Cantiere San Rocco, S.A. (Shipbuilding Co.) v. Clyde Shipbuilding and Engineering Co. [1922] ScotLR 520 (20 July 1922)

Cantiere San Rocco, S.A. (Shipbuilding Co.) v. Clyde Shipbuilding and Engineering Co. [1922] ScotLR 520 (20 July 1922)

The majority held that the outbreak of war discharged the parties from further performance of the contract but did not annul the contract ab initio or disturb rights already accrued. The instalment paid by the pursuers was an accrued right of the defenders and was not subject to restitution, as the contract did not provide for repayment in the event of supervening impossibility, and the payment was not a mere advance against consideration but a stipulated prepayment. Accordingly, the pursuers were not entitled to repayment of the instalment.

Citation
[1922] ScotLR 520
Parties
Pursuer: Cantiere San Rocco, S. A. (Shipbuilding Company); Defender: Clyde Shipbuilding and Engineering Company, Limited
Jurisdiction
Scotland
Judgment Date
20 July 1922
Procedural Posture
Civil Appeal / Inner House, First Division, Reclaiming Motion (appeal) Against Lord Ordinary's Interlocutor
Outcome
Appeal allowed; interlocutor of Lord Ordinary recalled; defenders assoilzied (absolved).
Legal Topics
Impossibility of Performance, Frustration of Contract, Restitution for Failure of Consideration, Executory Contracts Abrogated by War, Accrued Rights Under Contract, Effect of War on Contractual Obligations
Contract Law Restitution Commercial Law Impossibility of Performance Frustration of Contract Restitution for Failure of Consideration Executory Contracts Abrogated by War Accrued Rights Under Contract +1 more

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Parties

Cantiere San Rocco, S. A. (Shipbuilding Company)

Pursuer

Clyde Shipbuilding and Engineering Company, Limited

Defender

Procedural Posture

Civil Appeal / Inner House, First Division, Reclaiming Motion (appeal) Against Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether a party is entitled to repayment of an instalment paid under an executory contract abrogated by supervening war, where performance became impossible and the contract was not rescinded ab initio.
  2. 2 Whether accrued rights under the contract prior to the outbreak of war are affected by the subsequent illegality of performance.

Ratio Decidendi

The majority held that the outbreak of war discharged the parties from further performance of the contract but did not annul the contract ab initio or disturb rights already accrued. The instalment paid by the pursuers was an accrued right of the defenders and was not subject to restitution, as the contract did not provide for repayment in the event of supervening impossibility, and the payment was not a mere advance against consideration but a stipulated prepayment. Accordingly, the pursuers were not entitled to repayment of the instalment.

Court Disposition

Appeal allowed; interlocutor of Lord Ordinary recalled; defenders assoilzied (absolved).

Orders

  • Recall of Lord Ordinary's interlocutor granting repayment to pursuers.
  • Assoilzie (absolve) the defenders from the conclusions of the summons.