This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If a contract was lawful when made, and its performance is subsequently made legally impossible by a change in legislation, recovery may be had for whatever has been parted with under such contract.1 If money is paid for a license to sell intoxicating liquors, and such business is lawful when such payment is made, but during the period for which such license issued such business becomes unlawful, the party who made such payment is entitled in most jurisdictions to recover the unearned portion of such fee.2 If existing licenses can not be affected by subsequent legislation, during the time for which such license was given, no part of the license fee can be recovered because of such legislation.3 The person who pays for such license is ordinarily not regarded as taking the risk of such legislation.4 In jurisdictions in which it is held that the party who applies for a license takes the risk of subsequent action under a prior local option law, which will render the sale of intoxicating liquors invalid in that district, one who has paid for a license to sell intoxicating liquor can not recover any part thereof, if such sale is subsequently prevented by action under a prior local option statute.5 A had permission from the Secretary of the Treasury to search for a boatful of gold which had been sunk in the East River during the War of the Revolution. B advanced to A money to be expended in this search, A promising to pay B ten times as much money as B advanced to him in case the treasures were recovered. The Secretary of the Treasury subsequently canceled A's permission to make such search. A was held bound to refund to B the amount of money remaining in his hands unexpended.6 If A has conveyed realty to a railway in consideration of the promise of the railway to issue annual passes to him and it is subsequently made unlawful to issue passes, A is entitled to recover the value of the property thus conveyed less the value of the passes which he has already received.7 If an executory contract with a corporation is discharged by the dissolution of the corporation, one who has performed services thereunder and incurred - expenses thereunder may recover reasonable compensation.8
20 Huyett, etc., Mfg. Co. v. Edison Co., 167 Ill. 233, 59 Am. St. Rep. 272, 47 N. E. 384.
21 Krause v. Crothersville, 162 Ind. 278, 70 N. E. 264. (In this case the contractor had spent more than he had received and no recovery was allowed.)
1 Charles Blum Co. v. Hastings, - Fla. -, L. R. A. 1918F, 783, 79 So. 442; Louisville & N. R. Co. v. Crowe, 156 Ky. 27, 49 L. R. A. (N.S.) 848, 160 S. W. 759; Allsman v. Oklahoma City, 21 Okla. 142, 16 L. R. A. (N.S.) 511, 95 Pac. 468.
2 Charles Blum Co. v. Hastings, - Fla. -, L. R. A. 1918F, 783. 79 So. 442; Allsman v. Oklahoma City, 21 Okla. 142, 16 L. R. A. (N.S.) 511, 95 Pac
468; Bart v. Pierce County, 60 Wash. 507, 31 L. R. A. (N.S.) 1151, 111 Pac. 582.
3 Miller v. Central City, 178 Ky. 602, L. R. A. 1918C, 240, 199 S. W. 611.
4 "Specious reasoning which justifies an individual or corporation, municipal or private, in keeping money received for a privilege that, through no fault of either party, the recipient is unable to grant, is of slight weight.
It is no answer to this to say that the licensee knew that the people might at any time place it beyond the power of the city to give him the privilege that he had paid. for. The city had the same knowledge, and it can be as well said that it took the money, knowing it might have to return for the unused portion of the license, if, through operation of law, it could not continue the privilege it had agreed to grant to the licensee.
"The defendant in error concludes his brief with a statement of which this is a part, and this seems to be the theory upon which it predicates its defense: 'It took that chance. Having taken the chance, it can not, we submit, be heard to urge an implied obligation for relief against this defendant.'
"It is noticeable that the courts that sustain the contention of defendant in error adopt the same reasoning. We quote from some of these decisions: It is 'one of the risks and chances which he assumes when he procures his license.' Roberts v. Boise City, 23 Idaho 716, 45 L. R A. (N.S.) 593, 132 Pac. 306. 'He takes his chances about "the revocation." Mc-Ginnis v. Medway, 176 Mass. 67, 57 N. E. 210.
"This is the language of the race track and the card table, and is in marked contrast to that used by the courts that hold it to be the duty of the city to refund the unused portion of a liquor license when, through no fault of either party, both are precluded from doing that for which one paid and the other received the money." Charles Blum Co. v. Hastings, - Fla. -, L. R. A. 1918F, 783, 70 So. 442.
See Sec. 2717.
5 Peyton v. Hot Springs Co., 53 Ark. 236, 13 S. W. 764.
6 Thomas v. Hartshorn, 45 N. J. Eq. 215, 3 L. R. A. 381, 16 Atl. 916.
7 Louisville & N. R. Co. v. Crowe, 156 Ky. 27, 49 L. R. A. (N.S.) 848, 160 S. W. 750.
8 Griffith v. Blackwater B. & L. Co., 55 W. Va. 604, 69 L. R. A. 124, 48 S. E. 422 [for former opinion, see Griffith v. Lumber Co., 46 W. Va. 56, 33 S. E. 125].