1 The Moral Imagination & Contracts Classics 1 The Moral Imagination & Contracts Classics

1.1 THE SOCRATIC METHOD AND THE DEVELOPMENT OF THE MORAL IMAGINATION 1.1 THE SOCRATIC METHOD AND THE DEVELOPMENT OF THE MORAL IMAGINATION

[*647] A lawyer's professional life begins the day that he or she starts law school. This has not always been the case, of course, but today the first phase of almost every lawyer's career consists of a period of time spent studying law in a formal academic program under the supervision of university professors. However diverse their professional experiences may be in other respects, therefore, lawyers still share at least one thing in common: they have all been law students at one time or another, and it is as students that their professional habits first take shape. The single most prominent feature of twentieth-century American legal education is its heavy reliance on the so-called case method of instruction. By the case method I mean two things: first, the study of law through the medium of judicial opinions, mainly appellate opinions, that have been rendered in actual disputes; and second, the examination of these opinions in a spirit that has often, and aptly, been described as "Socratic." Though this latter term is sometimes used to denote a distinctive style of law teaching - one marked by an extreme of bullying and intimidation - it is the term's wider meaning that I have in mind. By Socratic I mean both an unwillingness to take the soundness of any judicial opinion for granted, no matter how elevated the tribunal or how popular the result, and a commitment to place the conflicting positions that each lawsuit presents in their most attractive light, regardless of how well they have been treated in the opinion itself. Most American law teachers today employ the case method of instruction in the broad sense just defined. It would be possible, of course, to teach the law by studying its operation at the trial and pretrial levels rather than concentrating as exclusively as American law teachers do on the decisions of appellate courts. But appellate opinions have the great advantage of bringing out the legal issues in a case with an economy and a precision that trial transcripts, for example, rarely do. To be sure, appellate opinions also have a characteristic deficiency that most law teachers recognize: they are typically mere distillates that leave out much of a dispute's original complexity and present its facts in an incomplete and stylized way. But the usefulness of appellate opinions as a vehicle for teaching the broad structure of the law outweighs this deficiency and explains why they are used instead of transcripts and briefs as the chief means for introducing students to the doctrine in most fields. This explanation for the heavy reliance on appellate opinions in American law teaching immediately raises the question why most American law teachers do not [*648] teach from treatises and textbooks instead? If the aim is to familiarize students with the doctrine in a certain field, why isn't a textbook that sets out the relevant rules in a clear and systematic way the best vehicle for doing so? What advantage is there in making students study these rules obliquely, by means of judicial opinions rendered in specific cases, rather than giving them the rules directly? There are three familiar answers to this question. First, since class time is scarce, it seems reasonable to concentrate on those problems likely to give students the greatest difficulty when they enter practice, and these will by definition be the problems that arise at the unsettled boundaries of a field, not those more routine ones that can be decided by already well-established principles. Boundary problems of this sort necessarily involve a clash of principles in which as much, or nearly as much, may be said on one side as on the other. The evenness of such contests means that at the margin of a field there are, in fact, no controlling principles at all, but only cases - controversies in which principles of roughly equal weight compete for precedence. The case method is certainly the most economical and perhaps the only way of giving students a feel for these controversies, for the boundary conflicts that define, at any given moment, the margins of a field. And from these conflicts it is easier for a student to construct an understanding of the field's settled interior than the other way around. Second, in addition to a knowledge of legal rules, practicing lawyers obviously also need skill in applying these rules to problems of a concrete kind. A lawyer must be able to apply the law to the complex, real-life dilemmas of clients. And the case method of instruction, which buffets students with a steady stream of such dilemmas, seems better adapted to the cultivation of this skill than textbook expositions do. A third justification for the case method is that it promotes rhetorical abilities needed in law practice. Lawyers are regularly called upon to defend their clients' interests before strangers in a public setting, often with little opportunity for advance preparation. To be effective a lawyer must therefore be skilled at spontaneous public speaking, and the case method of instruction - in which students are given no advance notice of the positions they will be required to defend before their classmates and under Socratic interrogation - seems the one best suited to teach this skill: better suited, in any case, than an abstract discussion of rules or principles that presents only familiar considerations of a general sort and no new facts that students must incorporate into their extemporaneous arguments. Each of these three justifications has merit, but each is also incomplete. The first justification, for example, tells us nothing about the way that boundary contests in the law should be resolved. A knowledge of general principles is clearly insufficient by itself to settle such disputes, for by definition they present dilemmas that existing principles do not straightforwardly decide. Is their decision therefore arbitrary? If not, what else must one know, what other skills must one possess, to decide them? And how does the case method teach these skills or convey the required sort of knowledge? The second justification is incomplete as well. No one will deny that the practice of law involves the application of general rules to specific cases. But the same may also be said of other disciplines, like medicine. The cases that doctors study differ, however, from those that constitute the subject matter of the lawyer's art. A law [*649] case is a fight or a contest; to say what it is, is necessarily to describe a disagreement. By contrast, to state a medical case - a patient's presenting symptoms - is not in the same way to report a controversy, though doctors may of course disagree in their diagnosis of a patient's problem. We might express this idea by saying that the problems with which lawyers deal are constitutively argumentative, at least in comparison with those of medicine. How is this distinctive feature of the cases they confront reflected in the method that is used to teach lawyers their craft? The claim that the case method teaches law students how to apply general rules to particular problems raises this question and brings it into focus, but by itself provides no answer. The third justification misses something too. A good lawyer must of course be an effective advocate, and it is reasonable to assume that this requires some skill at public speaking. But effective advocacy demands more than the ability to speak extemporaneously in front of strangers. It also requires that one be able to distinguish persuasive arguments from unpersuasive ones, and the third justification for the case method of laws teaching has nothing to say about the meaning of this distinction or the way in which the study of cases helps student to discern it. And it ignores a basic feature of the method itself. For while it is true that the case method forces students to practice the art of advocacy by making arguments on behalf of imaginary clients, it also compels them to reflect on the soundness of these same arguments from a judicial point of view and thus, some of the time at least, to adopt an attitude more neutral and inclusive than that of a committed advocate. These three justifications for the case method all lack one thing: an appreciation of the way in which it functions as an instrument for the development of moral imagination. It is this aspect of the method I now want to examine. The case method of law teaching presents students with a series of concrete disputes and compels them to reenact these disputes by playing the roles of the original contestants or their lawyers. It thus forces them to see things from a range of different points of view and to entertain the claims associated with each, broadening their capacity for sympathy by taxing it in unexpected ways. But it also works in the opposite direction. For the student who has been assigned a partisan position and required to defend it is likely to be asked a moment later for his views regarding the wisdom of the judge's decision in the case. To answer, he must disengage himself from the sympathetic attachments he may have formed as a committed, if imaginary, participant and reexamine the case from a disinterested judicial point of view. The case method thus works simultaneously to strengthen both the student's powers of sympathetic understanding and his ability to suppress all sympathies in favor of a judge's scrupulous neutrality. Most important, it increases his tolerance for the disorientation that movement back and forth between these different attitudes occasions. In this way he case method serves as a forcing ground for the moral imagination by cultivating that peculiar bifocality that I earlier described as its most essential property. One aim of this complex exercise in advocacy and detachment is the cultivation of those perceptual habits that lawyers need in practice. Forcing students to defend positions they do not believe in or that they consider morally offensive may seem arbitrary and insensitive, but it serves an important goal. The student who is put in this position must strain to see the claim he has been given to defend in its most [*650] attractive light. He must work to discover its strengths and to articulate them, and this he cannot do unless he temporarily puts his earlier convictions to one side. In this way students get used to looking with a friendly eye even at those positions they personally reject, and before long they acquire some skill at identifying the strengths and weaknesses of whatever claim is presented to them, those that are unfamiliar or morally distasteful as well as those they recognize and endorse. Gradually, much of this becomes habitual. One comes to see that the arguments for and against most positions fall into certain stylized patterns, and to recognize which argument forms are most appropriate to which causes. Over time these insights come to shape the increasingly instinctive scheme within which law students view the cases they are given. The gradual acceptance of this scheme marks a change in perception, in the way one sees legal conflict as well as thinks about it. Or more precisely, since this distinction is to some extent an artificial one, the way a law student learns to think about cases comes eventually to affect how he perceives them, below the level of reflective thought. This perceptual adjustment forms the core of the student's nascent professional persona, and is reflected in the habits and reflexes that increasingly distinguish his approach to legal problems from that of a layperson uneducated in the law. Along with this perceptual adjustment, the case method tends to promote a second change as well, a change in temperament or disposition. The role-playing and Socratic interrogation that are its central features force students to make the most of the conflicting claims presented by the cases. It forces them to entertain these claims from a sympathetic internal point of view. This means more than granting that their proponents have the right to assert them and accepting that they are not irrational to do so. To entertain a claim, one must make an effort to see its sense or value from the point of view of those who actually endorse it: to sympathize with their perspective and not simply tolerate it. The effort to entertain unfamiliar and disagreeable positions may at first cause some awkwardness and pain. But in time it increases a person's powers of emphatic understanding and relaxes the boundaries that initially restrict his sympathies to what he knows and likes. Some students find this experience disturbing and complain that the case method, which makes every position respectable, undermines their sense of integrity and personal self-worth. It is easy to understand why. For the discovery in oneself of a developing capacity to see the point of positions that previously seemed thoughtless or unfair is often accompanied by a corresponding sense of more critical detachment from one's earlier commitments, and this can lead to the feeling of being unmoored with no secure convictions and hence no identity at all. This experience, which law students sometimes describe, not inappropriately, as the experience of losing one's soul, strongly suggests that the process of legal education does more than impart knowledge and promote new perceptual habits. In addition it works - is meant to work - upon the students' dispositions by strengthening their capacity for sympathetic understanding. The strengthening of this capacity often brings with it the dulling or displacement of earlier convictions and a growing appreciation of the incommensurability of values, changes of attitude that many experience as personally transforming. It