Cantiere San Rocco SA v Clyde Shipbuilding & Engineering Co [1922] ScotCS CSIH_3 (20 July 1922)

Cantiere San Rocco SA v Clyde Shipbuilding & Engineering Co [1922] ScotCS CSIH_3 (20 July 1922)

The majority held that, under Scots law, where a contract is frustrated by supervening illegality (here, the outbreak of war), accrued rights under the contract prior to frustration are not disturbed unless the contract is rescinded ab initio. The payment of the first instalment was an accrued right of the defenders, not a conditional advance, and thus not subject to restitution. The pursuers are not entitled to recover the instalment paid, as the contract was not annulled from the beginning and the payment was made under a valid, operative contract.

Citation
[1922] ScotCS CSIH_3
Parties
Pursuer: Cantiere San Rocco SA; Defender: Clyde Shipbuilding & Engineering Co
Jurisdiction
Scotland
Judgment Date
20 July 1922
Procedural Posture
Civil Appeal / Appellate Judgment
Outcome
appeal allowed; action dismissed
Legal Topics
Frustration of Contract, Repetition (restitution), Failure of Consideration, Effect of War on Contracts
Contract Law Restitution Frustration of Contract Repetition (restitution) Failure of Consideration Effect of War on Contracts

Case Brief

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Parties

Cantiere San Rocco SA

Pursuer

Clyde Shipbuilding & Engineering Co

Defender

Procedural Posture

Civil Appeal / Appellate Judgment

Legal Issues

  1. 1 Whether a party who has paid an instalment under a contract frustrated by supervening illegality (outbreak of war) is entitled to restitution of that payment under Scots law.
  2. 2 Whether accrued rights under the contract prior to frustration are disturbed by the subsequent impossibility of performance.

Ratio Decidendi

The majority held that, under Scots law, where a contract is frustrated by supervening illegality (here, the outbreak of war), accrued rights under the contract prior to frustration are not disturbed unless the contract is rescinded ab initio. The payment of the first instalment was an accrued right of the defenders, not a conditional advance, and thus not subject to restitution. The pursuers are not entitled to recover the instalment paid, as the contract was not annulled from the beginning and the payment was made under a valid, operative contract.

Court Disposition

appeal allowed; action dismissed

Orders

  • Lord Ordinary's interlocutor recalled
  • Defenders assoilzied (absolved) from the conclusions of the summons