conveyance of property by the passage of a statute forbidding the giving of free transportation. Louisville & N. R. Co. v. Mottley, 219 U. S. 467, 31 Sup. Ct. 265, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671; Cowley v. Northern Pac. R. Co., 68 Wash. 558, 123 Pac. 998, 41 L. R. A. (N. S.) 559. But there is no discharge when the law merely makes performance more burdensome, though not impossible. Baker v. Johnson, 42 N. Y. 126; Newport News & M. V. Co. v. McDonald Brick Co.'s Assignee, 109 Ky. 408, 59 S. W. 332. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent'. Dig. §§ 1409-1443.

78 Baily v. De Crespigny, L, R. 4 Q. B. 180. See "Contracts," Deo. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

79 Hadley v. Clarke, 8 Term R. 259; Baylies v. Fettyplace, 7 Mass. 325. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. § 1417.

Clark Cont.(3d En.) - 38

In the case of property leased for the sale of intoxicating liquors, it has been held that the subsequent enactment of a law during the term of the lease forbidding the sale of intoxicating liquors terminates the lease.80 The weight of authority, however, is to the contrary;81 the majority holding being based on the ground that the sale of intoxicating liquors is well known to be subject to legal regulation and prohibition, and that the tenant is therefore not justly entitled to be relieved from his contract upon the happening of a contingency which he might have foreseen and protected himself against by express agreement. And the cases are agreed that the tenant is not relieved from further performance of the contract where the lease of the property is not for saloon purposes only.82

Legal impossibility may arise as well by action of the courts or by the executive as of the legislature, and in all such cases the contract is discharged. Thus, where an agent was under employment by an insurance company, and before expiration of the term the company was enjoined from doing business, and a receiver was appointed, at the instance of the state, the contract was discharged.88 So, where a servant agreed with his master that if he left without giving two weeks' notice he should receive nothing for wages due, and was arrested and imprisoned for crime, it was held that he could nevertheless recover.84 And where performance of a charter party for loading a cargo at a foreign port was prevented by a declaration of war rendering performance impossible without illegal trading with the enemy, the contract was discharged.85

80 Heart v. East Tennessee Brewing Co., 121 Tenn. 69, 113 S. W. 364, 19 L. R. A. (N. S.) 964, 130 Am. St. Rep. 753. See "Landlord and Tenant," Dec. Dig. (Key-No.) §§ 29, 34; Cent. Dig. §§ 85, 97; "Contracts," Cent. Dig. §§ 465, 513 1/2; "Intoxicating Liquors," Cent. Dig. § 473.

81 Houston Ice & Brewing Co. v. Keenan, 99 Tex. 79, 88 S. W. 197; J. J. Goodrum Tobacco Co. v. Potts-Thompson Liquor Co., 133 Ga. 776, 66 S. B. 1081, 26 L. R. A. (N. S.) 498; O'Byrne v. Henley, 161 Ala. 620, 50 South. 83, 23 L. R. A (N. S.) 496. See "Landlord and Tenant," Dec. Dig. (Key-No.) §§ 29, 34; Cent. Dig. §§ 85, 97.

82Lawrence v. White, 131 Ga. 840, 63 S. E. 631, 19 L. R. A. (N. S.) 966, 15 Ann. Cas. 1097; San Antonio Brewing Ass'n v. Brents, 39 Tex. Civ. App. 443, 88 S. W. 368; Kerley v. Mayer, 10 Misc. Rep. 718, 31 N. Y. Supp. 818 [affirmed, 155 N. Y. 636, 49 N. E. 1099]; Miller v. Maguire, 18 R. I. 770, 30 Atl. 966; Barghman v. Portman (Ky.) 14 S. W. 342; Hecht v. Acme Coal Co., 19 Wyo. 18, 113 Pac, 788, 117 Pac. 132, 34 L. R. A (N. S.) 773, 777, Ann. Cas. 1913E, 258; Shreveport Ice & Brewing Co. v. Mandel Bros., 128 La. 314, 54 South. 831. See "Landlord and Tenant," Dec. Dig. (Key-No.) §§ 29, 34; Cent. Dig. §§ 85, 97.

83People v. Insurance Co., 91 N. Y. 174. To the same effect, where performance is prevented by appointment of receiver and injunction. Malcom-son v. Wappoo Mills (C. C.) 88 Fed. 680; Burkhardt v. School Tp., 9 S. D. 315, 69 N. W. 16. Contra, Spader v. Manufacturing Co., 47 N. J. Eq. 18, 20 Atl. 378; State v. Railroad Co., 61 Neb. 545, 85 N. W. 556. See "Contracts," Dec. Dig. (Key-No.) § SOS; Cent. Dig. §§ 1409-1443.

84 Hughes v. Wamsutta Mills, 11 Allen (Mass.) 201. But see Leopold v.