1 CONTRACT LAW - Question 2 - Is There the Key Ingredient? 1 CONTRACT LAW - Question 2 - Is There the Key Ingredient?
1.1 Exploring Question 2 - Is There the Key Ingredient? 1.1 Exploring Question 2 - Is There the Key Ingredient?
This is the section on Question 2 - Is There the Key Ingredient? This is part of 3 guiding questions that will help us to determine whether a contract has been formed.
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1.2 Hamer v. Sidway 1.2 Hamer v. Sidway
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.
1.3 Kirksey v. Kirksey 1.3 Kirksey v. Kirksey
8 Ala. 131
KIRKSEY
v.
KIRKSEY.
JANUARY TERM, 1845.
Error to the Circuit Court of Talladega.
[132] ASSUMPSIT by the defendant, against the plaintiff in error. The question is presented in this Court, upon a case agreed, which shows the following facts:
The plaintiff was the wife of defendant's brother, but had for some time been a widow, and had several children. In 1840, the plaintiff resided on public land, under a contract of lease, she had held over, and was comfortably settled, and would have attempted to secure the land she lived on. The defendant resided in Talladega county, some sixty, or seventy miles off. On the 10th October, 1840, he wrote to her the following letter:
"Dear sister Antillico—Much to my mortification, I heard, that brother Henry was dead, and one of his children. I know that your situation is one of grief, and difficulty. You had a bad chance before, but a great deal worse now. I should like to come and see you, but cannot with convenience at present. . . . I do not know whether you have a preference on the place you live on, or not. If you had, I would advise you to obtain your preference, and sell the land and quit the country, as I understand it is very unhealthy, and I know society is very bad. If you will come down and see me, I will let you have a place to raise your family, and I have more open land than I can tend; and on the account of your situation, and that of your family, I feel like I want you and the children to do well."
Within a month or two after the receipt of this letter, the plaintiff abandoned her possession, without disposing of it, and removed with her family, to the residence of the defendant, who put her in comfortable houses, and gave her land to cultivate for two years, at the end of which time he notified her to remove, and put her in a house, not comfortable, in the woods, which he afterwards required her to leave.
A verdict being found for the plaintiff, for two hundred dollars, the above facts were agreed, and if they will sustain the action, the judgment is to be affirmed, otherwise it is to be reversed.
RICE, for plaintiff in error, cited 4 Johns. 235; 10 id. 246; 6 Litt. 101; 2 Cowen, 139; 1 Caine's, 47.
W. P. CHILTON and PORTER, for defendant in error, cited 1 Kinne's Law Com. 216, 218; Story on Con. 115; Chitty on Con. [133] 29; 18 Johns. 337 ; 2 Peters, 182 ; 1 Mar. 535; 5 Cranch, 142 ; 8 Mass. 200; 6 id. 58; 4 Maun. 63; 1 Conn. 519.
ORMOND, J.—The inclination of my mind, is, that the loss and inconvenience, which the plaintiff sustained in breaking up, and moving to the defendant's, a distance of sixty miles, is a sufficient consideration to support the promise, to furnish her with a house, and land to cultivate, until she could raise her family. My brothers, however think, that the promise on the part of the defendant, was a mere gratuity, and that an action will not lie for its breach. The judgment of the Court below must therefore be, reversed, pursuant to the agreement of the parties.
1.4 In Re Greene 1.4 In Re Greene
In re GREENE.
No. 48299.
District Court, S. D. New York.
Dec. 6, 1930.
Nathaniel J. Palzer, of New York City, for Irving Trust Co.
Sperry & Yankauer, of New York City (Walter D. Yankauer, of New York City, and Samuel Weinberg, of Brooklyn, N. Y., of counsel), for claimant Leila G. Trudel.
WOOLSEY, District Judge.
The petition for review is granted, and the order of the referee is reversed.
I. The claimant, a woman, filed proof of claim in the sum of $375,700, based on an alleged contract, against this bankrupt’s estate. The trustee in bankruptcy objected to the claim.
A hearing was held before the referee in bankruptcy and testimony taken.
The referee held the claim valid and dismissed the objections. The correctness of this ruling is raised by the trustee’s petition to review and the referee’s certificate.
II. For several years prior to April 28, 1926, the bankrupt, a married man, had apparently lived in adultery with the claimant. He gave her substantial'sums of money. He also paid $70,000 for a house on Long Island acquired by her, which she still owns.
Throughout their relations the bankrupt was a married man, and the claimant knew it. The claimant was well over thirty years of age when the connection began. She testified that the bankrupt has promised to marry her as soon as his wife should get a divorce from him; this the bankrupt- denied.
The relations of intimacy between them were discontinued in April, 1926, and they then executed a written instrument under seal which is alleged to be a binding contract and which is the foundation of the claim under consideration.
In this instrument, which was made in New York, the bankrupt undertook (1) to pay to the claimant $1,000 a month during their joint lives; (2) to assign to her a $100,000 life insurance policy on his life and to keep up the premiums on it for life, the *429 bankrupt to pay $100,000 to the claimant in case the policy should lapse for nonpayment of premiums; and (3) to pay the rent for four years on an apartment which she had leased.
it was declared in the instrument that the bankrupt had no interest in the Long Island house or in its contents, and that he should no longer be liable for mortgage interest, taxes, and other charges on this property.
The claimant on her part released the bankrupt from all claims whieh she had against him.
The preamble to the instrument recites as consideration the payment of $3 by the claimant to the bankrupt, “and other good and valuable considerations.”
The bankrupt kept up the seveial payments called for by the instrument until August, 1928, but failed to make payments thereafter.
III. In the proof of claim it is alleged that a total of $375,700 was due because of breach of the agreement, made up as follows; $250,000 for failure' to pay $1,000 a month; $99,200 for failure to maintain the insurance policy; and $26,500 for failure to pay the rent.
The claim was sustained by the referee for the full amount.
It seems clear that the $250,000 allowed as damages for failure to pay $1,000 a month was excessive. The bankrupt’s undertaking was to pay $1,000 a month only so long as both he and the claimant should live; it was not an annuity for the claimant’s life alone, as she seems to have assumed. There is nothing in the record to indicate the bankrupt’s age, and consequently there is a failure of proof as to this element of damage.
In view of my conclusion that the entire claim is void, however, the matter of damages is of no present importance.
IV. A contract for future illicit cohabitation is unlawful. There is consideration present in such a case, but the law strikes the agreement down as immoral. Williston on Contracts, § 1745.
Here the illicit intercourse had been abandoned prior to the making of the agreement, so that the above rule is not infringed. This case is one where the motive- whieh led the bankrupt to make the agreement on which the claim is based was the past illicit cohabitation between him and the claimant.
The law is that a promise to pay a woman on account of cohabitation which has ceased is void, not for illegality, but for want of consideration. The consideration in such a ease is past.
The more fact that past cohabitation is the motive for the promise will not of itself invalidate it, but the promise in such a ease* to be valid, must be supported by some consideration other than past intercourse. Williston on Contracts, §§ 148, 1745.
The problem in the present case, therefore, is one of consideration, not of illegality, and it is clear that the past illicit intercourse is not consideration.
The cases dealing with situations where there is illegitimate offspring or where there has been seduction are of doubtful authority, for the doctrine that past moral oblig-a11 on is consideration is now generally exploded. But these cases and others speaking of expiation of past wrong, cited by the referee, are not in point.
Here there was not any offspring as a result of the bankrupt’s union with the claimant; there was not any seduction shown in the sense in whieh that word is used in law. Cf. New York Penal Law, art. 195, § 2175. There was not any past wrong for which the bankrupt owed the claimant expiation—volenti non fit injuria.
Cases involving deeds, mortgages, and the like are not analogous, because no consideration is necessary in an executed transaction.
V. The question, therefore, is whether there was any consideration for the bankrupt's promises, apart from the past cohabitation. It seems plain that no such consideration can he found, but I will review the following points emphasized by the claimant as showing consideration:
(1) The $1 consideration recited in the paper is nominal. It cannot .seriously be urged that $1, recited but not even shown to have been paid, will support an executory promise to pay hundreds of thousands of dollars.
(2) “Other good and valuable considerations” are generalities that sound plausible, but the words cannot serve as consideration where the facts show that nothing good or valuable was actually given at the time the contract was made.
(3) It is said that the release of claims furnishes the necessary consideration. So it would if the claimant had had any claims to *430 release. But the evidence shows no vestige of any lawful claim. Release from imaginary claims is not valuable consideration for a promise. In this connection, apparently, the claimant testified that the bankrupt had promised to marry her as soon as he was divorced. Assuming that he did—though he denies it—the illegality of any such promise, made while the bankrupt was still married, is so obvious that no claim could • possibly arise from it, and the release of sueh claim could not possibly be lawful consideration.
(4) The claimant also urges that by the agreement the bankrupt obtained immunity from liability for taxes and other charges on the Long Island house. The fact is that he was never chargeable for these expenses. He doubtless had been in the habit of paying them, just as he had paid many other expenses for the claimant; but such payments were either gratuitous or were the contemporaneous price of the continuance of his illicit intercourse with the claimant.
It is absurd to suppose that, when a donor gives a valuable house to a donee, the fact that the donor need pay no taxes or upkeep thereafter on the property converts the gift into a contract upon consideration. The present case is even stronger, for the bankrupt had never owned the house and had never been liable for the taxes. He furnished the purchase price, but the conveyance was from the seller direct to the claimant.
(5) Finally, it is said that the parties intended to make a valid agreement. It is a non sequitur to say that therefore the agreement is valid.
A man may promise to make a gift to another, and may put the promise in the most solemn and formal document possible; but, bailing exceptional cases, such, perhaps, as charitable subscriptions, the promise will not be enforced. The parties may shout consideration to the housetops, yet, unless consideration is actually present, there is not a legally enforcible contract.
What the bankrupt obviously intended in this case was an agreement to make financial contribution to the claimant because of his past“eohabitation with her, and, as already pointed out, such an agreement lacks consideration.
Y. The presence of the seal would have been decisive in the claimant’s favor a hundred years ago. Then an instrument under seal required no consideration, or, to keep to the language of the cases, the seal was conclusive evidence of consideration. In New York, however, a seal is now only presumptive evidence of consideration on an executory instrument. Civil-Practice Act, § 342; Harris v. Shorall, 230 N. Y. 343, 348, 130 N. E. 572; Alexander v. Equitable Life Assurance Society, 233 N. Y. 300, 307, 135 N. E. 509. This presumption was amply rebutted in this case, for the proof clearly shows, I think, that there was not in fact any consideration for the bankrupt’s promise contained in the executory instrument signed by him and the claimant.