is this unsettling experience that underlies the law student's concern that his professional education threatens to [*651] rob him of his soul - an anxiety no mere increment in knowledge or refinement of perception can explain. It may seem implausible that the reading of appellate opinions can bring such a transformation about. Appellate opinions, after all, are typically rather dry documents that contain only an abbreviated statement of the facts; that commonly avoid decision on the merits but focus on the jurisdiction and procedure of lower courts instead; and that frequently fail to present the losing side in its most attractive light (for the obvious reason that doing so makes it easier for the court to justify its decision in the case). These characteristics might appear to make appellate opinions a poor vehicle for stimulating the moral imagination of law students by forcing them to sympathize with a diversity of points of view and to confront the impossibility of framing a comprehensive scheme of values within which all conflicting claims may be compared. If that is our goal, would it not be better to focus, say, on the parties' briefs and closing arguments at trial, where the facts are likely to be presented more fully and the positions of the contestants stated with maximum force? The answer is no, for several reasons. First, however incomplete the statement of facts in an appellate opinion, it almost always contains some details embarrassing to the winning party. These, so to speak, peep through the opinion and remind readers that the losing party had some facts on its side too. Second, the law teacher who teaches Socratically does not simply say, "On the facts as reported the court held thus and such," and let it go at that. Rather, using the court's selective but manageable statement of facts as a starting point, he invites his students to replay the case by considering whether the losing party might have put its position in a more compelling form and then imaging what could have been said in response. Often this means teaching against the grain of the court's opinion - by taking seriously facts it downplays and arguments it rejects. But many American law teachers teach this way, and since the appellate opinions that are selected for inclusion in student casebooks are often chosen precisely because they invite contrapuntal treatment of this sort, there is even a bias in favor of such teaching. Third, if it is objected that this can all be accomplished more easily by using other materials (a dubious claim in any case, given the length and disorderliness of most trial transcripts and the poor quality of many briefs), the response must be that this objection misses the point. For the students' imaginative powers are most likely to be strengthened if they are forced to work at reconstructing positions only partially visible to them rather than being presented with these positions in already finished form. The moral-educative function of law training requires that this work be strenuous; that it be possible but challenging. And the appellate opinion seems a particularly good instrument for this because it is rich enough in facts to give students something concrete to work with, but sufficiently schematic to make them struggle to reimagine fully the parties' conflicting claims. These considerations help explain why appellate opinions are more likely than treatises and textbooks, on the one hand, or briefs and transcripts, on the other, to encourage the growth of deliberative imagination, as well as being uniquely well adapted to conveying an understanding of legal doctrine. But there is another element to the moral education law students receive that is also linked to the study of judicial opinions and that would be missing if their reading consisted of [*652] academic synopses or partisan statements instead. Once we take this other element into account, moreover, reasons emerge for viewing the negative, belief-and commitment-threatening side of the case method in a more positive light. The task of an appellate judge is twofold: first, to decide the controversy before him, and second, to provide a set of supporting reasons for the decision that he gives. Both his decision and the rationale for it are set forth in the opinion the judge issues at the conclusion of the case. Of course, the parties to a legal dispute also often prepare documents of their own stating their version of the case. But it is the judge who has the final word, and his opinion enjoys priority over theirs. It establishes the point of view from which every other viewpoint must be assessed. Thus while it may in one sense be correct to describe the judge merely as another actor in the drama of the case, within the structure of this drama his perspective occupies a dominant place. In the case method of instruction, the priority of the judge's point of view is reflected in the disproportionate amount of class time typically devoted to questioning whether the case at hand was rightly decided, a question that must by definition be approached from the perspective of a judge whether one agrees with the decision or not. The case method is largely an exercise in forced role-playing. But it is important to remember that among the roles students are invited to play is that of a judge, and to recognize that the priority of this role over others is embedded in the method itself. If the effort to entertain the claims of the parties to a lawsuit demands enlarged powers of sympathy and leads to a loss of ideological conviction, to a blurring of the distinction between right and wrong, and to a diminished faith in the commensurability of values generally, the case method's emphasis on the priority of the judicial point of view underscores the need to conclude the dispute despite these certainties and to do so not by fiat but in a reasoned and publicly justifiable manner instead. In this way the case method provides its own counterweight to the student's growing acceptance of complexity and pluralism in the realm of values, and blocks the slide to what might otherwise become the cynical celebration of arbitrariness. It does this by habituating students to the need for reasoned judgment under conditions of maximum moral ambiguity, and by giving them practice at rendering such judgments themselves. The result is a combination of attitudes in tension with one another: an expanded capacity for sympathetic understanding coupled with the ability to see every claim with the coldest and most distant, most judicial, eye; a broad familiarity with diverse and irreconcilable human goods coupled with an indefatigable willingness to enter the fray, hear the arguments, render judgment, and articulate the reasons that support it, even when all hope of moral certainty is gone. At war with itself, this complex set of attitudes nonetheless describes a recognizable moral ideal, an ideal closest, perhaps, to the public-spirited stoicism implied by the Roman term gravitas, but in any event distinguishable from the indifferent cynicism that some believe the case method of instruction tends inevitably to produce. No doubt it sometimes does, and the fear that a person may lose his soul in the process is to that extent justified. But the aim of the case method is otherwise. For what it seeks to produce, ideally at least, are stoics rather than cynics, a distinction that becomes clear only when the priority of the judicial [*653] point of view and its function as a counterweight to relativism are recognized to be essential features of the method itself. The privileged position that the case method assigns the judicial point of view has another important consequence. Judges are expected to decide cases in a disinterested manner, meaning without concern for their own personal advantage. This does not mean, however, that a judge approaches his task without interests of any kind at all. There is one interest that all judges are allowed and whose absence in a judge is indeed considered a deficiency. That is the judge's interest in the administration of justice, in the integrity or well-being of the legal system as a whole. The judge's interest in the well-being of the law encompasses a variety of concerns - the concern for doctrinal coherence, for example, and for the responsiveness of doctrine to social and economic circumstances. It also includes a concern for the bonds of fellowship that legal conflict strains but that must be preserved to avoid other, more destructive conflicts. The judge's interest in all these things - which, far from compromising his authority, helps to constitute it - might be characterized, in general terms, as an interest in the good of the community represented by the laws. The judge's interest is thus broader or more inclusive than the interests of the parties. They are interested in their own separate welfare. He, by contrast, is concerned with the well-being of the larger community of which they are members, the community constituted by the laws the parties have invoked to settle their dispute. The judge's attitude is in this sense more public-spirited than theirs and his point of view more communitarian. When law students play-act at being judges, as the case method requires them to do, it is this public-spirited attitude they must assume. To begin with, the attitude is likely to be one most students merely "put-on," in the way an actor puts on a mask. It is too disinterested, too remote from most students' own partisan convictions, to be an attitude they experience as their own. But the built-in priority the case method gives the roles of judge and constant practice at playing it tend in time to blur the line between what a student puts on and what belongs to him in his own right. By a process of transference that the case method deliberately exploits, the judicial attitude that a student begins by mimicking becomes to some degree his own, and the student himself takes on a measure of the public-spiritedness that distinguishes the judge's view of legal conflict. The student to whom this has happened tends instinctively to look at the law and to argue about its meaning in the same way that a judge would, and even more important, to care with new intensity about the good of the legal system and the community it represents. One could of course devise a system of legal education in which the judicial point of view did not play the central organizing role it now does. Law students might be made, for example to consider problems from the point of view of a legislator rather than a judge. But a program of this sort would be less well-suited to the cultivation of civic-mindedness. No one doubts that legislators sometimes act for the sake of the public good, the good of the whole community whose laws they are empowered to enact, repeal, and adjust. But the actions of legislators are also often directed toward private ends, toward the advancement of the partisan interests of their constituents, the small groups of citizens that elect them and whose frequently parochial points of view they have pledged to represent. Public-spiritedness and partisanship are thus tangled up in legislation. In adjudication, by contrast, the [*654] civic-minded attitude appears in purer form. Unlike legislators, judges are expected to attend to the public good alone, and any deviation from this attitude, though acceptable in the sphere of legislation, is generally considered a failing in a judge. Without denying that civic-mindedness plays some part in the work of legislation, we may therefore say that it defines the judge's point of view in a more exclusive way. The priority that the case method gives to this point of view reflects the belief that it is part of what lawyers must be taught. It confirms that one purpose of their professional education is to acquaint lawyers with the attitude of civic-mindedness most perfectly exemplified in the work of judging and through repeated mimicry to inculcate this attitude in them as a dispositional trait. It is worth observing that this same purpose cannot be ascribed to every scheme of professional education that employs some form of case method as the vehicle for studying human conflict. Many business school programs, for example, use a version of the case method to study problems of entrepreneurship and management. The business school "case" resembles its law school counterpart in several respects. It, too, presents a concrete situation involving different actors with partly conflicting and partly cooperative interests, and challenges the student to discover or invent an appropriate solution to the problem. But the case that business school students study is simply a set of facts and not, as in law school, a judicial opinion. The business school case is not a problem conceived and articulated from the point of view of one who is expected by virtue of his office to be single-mindedly concerned with the promotion of the common good. Though it also involves considerable role-playing, the business school case thus lacks the one role to which the case method as it is practiced in law schools gives the greatest emphasis, the role of the judge, and hence it cannot be said to teach, as directly or insistently, the attitude that distinguishes this role form others. The dominant perspective in business school cases is that of a manager, not of a judge, and while a manager may more than others be concerned with the overall well-being of his firm, because the firm is situated in a competitive environment populated by other firms, managers must also be partisans in a way that judges are not. The managerial perspective mixes communitarian and self-interested attitudes, and to that extent encourages less forcefully than the judicial point of view the spirit of civic-mindedness that the latter exemplifies in an unmixed form. * Anthony Kronman, The Lost Lawyer 109-21 (1993).

