been held that failure of the supply of natural gas excused a gas company from liability on a promise to furnish gas or to lay gas pipes which would be useless; 41 that failure of an anticipated arrangement between the government and a contractor excused the latter from liability to a subcontractor; 42 that failure of the only available means of transportation, known by the parties to be such, excused a promise to sell and deliver goods; 43 and that the destruction of a factory which the parties contemplated as the means of fulfilling a contract to sell goods excused performance though the contract did not mention the factory.44 croft-Charnley Steel Co., 116 Fed. 176, 53 C. C. A. 548. Consider also cases where war between the governments of the contracting parties excuses performance. These decisions go mainly on grounds of public policy, but it seems they may also be rested on unanticipated alteration of circumstances precluding performance. See, e. g., Ertel Bieber & Co. v. Rio Tinto Co., [1918] A. C. 260; Naylor, Benzon & Co., Ltd., v. Krainische Industrie Gesellschaft, [1918] 2 K. B. 486. On the other hand, where a contract for manufactured goods may be satisfied by goods from any factory, the destruction of the seller's factory or machinery has been held by a number of courts to afford no excuse; 45 and there seems to have been remainder of the contract, though it did not in terms provide that the wood should be obtained from the tract which was burned. The Court said: "We need not say that the defendant could not have furnished live wood of equal quality from other lands, but the contract, read in connection with the known facts, shows the source from which the parties contemplated the wood should be furnished, and when the source is destroyed the defendant is excused from further performance." Cf. Blackburn Bobbin Co. v. T. W. Allen & Sons, Ltd., [1918] 1 K. B. 540, where the contract was for Finland lumber, but the buyer did not know (as was the fact) that such lumber was not kept in stock in England. It was held that impossibility of importing it due to the war did not excuse the seller from liability. 41 Bruce v. Indianapolis Gas Co., 46 Ind. App. 193, 92 N. E. 189. 42 McKenna v. McNamee, 15 Can. Sup. Ct. 311. 43 Lovering v. Buck Mountain Coal Co., 54 Pa. 291. 44 Stewart v. Stone, 127 N. Y. 500, 28 N. E. 595, 14 L. R. A. 215. See also Western Hardware Mfg. Co. v. Ban 45 Jones v. United States, 96 U. S. 24; Porto Rico Sugar Co. v. Lorenzo, 222 U. S. 481, 56 L. Ed. 277, 32 S. Ct. 133; Law v. San Francisco Gas &c. Co., 168 Cal. 112, 142 Pac. 52, Ann. Cas. 1915 D. 842; Summers v. Hibbard, 153 Ill. 102, 38 N. E. 899, 46 Am. St. Rep. 872; Hottellet v. American Corn Mill Co., 160 Ill. App. 58; Booth v. Spuyten Duyvil &c. Co., 60 N. Y. 487; Isaacson v. Starrett, 56 Wash. 18, 104 Pac. 1115. See also Bates Machine Co. v. Norton Iron Works, 113 Ky. 372, 68 S. W. 423; Middlesex Water Co. v. Knappmann Whiting Co., 64 N. J. L. 240, 81 Am. St. Rep. 467, 45 Atl. 692, 49 L. R. A. 572, 81 Am. St. 467. little inquiry in these cases whether the parties contemplated or assumed the continued existence of the factory as a basis of their contract. Other cases, too, apparently regard it as essential for a defence that the means of performance shall have been contracted for, not merely contemplated.46 It is probable that the tendency of the law is toward an enlargement of the defence of impossibility, and in any case where it may fairly be said that both parties assumed that the performance of the contract would involve the continued existence of a certain state of affairs, impossibility of performance due to a change in this condition of affairs will ultimately be held an excuse.47 But there certainly can be no excuse unless both parties contemplate a particular means of performance and contract on the assumption of its existence. Where a promise is absolute in terms to furnish goods or services, the mere fact that the promisor contemplated a certain means of 46 In Eddy v. Clement, 38 Vt. 486, it was expressly held that it was not enough that a certain source of supply understood by the parties as the only one available had failed. Unless the contract required that source the promisor was liable. In Ontario Electric L. & P. Co. v. Baxter &c. Co., 5 Ont. L. Rep. 419, a contract to furnish electricity "in the premises" of the consumers for power in running their mill was held not limited to the existing mill and the subscribers were not discharged by its destruction. It may be questioned whether the parties did not contemplate the continued existence of the original mill. In Northern Irrigation