An order in accordance with this opinion may be submitted for settlement on two days’ notice.
1.5 Levine v. Blumenthal 1.5 Levine v. Blumenthal
WILLIAM LEVINE, PLAINTIFF-RESPONDENT, v. ANNE BLUMENTHAL AND ANNE BROOKS, DEFENDANTS-APPELLANTS.
Argued October 1, 1935
Decided July 15, 1936.
*24 Before Justices Heher and Perskie.
For the appellants, Bernstein & Altschuler (Jacob L. Bernstei n, of counsel).
For the respondent, Mortimer L. Mahler.
*25 The opinion of the court was delivered by
Heher, J.
By an indenture dated April 16th, 1931, plaintiff leased to defendants, for the retail merchandising of women’s wearing apparel, store premises situate in the principal business district of the city of Paterson. The term was two years, to commence on May 1st next ensuing, with an option of renewal for the further period of three years; and the rent reserved was $2,100 for the first year, and $2,400 for the second year, payable in equal monthly installments in advance.
The state of the case settled by the District Court judge sets forth that defendants adduced evidence tending to show that, in the month of April, 1932, before the expiration of the first year of the term, they advised plaintiff that “it was absolutely impossible for them to pay any increase in rent; that their business had so fallen down that they had great difficulty in meeting the present rent of $175 per month; that if the plaintiff insisted upon the increase called for in the lease, they would be forced to remove from the premises or perhaps go out of business altogether;” and that plaintiff “agreed to allow them to remain under the same rental ‘until business improved.’ ” While conceding that defendants informed him that “they could not pay the increase called for in the lease because of adverse business conditions,” plaintiff, on the other hand, testified that he “agreed to accept the payment of $175 each month, on account.” For eleven months of the second year of the term rent was paid by defendants, and accepted by plaintiff, at the rate of $175 per month. The option of renewal was not exercised; and defendants surrendered the premises at the expiration of the term, leaving the last month’s rent unpaid. This action was brought to recover the unpaid balance of the rent reserved by the lease for the second year — $25 per month for eleven months, and $200 for the last month.
The District Court judge found, as a fact, that “a subsequent oral agreement had been made to change and alter the terms of the written lease, with respect to the rent paid,” but that it was not supported by “a lawful consideration,” and therefore was wholly ineffective.
*26 The insistence is that the current trade depression had disabled the lessees in respect of the payment of the full rent reserved, and a consideration sufficient to support the secondary agreement arose out of these special circumstances; and that, in any event, the execution of the substituted performance therein provided is a defense at law, notwithstanding the want of consideration. The principle invoked is applied in Long v. Hartwell, 34 N. J. L. 116; Halpern v. Shurken, 98 N. J. Eq. 28; Frank Wirth, Inc., v. Essex Amusement Corp., 115 N. J. L. 228. It is said also that, “in so far as the oral agreement has become executed as to the payments which had fallen due and had been paid and accepted in full as per the oral agreement,” the remission of the balance of the rent is sustainable on the theory of gift, if not of accord and satisfaction — citing McKenzie v. Harrison, 120 N. Y. 260; 24 N. E. Rep. 458; Evans v. Lincoln Co., 204 Pa. 448; 54 Atl. Rep. 321; Malis v. Campo, 25 Pa. Dist. 32; 43 A. L. R. 1458.
It is not suggested that the primary contract under consideration was of a class which may not lawfully be modified by parol, except to the extent that the substituted performance has been actually and fully executed and accepted; and we are not therefore called upon to consider that question. See Kerzner v. Chanin, 98 N. J. L. 38; Long v. Hartwell, supra; Troth v. Millville Bottle Works, 89 Id. 219; Headley v. Cavileer, 82 Id. 635; Wilkinson v. Plaket, 5 N. J. Mis. R. 853; affirmed, 104 N. J. L. 451; Halpern v. Shurkin, supra. The point made by respondent is that the subsequent oral agreement to reduce the rent is nudum pactum, and therefore created no binding obligation.
It is elementary that the subsequent agreement; to impose the obligation of a contract, must rest upon a new and independent consideration. The rule was laid down in very early times that even though a part of a matured liquidated debt or demand has been given and received in full satisfaction thereof, the creditor may yet recover the remainder. The payment of a part was not regarded in law as a satisfaction of the whole, unless it was in virtue of an agreement *27 supported by a consideration. Pinnel’s Case, 5 Coke 117, a; 77 Eng. Reprint 237; Fitch v. Sutton, 5 East. 230; Foakes v. Beer, 9 App. Cas. 605; Cumber v. Wane, 1 Str. 426; Chicago, Milwaukee and St. Paul Railway Co. v. Clark, 178 U. S. 353; 20 S. Ct. 924; 44 L. Ed. 1099; Williston on Contracts (Rev. Ed.) §§ 120 et seq.; Anson on Contracts (Turck Ed.) 229, 234 et seq. The principle is firmly imbedded in our jurisprudence that a promise to do what the promisor is already legally bound to do is an unreal consideration. Schaefer v. Brunswick Laundry Co., 116 N. J. L. 268; Haynes Auto Repair Co. v. Wheels, Inc., 115 Id. 447; 180 Atl. Rep. 836; Durant v. Block, 113 N. J. L. 509 ; Decker v. Smith & Co., 88 Id. 630 ; Watts v. Frenche, 19 N. J. Eq. 407; Clyne v. Helmes, 61 N. J. L. 358; Chambers v. Niagara Fire Insurance Co., 58 Id. 216. It has been criticised, at least in some of its special applications, as “mediaeval” and wholly artificial — one that operates to defeat the “reasonable bargains of business men.” See Professor Ames’ Treatise, tit. “Two Theories of Consideration,” in 12 Harvard Law Review 515, 521; Chicago, Milwaukee and St. Paul Railway Co. v. Clark, supra; Sigler v. Sigler, 98 Kan. 524; 158 Pac. Rep. 864; Brooks v. White, 43 Mass. 283; Bolt v. Dawkins, 16 S. C. 198, 214; Wm. Lindeke Land Co. v. Kalman, 190 Minn. 601; 252 N. W. Rep. 650. But these strictures are not well grounded. They reject the basic principle that a consideration, to support a contract, consists either of a benefit to the promisor or a detriment to the promisee — a doctrine that has always been fundamental in our conception of consideration. It is a principle, almost universally accepted, that an act or forebearance required by a legal duty owing to the promisor that is neither doubtful nor the subject of honest and reasonable dispute is not a sufficient consideration. Williston on Contracts (Rev. Ed.), §§ 103b, 120, 130; Contracts A. L. I., § 76; Anson on Contracts {Turck Ed.) 229, 234, et seq.
Yet any consideration for the new undertaking, however insignificant, satisfies this rule. Coast National Bank v. Bloom, 113 N. J. L. 597. For instance, an undertaking to *28 pay part of the debt before maturity, or at a place other than where the obligor was legally bound to pay, or to pay in property, regardless of its value, or to effect a composition with creditors by the payment of less than the sum due, has been held to constitute a consideration sufficient in law. The test is whether there is an additional consideration adequate to support an ordinary contract, and consists of something which the debtor was not legally bound to do or give. Haynes Auto Repair Co. v. Wheels, Inc., supra; Sigler v. Sigler, supra; Bryant v. Proctor (14 B. Mon.), 53 Ky. 451; Hastings v. Lovejoy, 140 Mass. 261; 2 N. E. Rep. 776; White v. Walker, 31 Ill. 422; Lamb v. Rathburn, 118 Mich. 666; 77 N. W. Rep. 268; Evans v. Lincoln Co., supra; Jaffray v. Davis, 124 N. Y. 164; 26 N. E. Rep. 351; Bice v. Silver, 170 Ia. 255; 152 N. W. Rep. 498; Singer Sewing Machine Co. v. Lee, 105 Md. 663; 66 Atl. Rep. 628; Perkins v. Lockwood, 100 Mass. 249; Good v. Cheesman, 2 B. & Ad. 328; Williston on Contracts (Rev. Ed.), §§ 103b, 131; Anson on Contracts (Turck Ed.) 236, 250; 1 C. J. 541, 544, 545.
And there is authority for the view that, where there is no illegal preference, a payment of part of a debt, “accompanied by an agreement of the debtor to refrain from voluntary bankruptcy,” is a sufficient consideration for the creditor’s promise to remit the balance of the debt. But the mere fact that the creditor “fears that the debtor will go into bankruptcy, and that the debtor contemplates bankruptcy proceedings,” is not enough; that alone does not prove that the creditor requested the debtor to refrain from such proceedings. Melroy v. Kemmerer, 218 Pa. 381; 67 Atl. Rep. 699. See Williston on Contracts (Rev. Ed.), § 120, and cases cited in footnote.
The eases to the contrary either create arbitrary exceptions to the rule, or profess to find a consideration in the form of a new undertaking which in essence was not a tangible new obligation or a duty not imposed by the lease, or, in any event, was not the price “bargained for as the exchange for the promise” (see Coast National Bank v. Bloom, supra), and therefore do violence to the fundamental principle. They *29 exhibit the modera tendency, especially in the matter of rent reductions, to depart from the strictness of the basic common law rule and give effect to what has been termed a “reasonable” modification of the primary contract. See Bowman v. Wright, 65 Neb. 661: 91 N. W. Rep. 580; 92 Id. 580: Ten Eyck v. Sleeper, 65 Minn. 413; 67 N. W. Rep. 1026; Ossowski v. Wiesner, 101 Wis. 238; 77 N. W. Rep. 184; Hastings v. Lovejoy, supra; Evans v. Lincoln Co., supra; Nonamaker v. Amos, 73 Ohio St. 163; 76 N. E. Rep. 949; Lamb v. Rathburn, supra; Wm. Lindeke Land Co. v. Kalman, supra; Sigler v. Sigler, supra; While v. Walker, supra; Donellan v. Read, 3 B. & Ad. 899; 23 E. D. L. 215; 6 Eng. Rul. Cas. 298; Jaffray v. Greenbaum, 64 Iowa 492; 20 N. W. Rep. 775; Sargent v. Robertson, 17 Ind. App. 411; 46 N. E. Rep. 925; United Steel Co. v. Casey, 262 Fed. Rep. 889; Commercial Car Line v. Anderson, 224 Ill. App. 187; 43 A. L. R. 1456, 1458, 1478.
