Limits on Bargains: Defenses

AuthorVal Ricks
Pages142-203
142
Chapter 4. Limits on
Bargains: Defenses
The cases in this Chapter answer the following question: Does enforcement depend
on the bargain being roughly equal in value on both sides, or is the equality of the
bargain left to the parties? Is some sort of just price required? You might be
surprised at the answer, but to answer that question you must study all of the cases
in this chapter. None of them is unusual. Each statement of law in them is mundane.
But their doctrines leave in the law a striking contradiction.
A. Introduction: Limits on Bargains?
HAMER v. SIDWAY (1891)
Court of Appeals of New York, Second Division
27 N.E. 256
1] Appeal from an order of the general term of the supreme court the fourth
judicial department, reversing a judgment entered on the decision of the court at
special term in the county clerk’s office of Chemung county on the 1st day of
October, 1889. The plaintiff presented a claim to the executor of William E. Story,
Sr. for $5,000 and interest from the 6th day of February, 1875. She acquired it
through several mesne assignments from William E. Story, 2d. The claim being
rejected by the executor, this action was brought.
2] It appears that William E. Story, Sr., was the uncle of William E. Story, 2d;
that at the celebration of the golden wedding of Samuel Story and wife, father and
mother of William E. Story, Sr., on the 20th day of March, 1869, in the presence of
the family and invited guests, he promised his nephew that if he would refrain from
drinking, using tobacco, swearing, and playing cards or billiards for money until he
became 21 years of age, he would pay him the sum of $5,000. The nephew assented
thereto, and fully performed the conditions inducing the promise. When the nephew
arrived at the age of 21 years, and on the 31st day of January, 1875, he wrote to his
uncle, informing him that he had performed his part of the agreement, and had
thereby become entitled to the sum of $5,000. The uncle received the letter, and a
few days later, and on the 6th day of February, he wrote and mailed to his nephew
the following letter:
143
Buffalo, Feb. 6, 1875.
“W.E. STORY, JR: `DEAR NEPHEW Your letter of the 31st ult. came to
hand all right, saying that you had lived up to the promise made to me
several years ago. I have no doubt but you have, for which you shall have
five thousand dollars as I promised you. I had the money in the bank the
day you was 21 years old that I intend for you, and you shall have the money
certain. Now, Willie, I do not intend to interfere with this money in any way
till I think you are capable of taking care of it and the sooner that time comes
the better it will please me. I would hate very much to have you start out in
some adventure that you thought all right and lose this money in one year.
The first five thousand dollars that I got together cost me a heap of hard
work. . . . It did not come to me in any mysterious way, and the reason I
speak of this is that money got in this way stops longer with a fellow that
gets it with hard knocks than it does when he finds it. Willie, you are 21 and
you have many a thing to learn yet. This money you have earned much
easier than I did besides acquiring good habits at the same time and you are
quite welcome to the money; hope you will make good use of it. I was ten
long years getting this together after I was your age. Now, hoping this will
be satisfactory, I stop....
Truly Yours, “W.E. STORY.
`P.S.-You can consider this money on interest.”
3] The nephew received the letter and thereafter consented that the money
should remain with his uncle in accordance with the terms and conditions of the
letters. The uncle died on the 29th day of January, 1887, without having paid over
to his nephew any portion of the said $5,000 and interest.”
PARKER, J. (after stating the facts above),
4] The question which provoked the most discussion by counsel on this appeal,
and which lies at the foundation of plaintiff’s asserted right of recovery, is whether
by virtue of a contract defendant’s testator William E. Story became indebted to his
nephew William E. Story, 2d, on his twenty-first birthday in the sum of five
thousand dollars. The trial court found as a fact that ‘on the 20th day of March,
1869, * * * * William E. Story agreed to and with William E. Story, 2d, that if he
would refrain from drinking liquor, using tobacco, swearing, and playing cards or
billiards for money until he should become 21 years of age then he, the said William
E. Story, would at that time pay him, the said William E. Story, 2d, the sum of
$5,000 for such refraining, to which the said William E. Story, 2d, agreed,’ and that
he ‘in all things fully performed his part of said agreement.’
144
5] The defendant contends that the contract was without consideration to
support it, and, therefore, invalid. He asserts that the promisee by refraining from
the use of liquor and tobacco was not harmed but benefited; that that which he did
was best for him to do independently of his uncle’s promise, and insists that it
follows that unless the promisor was benefited, the contract was without
consideration. A contention, which if well founded, would seem to leave open for
controversy in many cases whether that which the promisee did or omitted to do
was, in fact, of such benefit to him as to leave no consideration to support the
enforcement of the promisor’s agreement. Such a rule could not be tolerated, and
is without foundation in the law. The Exchequer Chamber, in 1875, defined
consideration as follows: ‘A valuable consideration in the sense of the law may
consist either in some right, interest, profit or benefit accruing to the one party, or
some forbearance, detriment, loss or responsibility given, suffered or undertaken
by the other.’ Courts ‘will not ask whether the thing which forms the consideration
does in fact benefit the promisee or a third party, or is of any substantial value to
anyone. It is enough that something is promised, done, forborne or suffered by the
party to whom the promise is made as consideration for the promise made to him.’
(Anson’s Prin. of Con. 63.)
6] ‘In general a waiver of any legal right at the request of another party is a
sufficient consideration for a promise.’ (Parsons on Contracts, 444.)
7] ‘Any damage, or suspension, or forbearance of a right will be sufficient to
sustain a promise.’ (Kent, vol. 2, 465, 12th ed.)
8] Pollock, in his work on contracts, page 166, after citing the definition given
by the Exchequer Chamber already quoted, says: ‘The second branch of this judicial
description is really the most important one. Consideration means not so much that
one party is profiting as that the other abandons some legal right in the present or
limits his legal freedom of action in the future as an inducement for the promise of
the first.’
9] Now, applying this rule to the facts before us, the promisee used tobacco,
occasionally drank liquor, and he had a legal right to do so. That right he abandoned
for a period of years upon the strength of the promise of the testator that for such
forbearance he would give him $5,000. We need not speculate on the effort which
may have been required to give up the use of those stimulants. It is sufficient that
he restricted his lawful freedom of action within certain prescribed limits upon the
faith of his uncle’s agreement, and now having fully performed the conditions
imposed, it is of no moment whether such performance actually proved a benefit to
the promisor, and the court will not inquire into it, but were it a proper subject of
inquiry, we see nothing in this record that would permit a determination that the
uncle was not benefited in a legal sense.
* * * * The order appealed from should be reversed and the judgment of the Special
Term affirmed, with costs payable out of the estate.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT