319 Mass. 592 | Mass. | 1946
This action was originally brought to recover the sum of $259,473.19 alleged to have become due and payable by the defendant
The plaintiffs have a place of business at Caguas in Puerto Rico. The defendant produces industrial ethyl alcohol at
Under the head of “Withdrawals” the contract provided that the buyer (defendant) would take delivery of “the molasses sold hereunder” during the year 1942 in not exceeding five parcels and would give the seller (plaintiffs) at least ten days’ notipe of the anticipated arrival of each tanker and of the amount to be loaded thereon by the seller. The molasses loaded was to be at the buyer’s risk from the time it passed over the rail of the buyer’s vessel, “except where earlier date is herein fixed for transfer of risk” — a reference, doubtless, to the proposed delivery in the seller’s tanks on August 31, 1942, hereinafter mentioned.
Under the head of “Pro Forma Payment” the contract provided that for each shipment prior to August 31, the buyer would make an initial payment of ninety per cent of the seller’s “pro forma invoice” upon presentation of the invoice and bill of lading indorsed to the buyer’s order at a designated bank in San Juan. (It was provided elsewhere in the contract that the amount of the final payment for each shipment was to be determined, after analysis of the molasses by a method of calculation elaborately described.) Under the head of “Pro Forma Payment” is also found this important provision, “The Buyer will on or before August 31, 1942, accept delivery in tanks of the seller [meaning in Puerto Rico] of all molasses covered by this Contract remaining unshipped.” Payment on account of “such undelivered molasses” was to be made on said August 31, 1942, to the seller by the buyer at the bank in San Juan of ninety per cent of the amount of the seller’s “pro forma invoice.” “Upon such payment, title shall pass to the Buyer and thereafter such molasses shall be at the risk of the Buyer, but the obligation of the Seller to continue to store during the remainder of the year 1942 and to deliver to Buyer’s
Under the head of “Storage” it was provided that the molasses would be free of storage until shipped.
Under the head of “Delivery” it was provided that the seller would deliver aboard the buyer’s vessel at safe anchorage in Humacao Harbor, and it was elsewhere stipulated that the barges “to effect delivery to tank vessels” should be provided by the seller.
The contract contained a clause headed “Force Majeure” and reading as follows: “Seller will not be liable for any delay in delivery, or failure to deliver, any or all of the aforesaid molasses in case such delay in delivery, or failure to deliver, is caused by labor troubles, strikes, lockouts, war, riots, insurrection, civil commotion, failure of crops or supplies from ordinary sources, fire, flood, storm, accident or any Act of God, or other cause beyond Seller’s control. In like manner Buyer shall not be liable for failure to take delivery of the molasses purchased hereunder for any of the above causes which would prevent Buyer’s vessel from accepting delivery. But, in any such case, the party claiming the benefit of this article shall use due diligence to remove any such causes, and resume performance hereunder as soon as possible, performance by other party being suspended and excused meanwhile.”
On April 3, 1942, the defendant took delivery at Humacao and later paid for four hundred forty thousand six hundred eighty-nine gallons. The tanker upon which this molasses was loaded was sunk by a submarine the next day. This was the only molasses ever delivered under the contract. The- reasons which prevented the defendant from sending other tankers to take delivery are set forth in the case stated as follows: “For a long period of time beginning in January, 1942, the defendant made every reasonable effort to arrange for shipments of molasses covered by its contract with the plaintiffs, but on account of war conditions, including the shortage of tankers and destruction by enemy submarines, it was unable to arrange for any
When August 31 arrived the plaintiffs presented at the bank in San Juan the “pro forma invoice” required by the contract for the two million fifty-nine thousand three hundred eleven gallons not yet delivered and demanded payment of ninety per cent of the amount thereof, or $259,473.19, which sum the defendant refused to pay. Thereafter the plaintiffs held in their tanks the two million fifty-nine thousand three hundred eleven gallons for the account of the defendant until this molasses was sold by agreement of the parties as hereinbefore stated.
. The defendant contends, among other things, that the “Force Majeure” clause is a defence to the action. It construes that clause as referring to the “delivery” on August 31 into tanks of the seller of “all molasses covered by this contract remaining unshipped” and as excusing the buyer from taking and paying for such “delivery” on August 31, if any of the casualties mentioned in the “Force Majeure” clause had up to that time prevented its vessel from accepting delivery. It argues that this is the literal meaning of the clause; that shipment and not storage was of the essence of the contract; and that any other construction would result in the defendant receiving practically no protection from the clause, although, as the defendant argues, it afforded substantial protection to the plaintiffs.