1.2 Lucy v. Zehmer 1.2 Lucy v. Zehmer

Supreme Court of Appeals of Virginia

196 Va. 493

Record No. 4272

1954-11-22

Richmond

W. O. Lucy and J. C. Lucy v. A. H. Zehmer and Ida S. Zehmer.

November 22, 1954.

Record No. 4272.

Present, Eggleston, Buchanan, Miller, Smith and Whittle, JJ.

The opinion states the case.

A. S. Harrison, Jr. and Emerson D. Baugh, for the appellants.

Morton G. Goode and William Earle White, for the appellees.

Buchanan, J.,

delivered the opinion of the court.

This suit was instituted by W. O. Lucy and J. C. Lucy, complainants, against A. H. Zehmer and Ida S. Zehmer, his wife, defendants, to have specific performance of a contract by which it was alleged the Zehmers had sold to W. O. Lucy a tract of land owned by A. H. Zehmer in Dinwiddie county containing 471.6 acres, more or less, known as the Ferguson farm, for $50,000. J. C. Lucy, the other complainant, is a brother of W. O. Lucy, to whom W. O. Lucy transferred a half interest in his alleged purchase.

The instrument sought to be enforced was written by A. H. Zehmer on December 20, 1952, in these words: “We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer,” and signed by the defendants, A. H. Zehmer and Ida S. Zehmer.

The answer of A. H. Zehmer admitted that at the time mentioned W. O. Lucy offered him $50,000 cash for the farm, but that he, Zehmer, considered that the offer was made in jest; that so thinking, and both he and Lucy having had several drinks, he wrote out “the memorandum” quoted above and induced his wife to sign it; that he did not deliver the memorandum to Lucy, but that Lucy picked it up, read it, put it in his pocket, attempted to offer Zehmer $5 to bind the bargain, which Zehmer refused to accept, and realizing for the first time that Lucy was serious, Zehmer assured him that he had no intention of selling the farm and that the whole matter was a joke. Lucy left the premises insisting that he had purchased the farm.

Depositions were taken and the decree appealed from was entered holding that the complainants had failed to establish their right to specific performance, and dismissing their bill. The assignment of error is to this action of the court.

W. O. Lucy, a lumberman and farmer, thus testified in substance: He had known Zehmer for fifteen or twenty years and had been familiar with the Ferguson farm for ten years. Seven or eight years ago he had offered Zehmer $20,000 for the farm which Zehmer had accepted, but the agreement was verbal and Zehmer backed out. On the night of December 20, 1952, around eight o’clock, he took an employee to McKenney, where Zehmer lived and operated a restaurant, filling station and motor court. While there he decided to see Zehmer and again try to buy the Ferguson farm. He entered the restaurant and talked to Mrs. Zehmer until Zehmer came in. He asked Zehmer if he had sold the Ferguson farm. Zehmer replied that he had not. Lucy said, “I bet you wouldn’t take $50,000.00 for that place.” Zehmer replied, “Yes, I would too; you wouldn’t give fifty.” Lucy said he would and told Zehmer to write up an agreement to that effect. Zehmer took a restaurant check and wrote on the back of it, “I do hereby agree to sell to W. O. Lucy the Ferguson Farm for $50,000 complete.” Lucy told him he had better change it to “We” because Mrs. Zehmer would have to sign it too. Zehmer then tore up what he had written, wrote the agreement quoted above and asked Mrs. Zehmer, who was at the other end of the counter ten or twelve feet away, to sign it. Mrs. Zehmer said she would for $50,000 and signed it. Zehmer brought it back and gave it to Lucy, who offered him $5 which Zehmer refused, saying, “You don’t need to give me any money, you got the agreement there signed by both of us.”

The discussion leading to the signing of the agreement, said Lucy, lasted thirty or forty minutes, during which Zehmer seemed to doubt that Lucy could raise $50,000. Lucy suggested the provision for having the title examined and Zehmer made the suggestion that he would sell it “complete, everything there,” and stated that all he had on the farm was three heifers.

Lucy took a partly filled bottle of whiskey into the restaurant with him for the purpose of giving Zehmer a drink if he wanted it. Zehmer did, and he and Lucy had one or two drinks together. Lucy said that while he felt the drinks he took he was not intoxicated, and from the way Zehmer handled the transaction he did not think he was either.

December 20 was on Saturday. Next day Lucy telephoned to J. C. Lucy and arranged with the latter to take a half interest in the purchase and pay half of the consideration. On Monday he engaged an attorney to examine the title. The attorney reported favorably on December 31 and on January 2 Lucy wrote Zehmer stating that the title was satisfactory, that he was ready to pay the purchase price in cash and asking when Zehmer would be ready to close the deal. Zehmer replied by letter, mailed on January 13, asserting that he had never agreed or intended to sell.