Co. v. Watkins (Tex. Civ. App.), 183 S. W. 431, the failure of the contemplated source of supply was held no defence for breach of a promise in terms absolute to furnish water, but the contract provided that in case of failure damages should be paid. See also Northern Irrigation Co.v. Dodd (Tex. Civ. App.), 162 S. W. 946. Cf. Hunter Canal Co. v. Robertson, 113 La. 833, 37 So. 771; Raywood &c. Mill Co. v. Erp, 105 In Whitman v. Anglum, 92 Conn. 392, 103 Atl. 114, the contract in suit was for the sale of milk for one year to be delivered to the buyer at "No. 1 Wawarme Avenue." This place was the defendant's farm. The defendant's cows were killed by the state authorities to prevent the spread of foot and mouth disease and products of his farm were quarantined. This was held not even a temporary defence, because the defendant could perform substantially (though not literally for delivery from No. 1 Wawarme Avenue had become illegal) and the contract did not require that the milk should be produced on the premises. More clearly a contract of employment as a salesman is not based on the assumed continued existence of the employer's factory or that he will find it profitable to continue in business. Turner v. Goldsmith, [1891] 1 Q. B. 544. See the interesting opinion in Kinzer Const. Co. v. State, 125 N. Y. S. 46. performance and had no other means will not excuse him from liability when this means is accidentally destroyed. § 1953. Test for determining whether the contract depended on continued existence of means of performance. It may be urged as a difficulty with the general adoption of the principle that destruction of contemplated means of performance excuses a promisor from liability that such a principle lacks definite boundaries. It may be said that any change of circumstances not foreseen by the parties which makes performance impossible or even more difficult, falls within the principle. Strikes, war, imposition of taxes, all might be urged as an excuse. The only answer to this is, that the difficulty is no greater than exists in the law governing mistake, and that the defence of impossibility is inherently similar to that of mistake. If it be true that a contract for future performance is made on the assumption that present import duties will continue, or that other existing circumstances will remain the same, there is as good reason for excusing the promisor if those circumstances change, as there would be had the parties been mistaken as to similar circumstances supposed to exist when the contract was made. It should be observed, however, that as in the case of such mistake, it should be is necessary for one 48 Hale v. Rawson, 4 C. B. (N. S.) 85 (contract to sell tallow on arrival of a certain ship, arrival of ship without the expected tallow); Hunter Canal Co. v. Robertson, 113 La. 834, 37 So. 771 (contract to supply water; drought); Pacific Sheet Metal Works v. Californian Canneries Co., 164 Fed. 980, 91 C. C. A. 108 (contract to sell cans, not excused by non-arrival of tin from which seller expected to make them); Oakland Electric Co. v. Union Gas &c. Co., 107 Me. 279, 78 Atl. 288 (contract to furnish electricity; dam of company injured); Middlesex Water Co. v. Knappmann Whiting Co., 64 N. J. L. 240, 45 Atl. 692, 49 L. R. A. 572, 81 Am. St. 467 (contract to furnish water; pipe burst); Whitehouse v. Staten Island Water Supply Co., 101 N. Y. App. D. 112, 91 N. Y. S. 544 (contract to supply water; pressure failed because cold weather led consumers to leave faucets running); Boker v. Demorest Mfg. Co., 28 N. Y. Misc. 263, 59 N. Y. S. 826 (inability to secure goods from a particular factory); Anderson v. Adams, 43 Oreg. 621, 74 Pac. 215 (contract to furnish water for irrigation; drought made it impossible except by acquiring further source of supply); Janes v. Scott, 59 Pa. 178, 98 Am. Dec. 328 (contract to drill well; accident to tools). See also Nicol v. Fitch, 115 Mich. 15, 72 N. W. 988, 69 Am. St. 542 (loss of boat did not excuse contract to pay share of salary of agent to secure freight for this and other boats); and cases cited supra, § 1099. who seeks relief, because of supervening change of circumstances, from the explicit terms of his promise, to convince the tribunal that there is more than a mere possibility, or even probability, that the contract was made on the assumed existence of a particular situation. It is true that the doctrine of mistake has been chiefly developed in equity while that of impossibility, masquerading as a condition of the contract, has been developed in courts of law; but this difference of tribunals cannot ultimately affect the boundaries