So tested, the secondary agreement at issue is not supported by a valid consideration; and it therefore created no legal obligation. General economic adversity, however disastrous it may be in its individual consequences, is never a warrant for judicial abrogation of this primary principle of the law of contracts.
It remains to consider the second contention that, in so far as the agreement has been executed by the payment and acceptance of rent at the reduced rate, the substituted performance stands, regardless of the want of consideration. This is likewise untenable. Ordinarily, the actual performance of that which one is legally bound to do stands on the same footing as his promise to do that which he is legally compellable to do. Anson on Contracts (Turck Ed.) 234; Willis ton on Contracts {Rev. Ed.), §§ 130, 130a. This is a corollary of the basic principle. Of course, a different rule prevails where bona fide disputes have arisen respecting the relative rights and duties of the parties to a contract, or the debt or demand is unliquidated, or the contract is wholly executory on both sides. Anson on Contracts (Turck Ed.) 240, 241.
*30 It is settled in this jurisdiction that, as in the case of other contracts, a consideration is essential to the validity of an accord and satisfaction. Haynes Auto Repair Co. v. Wheels, Inc., supra; Decker v. Smith & Co., supra; Union Cleaners and Dyers, Inc., v. Zeidman, 113 N. J. L. 86. On reason and principle, it could not be otherwise. This is the general rule. 1 Am. Jur. 235. The cases cited by appellant, Long v. Hartwell, supra; Halpern v. Shurken, supra, and Frank Wirth, Inc., v. Essex Amusement Corp., supra, are not in point. It results that the issue was correctly determined.
Judgment affirmed, with costs.
1.6 Alaska Packers' Ass'n v. Domenico 1.6 Alaska Packers' Ass'n v. Domenico
ROSS, Circuit Judge.
The libel in this case was based upon a contract alleged to have been entered into between the libelants and the appellant corporation on the 22d day of May, 1900, at Pyramid Harbor, Alaska, by which it is claimed the appellant promised to pay each of the libelants, among other things, the sum of $100 for services rendered and to be rendered. In its answer the respondent denied the execution, on its part, of the contract sued upon, averred that it was without consideration, and for a third defense alleged that the work performed by the libelants for it was performed under other and different contracts than that sued on, and that, prior to the filing of the libel, each of the libelants was paid by the respondent the full amount due him thereunder, in consideration of which each of them executed a full release of all his claims and demands against the respondent.
The evidence shows without conflict that on March 26, 1900, at the city and county of San Francisco, the libelants entered into a written contract with the appellant, whereby they agreed to go from San Francisco to Pyramid Harbor, Alaska, and return, on board such vessel as might be designated by the appellant, and to work for the appellant during the fishing season of 1900, at Pyramid Harbor, as sailors and fishermen, agreeing to do “regular ship’s duty, both up and down, discharging and loading; and to do any other work whatsoever when requested to do so by the captain or agent of the Alaska Packers’ Association.” By the terms of this agreement, the appellant was to pay each of the libelants $50 for the season, and two cents for each red salmon in the^ catching of which he took part.
On the 15th day of April, 1900, 21 of the libelants signed shipping articles by which they shipped as seamen on the Two Brothers, a vessel chartered by the appellant for the voyage between San Francisco and Pyramid Harbor, and also bound themselves to perform the same work for the appellant provided for by the previous contract of March 26th; the appellant agreeing to pay them therefor the sum of $60 for the season, and two cents each for each red salmon, in the catching of which they should respectively take part. Under these contracts, the libelants sailed on board the Two Brothers for Pyramid Harbor, where the appellant had about $150,000 invested in a salmon cannery. The libelants arrived there early in April of the year mentioned, and began *101to unload the vessel and fit up the cannery. A few days thereafter, to wit, May 19th, they stopped work in a body, and demanded of the company’s superintendent there in charge $100 for services in operating the vessel to and from Pyramid Harbor, instead of the sums stipulated for in and by the contracts; stating that unless they were paid this additional wage they would stop work entirely, and return to San Francisco. The evidence showed, and the court below found, that it was impossible for the appellant to get other men to take the places of the libelants, the place being remote, the season short and just opening; so that, after endeavoring for several days without success to induce the libelants to proceed with their work in accordance with their contracts, the company’s superintendent, on the 22d day of May, so far yielded to their demands as to instruct his clerk to copy the contracts executed in San Francisco, including the words “Alaska Packers’ Association” at the end, substituting, for the $50 and $60 payments, respectively, of those contracts, the sum of $100, which document, so prepared, was signed by the libelants before a shipping commissioner whom they had requested to be brought from Northeast Point; the superintendent, however, testifying that he at the time told the libelants that he was without authority to enter into any such contract, or to in any way alter, the contracts made between them and the company in San Francisco. Upon the return of the libelants to San Francisco at the close of the fishing .season, they demanded pay in accordance with the terms of the alleged contract of May 22d, when the company denied its validity, and refused to pay other than as provided for by the contracts of March 26th and April 5th, respectively. Some of the libelants, at least, consulted counsel, and, after receiving his advice, those of them who had signed the shipping articles before the shipping commissioner at San Francisco went before that officer, and received the amount due them thereunder, executing in consideration, thereof a release in full, and the others being paid at the office of the company, also receipting in full for their demands.
On the trial in the court below, the libelants undertook to show that the fishing nets provided by the respondent were defective, and that it was on that account that they demanded increased wages. On that point, the evidence was substantially conflicting, and the finding of the court was against the libelants, the court saying:
“Tlie contention of libelants that tbe nets provided them were rotten and unserviceable is not sustained by tbe evidence. The defendant’s interest required that libelants should be provided with every facility necessary to their success as fishermen, for on such success depended the profits defendant would be able to realize that season from its packing plant, and the large capital invested therein. In view of this self-evident fact, it is highly improbable that the defendant gave libelants rotten and unserviceable nets with which to fish. It follows from this finding that libelants were not justified in refusing performance of their original contract.” 112 Fed. 554.
The evidence being sharply conflicting in respect to these facts, the conclusions of the court, who heard and sáw the witnesses, will not be disturbed. The Alijandro, 6 C. C. A. 54, 56 Fed. 621; The Lucy, 20 C. C. A. 660, 74 Fed. 572; The Glendale, 26 C. C. A. 500, 81 Fed. 633; The Coquitlam, 23 C. C. A. 438, 77 Fed. 744; Gorham Mfg. Co. v. Emery-Bird-Thayer Dry Goods Co., 43 C. C. A. 511, 104 Fed. 243.
*102The real questions in the case as brought here are questions of law, and, in the view that we take of the case, it will be necessary to consider but one of those. Assuming that the appellant’s superintendent at Pyramid Harbor was authorized to make the alleged contract of May 22d, and that he executed it on behalf of the appellant, was it supported by a sufficient consideration? From the foregoing statement of the case, it will have been seen that the libelants agreed in writing, for certain stated compensation,'to render their services to the appellant in remote waters where the season for conducting fishing operations is extremely short, and in which enterprise the appellant had a large amount of money invested; and, after having entered upon the discharge of their contract, and at a time when it was impossible for the appellant to secure other men in their places, the libelants, without any valid cause, absolutely refused to continue the services they were under contract to perform unless the appellant would consent to pay them more money. Consent to such a demand, under such circumstances, if given, was, in our opinion, without consideration, for the reason that it was based solely upon the libelants’ agreement to render the exact services, and none other, that they were already under contract to render. The case shows that they willfully and arbitrarily broke that obligation. As a matter of course, they were liable to the appellant in damages, and it is quite probable, as suggested by the court below in its opinion, that they may have been unable to respond in damages. But we are unable to agree with the conclusions there drawn, from these facts, in these words:
“Under such circumstances, it would be strange, indeed, if the law would not permit the defendant to waive the damages caused by the libelants’ breach, and enter into the contract sued upon,—a contract mutually beneficial to all the parties thereto, in that it gave to the libelants reasonable compensation for their labor, and enabled the defendant to employ to advantage the large capital it had invested in its canning and fishing plant.”
Certainly, it cannot be justly held, upon the record in this case, that there was any voluntary waiver on the part of the appellant of the breach of the original contract. The company itself knew nothing of such breach until the expedition returned to San Francisco, and the testimony is uncontradicted that its superintendent at Pyramid Harbor, who, it is claimed, made on its behalf the contract sued on, distinctly informed the libelants that he had no power to alter the original or to make a new contract; and it would, of course, follow that, if he had no power to change the original, he would have no authority to waive any rights thereunder. The circumstances of the present case bring it, we think, directly within the sound and just observations of the supreme court of Minnesota in the case of King v. Railway Co., 61 Minn. 482, 63 N. W. 1105:
“No astute reasoning can change the plain fact that the party who refuses to perform, and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party. Surely it would be a travesty on justice to hold that the party so making the promise for extra pay was estopped from asserting that the promise was without consideration. A party cannot lay the founda*103tion of an estoppel by his own wrong, where the promise is simply a repetition of a subsisting legal promise. There can be no consideration for the promise of the other party, and there is no warrant for inferring that the parties have voluntarily rescinded or modified their contract. The promise cannot be legally enforced, although the other party has completed his contract in reliance upon it.”