Mr. and Mrs. Zehmer were called by the complainants as adverse witnesses. Zehmer testified in substance as follows:

He bought this farm more than ten years ago for $11,000. He had had twenty-five offers, more or less, to buy it, including several from Lucy, who had never offered any specific sum of money. He had given them all the same answer, that he was not interested in selling it. On this Saturday night before Christmas it looked like everybody and his brother came by there to have a drink. He took a good many drinks during the afternoon and had a pint of his own. When he entered the restaurant around eight-thirty Lucy was there and he could see that he was “pretty high.” He said to Lucy, “Boy, you got some good liquor, drinking, ain’t you?” Lucy then offered him a drink. “I was already high as a Georgia pine, and didn’t have any more better sense than to pour another great big slug out and gulp it down, and he took one too.”

After they had talked a while Lucy asked whether he still had the Ferguson farm. He replied that he had not sold it and Lucy said, “I bet you wouldn’t take $5.0,000.00 for it.” Zehmer asked him if he would give $50,000 and Lucy said yes. Zehmer replied, “You haven’t got $50,000 in cash.” Lucy said he did and Zehmer replied that he did not believe it. They argued “pro and con for a long time,” mainly about “whether he had $50,000 in cash that he could put up right then and buy that farm.”

Finally, said Zehmer, Lucy told him if he didn’t believe he had $50,00,0, “you sign that piece of paper here and say you will take $50,000.00 for the farm.” He, Zehmer, “just grabbed the back off of a guest check there” and wrote on the back of it. At that point in his testimony Zehmer asked to see what he had written to “see if I recognize my own handwriting.” He examined the paper and exclaimed, “Great balls of fire, I got ‘Firgerson’ for Ferguson. I have got satisfactory spelled wrong. I don’t recognize that writing if I would see it, wouldn’t know it was mine.”

After Zehmer had, as he described it, “scribbled this thing off,” Lucy said, “Get your wife to sign it.” Zehmer walked over to where she was and she at first refused to sign but did so after he told her that he “was just needling him [Lucy], and didn’t mean a thing in the world, that I was not selling the farm.” Zehmer then “took it back over there and I was still looking at the dern thing. I had the drink right there by my hand, and I reached over to get a drink, and he said, ‘Let me see it.’ He reached and picked it up, and when I looked back again he had it in his pocket and he dropped a five dollar bill over there, and he said, ‘Here is five dollars payment on it.’ I said, ‘Hell no, that is beer and liquor talking. I am not going to sell you the farm. I have told you that too many times before.’ ”

Mrs. Zehmer testified that when Lucy came into the restaurant he looked as if he had had a drink. When Zehmer came in he took a drink out of a bottle that Lucy handed him. She went back to help the waitress who was getting things ready for next day. Lucy and Zehmer were talking but she did not pay too much attention to what they were saying. She heard Lucy ask Zehmer if he had sold the Ferguson farm, and Zehmer replied that he had not and did not want to sell it. Lucy said, “I bet you wouldn’t take $50,000 cash for that farm,” and Zehmer replied, “You haven’t got $50,000 cash.” Lucy said, “I can get it.” Zehmer said he might form a company and get it, “but you haven’t got $50,000.00 cash to pay me tonight.” Lucy asked him if he would put it in writing that he would sell him this farm. Zehmer then wrote on the back of a pad, “I agree to sell the Ferguson Place to W. O. Lucy for $50,000.00 cash.” Lucy said, “All right, get your wife to sign it.” Zehmer came back to where she was standing and said, “You want to put your name to this?” She said “No,” but he said in an undertone, “It is nothing but a joke,” and she signed it.

She said that only one paper was written and it said: “I hereby agree to sell,” but the “I” had been changed to “We”. However, she said she read what she signed and was then asked, “When you read We hereby agree to sell to W. O. Lucy,’ what did you interpret that to mean, that particular phrase?” She said she thought that was a cash sale that night; but she also said that when she read that part about “title satisfactory to buyer” she understood that if the title was good Lucy would pay $50,000 but if the title was bad he would have a right to reject it, and that that was her understanding at the time she signed her name.

On examination by her own counsel she said that her husband laid this piece of paper down after it was signed; that Lucy said to let him see it, took it, folded it and put it in his wallet, then said to Zehmer, “Let me give you $5.00,” but Zehmer said, “No, this is liquor talking. I don’t want to sell the farm, I have told you that I want my son to have it. This is all a joke.” Lucy then said at least twice, “Zehmer, you have sold your farm,” wheeled around and started for the door. He paused at the door and said, “I will bring you $50,000.00 tomorrow. No, tomorrow is Sunday. I will bring it to you Monday.” She said you could tell definitely that he was drinking and she said to her husband, “You should have taken him home,” but he said, “Well, I am just about as bad off as he is.”

The waitress referred to by Mrs. Zehmer testified that when Lucy first came in “he was mouthy.” When Zehmer came in they were laughing and joking and she thought they took a drink or two. She was sweeping and cleaning up for next day. She said she heard Lucy tell Zehmer, “I will give you so much for the farm,” and Zehmer said, “You haven’t got that much.” Lucy answered, “Oh, yes, I will give you that much.” Then “they jotted down something on paper and Mr. Lucy reached over and took it, said let me see it.” He looked at it, put it in his pocket and in about a minute he left. She was asked whether she saw Lucy offer Zehmer any money and replied, “He had five dollars laying up there, they didn’t take it.” She said Zehmer told Lucy he didn’t want his money “because he didn’t have enough money to pay for his property, and wasn’t going to sell his farm.” Both of them appeared to be drinking right much, she said.

She repeated on cross-examination that she was busy and paying no attention to what was going on. She was some distance away and did not see either of them sign the paper. She was asked whether she saw Zehmer put the agreement down on the table in front of Lucy, and her answer was this: “Time he got through writing whatever it was on the paper, Mr. Lucy reached over and said, ‘Let’s see it.’ He took it and put it in his pocket,” before showing it to Mrs. Zehmer. Her version was that Lucy kept raising his offer until it got to $50,000.

The defendants insist that the evidence was ample to support their contention that the writing sought to be enforced was prepared as a bluff or dare to force Lucy to admit that he did not have $50,000; that the whole matter was a joke; that the writing was not delivered to Lucy and no binding contract was ever made between the parties.

It is an unusual, if not bizarre, defense. When made to the writing admittedly prepared by one of the defendants and signed by both, clear evidence is required to sustain it.

In his testimony Zehmer claimed that he “was high as a Georgia pine,” and that the transaction “was just a bunch of two doggoned drunks bluffing to see who could talk the biggest and say the most.” That claim is inconsistent with his attempt to testify in great detail as to what was said and what was done. It is contradicted by other evidence as to the condition of both parties, and rendered of no weight by the testimony of his wife that when Lucy left the restaurant she suggested that Zehmer drive him home. The record is convincing that Zehmer was not intoxicated to the extent of being unable to comprehend the nature and consequences of the instrument he executed, and hence that instrument is not to be invalidated on that ground. 17 C. J. S., Contracts, § 133 b., p. 483; Taliaferro v. Emery, 124 Va. 674, 98 S. E. 627. It was in fact conceded by defendants’ counsel in oral argument that under the evidence Zehmer was not too drunk to make a valid contract.

The evidence is convincing also that Zehmer wrote two agreements, the first one beginning “I hereby agree to sell.” Zehmer first said he could not remember about that, then that “I don’t think I wrote but one out.” Mrs. Zehmer said that what he wrote was “I hereby agree,” but that the “I” was changed to “We” after that night. The agreement that was written and signed is in the record and indicates no such change. Neither are the mistakes in spelling that Zehmer sought to point out readily apparent.

The appearance of the contract, the fact that it was under discussion for forty minutes or more before it was signed; Lucy’s objection to the first draft because it was written in the singular, and he wanted Mrs. Zehmer to sign it also; the rewriting to meet that objection and the signing by Mrs. Zehmer; the discussion of what was to be included in the sale, the provision for the examination of the title, the completeness of the instrument that was executed, the taking possession of it by Lucy with no request or suggestion by either of the defendants that he give it back, are facts which furnish persuasive evidence that the execution of the contract was a serious business transaction rather than a casual, jesting matter as defendants now contend.