of the substantive rules to be applied. It is frequently said that where an event which causes impossibility "might have been anticipated and guarded against in the contract," one who makes an absolute promise is bound by it unconditionally.49 Such a test, however, seems of little value. It has descended in the law from a time when it was more nearly true than it now is, because impossibility was more rarely an excuse. Any kind of impossibility is more or less capable of anticipation. The question is one of degree, and, if anticipated, any circumstance whatever may be guarded against in the contract. In a contract for personal service, the contingency of possible illness or death is very easily anticipated, and the possible destruction of the subjectmatter to which a contract relates is also not difficult to anticipate, yet these kinds of impossibility excuse a promisor from liability. Though this test therefore is not helpful, by a slight adaptation it may be made helpful in the troublesome class of cases where it is argued that a promisor is excused because a contemplated means of performance has failed. If the event causing the impossibility in question could not only have been anticipated but its occurrence could have been guarded against by the promisor (not the effect of it by a provision in the contract but the occurrence itself by preventing its happening) it is reasonable to assume that the promisor took the risk of the continued possibility of performance. 50 A similar argument is 49 Bailey v. De Crespigny, L. R. 4 Q. B. 180; Chicago, etc., Ry. v. Hoyt, 149 U. S. 1, 15, 37 L. Ed. 625, 13 S. Ct. 779. See also Berg v. Erickson, 234 Fed. 813, 821, 148 C. C. A. 415; Mahaska County State Bank v. Brown, 159 Iowa, 577, 141 N. W. 459; Bryan v. Spurgin, 5 Sneed, 681; Gunter v. Robinson (Tex. Civ. App.), 112 S. W. 134. 50 In Middlesex Water Co. v. Knappmann Whiting Co., 64 N. J. L. 240, 45 possible where the promisor though having no power to prevent the contingency had superior knowledge of the possibility of its happening. 51 The less the matter was within his control and the less knowledge he had in regard to the probability of the occurrence of the event, the more reason there is to assume that the parties entered into the contract on the mutual assumption that the contemplated means of performance would continue to exist, and that neither party bound himself absolutely for their continuance. § 1954. Expected value of performance fortuitously destroyed; Coronation cases. A step still further than that referred to in the previous two sections has been taken in a few cases. In the "coronation cases" it was held that a supervening circumstance excused performance of contracts though it did not make their performance (hiring and letting of seats) impossible or even difficult but merely deprived it of the value (as giving a view of the coronation procession) which was obviously the sole inducement for entering into the contracts. 52 In the argument of one of the cases 53-an action to recover the price promised but not paid by the defendant for Atl. 692, 49 L. R. A. 572, 81 Am. St. 467, a water company was held liable for failing to fulfil its contract to deliver water, whereby the promisee's factory was destroyed by fire, though the water company's failure was due to a break in its pipes caused by accident without neglect. 51 See Berg v. Erickson, 234 Fed. 817, 148 C. C. A. 415. 62 Blakeley v. Muller, 19 Times L. R. 186; Clark v. Lindsay, 19 Times L. R. 202; Krell v. Henry, [1903] 2 K. B. 740. See also Chandler v. Webster, [1904] 1 K. B. 493. In Krell v. Henry, [1903] 2 K. B. 740, 749, Vaughan Williams, L. J., said: "I think that you first have to ascertain, not necessarily from the terms of the contract, but, if required, from necessary inferences, drawn from surrounding circumstances recognized by both contracting parties, what is the substance of the contract, and then to ask the question whether that substantial contract needs for its foundation the assumption of the existence of a particular state of things." The full effect of the case was noted in a passage from Scottish Navigation Co. v. Souter, [1917] 1 K. B. 222, supra, § 1951, n. 34; and in Blackburn Bobbin Co. #. T. W. Allen & Sons, Ltd., [1918] 1 K. B. 540, 544, McArdie, J., said: "In Krell v. Henry the Court held that a collateral, though important, circumstance was the basis of the contract between the parties, and that when the basis ceased it followed that the contract was dissolved. Krell . Henry has been frequently cited and adopted in the highest tribunal." 53 Krell v. Henry, [1903] 2 K. B. 740, 750. |