In Lyingenfelder v. Brewing Co., 103 Mo. 578, 15 S. W. 844, the court, in holding void a contract by which the owner of a building agreed to pay its architect an additional sum because of his refusal to otherwise proceed with the contract, said:
“It is urged upon us by respondents that this was a new contract. New in what? Jungenfeld was bound by his contract to design and supervise this building. Under the new promise, he was not to do anything more or anything different What benefit was to accrue to Wainwright? He was to receive the same service from Jungenfeld under the new, that Jungenfeld was bound to tender under the original, contract. What loss, trouble, or inconvenience could result to Jungenfeld that he had not already assumed? No amount of metaphysical reasoning can change the plain fact that Jungenfeld took advantage of Wainwright’s necessities, and extorted the promise of five per cent, on the refrigerator plant as the condition of his complying with his contract already entered into. Nor had he even the flimsy pretext that Wainwright had violated any of the conditions of the contract on his part. Jungenfeld himself put it upon the simple proposition that ‘if he, as an architect, put up the brewery, and another company put up the refrigerating machinery, it would be a detriment to the Empire Refrigerating Company,’ of which Jungenfeld was president. To permit plaintiff to recover under such circumstances would be to offer a premium upon bad faith, and invite men to violate their most sacred contracts that they may profit by their own wrong. That a promise to pay a man for doing that which he is already under contract to do is without consideration is conceded by respondents. The rule has been so long imbedded in the common law and decisions of the highest courts of the various states that nothing but the most cogent reasons ought to shake it. [Citing a long list of authorities.] But it is ‘carrying coals to Newcastle’ to add authorities on a proposition so universally accepted, and so inherently just and right in itself. The learned counsel for respondents do not controvert the general proposition. Their contention is, and the circflit court agreed with them, that, when Jungenfeld declined to go further on his contract, the defendant then had the right to sue for damages, and not having elected to sue Jtragenfeld, but having acceded to his demand for the additional compensation, defendant cannot now be heard to say his promise is without consideration. While it is true Jungenfeld became liable in damages for the obvious breach of his contract, we do not think it follows that defendant is estopped from showing its promise was made without consideration. It is true that as eminent a jurist as Judge Cooley, in Goebel v. Linn, 47 Mich. 489, 11 N. W. 284, 41 Am. Rep. 723, held that an ice company which had agreed to furnish a brewery with all the ice they might need for their business from November 8, 1879, until January 1, 1881, at §1.75 per ton, and afterwards in May, 1880, declined to deliver any more ice unless the brewery would give it $3 per ton, could recover on a promissory note given for the increased price. Profound as is our respect for the distinguished judge who delivered the opinion, we are still of the opinion that his decision is not in accord with the almost universally accepted doctrine, and is not convincing; and certainly so much of the opinion as holds that the payment, by a debtor, of a part of his debt then due, would constitute a defense to a suit for the remainder, is not the law of this state, nor, do we think, of any other where the common law prevails. * * * What we hold is that, when a party merely does what he has already obligated himself to do, he cannot demand an additional compensation therefor; and although, by taking advantage of the necessities of his adversary, he obtains a promise for more, the law will regard it as nudum pactum, and will not lend its process to aid in the wrong.”
*104The case of Goebel v. Linn, 47 Mich. 489, 11 N. W. 284, 41 Am. Rep. 723, is one of the eight cases relied upon by the court below in support of its judgment in the present case, five of which are by the supreme court of Massachusetts, one by the supreme court of Vermont, and one other Michigan case,—that of Moore v. Locomotive Works, 14 Mich. 266. The Vermont case referred to is that of Lawrence v. Davey, 28 Vt. 264, which was one of the three cases cited by the court in Moore v. Locomotive Works, 14 Mich. 272, 273, as authority for its decision. In that case there was a contract to deliver coal at specified terms and rates. A portion of it was delivered, and plaintiff then informed the defendant that he could not deliver at those rates, and, if the latter intended to take advantage of it, he should not deliver any more; and that he should deliver no more unless the defendant would pay for the coal independent of the contract. The defendant agreed to do so, and the coal was delivered. On suit being brought for the price, the court said:
“Although the promise to waive the contract was after some portion of the coal sought to be recovered had been delivered, and so delivered that probably the plaintiff, if the defendant had insisted upon strict performance of the contract, could not have recovered anything for it, yet, nevertheless, the agreement to waive the contract, and the promise, and, above all, the delivery of coal after this agreement to waive the contract, and upon the faith of it, will be a sufficient consideration to bind the defendant to pay for the coal already received.”
The doctrine of that case was impliedly overruled by the supreme court of Vermont in the subsequent case of Cobb v. Cowdery, 40 Vt. 25, 94 Am. Dec. 370, where it was held that:
“A promise by a party to do what he is bound in law to do is not an illegal consideration, but is the same as no consideration at all, and is merely void; in other words, it is insufficient, but not illegal. Thus, if the master of a ship promise his crew an addition to their fixed wages in consideration of, and as an incitement to, their extraordinary exertions during a storm, or in any other emergency of the voyage, this promise is nudum pactum; the voluntary performance of an act which it was before legally incumbent on the party to perform being in law an insufficient consideration; and so it would be in any other case where the only consideration for the promise of one party was the promise of the other party to do, or his actual doing, something which he was previously bound in law to do. Chit. Cont. [10th Am. Ed.] 51; Smith, Cont. 87; 3 Kent, Comm. 185.”
The Massachusetts cases cited by the court below in support of its judgment commence with the case of Munroe v. Perkins, 9 Pick. 305, 20 Am. Dec. 475, which really seems to be the foundation of all of the cases in support of that view. In that case, the plaintiff had agreed in writing to erect a building for the defendants. Finding his contract a losing one, he had concluded to abandon it, and resumed work on the oral contract of the defendants that, if he would do so, they would pay him what the work was worth without regard to- the terms of the original contract. The court said that whether the oral contract was without consideration
—“Depends entirely on tbe question whether the first contract was waived. The plaintiff having refused to perform that contract, as he might do, subjecting himself to such damages as the other parties might show they were entitled to recover, he afterward went on, upon the faith of the new promise, and finished the work. This was a sufficient consideration. If Payne and *105Perkins were willing to accept his relinquishment of the old contract, and proceed on a new agreement, the law, we think, would not prevent it.”
The case of Goebel v. Linn, 47 Mich. 489, 11 N. W. 284, 41 Am. Rep. 723, presented some unusual and extraordinary circumstances. But, taking it as- establishing the precise rule adopted in the Massachusetts cases, we think it not only contrary to the weight of authority, but wrong on principle.
In addition to the Minnesota and Missouri cases above cited, the following are some of the numerous authorities holding the contrary doctrine: Vanderbilt v. Schreyer, 91 N. Y. 392; Ayres v. Railroad Co., 52 Iowa, 478, 3 N. W. 522; Harris v. Carter, 3 Ellis & B. 559; Frazer v. Hatton, 2 C. B. (N. S.) 512; Conover v. Stillwell, 34 N. J. Law, 54; Reynolds v. Nugent, 25 Ind. 328; Spencer v. McLean (Ind. App.) 50 N. E. 769, 67 Am. St. Rep. 271; Harris v. Harris (Colo. App.) 47 Pac. 841; Moran v. Peace, 72 Ill. App. 139; Carpenter v. Taylor (N. Y.) 58 N. E. 53; Westcott v. Mitchell (Me.) 50 Atl. 21; Robinson v. Jewett, 116 N. Y. 40, 22 N. E. 224; Sullivan v. Sullivan, 99 Cal. 187, 33 Pac. 862; Blyth v. Robinson, 104 Cal. 239, 37 Pac. 904; Skinner v. Mining Co. (C. C.) 96 Fed. 735; 1 Beach, Cont. § 166; Langd. Cont. § 54; 1 Pars. Cont. (5th Ed.) 457; Ferguson v. Harris (S. C.) 17 S. E. 782, 39 Am. St. Rep. 745.
It results from the views above expressed that the judgment must be reversed, and the cause remanded, with directions to the court below to enter judgment for the respondent, with costs. It is so ordered.
. See Admiralty, vol. 1, Cent. Dig. § 770.
1.7 Angel v. Murray 1.7 Angel v. Murray
Alfred L. Angel et al. vs. John E. Murray, Jr., Director of Finance of the City of Newport, et al.
JULY 22, 1974.
*484 Roberts, C. J.
This is a civil action brought by Alfred L. Angel and others against John E. Murray, Jr., Director of Finance of the City of Newport, the city of Newport, and James L. Maher, alleging that Maher had illegally been paid the sum of $20,000 by the Director of Finance and praying that the defendant Maher be ordered to repay the city such sum. The case was heard by a justice of the Superior Court, sitting without a jury, who entered a judgment 'Ordering Maher to repay the sum of $20,000 to the city of Newport. Maher is now before this court prosecuting an appeal.
The record discloses that Maher has provided the city of Newport with a refuse-collection service under a series of five-year contracts beginning in 1946. On March 12, 1964, Maher and the city entered into another such contract for a period of five years commencing, on July 1, 1964, and terminating on June 30, 1969. The contract provided, among other things, that Maher would receive $137,000 per year in return for collecting and removing all combustible and nonoombustible waste materials generated within the city.
In June of 1967 Maher requested an additional $10,000 per year from the city council because there had been a substantial increase in the cost of collection due to an unexpected and unanticipated increase of 400 new dwelling units. Maher’s testimony, which is uncontradicted, indicates the 1964 contract had been predicated on the fact that since 1946 there had been an average increase of 20 to 25 new dwelling units per year. After a public meeting of the city council where Maher explained in detail the reasons for his request and was questioned by members *485 of the city council, the city council agreed to pay him an additional $10,000 for the year ending on June 30, 1968. Maher made a similar request again in June of 1968 for the same reasons, and the city council again agreed to pay an additional $10,000 for the year ending on June 30, 1969.
The trial justice found that each such $10,000 payment was made in violation of law. His decision, as we understand it, is premised on two independent grounds. First,, he found that the additional payments were unlawful because they had not been recommended in writing to the city council by the city manager. Second, he found that Maher was not entitled to extra compensation because the original contract already required him to collect all refuse generated within the city and, therefore, included the 400' additional units. The trial justice further found that these 400 additional units were within the contemplation of the parties when they entered into the contract. It appears that he based this portion of the decision upon the rule that Maher had a preexisting duty to collect the refuse generated by the 400 additional units, and thus there was no consideration for the two additional payments.
I.
The first ground upon which the trial justice appears to have based his decision is that the action of the city council in amending the 1964 contract so as to provide for the additional compensation' violated §9-23 of the Charter of the City of Newport. Generally, §9-23 of the charter mandates that the purchase of or contract for supplies, materials, or equipment shall be on the basis of competitive bidding and that all contracts in which the amount involved exceeds $1,000 shall be awarded to the lowest responsible bidder after public notice, and gives the council power to reject all bids and to advertise for new bids. Said §9-23 goes on to provide specifically: *486 “Alterations in any contract entered into may be made when authorized by the ■council on the written recommendation of the manager.”
The record discloses that the original contract for refuse collection executed in 1964 was awarded after full compliance with the bidding provisions of §9-23. It is, however, also clear that neither award for additional compensation was made on the basis of a written recommendation therefor by the city manager. The trial justice found specifically that the pertinent language of §9-23 constitutes a limitation on the authority of the city council to amend an existing contract in that this section mandates that the authority to amend an existing contract can be exercised only when such action is recommended in writing by the city manager.