On Sunday, the day after the instrument was signed on Saturday night, there was a social gathering in a home in the town of McKenney at which there were general comments that the sale had been made. Mrs. Zehmer testified that on that occasion as she passed by a group of people, including Lucy, who were talking about the transaction, $50,000 was mentioned, whereupon she stepped up and said, “Well, with the high-price whiskey you were drinking last night you should have paid more. That was cheap.” Lucy testified that at that time Zehmer told him that he did not want to “stick” him or hold him to the agreement because he, Lucy, was too tight and didn’t know what he was doing, to which Lucy replied that he was not too tight; that he had been stuck before and was going through with it. Zehmer’s version was that he said to Lucy: “I am not trying to claim it wasn’t a deal on account of the fact the price was too low. If I had wanted to sell $50,000.00 would be a good price, in fact I think you would get stuck at $50,00.0.00.” A disinterested witness testified that what Zehmer said to Lucy was that “he was going to let him up off the deal, because he thought he was too tight, didn’t know what he was doing. Lucy said something to the effect that ‘I have been stuck before and I will go through with it.’ ”

If it be assumed, contrary to what we think the evidence shows, that Zehmer was jesting about selling his farm to Lucy and that the transaction was intended by him to be a joke, nevertheless the evidence shows that Lucy did not so understand it but considered it to be a serious business transaction and the contract to be binding on the Zehmers as well as on himself. The very next day he arranged with his brother to put up half the money and take a half interest in the land. The day after that he employed an attorney to examine the title. The next night, Tuesday, he was back at Zehmer’s place and there Zehmer told him for the first time, Lucy said, that he wasn’t going to sell and he told Zehmer, “You know you sold that place fair and square.” After receiving the report from his attorney that the title was good he wrote to Zehmer that he was ready to close the deal.

Not only did Lucy actually believe, but the evidence shows he was warranted in believing, that the contract represented a serious business transaction and a good faith sale and purchase of the farm.

In the field of contracts, as generally elsewhere, “We must look to the outward expression of a person as manifesting his intention rather than to his secret and unexpressed intention. ‘The law imputes to a person an intention corresponding to the reasonable meaning of his words and acts.’ ” First Nat. Bank v. Roanoke Oil Co., 169 Va. 99, 114, 192 S. E. 764, 770.

At no time prior to the execution of the contract had Zehmer indicated to Lucy by word or act that he was not in earnest about selling the farm. They had argued about it and discussed its terms, as Zehmer admitted, for a long time. Lucy testified that if there was any jesting it was about paying $50,000 that night. The contract and the evidence show that he was not expected to pay the money that night. Zehmer said that after the writing was signed he laid it down on the counter in front of Lucy. Lucy said Zehmer handed it to him. In any event there had been what appeared to be a good faith offer and a good faith acceptance, followed by the execution and apparent delivery of a written contract. Both said that Lucy put the writing in his pocket and then offered Zehmer $5 to seal the bargain. Not until then, even under the defendants’ evidence, was anything said or done to indicate that the matter was a joke. Both of the Zehmers testified that when Zehmer asked his wife to sign he whispered that it was a joke so Lucy wouldn’t hear and that it was not intended that he should hear.

The mental assent of the parties is not requisite for the formation of a contract. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party. Restatement of the Law of Contracts, Vol. I, § 71, p. 74.

"The law therefore, judges of an agreement between two persons exclusively from those expressions of their intentions which are communicated between them. Clark on Contracts, 4 ed., § 3, p. 4.

An agreement or mutual assent is of course essential to a valid contract but the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. If his words and acts, judged by a reasonable standard, manifest an intention to agree, it is immaterial what may be the. real but unexpressed state of his mind. 17 C. J. S., Contracts, § 32, p. 361; 12 Am. Jur., Contracts, § 19, p. 515.

So a person cannot set up that he was merely jesting when his conduct and words would warrant a reasonable person in believing that he intended a real agreement, 17 C. J. S., Contracts, § 47, p. 390; Clark on Contracts, 4 ed., § 27, at p. 54.

Whether the writing signed by the defendants and now sought to be enforced by the complainants was the result of a serious offer by Lucy and a serious acceptance by the defendants, or was a serious offer by Lucy and an acceptance in secret jest by the defendants, in either event it constituted a binding contract of sale between the parties.

Defendants contend further, however, that even though a contract was made, equity should decline to enforce it under the circumstances. These circumstances have been set forth in detail above. They disclose some drinking by the two parties but not to an extent that they were unable to understand fully what they were doing. There was no fraud, no misrepresentation, no sharp practice and no dealing between unequal parties. The farm had been bought for $11,000 and was assessed for taxation at $6,300. The purchase price was $50,000. Zehmer admitted that it was a good price. There is in fact present in this case none of the grounds usually urged against specific performance.

Specific performance, it is true, is not a matter of absolute or arbitrary right, but is addressed to the reasonable and sound discretion of the court. First Nat. Bank v. Roanoke Oil Co., supra, 169 Va. at p. 116, 192 S. E. at p. 771. But it is likewise true that the discretion which may be exercised is not an arbitrary or capricious one, but one which is controlled by the established doctrines and settled principles of equity; and, generally, where a contract is in its nature and circumstances unobjectionable, it is as much a matter of course for courts of equity to decree a specific performance of it as it is for a court of law to give damages for a breach of it. Bond v. Crawford, 193 Va. 437, 444, 69 S. E. (2d) 470, 475.

The complainants are entitled to have specific performance of the contracts sued on. The decree appealed from is therefore reversed and the cause is remanded for the entry of a proper decree requiring the defendants to perform the contract in accordance with the prayer of the bill.

Reversed and remanded.

1.3 Hamer v. Sidway ("Hamer I") 1.3 Hamer v. Sidway ("Hamer I")

New York Supreme Court

64 N.Y. Sup. Ct. 229

1890-07

LOUISA W. HAMER, Respondent, v. FRANKLIN SIDWAY, as Executor of the Last Will and Testament of WILLIAM E. STORY, Deceased, Appellant.

Promise to make a gift — evidence of delivery is essential to its enforcement — a rnotive for a promise is not a consideration therefor — statute of limitations — trust.

An uncle promised liis nephew that if he would not drink, smoke, play cards for money, or play billiards, until he was twenty-one years of age, he, the uncle, would give him $5,000 on that day.

Subsequently, on the nephew’s becoming of age, he wrote to his uncle as follows:

“lam twenty-one years old to-day and I am now my own boss, and I believe, according to agreement, that there is due me five thousand dollars. I have lived up to the contract to the letter in every sense of the word,” to which the uncle replied: “Tour letter of the 81st ult. came to hand all right, saying you had liyed up to the promise made to me several years ago. I have no doubt but what you have, for which you shall have five thousand dollars as I promised you.” The letter further stated that the writer had the money in the bank which he intended for his nephew, and which he should certainly have, further stating: “I do not intend to interfere with this money in any way until I think you are capable of taking care of it, and the sooner that time comes the better it will please me.”

In an action brought to recover this money:

Reid, that the word “gift ” signified a gratuitous transfer without any equivalent; that although the intention to give may be established by the most satisfactory evidence, and instruments to that effect may have been formally executed by the donor purporting to transfer title to the donee, or there may be the most explicit declaration of an intention to give, or of an actual present gift, yet unless . there is delivery the intention is defeated.

That as the gift in this case was not completed, by a delivery of the subject-matter of it, it was invalid and did not give a cause of action to the nephew for the recovery thereof.

That while there was a motive for this promise there was no consideration therefor.

That, even if it were assumed that there was a sufficient consideration to uphold the promise,, the claim of the nephew to this $5,000 accrued when he became twenty-one years of age, in 1875, and was consequently barred by the statute of limitations at the time that this action was brought in 1887.

That, in this case, there was no declaration of a trust under which the uncle was to hold this money, nor circumstances which showed that a trust was intended, and consequently the bar of the statute was not avoided.

Appeal by tbe defendant from a judgment, entered in tbe office of tbe clerk of tbe county of Cbemung on tbe 1st day of October, 1889, in favor of tbe plaintiff:, for $9,585.89 and interest and costs.

*230The action was brought in December, 1887, to recover $5,000, with interest from February 6, 1875, alleged, to be on deposit with William E. Story, the defendant’s testator, on the 6th day of February, 1875, which sum it was alleged that the said William E. Story had promised and agreed to pay whenever thereunto duly requested so to do.

