steamer for the second 1919 voyage. On the 4th Sept. 1919 the appellants replied that they were advised that the war and its incidents had put an end to the contract.

The dispute having been referred to arbitration, the arbitrator made an award, holding that there was no frustration, and assessing the damages at 29,1371. 10s. McCardie, J. affirmed the award.

On appeal to the Court of Appeal (Bankes and Scrutton, L.JJ., Atkin, L.J., dissenting) held that having regard to the course of business between the parties, the contract should be treated as a series of separate contracts embodied in one document, and that, although frustrated as to part it might have to be performed as to the remainde and therefore there was no frustration of contract.

The shipowners appealed.

R. A. Wright, K.C., A. T. Miller, K.C., and Valentine Holmes for the appellants.

Jowitt, K.C. and James Dickinson for the respondents.

The following cases were cited:

Taylor v. Caldwell, 3 B. & S. 826 ;

Appleby v. Myers, 16 L. T. Rep. 669;
L. Rep. 2 C. P. 651;

Metropolitan Water Board v. Dick, Kerr, and
Co. Limited, 117 L. T. Rep. 766; (1918)
A. C. 119;

Distington Hematite Iron Company Limited
v. Possehl and Co., 115 L. T. Rep. 412;
(1916) 1 K. B. 811;

Krell v. Henry, 89 L. T. Rep. 328; (1903)
2 K. B. 740;

The Moorcock, 60 L. T. Rep. 654; 14
Prob. Div. 64;

Re Arbitration between F. A. Tamplin
Steamship Company Limited and Anglo-
Mexican Petroleum Products Company
Limited, 115 L. T. Rep. 315; (1916)
2 A. C. 397;

Hamlyn and Co. v. Wood and Co., 65 L. T.
Rep. 286; (1891) 2 Q. B. 488;
Jackson v. Union Marine Insurance Com-
pany Limited, 31 L. T. Rep. 789; L. Rep.
10 C. P. 125;

Bank Line Limited v. Arthur Capel and Co.,

120 L. T. Rep. 129; (1919) A. C. 435 ;
Ertel Bieber and Co. v. Rio Tinto Company
Limited, 118 L. T. Rep. 181; (1918)
H. C. 260;

Honck v. Muller, 45 L. T. Rep. 202;
L. Rep. 7 Q. B. Div. 92.

The House took time for consideration.

Lord FINLAY.-The appellants in this case are a Liverpool shipping company owning steamers running between Europe and the southern ports of the United States of America. The respondents are the owners of phosphate mines in Florida. A dispute arose between them with reference to a contract made in April 1913 for the chartering of vessels to bring phosphates from Port Tampa in Florida to Dunkirk. An agreement, dated the 19th Dec.

1919, was entered into for reference to arbitration of this dispute, and the matter comes before your Lordships' House upon an award in the form of a special case.

war.

The claim of the phosphate company was for failure to provide vessels for the carriage of phosphates to Dunkirk from Port Tampa, and the main case set up on behalf of the Larrinaga Company was "frustration" by reason of the The arbitrator by his award, subject to the opinion of the court on points of law on the case stated by him, found that the Larrinaga Company was liable to the phosphate company in damages for their failure to provide steamers for the last three voyages and assessed the damage at 29,1371. 10s. The case in the first instance came before McCardie, J. who confirmed the arbitrator and gave judgment for the amount assessed. His decision was confirmed in the Court of Appeal by Bankes and Scrutton, L.JJ. (Atkin, L.J. dissenting).

The material facts lie in small compass.

Three contracts for chartering vessels were entered into between the appellants and the respondents. The first (a), dated the 26th July 1912, was for the carriage of four consignments of phosphates, each of 3000 tons, ten per cent. more or less, from Port Tampa to Dunkirk at dates ranging from the 1st July 1913 to the 30th Sept. 1915. The second (b), dated the 10th Sept. 1912, was for eleven consignments, some of 3000 tons ten per cent. more or less, and some of 4500 tons, ten per cent. more or less, of phosphates, also from Port Tampa to Dunkirk, at dates ranging from the 15th March 1914 to the 28th Feb. 1918. Neither of these two contracts is in question in the present proceedings.

The third contract (c) is that to which the present proceedings relate. Its date is described sometimes as the 5th April and sometimes as the 15th April 1913. It provides for the carriage of six consignments of 3000-3300 tons each of phosphate from Port Tampa to Dunkirk at dates ranging from the 15th March 1918 to the 15th Nov. 1920. There is an ordinary form of charter-party for carriage from Port Tampa to Dunkirk, and on the back there is a note that it applies to the six parcels with their several dates. By the fifteenth clause in the body of the charter it is provided that should the steamer not arrive at her loading port and be in all respects ready to load under this charter on or before the day stated in the note on the back, the charterers have the option of cancelling, the same to be declared when the vessel is ready to load. It seems clear that this option applies only to a cancellation so far as the particular voyage is concerned.

