• In the case of Appleby v Myers [1867] L.R. 2 C.P. 651, it was held that there is no restitution available where the work is completed satisfactorily but the work is subsequently destroyed by an event beyond the control of both parties. The destruction confers no benefit to either party, and there is no reason why the party who has completed their contract obligations should suffer.

Facts of the Case

  • C contracted D to erect certain machinery on D’s premises at specific prices for portions, and to keep it in repair for 2 years. The price for the work was to be paid after the end of that 2-year period.
  • During the production of the machinery, D’s premises, and the materials inside were destroyed by an accidental fire.
  • C sued D for the recovery of the sum of the completed work and was successful at first instance. D appealed to the Court of Exchequer Chamber.

Issues

  • Was C entitled to recover the sum for the completed work where the destruction was accidental (D not being at fault)?

Held by the Court of Exchequer Chamber

  • Finding for D, that both parties were excused from the contract after the fire. Where there is a contract according to the terms used in the present case, C is not entitled to recover anything until the work is completed, unless it is shown that fulfilment of the contract was prevented by D’s defaulting on the contract. C was not entitled to sue in respect of the portions of the work which had been completed at the time of destruction.

Blackburn J.

  • The Court below assumed that the property in the work that had been completed passed onto C, which is true. There is no doubt that the general principle is that payment cannot be claimed until completion of the contract. But the law has, for general convenience, allowed for exceptions.
  • An exception was established in Planché v Colburn [1831]. This established that if the full performance of the work had been prevented by D’s own act, the law would imply a contract to pay a reasonable sum for the work completed.
  • However, suppose a riotous mob entered D’s premises and broke the machinery before the work was completed. According to the principle, D would be excused from repairing and completing the work. Neither party being at fault, the question is, which is to be the sufferer. The work being out of the control of D, and C being the owner, the maxim ‘res perit domino suo’-the destruction of the thing is the loss of its owner-applies.
  • D has also suffered because the work being done on their premises would increase the market value of the premises. The Court will construe the contract as to carry out, if possible, the intention of the parties. It is evident that both parties here contemplated the premises continuing to exist in a condition to receive the work, and there was no intention to claim or pay for the machinery until the whole was completed.
  • “The whole question depends upon the true construction of the contract between the parties. We agree with the Court below in thinking that it sufficiently appears that the work which D agreed to perform could not be performed unless D’s premises continued in a fit state to enable D to perform the work on them; and we agree in thinking that, if by any default on the part of D, his premises were rendered unfit to receive the work, C would have had the option to sue D for this default, or to treat the contract as rescinded, and sue on a quantum meruit. But we do not agree with them in thinking that there was an absolute promise or warranty by D that the premises should at all events continue so fit. We think that where, as in the present case, the premises are destroyed without fault on either side, it is a misfortune equally affecting both parties, excusing both from further performance of the contract, but giving a cause of action to neither” [659].