Lewis <& Moot, for the appellant.

Swift <& Weaver, for the respondent.

Martin, J.:

The respondent seeks to uphold the recovery in this action primarily on the ground that, in March, 1869, the defendant’s testator promised his nephew, William E. Story (to whose rights the plaintiff claims to have succeeded), that if he would not drink, smoke, play cards for money or play billiards until he was twenty-one years of age, he, the testator, would give ,him $5,000 on that day, and that that transaction constituted a valid and binding contract between the parties which can be enforced against the testator’s estate.

Thus, at the threshold of this investigation, we are presented with the broad question, whether what occurred at that time amounted to a valid and binding contract. The nature and character' of this transaction will, perhaps, be better understood if we here group the evidence as to what was said and done by the parties. The testimony introduced by the plaintiff was to the effect that, in March, 1869, when the testator and William E. Story were attending the golden wedding of the father of the testator, he said to William, “Willie, I am going to make you a proposition. Willie told him he would like to hear it; ” that the testator then said, “ If you will not drink any liquor, will not smoke, will not play cards or billiards until you are twenty-one, I will give you five thousand dollars that day.” “ Of course, if you want to play for fun, that I don’t consider playing cards. Willie said he would endeavor to carry it out, that he would do it.” The plaintiff also proved by the witness, Maggie E. Judson, that she was in the employ of William’s father from 1864 for five or six years and boarded in the family; that during that time the testator frequently visited there, and during those visits she frequently heard Mm, when in conversation with the family, *231make the statement that he had $5,000 in bank for his nephew, William E. Story, and that on two occasions he made the statement to her that he had $5,000 on deposit in the bank for his little nephew, William E. Story, when he became of age. This witness further testified that she never heard him mention any contract between himself and his nephew. This nephew was only a child then of eight or ten years of age. On cross-examination the witness testified: “ Just what he said to me was, I have five thousand dollars on deposit in the bank at interest for Willie when he comes of age. He also said at the same time that when Willie came of age, if everything was favorable, he would start him in business and help him, and he said he thought this five thousand dollars would be something for him to look forward to that would stimulate him to do right; and if he was steady and industrious this would be a good start, and if he was not, this would be enough for him to squander.” The plaintiff also proved that the relations between the testator and his nephew were intimate.

When William became twenty-one years of age he wrote the testator the following letter:

“ Dear Hnole. — I am twenty-one years old to-day and I am now my own boss, and I believe, according to agreement, that there is due me $5,000. I have lived up to the contract to the letter in every sense of the word.”

The testator’s reply to this letter, so far as material to the questions involved in this case, was as follows:

“ Buffalo, February 26, 18Y5.

“ W. E. Story, Jr.:

“Dear Nephew. — Your letter of the thirty-first ult. came to hand all right saying you had lived up to the promise made to me several years ago. I have no doubt but what you have, for which you shall have $5,000 as I promised you. I had the money in the bank the day you were twenty-one years old that I intended for you, and you shall have the money certain. Now, Willie, I do not intend to interfere with this money in any way until 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 $5,000 I got together cost me a heap of hard *232work. * * * Willie, you are twenty-one and you have many a tiling to learn yet. This money you have earned muck 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. * * *

“ P. S. You can consider this money on interest.”

From this evidence can it be properly said that there was a valid contract between the parties by which the testator became legally bound to pay William E. Story $5,000 when he became twenty-one years of age if he refrained until that time from indulging in the habits mentioned? The appellant claims not. His contention is, that what occurred between the parties did not amount to and was not understood or intended by them as a legal and binding contract, but that it was simply a promise by the testator to make his nephew a gift of the sum of $5,000 when he became twenty-one years of age if he should abstain from the evil and unnecessary habits referred to. The evidence, we think, shows that such was the nature and effect of that transaction.

The promise of the testator, as testified to by the plaintiff’s witnesses, was that, if his nephew would refrain from smoking, drinking and gambling during his minority, he would give him $5,000 on the day he became of age. It will be observed that this promise was not that he would pay him that amount for any service to be performed for the testator, but that he would give him that amount as a gratuity, as an incentive to his nephew to become a sober and worthy man, free from evil and useless habits. In its ordinary and familiar signification the word “ give ” means to transfer gratuitously, without any equivalent. Presumably, the word was used m that sense by the testator. Hnless the evidence shows that it was used in some other sense, its ordinary signification should be given it. We find no sufficient evidence in this case to hold that the word. “ give ” was used otherwise than in its ordinary sense. The evidence of the witness Judson shows that when Willie was a child only eight or ten years of age the testator contemplated making him a gift of that sum when he became of age, and that he frequently mentioned his purpose in the family of his brother, and that he also contemplated starting him in business at that time if everything was favor*233■able. Thus the purpose of the testator would seem not to have been •a new one arising at that time, but one which had existed for years, and which was known to the family. This witness also testified that this contemplated gift was not only a subject of frequent conversation between the testator and his brother’s family, but that he ■conversed with her in relation to it upon at least two occasions, and still she never heard anything about any contract between the testator and William. This testimony tends to sustain the appellant’s •claim that the arrangement between the parties was in the nature .■of a promised gift by the testator.

But it may be said that the correspondence between the parties when William became of age tends to show that the arrangement • was as claimed by the respondent. It is true that William, in his letter to the testator, refers to the arrangement between them as an agreement or contract, and states that he believes there is his due $5,000, but in the testator’s reply to that letter he mentions the $5,000 ■only as a sum which he had promised to his nephew. In this letter there is nothing reflecting any light /upon the original transaction which shows that the testator recognized any legal liability or binding contract upon which lie regarded himself as indebted to his nephew. On the contrary, the testator’s letter is inconsistent with that idea, for, after stating that he had the money in the bank that he intended for him (William), and after he again promised that he should have it, the testator states unqualifiedly that he does not intend to interfere with this money in any way until he 'thinks William capable of taking care of it. Thus the testator, instead of recognizing any legal liability to pay the money when William became twenty-one years of age, treated the matter just as he doubtless understood it, as a promise to make a gift at that time, •and he then, in effect, refused to perfect the gift by delivery, but insisted upon retaining it under his own dominion, and control until he should think William capable of taking care of it. When this letter was received by William the evidence fails to show that he •objected to it, or claimed that he had any right to the money until ■such time as the testator should see fit to give it to him. This evidence is inconsistent with the existence of a valid contract, and ■consistent only with the appellant’s theory that this transaction was -a mere promise to make a gift, and that both parties so regarded it. *234We think the transaction between the testator and William E. Story-amounted to no more than a promise on the part of the testator that, he would give William $5,000 when he became twenty-one years of' age if he should prove himself worthy of it by abstaining from certain-useless, evil and expensive habits. As was said by Andrews, J., in Beaver v. Beaver (117 N. Y., 428, 429): “ The elements necessary to constitute a valid gift are well understood and are not the subject, of dispute. There must be on the part of the donor an intent to-give, and a delivery of the thing given, to or for the donee, in pursuance of such intent, and on the part of the donee, acceptance. The subject of the gift may be chattels, choses in action, or any form of personal property, and what constitutes a delivery may depend on the nature and situation of the thing given. The-delivery may be symbolical or actual, that is, by actually transferring the manual custody of the chattel to the donee, or giving to-him the symbol which represents possession. In case of bonds,, notes or choses in action, the delivery of the instrument which represents the debt is a gift of the debt, if that is the intention and so, also, where the debt is that of the donee it may be given, as. has been held, by the delivery of a receipt acknowledging payment.. ( Westerlo v. De Witt, 36 N. Y., 340; Gray v. Barton, 55 id., 72; 2 Schouler on Pers. Prop., § 66 et seq.) The acceptance, also, may be implied where the gift, otherwise complete, is beneficial to thedonee. But delivery by the donor, either actual or constructive, operating to divest the donor of possession of and dominion over-the thing, is a constant and essential factor in every transaction which takes effect as a completed ' gift. Anything short of' this strips it of the quality of completeness which distinguishes an intention to give, which alone amounts to nothing, from the consummated act, which changes the title. The intention to give is often established by most satisfactory evidence, although the gift fails. Instruments may be ever so formally executed by the donor, purporting to transfer title to the donee, or there may be the most: explicit declaration of an intention to give, or of an actual present, gift, yet unless there is delivery the intention is defeated. Several, cases of this kind have been recently considered by this court.. (Young v. Young, 80 N. Y., 438; Jackson v. Twenty-third St. Ry. Co., 88 id., 520; In re Crawford, 113 id., 560.)” Therefore,. *235as tbe gift in. this case was not completed by a delivery of the subject of it, it was invalid and could not form the basis of a recovery-in this action.