We are unable to agree. A literal reading of the pertinent provision of §9-23 does appear to give the city manager power to prevent the city council from amending an existing contract, however comprehensive might be the city council’s knowledge of the compelling need for such an amendment. However, in Rhode Island Consumers’ Council v. Public Utilities Commission, 107 R. I. 284, 267 A.2d 404 (1970), we reiterated our well-settled rule of statutory construction that this court will not undertake to read an enactment literally if to do so would result in attributing to the Legislature an intention that is contradictory of or inconsistent with the evident purposes of the act. We have consistently subscribed to the principle that a legislative enactment should be given what appears to be the meaning most consistent with its policy or obvious purposes. Mason v. Bowerman Bros., 95 R. I. 425, 187 A.2d 772 (1963); Zannelli v. DiSandro, 84 R. I. 76, 121 A.2d 652 (1956). These rules of statutory construction, in our opinion, apply also when this court is called upon to construe the provisions of a municipal charter. After *487 closely scrutinizing the provisions of the charter in the light of the above-stated rule, we conclude that, in adopting the pertinent provision of §9-23 of the charter, the people of Newport did not intend therein to limit in any way the authority of the city council to amend an existing contract.
In the first place, the charter makes clear the supremacy of the city council in the exercise of all of the powers of the city. The provision of §1-2 of the charter grants the city comprehensive powers, both express and implied. Section 1-1 thereof provides that “* * * all powers of the city shall be vested in an elective council, hereinafter referred to as ‘the council/ which shall enact local legislation, adopt budgets, determine policies, and appoint the city manager, who shall execute the laws and administer the government of the city.” The power to appoint or engage a city manager is provided for in §5-1 of the charter, which also provides that “[t]he relationship between the city and the city manager .shall be contractual and not that between a municipality and a civil officer.” The power to remove the city manager from office is vested in the city council by the provisions of §5-2, and in Nugent ex rel. Beck v. Leys, 88 R. I. 446, 454-55, 149 A.2d 716, 721 (1959), we held that under the Newport charter “* * * the people of Newport intended that the city manager should be an employee, as distinguished from a civil officer, and could be removed at the pleasure of the council.” In Nugent this court held: “Nowhere in the charter is there any language which persuades us that the status of the relator is anything but that of a mere employee subject to engagement and removal by the council in accordance with the procedure set forth in secs. 5-1 and 2.” Id. at 455, 149 A.2d at 721. The concept of intellectual consistency inhibits our subscribing to the view that the people of Newport intended to confer on the city manager a power to *488 thwart the city council in the matter of amending existing contracts and at the same time in the same charter deny him even minimal tenure in his employment.
We are persuaded, then, that in adopting the charter, the people intended to make the city manger an administrative arm of the city council and to charge him with the performance of such duties as could more conveniently be performed by him than by the city council. It is obvious that the charter contemplates that the city manager, pursuant to the provisions of §5-4, will be kept fully informed by the various municipal departments of the status of their operational affairs and of the financial condition of the city. In such circumstances he ordinarily would be aware of conditions that would warrant his bringing to the attention of the city council the need for the alteration of an existing contract in the city’s interest. Thus, in adopting §9-23 the people intended to require the city manager to make recommendations to the city council for action but not to preclude the city council from acting on its own where the circumstances would warrant such action. See Angel v. City of Newport, 109 R. I. 558, 288 A.2d 498 (1972). We, therefore, conclude that §9-23 does not operate to limit the authority of the city council to amend an existing contract.
II.
Having found that the city council had the power to modify the 1964 contract without the written recommendation of the city manager, we are still confronted with the question of whether the additional payments were illegal because they were not supported by consideration.
—A—
As previously stated, the city council made two $10,000 payments. The first was made in June of 1967 for the year beginning on July 1, 1967, and ending on June 30, 1968. *489 Thus, by the time this action was commenced in October of 1968, the modification was completely executed. That is, the money had been paid by the city council, and Maher had collected all of the refuse. Since consideration is only a test of the enforceability of executory promises, the presence or absence of consideration for the first payment is unimportant because the city council’s agreement to make the first payment was fully executed at the time of the commencement of this action. See Salvas v. Jussaume, 50 R. I. 75, 145 A. 97 (1929); Young Foundation Corp. v. A. E. Ottaviano, Inc., 29 Misc.2d 302, 216 N.Y.S.2d 448, aff’d 15 A.D.2d 517, 222 N.Y.S.2d 685 (1961); Sloan v. Sloan, 66 A.2d 799 (D.C. Mun. Ct.App. 1949); Hines v. Ward Baking Co., 155 F.2d 257 (7th Cir. 1946); Julian v. Gold, 214 Cal. 74, 3 P.2d 1009 (1931); 1 Williston, CW- tracts §130A at 543 (Jaeger 3d ed. 1957); Simpson, Contracts §58 at 102 (2d ed. 1965). However, since both payments were made under similar circumstances, our decision regarding the second payment (Part B, infra) is fully applicable to the first payment.
—B—
It is generally held that a modification of a contract is itself a contract, which is unenforceable unless supported by consideration. See Simpson, supra, §93. In Rose v. Daniels, 8 R. I. 381 (1866), this court held that an agreement by a debtor with a creditor to discharge a debt for a sum of money less than the .amount due is unenforceable because it was not supported by consideration.
Rose is a perfect example of the preexisting duty rule.. Under this rule an agreement modifying a contract is not. supported by consideration if one of the parties to the-agreement does or promises to do something that he is-, legally obligated to do or refrains or promises to refrain: from doing something he is not legally privileged to do,. *490 See Calamar & Perillo, Contracts §60 (1970); 1A Corbin, Contracts §§171-72 (1963); 1 Williston, supra, §130; Annot., 12 A.L.R.2d 78 (1950). In Bose there was no consideration for the new agreement because the debtor was already legally obligated to repay the full amount of the debt.
Although the preexisting duty rule is followed by most jurisdictions, a small minority of jurisdictions, Massachusetts, for example, find that there is consideration for a promise to perform what one is already legally obligated to do because the new promise is given in place of an action for damages to secure performance. See Swartz v. Lieberman, 323 Mass. 109, 80 N.E.2d 5 (1948); Munroe v. Perkins, 26 Mass. (9 Pick.) 298 (1830). Swartz is premised on the theory that a promisor’s forbearance of the power to breach his original .agreement and be sued in an action for damages is consideration for a subsequent agreement by the promisee to pay extra compensation. This rule, however, has been widely criticized as an anomaly. See Calamar & Perillo, supra, §61; Annot., 12 A.L.R.2d 78, 85-90 (1950).
The primary purpose of the preexisting duty rule is to prevent what has been referred to as the “hold-up game.” See 1A Corbin, supra, §171. A classic example of the “hold-up game” is found in Alaska Packers’ Ass’n v. Domenico, 117 F. 99 (9th Cir. 1902). There 21 seamen entered into a written contract with Domenico to sail from San Francisco to Pyramid Harbor, Alaska. They were to work as sailors and fishermen out of Pyramid Harbor during the fishing season of 1900. The contract specified that each man would be paid $50 plus two cents for each red salmon he caught. Subsequent to their arrival at Pyramid Harbor, the men stopped work and demanded an additional $50. They threatened to return to San Francisco if Domenico did not agree to their demand. Since it was *491 impossible for Domenico to find other men, he agreed to pay the men an additional $50. After they returned to San Francisco, Domenico refused to pay the men an additional $50. The court found that the subsequent agreement to pay the men an additional $50 was not supported by consideration because the men had a preexisting duty to work on the ship under the original contract, and thus the subsequent agreement was unenforceable.
Another example of the “hold-up game” is found in the area of construction contracts. Frequently, a contractor will refuse to complete work under an unprofitable contract unless he is awarded additional compensation. The courts have generally held that a subsequent agreement to award additional compensation is unenforceable if the contractor is only performing work which would have been required of him under the original contract. See, e.g., Lingenfelder v. Wainwright Brewing Co., 103 Mo. 578, 15 S.W. 844 (1891), which is a leading case in this area. See also cases collected in Annot., 25 A.L.R. 1450 (1923), supplemented by Annot., 55 A.L.R. 1333 (1928), and Annot., 138 A.L.R. 136 (1942); cf. Ford & Denning v. Shepard Co., 36 R. I. 497, 90 A. 805 (1914).
These examples clearly illustrate that the courts will not enforce an agreement that has been procured by coercion or duress and will hold the parties to their original contract regardless of whether it is profitable or unprofitable. However, the courts have been reluctant to apply the preexisting duty rule when a party to a contract encounters unanticipated difficulties and the other party, not influenced by coercion or duress, voluntarily agrees to pay additional compensation for work already required to be performed under the contract. For example, the courts-have found that the original contract was rescinded, Linz v. Schuck, 106 Md. 220, 67 A. 286 (1907); abandoned, Connelly v. Devoe, 37 Conn. 570 (1871), or waived, *492 Michaud v. MacGregor, 61 Minn. 198, 63 N.W. 479 (1895).
Although the preexisting duty rule has served a useful purpose insofar as it deters parties from using coercion and duress to obtain additional compensation, it has been widely criticized as a general rule of law. With regard to the preexisting duty rule, one legal scholar has stated: “There has been a growing doubt as to the soundness of this doctrine as a matter of social policy. * * * In certain classes of cases, this doubt has influenced courts to refuse to apply the rule, or to ignore it, in their actual decisions. Like other legal rules, this rule is in process of growth and change, the process being more active here than in most instances. The result of this is that a court should no longer accept this rule as fully established. It should never use it as the major premise of a decision, at least without giving careful thought to the circumstances of the particular case, to the moral deserts of the parties, and to the social feelings and interests that are involved. It is ■certain that the rule, stated in general and all-inclusive terms, is no longer so well-settled that a court must apply it though the heavens fall.” 1A Corbin, supra, §171; see also Calamari & Perillo, supra, §61.
The modern trend appears to recognize the necessity that courts should enforce agreements modifying contracts when unexpected or unanticipated difficulties arise during the course of the performance of a contract, even though there is no consideration for the modification, as long as the parties agree voluntarily.
Under the Uniform Commercial Code, §2-209(1), which has been adopted by 49 states, “[a]n agreement modifying a contract [for the sale of goods] needs no consideration to be binding.” See G. L. 1956 (1969 Reenactment) §6A-2-209(l). Although at first blush this section appears to validate modifications obtained by coercion and duress, the comments to this section indicate that a modification *493 under this section must meet the test of good faith imposed by the Code, and a modification obtained by extortion without a legitimate commercial reason is unenforceable.