There is force in the argument, but after careful study of
Our construction of the “Force Majeure” clause does not render that clause worthless to the defendant. It would still effectually relieve the defendant from liability for failure to take the molasses in its vessels during the calendar year 1942 and thereafter at least as long as and to the extent that, notwithstanding due diligence on its part, the excuse continued. This may well have been the extent of the protection intended to be given to the defendant. Indeed, the provision for acceptance in tanks of the seller and for payment for the molasses remaining unshipped on August 31, which seems to be superimposed upon the other terms of the contract, may well have been inserted because of doubt whether in time of war available shipping would permit of removal of the molasses in‘accordance with the contract and for the sole purpose of protecting the seller against unreasonable delay in payment if shipping could not be found.
The defendant next contends that it was forbidden to accept delivery in tanks of the seller on August 31, and therefore that it was excused from making the payipent due on that day, by “General Imports Order M-63” of the War Production Board, as amended June 2, 1942 (7 Fed. Reg. 4198). As amended, paragraph “(b)” of this order entitled “Restrictions on imports of materials,” including “imports” from Puerto Rico to continental United States (see definitions, 6 Fed. Reg. 6796, 7 Fed. Reg. 4878), provided that no person other than certain Federal agencies, except as authorized by the director of industry operations, should “purchase for import, import, offer to purchase for import, receive, or offer to receive on consignment for import, or make any contract or other arrangement for the importing of” certain materials, including molasses (amendment of June 30, 1942, effective July 2, 1942, 7 Fed. Reg. 4878, 4880).
If this order can be stretched to forbid the mere receipt
The defendant’s last contention is based upon the theory that performance of a contract may be excused if the parties contract on the assumption of the continued existence of something essential to performance and that thing fortuitously ceases to exist. Baylies v. Fettyplace, 7 Mass. 325. Gilbert & Barker Manuf. Co. v. Butler, 146 Mass. 82. Butterfield v. Byron, 153 Mass. 517. Angus v. Scully, 176 Mass. 357. Young v. Chicopee, 186 Mass. 518, 520. Hawkes v. Kehoe, 193 Mass. 419. Browne v. Fairhall, 213 Mass. 290. Amiro v. Crowley, 256 Mass. 53. Cochrane v. Forbes, 257 Mass. 135. Texas Co. v. Hogarth Shipping Co. Ltd. 256 U. S. 619. F. A. Tamplin Steamship Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd. [1916] 2 A. C. 397. Compare Moreland v. Credit Guide Publishing Co. Inc. 255 Mass. 469. It is contended that this principle covers the means of performance as well as the subject matter of the contract itself, and therefore that when it became impossible to obtain shipping the defendant was excused. Israel v. Luckenbach Steamship Co. Inc. 6 Fed. (2d) 996, 997, certiorari denied, 268 U. S. 691. H. Hackfeld & Co. Ltd. v. Castle, 186 Cal. 53.
At this point the defence fails. The case stated does not show either that the undertakings of the parties were expressly or impliedly conditioned in a contractual sense upon the continuance of shipping facilities or that they were entered into .upon the mutual assumption of such continuance, conditioning the belief of the parties in a continuing obligation. In our opinion the case shows the contrary. When the contract was entered into on April 3, 1942, this country had been formally at war for approximately four months. The statutes of the United States had for some time contained general provisions for government requisition of vessels during a national emergency declared by the President. Act of June 29, 1936, U. S. C. (1940 ed.) Title 46, § 1242. Act of June 6, 1941, U. S. C. (1940 ed.) Sup. IV, Title 50, Appendix, § 1271. On September 8, 1939, the President had proclaimed a limited national emergency (4 Fed. Reg. 3851), and on May 27, 1941, he had pro
Even if we were to go beyond the alleged defence of impossibility of performance on the part of the defendant and were to consider the case with reference to the modern doctrine of so called “frustration,”
The result is that the defendant was not excused from making payment on August 31, 1942, for the two million fifty-nine thousand three hundred eleven gallons of molasses delivered in the plaintiffs’ tanks and is liable for the interest on the sum which should have been paid. Under stipulations contained in the case stated the amount recoverable is $28,946.78 plus interest at six per cent from October 12, 1945, on the principal sum of $26,679.11. Judgment is to be entered for the plaintiffs accordingly.
So ordered.
The writ runs against “New England Alcohol Company, a voluntary association under a written instrument or declaration of trust, the beneficial interest under which is divided into transferable certificates of participation or shares.” The action runs against the trust under G. L. (Ter. Ed.) c, 182, § 6, as if it were a corporation.
This doctrine is explained in Williston on Contracts (Rev. ed.) § 1954. See Krell v. Henry, [1903] 2 K. B. 740; The Claveresk, 264 Fed. 276, 282-284; Field v. Woodmancy, 10 Cush. 427.