It is stated in the special case that in consequence of the confusion caused by the war the charter-parties for shipments during the early period of the war were declared by both sides to be null and void. This has no reference to the charter-party now in question (c).

In Feb. 1916 the phosphate company desired to recommence shipments, and inquired whether the Larrinaga Company were willing to execute

nothing to prevent the owners from chartering neutral tonnage for the voyages in question, and that after the 15th Feb. 1919 there was no requisition or direction imposed by the British Government upon the owners' tonnage preventing the carriage of the phosphates contracted for during the years 1919 and 1920; that the conditions prevailing in 1918, 1919, and 1920 were not in contemplation of either party, but that each party, having regard to the speculative nature of the contract, took the risk of such conditions prevailing; that the contract sought to be enforced was in substance and effect the same contract that was entered into in 1913. The findings of the arbitrator which I have thus summarised are set out at length in the special

case.

The arbitrator's award was that, subject to the opinion of the court on any point of law, the owners were liable to the charterers in damages in respect of the last three voyages.

The Larrinaga Company have submitted in argument at the Bar of your Lordships' House that in point of law the award ought to have been in their favour.

The doctrine of" frustration as a defence to an action for breach of contract has been very much discussed in recent years. If a man contracts absolutely to do a certain thing he is liable on his contract, even if the performance of it has since the contract become impossible. When certain risks are foreseen the contract may contain conditions providing that in certain events the obligations shaH cease to exist. But even when there is no express condition in the contract, it may be clear that the parties contracted on the basis of the continued existence of a certain state of facts, and it is with reference to cases alleged to be of this kind that the doctrine of "frustration" is most frequently invoked. If the contract be one which for its performance depends on the continued existence of certain buildings or other premises, it is an implied condition that the premises should continue to be in existence, and their total destruction by fire without fault on the part of those who have entered into the contract will be a good defence. Such a contract does not as a matter of law imply a warranty that the buildings or other property shall continue to exist. (Taylor v. Caldwell, sup.; Appleby v. Myers, sup.)

I share the doubts which have been expressed (see Pollock on Contracts, 8th edit., p. 439, and the following pages) as to the extension of this doctrine to such cases as Krell v. Henry (sup.) and the other cases known as the Coronation cases. In each case the question must be, What was the basis on which the contract proceeded? It may be that the parties contracted in the expectation that a particular event would happen, each taking his chance, but that the actual happening of the event was not made the basis of the contract.

If, in consequence of war, there is a compulsory cessation of the execution of a contract for construction of works of such a character and duration that it fundamentally changes the

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conditions of the contract and could not have been in the contemplation of the parties when it was made, to hold that the contract still subsists would be “not to maintain the original contract but to substitute a different contract for it." (Metropolitan Water Board v. Dick Kerr and Co. Limited (sup.) and the judgment of Rowlatt, J. in Distington Hematite Iron Company Limited v. Possehl and Co,, (sup.)

It is quite clear from the findings of the arbitrator that performance of this contract was not made impossible by the war. The conduct of the parties, as stated in the special case, shows that they did not regard the outbreak of war as effecting any fundamental change in the incidents of the charter-parties. Inconvenience and danger there was, no doubt, but the parties, taking a business view of the matter, were content to agree that the shipments should not be required while the war continued. They obviously contemplated resuming them when peace should have been concluded.

We are asked to review the findings of the arbitrator as being on a mixed question of fact and law, and, therefore, subject to review by the court. Upon the facts of the special case, the view to which these facts lead me is, that the conclusions of the arbitrator were right, both in fact and in law. This is the view which was taken by Bankes, L.J., and by Scrutton, L.J.

It is true that Atkin, L.J. dissented. With the greatest respect for any opinion of his, I am unable to agree with him in this case. His judgment rests upon two propositions: the first is, that the contract was dissolved on the doctrine of frustration. I have already given my reasons at length for thinking that there was no frustration in the present case, and that the parties themselves recognised this.

The second ground on which the Lord Justice proceeds is that which was taken at the Bar as a second point completely separate from " frustration," It was this, that apart from frustration altogether the defendants are entitled to say, we contracted for six shipments-we did not get them, and we did not contract for three. This ground appears to me untenable on the facts of the present case. It was by the consent of both parties that the first three shipments under this contract were not made. How can this be said to affect the right of the charterers to have the remaining shipments carried out? The case presents a totally different aspect from that which it would have borne if the shipments Nos. 1, 2, and 3 under this contract had not been made in consequence of a wrongful repudiation by the charterers of these shipments, and an assertion of a right to convert the contract for six shipments into a contract for three. They did nothing of the kind. As a matter of business convenience the first three shipments, which would have been during the continuance of the war, were dispensed with by common consent. The right under the remaining contract was intact so far as this point is concerned, and, as I have already stated, I think that the

main contention on the ground of frustration fails.

