Hawkins v. First Fed. Sav. and Loan Ass'n
Decision Date | 22 February 1973 |
Citation | 280 So.2d 93,291 Ala. 257 |
Parties | Frank L. HAWKINS v. FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION. SC 55. |
Court | Alabama Supreme Court |
Holberg & Tully and Ralph G. Holberg, III, Mobile, for appellant.
David R. Coley, III, Mobile, for appellee.
Frank Hawkins decided to build a Holiday Inn on property bounded by Church, Monroe, Jackson, and Joachim Streets in a downtown urban renewal area of Mobile. He contracted with First Federal Savings and Loan Association for a loan of $500,000, subject to several conditions, including the following:
In accordance with this provision, Hawkins paid $25,000 to First Federal. It is this sum which is now the subject of the litigation.
Upon trial, Hawkins testified as follows:
According to Hawkins' testimony, the City of Mobile, at the direction of the State Highway Department, refused to issue him a building permit because of the pending condemnation of all or part of his land. Later, when it became clear that only a small part of the tract was being taken, Hawkins received approval for a redesigned building, and construction commenced. However, in the meantime, the deadline embodied in the contract, which had already been extended once by agreement of the parties, expired. First Federal insisted that Hawkins had forfeited the $25,000 'stand by' fee by failing to close the loan within the agreed period. Hawkins brought an action to recover the money.
The cause was tried to a jury in the Circuit Court of Mobile County. At the close of the evidence plaintiff requested seventeen charges, of which sixteen were refused. A verdict was returned in favor of the defendant, First Federal. Plaintiff Hawkins now brings this appeal, arguing that denial of four of his requested charges, and his motion for a new trial, constituted reversible error.
All four of the charges in question relate to the issue of whether alleged impossibility of performance should excuse appellant Hawkins from his contractual obligations. All four were refused by the trial judge:
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* * *.'
Charge No. 13 is imporperly grouped with the others on appeal because it refers to impossibility caused by 'Defendant's actions', not by governmental agencies. It is substantially the same as Plaintiff's Charge No. 11, relating to alleged alteration of contract terms by the defendant, which was given by the trial judge. The judge is empowered by statute to refuse redundant charges if the same rule of law was substantially and fairly given in another charge. Title 7, § 273, Code of Alabama 1940 (Recompiled 1958).
Whether Charges No's. 12, 14, and 15 are good depends fundamentally upon the extent to which impossibility, arising without fault of the obligee, is recognized by our law as a defense to breach of contract by the obligor. There appears to be a major division among the authorities on the issue.
On the one hand, there is the view requiring strict adherence to the terms of a contract, regardless of any circumstances arising later. This rationale was classically expressed in Paradine v. Jane, 82 Eng.Rep. 897 (K.B.1647):
In contrast, there is the view expressed by the Restatement of Contracts (1932), § 457:
'(W)here, after the formation of a contract facts that a promisor had no reason to anticipate, and for the occurrence of which he is not in contributing fault, render performance of the promise impossible, the duty of the promisor is discharged * * *.'
The difference between the views is aptly put by Williston:
6 Williston on Contracts, § 1931 (Rev.Ed.1938).
In Alabama, it is generally the strict rule that has been upheld by our decisions. As this Court stated in Lee v. Cochran, 157 Ala. 311, 313, 47 So. 581, 582 (1908):
The same strict or literal view has been upheld in numerous other cases. Stone v. Dennis, 3 Port. 231 (1936); M'Gehee v. Hill, 4 Port. 170, 29 Am.Dec. 277 (1836); Marx v. Kilby Locomotive & Machine Works, 162 Ala. 295, 50 So. 136 (1909); Capital Fertilizer Co. v. Ashcraft-Wilkinson Co., 202 Ala. 92, 79 So. 484 (1918); Otinger v. Water Works and Sanitary Sewer Board, 278 Ala. 213, 177 So.2d 320 (1965). See Case Note, 'Impossibility of Performance in Action for Breach of Contract', 15 Ala.L.Rev. 582 (1963). The Fifth Circuit has correctly interpreted our law in this area in City of Albertville, Ala. v. United States Fidelity & Guaranty Company, 272 F.2d 594 (1959).
However, this court has recognized an exception to the strict rule. In the words of Greil Brothers Co. v. Mabson, 179 Ala. 444, 450, 60...
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