The modern trend away from a rigid application of the preexisting duty rule is reflected by §89D(a) of the American Law Institute's Restatement Second of the Law of Contracts, 1 which provides: “A promise modifying a duty under a contract not fully performed on either side is binding (a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made * *
We believe that §89D(a) is the proper rule of law and find it applicable to the facts of this case. 2 It not only prohibits modifications obtained by coercion, duress, or extortion but also fulfills society's expectation that agreements entered into voluntarily will be enforced by the *494 courts. 3 See generally Horwitz, The Historical Foundations of Modern Contract Law, 87 Harv. L. Rev. 917 (1974). Section 89D(a), of course, does not compel a modification of .an unprofitable or unfair contract; it only enforces a modification if the parties voluntarily agree and if (1) the promise modifying the original contract was made before the contract was fully performed on either side, (2) the *495 underlying circumstances which prompted the modification were unanticipated by the parties, and (3) the modification is fair and equitable.
The evidence, which is uncontradicted, reveals that in June of 1968 Maher requested the city council to pay him ■an additional $10,000 for the year beginning on July 1, 1968, and ending on June 30, 1969. This request was made at ia public meeting of the city council, where Maher explained in detail his reasons for making the request. Thereafter, the city council voted to authorize the Mayor to sign an amendment to the 1954 contract which provided that Maher would receive an additional $10,000 per year for the duration of the contract. Under such circumstances we have no doubt that the city voluntarily agreed to modify the 1964 contract..
Having determined the voluntariness of this agreement, we turn our attention to the three criteria delineated above. First, the modification was made in June of 1968 at a time when the five-year contract which was made in 1964 had not been fully performed by either party. Second, although the 1964 contract provided that Maher collect all refuse generated within the city, it appears this contract was premised on Maher’s past experience that the number of refuse-generating units would increase at a rate of 20 to 25 per year. Furthermore, the evidence is uncontradicted that the 1967-1968 increase of 400 units “went beyond any previous expectation.” Clearly, the circumstances which prompted' the city council to modify the 1964 contract were unanticipated. 4 Third, although the *496 evidence does not indicate what proportion of the total this increase oomprised, the evidence does indicate that it was a “substantial” increase. In light of this, we cannot say that the council’s agreement to pay Maher the $10,000 increase was not fair and equitable in the circumstances.
Vernon A. Harvey, for plaintiffs.
Moore, Virgadamo, Boyle & Lynch, Ltd., Jeremiah C. Lynch, Jr., for defendants.
The judgment appealed from is reversed, and the cause is remanded to the Superior Court for entry of judgment for the defendants.
The first nine chapters of the Restatement Second of the Law of Contracts were given tentative approval by the American Law Institute at successive meetings from 1964 to 1972. These chapters, which include §§1-255, were published by the Institute in 1973 in a hard-cover edition. Herbert Wechsler, Director of the Institute, in a foreword to this edition indicates that although these sections are still tentative and await final approval, it is unlikely that any further changes will be made.
The fact that these additional payments were made by a municipal corporation rather than a private individual does not, in our opinion, affect the outcome of this case. Unlike many other jurisdictions, there is no constitutional or statutory restriction in this state limiting the power of a city or town to award extra compensation to a private contractor. See, e.g., McGovern v. City of New York, 234 N.Y. 377, 138 N.E. 26 (1923); Annot., 25 A.L.R. 1450 (1923), supplemented by Annot., 55 A.L.R. 1333 (1928), and Annot., 138 A.L.R. 136 (1942). Absent such limitation, a city or town may modify an existing contract in precisely the same manner as a private individual as long as the modification is reasonable and proper. See Arnold v. Mayor of Pawtucket, 21 R. I. 15, 19, 41 A. 576, 578 (1898).
The drafters of §89D(a) of the Restatement Second of the Law of Contracts use the following illustrations in comment (b) as examples of how this rule is applied to certain transactions:
“1. By a written contract A agrees to excavate a cellar for B for a stated price. Solid rock is unexpectedly encountered and A so notifies B. A and B then orally agree that A will remove the rock at a unit price which is reasonable but nine times that used in computing the original price, and A completes the job. B is bound to pay the increased amount.
“2. A contracts with B to supply for $300 a laundry chute for a building B has contracted to build for the government for $150,000. Later A discovers that he made an error as to the type of material to be used and should have bid $1,200. A offers to supply the chute for $1,000, eliminating overhead and profit. After ascertaining that other suppliers would charge more, B agrees. The new agreement is binding.
"3. A is employed by B as a designer of coats at $90 a week for a year beginning November 1 under a written contract executed September 1. A is offered $115 a week by another employer and so informs B. A and B then agree that A will be paid $100 a week and in October execute a new written contract to that effect, simultaneously tearing up the prior contract. The new contract is binding.
“4. A contracts to manufacture and sell to B 2,000 steel roofs for com cribs at $60. Before A begins manufacture a threat of a nationwide steel strike raises the cost of steel about $10 per roof, and A and B agree orally to increase the price to $70 per roof. A thereafter manufactures and delivers 1,700 of the roofs, and B pays for 1,500 of them at the increased price without protest, increasing the selling price of the corn cribs by $10. The new agreement is binding.
“5. A contracts to manufacture and sell to B 100,000 castings for lawn mowers at 50 cents each. After partial delivery and after B has contracted to sell a substantial number of lawn mowers at a fixed price, A notifies B that increased metal costs require that the price be increased to 75 cents. Substitute castings are available at 55 cents, but only after several months delay. B protests but is forced to agree to the new price to keep its plant in operation. The modification is not binding.”
The trial justice found that sec. 2(a) of the 1964 contract precluded Maher from recovering extra compensation for the 400 additional units. Section 2(a) provided: “The Contractor, having made his proposal after his own examinations and estimates, shall take all responsibility for, and bear, any losses resulting to him in carrying out the contract- and shall assume the defence of, and hold the City, its agents and employees *496 harmless from all suits and claims arising from the use of any invention, patent, or patent rights, material, labor or implement, by or from any act, omission or neglect of, the Contractor, his agents or employees, in carrying out the contract.” (Emphasis added). The trial justice, quoting the italicized portion of sec. 2(a), found that this section required that any losses incurred in the performance of the contract were Maher’s responsibility. In our opinion, however, the trial justice overlooked the thrust of sec. 2(a) when read in its entirety.
It is clearly a contractual provision requiring the contractor to hold the city harmless and to defend it in any litigation arising out of the performance of his obligations under the contract, whether a result of affirmative action or some omission or neglect on the part of Maher or his agents or employees. We are persuaded that the portion of sec. 2(a) specifically referred to by the court refers to losses resulting to Maher from some action or omission on the part of his own agents or employees. It cannot be disputed, however, that any losses that resulted from an increase in the cost of collecting from the increased number of units generating refuse in no way resulted from any action on the part of either Maher or his employees. Rather, whatever losses he did entail by reason of the requirement of such extra collection resulted from ■actions completely beyond his control and thus unanticipated.
1.8 Mills v. Wyman 1.8 Mills v. Wyman
Daniel Mills versus Seth Wyman.
The general position, that a moral obligation is a sufficient consideration for an express promise, is to be limited in its application, to cases where a good or valuable consideration has once existed.
Thus, where a son, who was of full age and had ceased to be a member of his father’s family, was suddenly taken sick among strangers, and, being poor and in distress, was relieved by the plaintiff, and afterwards the father wrote to the plaintiff promising to pay him the expenses incurred, it was held, that such promise would not sustain an action.
This was an action of assumpsit brought to recover a com pensation for the board, nursing, &c., of Levi Wyman, son ol the defendant, from the 5th to the 20th of February, 1821. The plaintiff then lived at Hartford, in Connecticut; the defendant, at Shrewsbury, in this county. Levi Wyman, at the time when the services were rendered, was about 25 years of age, and had long ceased to be a member of his father’s family. He was on his return from a voyage at sea, and being suddenly taken sick at Hartford, and being poor and in distress, was relieved by the plaintiff in the manner and to the extent above stated. On the 24th of February, after all the expenses had been incurred, the defendant wrote a letter to the plaintiff, promising to pay him such expenses. There was no consideration for this promise, except what grew out of the relation which subsisted between Levi Wyman and the defendant, and Howe J., before whom the cause was tried in the Court of Common Pleas, thinking this not sufficient to support the action, directed a nonsuit. To this direction the plaintiff filed exceptions.
J. .Davis and Allen m support of the exceptions.
The moral obligation of a parent to support his child is a sufficient consideration for an express promise. Andover &c. Turnpike Corp. v. Gould, 6 Mass. R. 40; Andover v. Salem, 3 Mass. R. 438; Davenport v. Mason, 15 Mass. R. 94 ; 1 Bl. Comm. 446 ; Reeve’s Dom. Rel. 283. The arbitrary rule of law, fixing the age of twenty-one years for the period of emancipation, does not interfere with this moral obligation, in case a child of full age shall be unable to support himself. Our statute of 1793, c. 59, requiring the kindred of a poor *208person to support him, proceeds upon the ground of a :iora obligation.
But if there was no moral obligation on the part of the defendant, it is sufficient that his promise was in writing, and was made deliberately, with a knowledge of all the circumstances A man has a right to give away his property. [Parker C. J. There is a distinction between giving and promising.] The case of Bowers v. Hurd, 10 Mass. R. 427, does not take that distinction. [Parker C. J. That case has been doubted.] Neither does the case of Packard v. Richardson, 17 Mass. R. 122 ; and in this last case (p. 130) the want of consideration is treated as a technical objection.
Brigham, for the defendant,
furnished in vacation a written argument, in which he cited Fowler v. Shearer, 7 Mass. R. 22 ; Rann v. Hughes, 7 T. R. 350, note ; Jones v. Ashburnham, 4 East, 463; Pearson v. Pearson, 7 Johns. R. 26 ; Schoonmaker v. Roosa, 17 Johns. R. 301 ; the note to Wennall v. Adney, 3 Bos. & Pul. 249 ; Fink v. Cox, 18 Johns. R. 145 ; Barnes v. Hedley, 2 Taunt. 184 ; Lee v. Muggeridge, 5 Taunt. 36. He said the case of Bowers v. Hurd was upon a promissory note, where the receipt of value is acknowledged ; which is a privileged contract. Livingston v. Hastie, 2 Caines’s R. 246 ; Bishop v. Young, 2 Bos. & Pul. 79, 80 ; Pillans v. Mierop, 3 Burr. 1670 ; 1 Wms’s Saund 211, note 2.