I wish to add that I entirely agree with the observations made by McCardie, J. as to the dangers attending any undue extension of the doctrine of frustration as a defence to actions of contract. The doctrine is perfectly sound and thoroughly established, but care is very necessary in its application to particular cases. In my opinion the appeal should be dismissed with costs.

Lord ATKINSON.-The facts have already been fully stated. But for the division of opinion in the Court of Appeal, I should have been of opinion that this was a plain case. Any difficulty one may feel in deciding it is due to the unscientific and careless way in which the parties have framed the instrument in which they designed to embody the agreement at which they had arrived.

On the 5th or 15th April 1913 they, through their agents, executed a charter-party in a printed form, upon the proper construction of which, coupled with the endorsement on its back, the question for decision mainly, if not entirely, depends. It begins with a provision that the appellants are disponents of six good steamships not named. No flag is named, no measurements given. And then it proceeds as if it dealt with one ship, a steamer, and only one, and provides that she shall repair to Tampa in Florida and there load and carry from thence to Dunkirk phosphate in bulk from the mines of the respondents, in no case exceeding "as stated hereafter tons," and not less than as stated hereafter tons."

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No number of tons are stated in the body of the charter-party, but it must, I think, be taken that the words " as stated hereafter" refer to the endorsement on the back of the charterparty in which latter the tons are stated. By clause 15 of the charter-party it is provided that "should the steamer not arrive at her loading port and be in all respects ready to load under this charter on or before the day of as stated hereafter the charterers have the option of cancelling the same (i.e., the charter-party), to be declared when the vessel is ready to load." On the back of the charter-party one finds the following endorsement :

The within charter applies to six (6) parcels, the three last of which were as follows, the first three having been abandoned by consent: No. 4.3000/3300 tons, margin in owners' option, loading dates the 15th Sept. to the 15th Nov. 1919. No. 5. -3000/3300 tons, margin in owners' option, loading dates the 15th March to the 15th May 1920. No. 6. -3000/3300 tons, margin in owners' option, loading dates the 15th Sept. to the 15th Nov. 1920. The cargo to be discharged by charterers' stevedore at steamer's expense and at lowest current rate, including the cost of tubs if same required by charterers. Should steamers load at Tampa, captain to report to charterer's agents who will be named three months before lay days commence on each parcel. (Signed) H. G. T. and Co.-Société Franco-Américaine des Phosphates de Médulla, Un Administr. (Signed) L. Menage.

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It is not disputed that the charter-party plus the endorsement on its back together contain the contract of the parties. It is an advance contract. The first service under it is not to be rendered till about five years after its date and the last till about seven-and-a-half years after its date. It is difficult to see upon what principle the charterers must not be held to have taken the risk of what might happen in these periods of years. It will also be observed that the endorsement deals not at all with ships but with the cargoes which are to be carried by them, so that the appellants could perform their part of their contract by providing ships to carry these cargoes no matter to whom the ships belonged. The fact that the appellants' own ships were requisitioned by the Government would not by itself relieve them from the obligation to supply ships to implement their contract, unless they proved in addition that it was commercially impossible for them to procure other suitable ships by charter or otherwise to do so.

I concur with the Court of Appeal in thinking that by executing this charter-party and the endorsement on its back, the appellants and respondents entered into one contract, not six contracts; but this one contract dealt with six wholly distinct, separate, and severable adventures between which there was no interdependence in the sense that the carrying out of any one of them was made to depend in any way upon the carrying out or abandonment of any of the others. The six adventures were not united into one composite adventure by any condition of that kind.

The appellants' counsel admitted that though clause 15 of the charter-party purports to give to the respondents the right to cancel the charter-party itself, this must mean only the right to cancel it quoad the particular ship which arrived late. As I understood Mr. Wright, he contended that this fact had no significance because it was a provision of the contract. It is in my mind just because it is part of the contract that it has significance. It shows that the six adventures do not form such a composite whole that they may not be separately dealt with, the one abandoned or dispensed with without affecting the others.