If, however, it could be held that the transaction between the-testator and William E. Story was intended by the parties as a valid agreement by the testator to pay his nephew $5,000 to induce him to abstain from smoking, drinking and gambling until he was-twenty-one years of age, still it would be very difficult to discover any sufficient consideration to uphold such an agreement. There was doubtless a motive for this promise, but was there a consideration ? There are many motives which may induce an agreement. which do not furnish sufficient consideration to uphold it. It may be that the testator was morally bound to keep his promise, but a-gratuitous promise, not under seal, however strong may be the motives, or even the moral duty on which it rests, will not be enforced by courts of justice. The doctrine that a moral obligation may become legally binding through an express promise, though formerly held in England and in the Enited States, has since been generally repudiated, except in Pennsylvania. That doctrine now forms no part of the jurisprudence of this State. Only a valuable consideration will uphold an executory contract. The consideration must be something of value, something either beneficial to one party or disadvantageous to the other in a pecuniary sense. How can it be said that William E. Story has performed any act which was in any pecuniary sense either beneficial to the testator or disadvantageous to himself by abstaining from. habits which would have been not only expensive, but which were unnecessary and evil in their tendency ?

The only case cited by the respondent which tends to give the slightest countenance to the doctrine contended for is that of Shadwell v. Shadwell (9 C. B. [N. S.] 169), but that case is clearly distinguishable from this. The decision in that case may well be sustained upon the ground that the plaintiff made a material change in his position and incurred additional pecuniary liabilities. While in the case cited it might be said that the nephew changed his position by his marriage, and thus incurred additional pecuniary liabilities at the request of his uncle, such is not the case at bar. If the nephew in this ease changed his position by abstaining from *236■expensive liabits which could in no way benefit him, it did not in any way add to his pecuniary liability, but could only have resulted to his pecuniary benefit. We doubt if there was any sufficient consideration to uphold an agreement between the testator and his nephew, even if the transaction between them were to be regarded .as such.

Again, if it were admitted that this agreement was intended as a ■contract between the parties, and not as a gift, and that the consideration was sufficient to uphold it, still the plaintiff’s right of recovery would be barred by the statute of limitations. If there was a contract between the parties, it was that the testator should pay his nephew $5,000 when he became twenty-one years of age. If this claim was ever due, it became due at that time. It was then that William demanded it, and the testator, in effect, declined to pay it until such time as he should think William capable of taking care ■of it. If William ever had a cause of action against the testator, it arose when he became twenty-one years of age and more than twelve years before the commencement of this action.

But it is claimed by the respondent that the letter of the testator, interpreted in the light of the surrounding circumstances, established a trust in favor of William and made the testator a trustee ■of the sum of $5,000 which he had promised William. The case of Martin v. Funk (75 N. Y., 134) and kindred cases are relied upon as sustaining that claim. The cases cited are to the effect that where a trust is declared, whether in a third person or in the donor, it is not essential that the property should be possessed by the cestui que trust, or that the latter should be informed of the trust.

It will be seen, by an examination of the cases relied upon, that they were cases where there was an unequivocal declaration of a trust. In the case at bar there was no declaration of a trust either by the testator’s letter or otherwise. There was no evidence in the case that the testator ever deposited any money in the bank in the name of his nephew, or that he ever deposited any in his own name as trustee for him. The letters and other proof were, at most, to the effect that the testator had money in the bank that he intended for William, with which he did not propose to interfere until he thought William capable of taking care of it, but that William could ■consider the money on interest. This evidence falls far short of the *237requirements necessary to create a valid trust, even under the authorities cited by the respondent. As was further said by Andrews, J\, in Beaver v. Beaver (supra), which was a case somewhat similar to this : “ To constitute a trust there must be either an explicit declara-, tion of trust, or circumstances which show beyond reasonable doubt that a trust was intended to be created. It would introduce a dangerous instability of titles if anything less was required, or if a voluntary trust -mter vivos could be established in the absence of express words, by circumstances capable of another construction, or consistent with a different' intention.” (See, also, Young v. Young, 80 N. Y., 422; Hone v. De Peyster, 3 How. Pr. [N. S.], 422; S. C., 103 N. Y., 662; In re Crawford, 113 id., 560.)

We are unable to discover any ground upon which it can be held that the testator intended to establish a trust in favor of William, or to constitute himself a trustee of the $5,000 in question. It. seems to us that the evidence, at most, discloses an unexecuted promise by the testator to give William $5,000 when he became of age, if he proved himself worthy of it, and that, upon his attaining his. majority, the testator again promised to make the same gift, with the addition of the interest, when he should consider his nephew capable of taking care of it. As there was in this case neither an express delaration of a trust, nor circumstances which show that a trust was intended, it follows that the recovery in this action cannot be sustained upon that ground.

Moreover, the evidence in this case is far from satisfactory. It tends to show quite clearly that the testator, during his lifetime, had fulfilled his promise to his nephew. Soon after the letter of the testator was written we find William engaged in business with his father. He had borrowed $2,500 of the testator, for which he gave his promissory note. Subsequently he, and his father failed in business and were declared bankrupts. In the schedules filed in that proceeding he makes no mention of any claim or debt against the testator, and when required to state any and all money or debts that were due or owing to him, he declared there were none except those which were mentioned, which did not include this claim.- He also declared upon his oath that there was no money held in trust for him by any one. After this the testator transferred to William and his father $11,000 worth of goods, for which he received two one *238thousand dollar notes and a general release under seal executed by both, which was broad enough to cover this claim.

The plaintiff seeks to avoid the effect of this evidence by proving that the plaintiff’s claim had been previously assigned by William to his wife, and that the testator knew of such assignment when the release was given. The credibility of that testimony is materially .shaken by the fact that when this action was brought no such assignment was alleged, but the plaintiff alleged in her complaint that she acquired title to this claim directly from William by an assignment made February 3, 1887. The plaintiff’s attorney, who drew that ■complaint, also swears that such an assignment was before him when he drew it. It may be that the assignment was made by William to his Avife, as alleged and proved, but it is certainly very remarkable that that fact should have been forgotten by them until the defendant pleaded a release as a defense to this action. It would seem that either William, his wife or the plaintiff, must have remembered the fact, if it existed, either when the claim against the testator’s estate Avas made, verified and presented, or when the original complaint in this action was prepared. Without stating the evidence in further detail, it certainly is not satisfactory to us. In a ease like this, where the estate of a dead man is assaulted by dissatisfied relatives, it is the duty of a court to scrutinize the evidence given to sustain such an assault quite carefully, and such a claim should be allowed only upon fair, reliable and consistent evidence, which shows that it is a just one. If there were no other questions in the case except the question whether the plaintiff’s claim had been paid and released, we should be inclined to regard it as our duty to grant a new trial upon the ground that the decision was against the weight of evidence. We are, however, of the opinion that there was no legal contract between the parties sufficient to uphold the recovery in this ease, and that the judgment should be reversed.

Hardin, P. J., and Merwin, J., concurred.

Judgment reversed and a new trial ordered, with costs to abide the event.

1.4 Hamer v. Sidway ("Hamer II") 1.4 Hamer v. Sidway ("Hamer II")

New York Court of Appeals

124 N.Y. 538

1891-04-14

124 N.Y. 538

Louisa W. Hamer, Appellant,
v.
Franklin Sidway, as Executor, etc., Respondent.

Court of Appeals of New York.
Argued February 24, 1981.
Decided April 14, 1891.

OPINION OF THE COURT

PARKER, J. 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.”

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.)

“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.)

“Any damage, or suspension, or forbearance of a right will be sufficient to sustain a promise.” (Kent, vol. 2, 465, 12th ed.)

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.”

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. Few cases have been found which may be said to be precisely in point, but such as have been support the position we have taken.

