163 Md. 565 | Md. | 1933
delivered the opinion of the Court.
The plaintiff sued the defendant on the common counts and on a seventh special count in contract, which alleged that, on August 13th, 1929, the plaintiff, an expert in the manufacture of whisky, was employed by the defendant, a corporation engaged in the business of distilling whisky, for the period of one year, at a salary of $100 a wnek, to have the exclusive management and control of all operations at a particular distillery in the production of whisky by the defendant until the whisky was delivered to the cistern room, and meanwhile neither party was to engage in any violation of any law; that on August 22nd, 1929, the plaintiff began his duties under the contract and continued uninterruptedly in the service of the defendant, and was regularly paid the weekly sum of $100, until September 12th, 1929, when, without cause, the defendant dismissed the plaintiff from said service and thereafter refused to permit him to perform the contract, although the plaintiff was ever ready and willing so to perform.
The defense to this action on the contract was set up in twTo amended pleas to the seventh count of the declaration. A demurrer was interposed to these pleas, and the demurrer wras overruled, and, on a refusal of the plaintiff to plead further, a judgment was entered in favor of the defendant, and this appeal taken.
The pleas are in the form of a confession and avoidance, and differ only in unessential particulars, and each presents the same defense. The contract is admitted, but the plea alleges these facts in avoidance of that admission: The defendant was a distiller of intoxicants, ami its business was unlawful except when engaged in distilling for one of the few permitted purposes and then under the express authorization and supervision of the government of the United States. The distillation could not proceed until the distiller had filed a prescribed application for the issuance of a permit to distill and a governmental permit had been granted in accordance with the federal statutes and regulations on the subject. The defendant had filed its application in the form
Tbe promise of tbe plaintiff was to render, at a specified place, during tbe whole period of tbe contract, personal service in a special art in which be was proficient. Tbe service, however, was in connection with tbe production of an article which could not be manufactured except by tbe express permission of tbe government of tbe United States under. prescribed statutory conditions and authorized regulations. Tbe difficulty of confining tbe manufactured product to its limited lawful use, and tbe comparative' ease and great gain in its illicit diversion, made it necessary for tbe government to determine who could engage in tbe business and to prevent tbe employment of undesirable workmen of whatever grade. So tbe federal statute- made it an imperative condition precedent to tbe manufacture of whisky that a permit be granted, whose issuance was in tbe reasonable discretion of tbe Commissioner of Internal Revenue. The Commissioner was empowered to prescribe tbe form of tbe applications for permits and tbe facts to be set forth, and bis action in refusing to grant a permit to tbe applicant was subject to review. McCormick & Co. v. Brown, 286 U. S. 131, 145, 52 S. Ct. 522, 76 L. Ed. 1017, 1026; U. S. Code Ann., title 27, secs. 5, 12,
As was said in Ma-King Products Co. v. Blair, 271 U. S. 479, 46 S. Ct. 544, 545, 70 L. Ed. 1046: “It Is clear that the Act does not impose on the Commissioner the mere ministerial duty of issuing a permit to any one making an application on the prescribed form, but, on the contrary, places upon him, as the administrative officer directly charged with the enforcement of the law, a responsibility in the manner of granting the privilege of dealing in liquor for nonbeverage purposes, which requires him to refuse a permit to one who is not a suitable person to be entrusted, in a relation of such confidence, with the possession of liquor susceptible of diversion to beverage uses.”
So, if the owner of a distillery submitted an application for a permit to manufacture whisky, and the government was advised and concluded that one of the employees, who was to' perform an important service in an executive position, is neither competent nor trustworthy, the Commissioner or his. representative, in the exercise of a reasonable discretion, might decline to- issue the permit unless such employee was discharged. In the absence of any averment on the pleading that such action of the representative of the government was arbitrary or capricious, the court will assume
The effect of the government’s official notice was that the defendant .could not obtain a permit lawfully to- manufacture whisky so long’ as the plaintiff was in its service at the plant, but the contract to pay the plaintiff the weekly wage throughout a year was in consideration of the daily performance by the plaintiff of his service as distiller in charge. The service, which took time, must first be performed before the weekly payment of money, which could practically be instantaneous, need be made. If the plaintiff should not continue to perform this service, week by week, during the remaining period of his contract, there would be a total failure of consideration for that period. Since a permit to manufacture whisky would not be issued, the defendant could not lawfully operate its plant, and there would be no service within the terms of the contract for the plaintiff to render, because it will not be gratuitously assumed that the contracting parties contemplated the illicit manufacture of whisky. The stipulations of the contract must therefore be construed to have implicit reference to- a continuing lawful manufacture that would require a grant by the federal government of a permit to manufacture whisky. The refusal of the necessary permit was therefore a subsequent, unanticipated, circumstance, in connection with which the contract must be construed and the relative rights of the parties- ascertained.
Apart from the right to rescind the contract because of the breach by the plaintiff, there is another reason to sustain the judgment on demurrer, in that the performance of the ■contract became legally impossible.
The general rule with respect to contracts is generally stated to be that, when the impossibility of performance arises after the formation of the contract, the failure of the promisor to perform is not excused, whether such impossibility was absolute or relative, or whether owing to the fault of the promisor or not, upon the theory that, if the promisor makes his promise unconditionally, he takes the risk of being held liable even though performance should become impossible by circumstances beyond his control. Benson v. Atwood, 13 Md. 20, 52, 53; Kribs v. Jones, 44 Md. 396, 409; Pennsylvania R. Co. v. Reichert, 58 Md. 261, 274; Southern Bldg. & Loan Assn. v. Price, 88 Md. 155, 163, 164, 41 A. 53; Cowan, Inc., v. Meyer, 125 Md. 450, 466, 467, 94 A. 18; Standard Scale etc. Co. v. Balto. Enamel etc. Co., 136 Md. 278, 283, 110 A. 486. The unfair consequences of this rule resulted in exceptions when the impossibility arises (1) either from a change in domestic law or by an executive •or administrative order; (2) or when the thing, whose continued existence is essential to the performance of the contract, is destroyed without fault of either party to the contract; (3) or the contract is for the personal services of the promisor who, without his own default, becomes physicially incapacitated or dies. Stewart v. McIntosh, 4 H. & J. 233; American Towing etc. Co. v. Coal Co., 117 Md. 660, 677-680, 84 A. 182; Furness, Withy & Co. v. Randall, 124 Md. 101, 108, 91 A. 797; 3 Williston on Contracts, secs. 1931, 1935, 1938.
If a contract is legal when made, and no fault on the part' ■of the promisor exists, the promisor has no liability for failing to perform the promised act, after the law itself subsequently forbids or prevents the performance of the promise.
The present law on the subject is formulated in the Kestatement of Law of Contracts by the American Law Institute, vol. II, p. 852, sec. 458, “Supervening Prohibition or Prevention by Law” : “A contractual duty or a duty to make compensation is discharged in the absence of circumstances showing either a contrary intention or contributing fault on the part of the person subject to the duty, where performance is subsequently prevented or prohibited (a) by the Constitution or a statute of the United States, or of any one of the United States whose law determines the validity and effect of the. contract, or by a municipal regulation enacted with constitutional or statutory authority of such a State, or (b) by' a judicial, executive or administrative order made with due authority by a judge or other officer of the United States, or of any one of the United States.”
The application of this rule to the facts on this record obviously indicates .an affirmance.
Judgment affirmed, with costs to the appellee.