Since the case of Re Arbitration between F. A. Tamplin Steamship Company Limited and Anglo-Mexican Petroleum Products Company Limited (sup.) was decided, it has, I think, been generally accepted that the principle upon which the courts of law act in absolving persons from the further performance of their contract by reason of the frustration of its objects, is correctly stated by Lord Loreburn in his judgment in that case, at pp. 403-4 of the report. After dealing with the authorities he says: "In most of the cases it is said that there was an implied condition in the contract which operated to release the parties from performing it, and in all of them I think that was at bottom the principle upon which the court proceeded." It is, in my opinion, the true principle, for no court has an absolving

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power; but it can infer from the nature of the contract and the surrounding circumstances that a condition which is not expressed was a foundation upon which the parties contracted." It is not enough, however, that this inference should be merely a reasonable inference to draw and nothing more. It must be an inference which it is necessary to draw in order to effectuate the intention of the parties as revealed by the language they have used. In Hamlyn and Co. v. Wood and Co. (sup.) and the case of The Moorcock (sup.) the law upon the point was laid down thus. “A stipulation must not by implication be introduced into a written contract unless, on consideration of the contract in a reasonable and business-like manner, an implication necessarily arises that the parties must have intended that such a stipulation should exist. It is not enough to say that it would be a reasonable thing to make such an implication. It must be an implication which is necessary in order to effectuate the intention of the parties." Again it is impossible to imply in a contract any term or condition inconsistent with its express provisions, or with the intention of the parties as revealed by those provisions. In Re Arbitration between F. A. Tamplin Steamship Company Limited v. Anglo-Mexican Petroleum Products Company Limited (sup.) Lord Parker, dealing with this question, said at p. 422: "It is, of course, impossible to imply in a contract any term of condition inconsistent with its express provisions, or with the intention of the parties as gathered from those provisions. The first ning, therefore, in every case is to compare the term or condition which it is sought to imply with the express provisions of the contract and with the intention of the parties as gathered from those provisions, and ascertain whether there is any such inconsistency." The phrase "frustration of a contract," is an incorrect phrase. It is the performance of the contract which must be frustrated, with the result that the contract itself is thereby dissolved. In the case of a charter-party, it is the maritime adventure with which the charter-party deals that must be "frustrated." This is obvious from the judgment of Bramwell, B. (as he then was) in Jackson v. Union Marine Insurance Company Limited (sup.). Lord Sumner, in his judgment in Bank Line Limited v. Arthur Capel and Co (sup.) points out what was the origin of the phrase "frustrate the commercial object of the contract," and what would be the effect of such a frustration upon the contract of the parties. During the argument addressed to your Lordships on behalf of the appellants, though I listened to it most attentively, I failed to apprehend precisely what was the unexpressed condition which, to use Lord Loreburn's language, formed the foundation of the contract entered into by the appellants and respondents on the 13th April 1913. It certainly was not, it would appear to me, to be that England should not be at war with any power, European or other, during this period of seven-and-ahalf years from its date. Nor was it a con

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dition that the appellants should be relieved from the obligation to provide ships to implement their contract if their own ships should be requisitioned by the Crown. In my view, there is nothing in the contract or in the surrounding circumstances to induce any court to infer that these conditions or either of them formed the foundation of the contract of the parties. If the appellants had contracted that they would employ in the stipulated adventure none but ships belonging to themselves, it might possibly be contended that there was an implied condition upon which this written contract was based, to the effect that if they should be deprived of the use of these ships by force majeure, such as a requisition by the Crown, they should be relieved from the further performance of their contract. But the parties never entered into a contract of that kind. The arbitrator, a commercial man and not a lawyer, has found as a fact that there was nothing to prevent the appellants from chartering neutral tonnage for the three voyages in respect of which the respondents claim relief, namely, those in Nov. 1919, and May and Nov. 1920. Had they done this, they would have had a complete answer to the respondents' claim. The correspondence which passed between the parties clearly supports, in my view, the finding of the arbitrator, that it was agreed between the parties that the appellant should not furnish steamers nor the respondents ship cargoes of phosphate during the period of the war, and that this agreement was, by respondents' letter of the 27th Aug. 1919, extended to the date at which peace should be signed.

It may well be that these mutual agreements could not be enforced at law, but they show clearly that the parties regarded the agreement of the 5th April 1913, not as dissolved, but as existing and being valid and binding; but that owing to the condition of things prevailing, they were willing to abstain from enforcing each against the other the rights which this contract conferred respectively upon them. For these reasons I think that the appeal fails. that the decision appealed from was right, and should be upheld and the appeal be dismissed with costs.

Lord SUMNER.-The rights of the parties in this case must depend upon the original charter of the 15th April 1913, for no agreement was afterwards entered into which would vary them. Neither the communications which actually passed, nor the suspension of communications, shows more than that both acquiesced in dropping the first three voyages.

The charter-party provides for six separate voyages, each being a distinct commercial adventure. There is no reason why a single contract should not provide for many adventures, nor why those adventures should not be entirely independent independent of one another. That the voyages are to be made at fixed and regular intervals; that the cargo is to be always of the same material; that the ports of loading and discharge, the rate of freight and the contractual terms are to be the same