The opinion of the Court was read, as drawn up by
General rules of law established for tho protection and security of honest and fair-minded men, who may inconsiderately make promises without any equivalent, will sometimes screen men of a different character from engagements which they are bound in foro consciehtice to perform. This is a defect inherent in all human systems of legislation. The rule that a mere verbal promise, without any consideration, cannot be enforced by action, is universal in its application, and cannot be departed from to suit particular cases m which a refusal to perform such a promise may be disgraceful.
The promise declared on in this case appears to have been made without any legal consideration. The kindness and set-vices towards the sick son of the defendant were not bestowed *209at his request. The son was in no respect under the care of the defendant. He was twenty-five years old, and had long left his father’s family. On his return from a foreign country, he fell sick among strangers, and the plaintiff acted the part oi the good Samaritan, giving him shelter and comfort until he died. The defendant, his father, on being informed of this event, influenced by a transient feeling of gratitude, promises in writing to pay the plaintiff for the expenses he had incurred. But he has determined to break this promise, and is willing to have his case appear on record as a strong example of particular injustice sometimes necessarily resulting from the operation of general rules.
It is said a moral obligation is a sufficient consideration to support an express promise ; and some authorities lay down the rule thus broadly ; but upon examination of the cases we are satisfied that the universality of the rule cannot be supported, and that there must have been some preexisting obligation, which has become inoperative by positive law, to form a basis for an effective promise. The cases of debts barred by the statute of limitations, of debts incurred by infants, of debts of bankrupts, are generally put for illustration of the rule. Ex press promises founded on such preexisting equitable obligations may be enforced ; there is a good consideration for them ; they merely remove an impediment created by law to the recovery of debts honestly due, but which public policy protects the debtors from being compelled to pay. In all these cases there was originally a quid pro quo ; and according to the principles of natural justice the party receiving ought to pay ; but the legislature has said he shall not be coerced ; then comes the promise to pay the debt that is barred, the promise of the man to pay the debt of the infant, of the discharged bankrupt to restore to his creditor what by the law he had lost. In all these cases there is a moral obligation founded upon an antecedent valuable consideration. These promises therefore have a sound legal basis. They are not promises to pay someth. ng for nothing; not naked pacts ; but the voluntary revival or creation of obligation which before existed in natural law, but which had been dispensed with, not for the benefit of the party obliged solely, but principally for the public convenience *210If moral obligation, in its fullest sense, is a good substratum f°r an express pi ~>mise, it is not easy to perceive why it is not equally good to support an implied promise. What a man ought to do, generally he ought to be made to do, whether he promise or refuse. But the law of society has left most of such obligations to the interior forum, as the tribunal of conscience has been aptly called. Is there not a moral obligation upon every son who has become affluent by means of the education and advantages bestowed upon him by his father, to relieve that father from pecuniary embarrassment, to promote his comfort and happiness, and even to share with him his riches, if thereby he will be made happy ? And yet such a son may, with impunity, leave such a father in any degree of penury above that which will expose the community in which ho dwells, to the danger of being obliged to preserve him from absolute want. Is not a wealthy father under strong moral obligation to advance the" interest of an obedient, well disposed son, to furnish him with the means of acquiring and maintaining a becoming rank in life, to rescue him from the horrors of debt incurred by misfortune ? Yet the law will uphold him in any degree of parsimony, short of that which would reduce his son to the necessity of seeking public charity.
Without doubt there are great interests of society which justify withholding the coercive arm of the law from these duties of imperfect obligation, as they are called; imperfect, not uecause they are less binding upon the conscience than those which are called perfect, but because the wisdom of the social law does not impose sanctions upon them.
A deliberate promise, in writing, made freely and without any mistake, one which may lead the party to whom it is made into contracts and expenses, cannot be broken without a violation of moral duty. But if there was nothing paid or promised for it, the law, perhaps wisely, leaves the execution of it to the conscience of him who makes it. It is only when the party making the promise gains something, or he to whom it is made loses something, that the law gives the promise validity. And in the case of the promise of the adult to pay the debt of the infant, of the debtor discharged by the statute of hm *211rations or bankruptcy, the principle is preserved by looking back to the origin of the transaction, where an equivalent is to be founn An exact equivalent is not required by the law ; for there oeing a consideration, the parties are left to estimate its value : though here the courts of equity will step in to relieve from gross inadequacy between the consideration and the promise.
These principles are deduced from the general current of decided cases upon the subject, as well as from the known maxims of the common law. The general position, that moral obligation is a sufficient consideration for an express promise, is to be limited in its application, to cases where at some time or other a good or valuable consideration has. existed.1
A legal obligation is always a sufficient consideration to support either an express or an implied promise ; such as an infant’s debt for necessaries, or a father’s promise to pay for the support and education of his minor children. But when the child shall have attained to manhood, and shall have become his own agent in the world’s business, the debts he in curs, whatever may be their nature, create no obligation upon the father ; and it seems to follow, that his promise founded upon such a debt has no legally binding force.
The cases of instruments under seal and certain mercantile contracts, in which considerations need not be proved, do not contradict the principles above suggested. The first import a consideration in themselves, and the second belong to a branch of the mercantile law, which has found it necessary to disregard the point of consideration in respect to instruments *212negotiable in their nature and essential to the interests of com merce.
Instead of citing a multiplicity of cases to support the positions I have .aben, I will only refer to a very able review of all the cases in' the note in 3 Bos. & Pul. 249. The opinions of the judges had been variant for a long course of years upon this subject, but there seems to be no case in which it was nakedly decided, that a promise to pay the debt of a son of full age, not living with his father, though the debt were incurred by sickness which ended in the death of the son, without a previous request by the father proved or presumed, could be enforced by action. e
It has been attempted to show a legal obligation on the part of the defendant by virtue of our statute, which compels lineal kindred in the ascending or descending line to support such of their poor relations as are likely to become chargeable to the town where they have their settlement. But it is a sufficient answer to this position, that such legal obligation does not exist except in the very cases provided for in the statute, and never until the party charged has been adjudged to be of sufficient ability thereto. We do not know from the report any of the facts which are necessary to create such an obligation. Whether the deceased had a legal settlement in this commonwealth at the time of his death, whether he was likely to become chargeable had he lived, whether the defendant was of sufficient ability, are essential facts to be adjudicated by the court to which is given jurisdiction on this subject. The legal liability does not arise until these facts have all been ascertained by judgment, after hearing the party intended to be charged.1
For the foregoing reasons we are all of opinion that the non-suit directed by the Court of Common Pleas was right, and that judgment be entered thereon for costs for the defend ■ ant,
1.9 Ricketts v. Scothorn 1.9 Ricketts v. Scothorn
57 Neb. 51
ANDREW D. RICKETTS, EXECUTOR,
v.
KATIE SCOTHORN.
No. 8326.
FILED DECEMBER 8, 1898.
[52] ERROR from the district court of Lancaster county. Tried below before HOLMES, J. Affirmed.
The opinion contains a statement of the case.
Ricketts & Wilson, for plaintiff in error:
A promissory note which is not given for a valuable consideration, as distinguished from a good consideration, cannot be enforced. (Stenberg v. State, 48 Neb. 299; Kirkpatrick v. Taylor, 43 Ill. 207; Blanchard v. Williamson, 70 Ill. 647; Pratt v. Trustees, 93 Ill. 475; Williams v. Forbes, 28 N.E. Rep. [Ill.] 463; Richardson v. Richardson, 36 N. E. Rep. [Ill.] 608; Fink v. Fink, 18 Johns. [N.Y.] 145; Hadley v. Reed, 58 Hun [N.Y.] 608; Hill v. Buckminster, 22 Mass. 391; Carr v. Silloway, 111 Mass. 24.)
It was necessary to allege and prove a consideration. (Courtney v. Doyle, 92 Mass. 122.)
The question of consideration was one to be proved preliminary to the admission of the note in evidence, and. it was for the court to decide this preliminary fact before admitting the note in evidence. (Robinson v. Ferry, 11 Conn. 460; Merrill v. Berkshire, 11 Pick. [Mass.] 269; Bartlett v. Smith, 11 Mees. & W. [Eng.] 483.)
Defendant in error's liberty to continue in her employment or to enter the employment of another was as untrammelled at the time and after she received the note as it had ever been, so far as the evidence shows. The evidence does not establish a consideration. (Mecorney v. Stanley, 62 Mass. 87; Manter v. Churchill, 127 Mass. 31; First Nat. Bank of Arlington v. Cecil, 32 Pac. Rep. [Ore.] 393.)
Where the controlling facts are undisputed, and different conclusions cannot be drawn therefrom, what the verdict should be is a question of law for the court, and it is the duty of the court to direct a verdict. (Gardner v. Michigan C. R. Co., 150 U. S. 349; Northern P. R. Co. v. Austin, 24 U. S. App. 336; Powell v. Powell, 23 Mo. App. 365.)
[53] Lamb & Adams, contra:
There was a sufficient consideration. (Talbott v. Stemmons, 89 Ky. 222; Doyle v. Dixon, 97 Mass. 213; Parker v. Urie, 21 Pa. St. 305; Appeal of Clark, 19 Atl. Rep. [Conn.] 322; Emery v. Darling, 33 N. E. Rep. [O.] 715.)
A promissory note imports a consideration. (Flint v. Phipps, 19 Pac. Rep. [Ore.] 543; Wilson v. Wilson, 38 Pac. Rep. [Ore.] 189.)
To uphold a contract, it is not necessary that the promisor should receive a consideration. It is sufficient if the promisee or other beneficiary sustains the least injury or detriment, or parts with anything of the least value on the faith of the contract. (Houck v. Frisbee, 66 Mo. App. 16.)
Forbearance from doing an act is evidence from which the jury may infer an agreement to forbear. (Boyd v. Freize, 5 Gray [Mass.] 553; Walker v. Sherman, 11 Met. [Mass.] 172; Breed v. Hillhouse, 7 Conn. 523.)
It is not necessary that a consideration should exist at the time the promise is made. Before revocation of the promise, performance of the acts required of promisee renders the promise obligatory. (Train v. Gold, 5 Pick. [Mass.] 380; Hilton v. Southwick, 17 Me. 303; L'Amoreux v. Gould, 57 Am. Dec. [N.Y.] 524; Brown v. Ray, 51 Am. Dec. [N. Car.] 379.)
The note was properly admitted in evidence. (Stevenson v. Gunning, 25 Atl. Rep. [Vt.] 697; Martin v. Stone, 29 Atl. Rep. [N.H.] 845.)