In Shadwell v. Shadwell (9 C. B. [N. S.] 159), an uncle wrote to his nephew as follows:

"MY DEAR LANCEY — I am so glad to hear of your intended marriage with Ellen Nicholl, and as I promised to assist you at starting, I am happy to tell you that I will pay to you 150 pounds yearly during my life and until your annual income derived from your profession of a chancery barrister shall amount to 600 guineas, of which your own admission will be the only evidence that I shall require.
“Your affectionate uncle,
“CHARLES SHADWELL.”

It was held that the promise was binding and made upon good consideration.

In Lakota v. Newton, an unreported case in the Superior Court of Worcester, Mass., the complaint averred defendant's promise that “if you (meaning plaintiff) will leave off drinking for a year I will give you $100,” plaintiff's assent thereto, performance of the condition by him, and demanded judgment therefor. Defendant demurred on the ground, among others, that the plaintiff's declaration did not allege a valid and sufficient consideration for the agreement of the defendant. The demurrer was overruled.

In Talbott v. Stemmons (a Kentucky case not yet reported), the step- grandmother of the plaintiff made with him the following agreement: “I do promise and bind myself to give my grandson, Albert R. Talbott, $500 at my death, if he will never take another chew of tobacco or smoke another cigar during my life from this date up to my death, and if he breaks this pledge he is to refund double the amount to his mother.” The executor of Mrs. Stemmons demurred to the complaint on the ground that the agreement was not based on a sufficient consideration. The demurrer was sustained and an appeal taken therefrom to the Court of Appeals, where the decision of the court below was reversed. In the opinion of the court it is said that

“the right to use and enjoy the use of tobacco was a right that belonged to the plaintiff and not forbidden by law. The abandonment of its use may have saved him money or contributed to his health, nevertheless, the surrender of that right caused the promise, and having the right to contract with reference to the subject-matter, the abandonment of the use was a sufficient consideration to uphold the promise.”

Abstinence from the use of intoxicating liquors was held to furnish a good consideration for a promissory note in Lindell v. Rokes (60 Mo. 249).

The cases cited by the defendant on this question are not in point. In Mallory v. Gillett (21 N. Y. 412); Belknap v. Bender (75 id. 446), and Berry v. Brown (107 id. 659), the promise was in contravention of that provision of the Statute of Frauds, which declares void all promises to answer for the debts of third persons unless reduced to writing. In Beaumont v. Reeve (Shirley's L. C. 6), and Porterfield v. Butler (47 Miss. 165), the question was whether a moral obligation furnishes sufficient consideration to uphold a subsequent express promise. In Duvoll v. Wilson (9 Barb. 487), and In re Wilber v. Warren (104 N. Y. 192), the proposition involved was whether an executory covenant against incumbrances in a deed given in consideration of natural love and affection could be enforced. In Vanderbilt v. Schreyer (91 N. Y. 392), the plaintiff contracted with defendant to build a house, agreeing to accept in part payment therefor a specific bond and mortgage. Afterwards he refused to finish his contract unless the defendant would guarantee its payment, which was done. It was held that the guarantee could not be enforced for want of consideration. For in building the house the plaintiff only did that which he had contracted to do. And in Robinson v. Jewett (116 N. Y. 40), the court simply held that “The performance of an act which the party is under a legal obligation to perform cannot constitute a consideration for a new contract.” It will be observed that the agreement which we have been considering was within the condemnation of the Statute of Frauds, because not to be performed within a year, and not in writing. But this defense the promisor could waive, and his letter and oral statements subsequent to the date of final performance on the part of the promisee must be held to amount to a waiver. Were it otherwise, the statute could not now be invoked in aid of the defendant. It does not appear on the face of the complaint that the agreement is one prohibited by the Statute of Frauds, and, therefore, such defense could not be made available unless set up in the answer. (Porter v. Wormser, 94 N. Y. 431, 450.) This was not done.

In further consideration of the questions presented, then, it must be deemed established for the purposes of this appeal, that on the 31st day of January, 1875, defendant's testator was indebted to William E. Story, 2d, in the sum of $5,000, and if this action were founded on that contract it would be barred by the Statute of Limitations which has been pleaded, but on that date the nephew wrote to his uncle as follows:

“DEAR UNCLE—I am now 21 years old to-day, and I am now my own boss, and I believe, according to agreement, that there is due me $5,000. I have lived up to the contract to the letter in every sense of the word."

A few days later, and on February sixth, the uncle replied, and, so far as it is material to this controversy, the reply is as follows:

"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 $5,000 as I promised you. I had the money in the bank the day you was 21 years old that I intended for you, and you shall have the money certain. Now, Willie, I don't intend to interfere with this money in any way until 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. . . . 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. . . .
W. E. STORY.
P. S.—You can consider this money on interest.”

The trial court found as a fact that “said letter was received by said William E. Story, 2d, who thereafter consented that said money should remain with the said William E. Story in accordance with the terms and conditions of said letter.”

And further,

“That afterwards, on the first day of March, 1877, with the knowledge and consent of his said uncle, he duly sold, transferred and assigned all his right, title and interest in and to said sum of $5,000 to his wife Libbie H. Story, who thereafter duly sold, transferred and assigned the same to the plaintiff in this action.”

We must now consider the effect of the letter, and the nephew's assent thereto. Were the relations of the parties thereafter that of debtor and creditor simply, or that of trustee and cestui que trust? If the former, then this action is not maintainable, because barred by lapse of time. If the latter, the result must be otherwise. No particular expressions are necessary to create a trust. Any language clearly showing the settler's intention is sufficient if the property and disposition of it are definitely stated. (Lewin on Trusts, 55.)

A person in the legal possession of money or property acknowledging a trust with the assent of the cestui que trust, becomes from that time a trustee if the acknowledgment be founded on a valuable consideration. His antecedent relation to the subject, whatever it may have been, no longer controls. (2 Story's Eq. §972.) If before a declaration of trust a party be a mere debtor, a subsequent agreement recognizing the fund as already in his hands and stipulating for its investment on the creditor's account will have the effect to create a trust. (Day v. Roth, 18 N. Y. 448.)

It is essential that the letter interpreted in the light of surrounding circumstances must show an intention on the part of the uncle to become a trustee before he will be held to have become such; but in an effort to ascertain the construction which should be given to it, we are also to observe the rule that the language of the promisor is to be interpreted in the sense in which he had reason to suppose it was understood by the promisee. (White v. Hoyt, 73 N. Y. 505, 511.) At the time the uncle wrote the letter he was indebted to his nephew in the sum of $5,000, and payment had been requested. The uncle recognizing the indebtedness, wrote the nephew that he would keep the money until he deemed him capable of taking care of it. He did not say “I will pay you at some other time,” or use language that would indicate that the relation of debtor and creditor would continue. On the contrary, his language indicated that he had set apart the money the nephew had 'earned' for him so that when he should be capable of taking care of it he should receive it with interest. He said: “I had the money in the bank the day you were 21 years old that I intended for you and you shall have the money certain.” That he had set apart the money is further evidenced by the next sentence: “Now, Willie, I don't intend to interfere with this money in any way until I think you are capable of taking care of it.” Certainly, the uncle must have intended that his nephew should understand that the promise not “to interfere with this money” referred to the money in the bank which he declared was not only there when the nephew became 21 years old, but was intended for him. True, he did not use the word “trust,” or state that the money was deposited in the name of William E. Story, 2d, or in his own name in trust for him, but the language used must have been intended to assure the nephew that his money had been set apart for him, to be kept without interference until he should be capable of taking care of it, for the uncle said in substance and in effect:

“This money you have earned much easier than I did . . . you are quite welcome to. I had it in the bank the day you were 21 years old and don't intend to interfere with it in any way until I think you are capable of taking care of it and the sooner that time comes the better it will please me.”

In this declaration there is not lacking a single element necessary for the creation of a valid trust, and to that declaration the nephew assented.

The learned judge who wrote the opinion of the General Term, seems to have taken the view that the trust was executed during the life-time of defendant's testator by payment to the nephew, but as it does not appear from the order that the judgment was reversed on the facts, we must assume the facts to be as found by the trial court, and those facts support its judgment.

The order appealed from should be reversed and the judgment of the Special Term affirmed, with costs payable out of the estate.

All concur.

Order reversed and judgment of Special Term affirmed.