The doctrine is applicable to any condition subject to which land is sold, and which becomes an impossible condition.

V. Myers, L. R. 2 C. P. 651;

Robinson v. Davison, L. R. 6 Ex. 269; Howell v. Coupland, 1 Q. B. D. 258; Nickoll v. Ashton, 1901, 2 K. B. 126.

(n) See above, pp. 425, 507.

(o) Counter v. Macpherson, 5 Moore, P. C. 83, 104, 105; Taylor v. Caldwell, 3 B. & S. 826.

(p) Above, p. 917, n. (m).

(o) Krell v. Henry, 1903, 2 K. B. 740.

(r) Cf. Herne Bay, etc. Co. v. Hutton, 1903, 2 K. B. 683, with Krell v. Henry, ib. 740.

Similarly, a contract may be discharged where its performance is rendered impossible owing to a change in the law (s). Thus, if it were a term of a contract to sell land that the vendor should enter into covenants restrictive of the use of some adjoining land of his, and the sale were completed and the covenants entered into accordingly, and afterwards the adjoining land were taken by a railway company under their parliamentary powers, the vendor would be discharged from all further liability on the covenants by reason of the impossibility of performance, the land having been handed over by a cause beyond his control to a body not bound by the covenants (t). Suppose, however, that the house or the adjoining land were taken by the railway company after the formation of the contract but before its completion (u), the case would be governed by the general rule (x), unless the continued existence in statu quo of the whole property sold up to the time for completion were an essential condition of the sale. If not, the purchaser would have to pay the whole purchase money and take a conveyance of the property in its altered condition, but he would be entitled to compensation from the railway company in respect of his equitable estate or interest in the land compulsorily taken (y). Where it is an essential condition of the sale that the property shall be conveyed in its existing state, it appears that the contract will be discharged, if before completion the whole or any part thereof be taken away compulsorily under parliamentary powers.

Impossibility of performance owing to a change in the law.

(s) See above, pp. 782, 783.

(t) Baily v. De Crespigny, L. R. 4 Q. B. 180; and see Kirby v. School Board for Harrogate, 1896, 1 Ch. 437.

(u) For the purpose of ascertaining the time at which lands are taken under the Lands Clauses Act, 1845, the crucial date is that of service of the notice to treat; Mercer v. Liverpool, etc. By. Co., 1903, 1 K. B. 652, 1904, A. C. 461; Dawson v. Great Northern, etc. By. Co., 1904, 1 K. B. 277, 278, n., 1905, 1 K. B. 260, 273.

(x) Above, p. 917.

(y) See Martin v. London, Chatham & Dover Ry. Co., L. R. 1 Ch. 501; Be King's Leasehold Estates, L. R. 16 Eq. 521; Fur-ncss Ry. Co. v. Cumberland, etc. Bdg. Socy., 52 L. T. 144, 146; Birmingham, etc. Land Co. v. London & North Western By. Co., 40 Ch. D. 268; Long Eaton, etc. Co. v. Midland By. Co., 1902, 2 K. B. 574. A right to compensation under the Lands Clauses Act, 1845, for one's lands being injuriously affected is assignable; Dawson v. Great Northern, etc. By. Co., 1905, 1 K. B. 260.

When the obligation to carry out a contract partly performed is discharged in this way for impossibility of performance, the parties (in the absence of stipulation to the contrary) are not entitled to be restored to their former position, but are left to remain as they are, as in the case of an illegal or a void contract partly executed (2); and any money paid or property transferred under the contract previously to the discharge so caused cannot be recovered back (a). But obligations arising from the breach prior to this discharge of some part of the contract are unaffected and remain enforceable (b). Thus, if a music-hall be sold with possession to be given on a future day, on condition that it shall then be in a fit state for giving performances therein, a deposit of 20 per cent, of the purchase money to be paid to the vendor on signing the contract, and the deposit be paid and the house be accidentally burnt down before the day for completion, the parties would be discharged from further performance of the contract (c): but the vendor would be entitled to retain the deposit. And if the deposit had not been paid as agreed, the vendor would be entitled to sue for it (b). If in such a case the deposit were paid to a third person as stakeholder pending completion, it is thought that, on the discharge of the contract for impossibility of performance, the purchaser would be entitled to recover it (d). Where the parties have in effect expressly stipulated that, in case of the impossibility of fulfilling the condition the contract shall be rescinded ab initio, it appears that they would be impliedly entitled to restitutio in integrum (e).

Position of the parties "where a contract partly performed is discharged for impossibility of performance.

(z) Above, pp. 777, 779.

(a) Civil Service Co-op. Socy. v. General Steam Navigation Co., 1903, 2 K. B. 756; and see Be Silvale v. Kendall, 4 M. & S. 37; Byrne v. Schiller, L. R. 6 Ex. 319.

(b) Chandler v. Webster, 1904, 1

K. B. 493

(c) Above, p. 918.

(d) It is thought that this case is parallel to that of money paid to a stakeholder to be applied under an illegal or a void contract, which is not performed; above, pp. 779 - 781.

Discharge of the obligation of a contract, before breach, may also be effected in consequence of the bankruptcy since the formation of the contract of one of the parties thereto. This may take place (1) by the disclaimer of the contract, as unprofitable, by his trustee in the bankruptcy; when the liability of the bankrupt and of the trustee under the contract is determined, but the other party is deemed to be a creditor of the bankrupt to the extent of the injury he suffers by the operation of the disclaimer, and may prove the same as a debt in the bankruptcy (f). (2) By the rescission of the contract by order of the Court, which may be made in the bankruptcy on the other party's application, and on such terms as to the Court may seem equitable, and under which any damages made payable to the other party may be proved by him as a debt in the bankruptcy (g). (3) By the effect of a composition or scheme of arrangement accepted and approved by the Court under the Bankruptcy Act, 1890 (h). And (4) by the operation of an order of discharge obtained by the bankrupt (i). As we have seen, in the case of a contract to sell land, the purchaser's liability to pay the price may be disclaimed by his trustee in bankruptcy, and will be extinguished by an order for his discharge (k); and in either of these cases the vendor is discharged from his obligation to convey, to the performance of which the payment of the price is a condition precedent (l). But the vendor's obligation to convey the land sold, so far as it is capable of being specifically enforced in equity, cannot, as a rule, be disclaimed in his own bankruptcy (m), and is not released by an order made therein for his discharge (n).