The decision of the English court seems to involve the result that if the government hire had been less than that reserved in the charter, the charterer must, nevertheless, continue to pay the owner. Furthermore, the decision affords no suggestion of relief for the charterer if the ships had been taken over permanently by the government. In two American decisions on the subject the courts did not altogether escape from the defective reasoning of the English decision.5 A better solution of the difficulty than that reached by the decisions, seems to be to absolve the charterer from liability on his promise, but to hold him liable on principles of quasicontract for any benefit which he may receive from the dissolution of the contract; that is, for any excess of the government payment over the hire reserved in the charter party." think that any requisition ought prima facie to terminate the charterparty. Earn Line S. S. Co. v. Sutherland S. S. Co., 254 Fed. 126, 134. 5 In Earn Line S. S. Co. v. Sutherland S. S. Co., 254 Fed. 126, L. Hand, J., held that where requisition by the English government of an English vessel was made, and there appeared no likelihood that the vessel would be released before the expiration of the charter, that the owner was warranted in treating the charter at an end, and in refusing both to receive further hire and to allow the charterer to collect sums paid by the Admiralty. Though the decision seems right in holding the charter at an end, the consequence which the court apparently accepts that the owner secures the profit of the increased compensation by the government is unjust. In The Isle of Mull, 257 Fed. 798, Rose, J., held that though the British Admiralty actually retained control of the vessel until after the expiration of the charter party, the requisition could not be regarded as a frustration of the contract, and the charterer was entitled to the difference between the rate fixed in the charter party and the hire paid by the Admiralty. The If it decision achieves a just result, but the In Chinese Mining and Engineering Co., Ltd., v. Sale & Co., [1917] 2 K. B. 599, the court held that if during the currency of a charter party, whether it be a charter party for a voyage or for a definite period, the ship is requisitioned by the Admiralty in such circumstances that the charter party is not terminated by reason thereof, and The German Civil Code contains a provision effecting this result." § 1979. Impossibility in the Civil law. The Civil law starts from a principle opposite to that of the Common law. While the Common law regards a promise as binding according to its terms, even though it proves impossible of performance, unless the promisor can show that it falls within an excepted clause or that there is an "implied condition," the Civil law regards impossibility as an excuse unless it can be shown that the promisor assumed the risk of possibility. Though the fundamental principle is thus stated in diametrically opposite ways in the two systems of law, it is probable that the decisions on actual cases do not greatly vary. The German law prior to the enactment of the Civil Code has been stated substantially as follows: ' Impossibility of performance is divided into original and supervening impossibility. if the employment of the ship by the Admiralty is of a more extensive character and more onerous to the owner than that authorized by the charter party, the hire paid by the Admiralty for the use of the ship, whether it be more or less than the charter party hire, is divisible between the owner and the charterer in proportion to their respective interests in the ship. 7 Civ. Code, Sec. 281, provides: "If the debtor in consequence of the circumstance, which makes performance impossible, obtains a compensation or a right to compensation for the thing to which he is entitled, the creditor may require delivery of the compensation or assignment of the right to compensation." See also Sec. 323, supra, § 910. 8 The provisions of the French Civil Code stating the general principle and some particular applications of it are contained in Arts. 1148, 1302, 1647, 1733, 1929, 1954. These provisions have been largely copied in the codes of other countries: Italy, Arts. 1226, 1298, 1504, 1589, 1845, 1868; Spain, Arts. 1105, 1182 et seq., 1487, 1488, 1563, 1766, 1784; Portugal, Arts. 705, 717, 1608, 1422, 1436; Holland, Arts. 1282, 1480, 1546, 1601, 1745, 1748; Chili, Arts. 1556, 1670-1680, 1862, 1947, 2242, 2230; Mexico, Arts. 1463-1465, 1442 et seq., 2878, 2975, 2976. See also La. Rev. C. C. Art. 1933; Eugster v. West, 35 La. Ann. 119, 48 Am. Rep. 232; Romero v. Newman, 50 La. Ann 80, 23 So. 493. The provisions of the German Civil Code, and of the Swiss Code of Obligations are different in form, but are based on the same general principle that impossibility is prima facie an excuse. See German Civil Code, Secs. 265, 275, 280 et seq., 285, 287, 291, 323, 425, 815. Swiss Code of Obligations, Arts. 97, 119, 163, 378, 379, 392. The statement is a paraphrase of §§ 264, 315, of Windscheid's Lehrbuch des Pandektenrechts. 1. Original impossibility is divided into a. Objective, which is a defence, though the obligor knew of the impossibility. b. Subjective, in which case the obligor must pay a money equivalent though he did not know of the impossibility when he entered into the contract. In case of objective impossibility, however, the obligor is bound to make good to the obligee, if the latter did not know of the impossibility when the contract was made, all damage which the latter has incurred by acting on the assumption that the contract was valid; and in such a case if the obligor knew of the impossibility he is bound to make good the whole performance. Subsequent termination of the impossibility makes the contract valid only if such termination was founded in the nature of the impossibility-not if it was accidental. 2. Supervening impossibility. It is not important whether it is subjective or objective, but only whether it has happened because of any fault of the obligor. If not, he is free, and need only perform whatever may remain still possible, or give up instead of the object due whatever the event causing the impossibility may have given him. If the impossibility was due to the obligor's fault, he is bound to pay a money equivalent, less any gain the obligee has made by the impossibility. It is further to be observed: a. The obligor may by express contract or by statute be liable for impossibility, i. e., take the risk. b. If performance is possible only at a disproportionate sacrifice, the obligor is bound only for the real value of the performance. If the question is whether the supervening impossibility is due to the fault of the obligor, the main rules are: 1. If the impossibility is due to the obligor's fraud, he is always chargeable. 2. If due to his gross negligence, he is also chargeable. 3. If due to ordinary negligence, he is chargeable if he is accustomed to use greater care in his own affairs. 4. Aside from the cases included under (3) it is the rule that the obligor is chargeable if the impossibility is due to ordinary negligence, but this rule is subject to exception. The Indian Contract Act adopts the broad general principles of the Civil law. 10 10 Sec. 56 of the Act provides: "An agreement to do an act impossible in itself is void. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. "Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise." Contingent debts under early bankruptcy laws in the United State. Contingent claims against sureties under the Federal Bankruptcy Act of 1898.... Contingent claims by sureties... Other contingent claims under the Act of 1898.. Creditor's right against several bankrupt principals and sureties.. Application of principles to parties to negotiable instruments. 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Personal contracts... Claims barred by the Statute of Limitations. Set-off..... Debts not affected by discharge.. Composition with creditors.. § 1980. Bankruptcy. 1 Bankruptcy can here be considered only so far as it operates as a discharge of a contractual obligation. It may do this in two ways. Bankruptcy may preclude the bankrupt from enforcing a right and may also free him from liability. It has previously been seen that insolvency or bankruptcy may operate as an excuse for giving credit to the insolvent or bankrupt. But insolvency or bankruptcy does not necessarily involve the loss of the bankrupt's contractual rights; for unless the contract is personal "it may be finally and fully performed by others who may be acting, for instance, as trustee or as successors or purchasers of the bankrupt's property and rights involved therein or affected thereby." 2 1 See supra, § 880. 2 In re Morgantown Tin Plate Co., 184 Fed. 109, citing Carey v. Nagle, Fed. Cas. No. 2,403; Lester v. Webb, |