J. SKELLY WRIGHT, Circuit Judge:
This appeal involves a voyage charter between Transatlantic Financing Corporation, operator of the SS CHRISTOS, and the United States covering carriage of a full cargo of wheat from a United States Gulf port to a safe port in Iran. The District Court dismissed a libel filed by Transatlantic against the United States for costs attributable to the ship's diversion from the normal sea route caused by the closing of the Suez Canal. We affirm.
On July 26, 1956, the Government of Egypt nationalized the Suez Canal Company and took over operation of the Canal. On October 2, 1956, during the international crisis which resulted from the seizure, the voyage charter in suit was executed between representatives of Transatlantic and the United States. The charter indicated the termini of the voyage but not the route. On October 27, 1956, the SS CHRISTOS sailed from Galveston for Bandar Shapur, Iran, on a course which would have taken her through Gibraltar and the Suez Canal. On October 29, 1956, Israel invaded Egypt. On October 31, 1956, Great Britain and France invaded the Suez Canal Zone. On November 2, 1956, the Egyptian Government obstructed the Suez Canal with sunken vessels and closed it to traffic.
On or about November 7, 1956, Beckmann, representing Transatlantic, contacted Potosky, an employee of the United States Department of Agriculture, who appellant concedes was unauthorized to bind the Government, requesting instructions concerning disposition of the cargo and seeking an agreement for payment of additional compensation for a voyage around the Cape of Good Hope. Potosky advised Beckmann that Transatlantic was expected to perform the charter according to its terms, that he did not believe Transatlantic was entitled
Transatlantic's claim is based on the following train of argument. The charter was a contract for a voyage from a Gulf port to Iran. Admiralty principles and practices, especially stemming from the doctrine of deviation, require us to imply into the contract the term that the voyage was to be performed by the "usual and customary" route. The usual and customary route from Texas to Iran was, at the time of contract, via Suez, so the contract was for a voyage from Texas to Iran via Suez. When Suez was closed this contract became impossible to perform. Consequently, appellant's argument continues, when Transatlantic delivered the cargo by going around the Cape of Good Hope, in compliance with the Government's demand under claim of right, it conferred a benefit upon the United States for which it should be paid in quantum meruit.
The doctrine of impossibility of performance has gradually been freed from the earlier fictional and unrealistic strictures of such tests as the "implied term" and the parties' "contemplation." Page, The Development of the Doctrine of Impossibility of Performance, 18 MICH.L.REV. 589, 596 (1920). See generally 6 CORBIN, CONTRACTS §§ 1320-1372 (rev.ed. 1962); 6 WILLISTON, CONTRACTS §§ 1931-1979 (rev. ed. 1938). It is now recognized that "`A thing is impossible in legal contemplation when it is not practicable; and a thing is impracticable when it can only be done at an excessive and unreasonable cost.'" Mineral Park Land Co. v. Howard, 172 Cal. 289, 293, 156 P. 458, 460, L.R.A. 1916F, 1 (1916). Accord, Whelan v. Griffith Consumers Company, D.C.Mun.App., 170 A.2d 229 (1961); RESTATEMENT, CONTRACTS § 454 (1932); UNIFORM COMMERCIAL CODE (U. L.A.) § 2-615, comment 3. The doctrine ultimately represents the ever-shifting line, drawn by courts hopefully responsive to commercial practices and mores, at which the community's interest in having contracts enforced according to their terms is outweighed by the commercial senselessness of requiring performance.
The first requirement was met here. It seems reasonable, where no route is mentioned in a contract, to assume the parties expected performance by the usual and customary route at the time of contract.
Proof that the risk of a contingency's occurrence has been allocated may be expressed in or implied from the agreement. Such proof may also be found in the surrounding circumstances, including custom and usages of the trade. See 6 CORBIN, supra, § 1339, at 394-397; 6 WILLISTON, supra, § 1948, at 5457-5458. The contract in this case does not expressly condition performance upon availability
If anything, the circumstances surrounding this contract indicate that the risk of the Canal's closure may be deemed to have been allocated to Transatlantic. We know or may safely assume that the parties were aware, as were most commercial men with interests affected by the Suez situation, see The Eugenia, supra, that the Canal might become a dangerous area. No doubt the tension affected freight rates, and it is arguable that the risk of closure became part of the dickered terms. UNIFORM COMMERCIAL CODE § 2-615, comment 8. We do not deem the risk of closure so allocated, however. Foreseeability or even recognition of a risk does not necessarily prove its allocation.
We turn then to the question whether occurrence of the contingency rendered performance commercially impracticable under the circumstances of this case. The goods shipped were not subject to harm from the longer, less temperate Southern route. The vessel and crew were fit to proceed around the Cape.
We conclude, therefore, as have most other courts considering related issues arising out of the Suez closure,
There are two clauses which allegedly demonstrate that time is of importance in this contract. One clause computes the remuneration "in steaming time" for diversions to other countries ordered by the charterer in emergencies. This proves only that the United States wished to reserve power to send the goods to another country. It does not imply in any way that there was a rush about the matter. The other clause concerns demurrage and despatch. The charterer agreed to pay Transatlantic demurrage of $1,200 per day for all time in excess of the period agreed upon for loading and unloading, and Transatlantic was to pay despatch of $600 per day for any saving in time. Of course this provision shows the parties were concerned about time, see GILMORE & BLACK, THE LAW OF ADMIRALTY § 4-8 (1957), but the fact that they arranged so minutely the consequences of any delay or speedup of loading and unloading operates against the argument that they were similarly allocating the risk of delay or speed-up of the voyage.
In Tsakiroglou & Co. Ltd. v. Noblee Thorl G.m.b.H., supra Note 4, the difference to the seller under a C.I.F. contract in freight costs caused by the Canal's closure was £15 per ton instead of £7.10s. per ton — precisely twice the cost. The House of Lords found no frustration.
These cases certainly are not distinguishable, as appellant suggests, on the ground that they refer to "frustration" rather than to "impossibility." The English regard "frustration" as substantially identical with "impossibility." 6 CORBIN, supra, § 1322, at 327 n. 9.