Additional references as to sufficiency of consideration: Hamer v. Sidway, 124 N.Y. 538; Lindell v. Rokes, 60 Mo. 249; Earle v. Angell, 157 Mass. 249; Bretton v. Prettiman, Sir T. Raym. [Eng.] 153; Wilkinson v. Oliveira, 27 E. C. L. [Eng.] 490.
SULLIVAN, J.
In the district court of Lancaster county the plaintiff Katie Scothorn recovered judgment against the defendant [54] Andrew D. Ricketts, as executor of the last will and testament of John C. Ricketts, deceased. The action was based upon a promissory note, of which the following is a copy:
May the first, 1801. I promise to pay to Katie Scothorn on demand, $2,000, to be at 6 per cent per annum.
J. C. RICKETTS.
In the petition the plaintiff alleges that the consideration for the execution of the note was that she should surrender her employment as bookkeeper for Mayer Bros, and cease to work for a living. She also alleges that the note was given to induce her to abandon her occupation, and that, relying on it, and on the annual interest, as a means of support, she gave up the employment in which she was then engaged. These allegations of the petition are denied by the executor. The material facts are undisputed. They are as follows: John O. Ricketts, the maker of the note, was the grandfather of the plaintiff. Early in May,—presumably on the day the note bears date,—he called on her at the store where she was working. What transpired between them is thus described by Mr. Flodene, one of the plaintiff's witnesses:
A. Well the old gentleman came in there one morning about 9 o'clock,—probably a little before or a little after, but early in the morning,— and he unbuttoned his vest and took out a piece of paper in the shape of a note; that is the way it looked to me; and he says to Miss Scothorn, "I have fixed out something that you have not got to work any more." He says, "None of my grandchildren work and you don't have to."
Q. Where was she?
A. She took the piece of paper and kissed him; and kissed the old gentleman and commenced to cry.
It seems Miss Scothorn immediately notified her employer of her intention to quit work and that she did soon after abandon her occupation. The mother of the plaintiff was a witness and testified that she had a conversation with her father, Mr, Ricketts, shortly after the [55] note was executed in which he informed her that he had given the note to the plaintiff to enable her to quit work; that none of his grandchildren worked and he did not think she ought to. For something more than a year the plaintiff was without an occupation; but in September, 1892, with the consent of her grandfather, and by his assistance, she secured a position as bookkeeper with Messrs. Funke & Ogden. On June 8, 1894, Mr. Ricketts died. He had paid one year's interest on the note, and a short time before his death expressed regret that he had not been able to pay the balance. In the summer or fall of 1892 he stated to his daughter, Mrs. Scothorn, that if he could sell his farm in Ohio he would pay the note out of the proceeds. He at no time repudiated the obligation. We quite agree with counsel for the defendant that upon this evidence there was nothing to submit to the jury, and that a verdict should have been directed peremptorily for one of the parties. The testimony of Flodene and Mrs. Scothorn, taken together, conclusively establishes the fact that the note was not given in consideration of the plaintiff pursuing, or agreeing to pursue, any particular line of conduct. There was no promise on the part of the plaintiff to do or refrain from doing anything. Her right to the money promised in the note was not made to depend upon an abandonment of her employment with Mayer Bros, and future abstention from like service. Mr. Ricketts made no condition, requirement, or request. He exacted no quid pro quo. He gave the note as a gratuity and looked for nothing in return. So far as the evidence discloses, it was his purpose to place the plaintiff in a position of independence where she could work or remain idle as she might choose. The abandonment by Miss Scothorn of her position as bookkeeper was altogether voluntary. It was not an act done in fulfillment of any contract obligation assumed when she accepted the note. The instrument in suit being given without any valuable consideration, was nothing more than a promise to make a gift in the future of the [56] sum of money therein named. Ordinarily, such promises are not enforceable even when put in the form of a promissory note. (Kirkpatrick v. Taylor, 43 Ill. 207; Phelps v. Phelps, 28 Barb. [N.Y.] 121; Johnston v. Griest, 85 Ind. 503; Fink v. Cox, 18 Johns. [N.Y.] 145.) But it has often been held that an action on a note given to a church, college, or other like institution, upon the faith of which money has been expended or obligations incurred, could not be successfully defended on the ground of a want of consideration. (Barnes v. Perine, 12 N.Y. 18; Philomath College v. Hartless, 6 Ore. 158; Thompson v. Mercer County, 40 Ill. 379; Irwin v. Lombard University, 56 O. St. 9.) In this class of cases the note in suit is nearly always spoken of as a gift or donation, but the decision is generally put on the ground that the expenditure of money or assumption of liability by the donee, on the faith of the promise, constitutes a valuable and sufficient consideration. It seems to us that the true reason is the preclusion of the defendant, under the doctrine of estoppel, to deny the consideration. Such seems to be the view of the matter taken by the supreme court of Iowa in the case of Simpson Centenary College v. Tuttle, 71 Ia. 596, where Rothrock, J., speaking for the court, said:
Where a note, however, is based on a promise to give for the support of the objects referred to, it may still be open to this defense [want of consideration], unless it shall appear that the donee has, prior to any revocation, entered into engagements or made expenditures based on such promise, so that he must suffer loss or injury if the note is not paid. This is based on the equitable principle that, after allowing the donee to incur obligations on the faith that the note would be paid, the donor would be estopped from pleading want of consideration.
And in the case of Reimensnyder v. Gans, 110 Pa. St. 17, 2 Atl. Rep. 425, which was an action on a note given as a donation to a charitable object, the court said: "The fact is that, as Ave may see from the case of Ryerss v. Trustees, 33 Pa. St. 114, ft contract of the kind here [57] involved is enforceable rather by way of estoppel than on the ground of consideration in the original undertaking." It has been held that a note given in expectation of the payee performing certain services, but without any contract binding him to serve, will not support an action. (Hulse v. Hulse, 84 Eng. Com. Law 709.) But when the payee changes his position to his disadvantage, in reliance on the promise, a right of action does arise. (McClure v. Wilson, 43 Ill. 356; Trustees v. Garvey, 53 Ill. 401.)
Under the circumstances of this case is there an equitable estoppel which ought to preclude the defendant from alleging that the note in controversy is lacking in one of the essential elements of a valid contract? We think there is. An estoppel in pais is defined to be "a right arising from acts, admissions, or conduct which have induced a change of position in accordance with the real or apparent intention of the party against whom they are alleged." Mr. Pomeroy has formulated the following definition:
Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, or contract, or of remedy, as against another person who in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right either of property, of contract, or of remedy. (2 Pomeroy, Equity Jurisprudence 804.)
According to the undisputed proof, as shown by the record before us, the plaintiff was a working girl, holding a position in which she earned a salary of $10 per week. Her grandfather, desiring to put her in a position of independence, gave her the note, accompanying it with the remark that his other grandchildren did not work, and that she would not be obliged to work any longer. In effect he suggested that she might abandon her employment and rely in the future upon the bounty which he promised, lie, doubtless, desired that she should give [58] up her occupation, but whether he did or not, it is entirely certain that he contemplated such action on her part as a reasonable and probable consequence of his gift. Having intentionally influenced the plaintiff to alter her position for the worse on the faith of the note being paid when due, it would be grossly inequitable to permit the maker, or his executor, to resist payment on the ground that the promise was given without consideration. The petition charges the elements of an equitable estoppel, and the evidence conclusively establishes them. If errors intervened at the trial they could not have been prejudicial. A verdict for the defendant would be unwarranted.
The judgment is right and is
AFFIRMED.
1.10 Dynalectric Co. of Nevada, Inc. v. Clark & Sullivan Constructors, Inc. 1.10 Dynalectric Co. of Nevada, Inc. v. Clark & Sullivan Constructors, Inc.
DYNALECTRIC COMPANY OF NEVADA, INC., a Nevada Corporation, Appellant, v. CLARK & SULLIVAN CONSTRUCTORS, INC., Respondent.
No. 51758
July 14, 2011
*481 [Rehearing denied October 5, 2011]
Morris Peterson and Akke Levin and Steve Morris, Las Vegas; Holland & Hart, LLP, and Philip Dabney and Lars Evensen, Las Vegas, for Appellant.
McDonald Carano Wilson LLP and William A.S. Magrath, II, and Craig A. Newby, Las Vegas, for Respondent.
The Honorable Kristina Pickering, Justice, voluntarily recused herself from participation in the decision of this matter.
OPINION
Per Curiam:
In this appeal, we address the measure of damages applicable to promissory estoppel claims. We adopt a flexible approach as suggested in the Restatement (Second) of Contracts and apply the same factors that bear on promissory estoppel relief to the remedy afforded by the breach. The determination of the appropriate measure of damages in any given case turns on considerations of what justice requires and the foreseeability and certainty of the particular damages award sought. We further conclude that the presumptive measure of damages for a general contractor that reasonably relies upon a subcontractor’s unfulfilled promise is the difference between the nonperforming subcontractor’s original bid and the cost of the replacement subcontractor’s performance.
FACTS AND PROCEDURAL HISTORY
This appeal arises from a dispute between appellant Dynalectric Company of Nevada, Inc., a subcontractor, and respondent Clark and Sullivan Constructors, Inc. (C&S), a general contactor, concerning a public works project (the Project). The Project involved the expansion of the University Medical Center (UMC) in Las Vegas. In 2004, UMC solicited bids for the Project. C&S, interested in serving as the general contractor for the Project, sought bids from subcontractors. Dynalectric submitted a bid to C&S to perform the electrical work for the Project and repeatedly assured C&S of the accuracy of its bid. C&S incorporated Dynalectric’s bid into its bid to UMC for the general contract (Prime Contract). C&S was the low bidder, and UMC awarded it the Prime Contract. C&S notified Dynalectric. Subsequently, Dynalectric repudiated its obligations to C&S and refused to negotiate with C&S. C&S therefore contracted with three replacement subcontractors to complete the electrical work for the Project.
C&S then sued Dynalectric in district court under various theories of liability, including breach of contract, promissory estoppel, and breach of the covenant of good faith and fair dealing. Dy- *483 nalectric countersued for, among other theories, breach of an implied contract, fraud, and violation of NRS 338.141. 2
Following a 12-day bench trial, the district court entered a judgment for C&S on its promissory estoppel claim and rejected each of Dynalectric’s counterclaims. The district court awarded C&S $2,501,615 in damages, which represents the difference between Dynalectric’s bid ($7,808,983) and the amount C&S paid the three replacement contractors to complete the work ($10,310,598). Dynalectric appealed.
DISCUSSION
Dynalectric contends that the district court applied the incorrect measure of damages. 3 Specifically, it asserts that the district court should not have awarded C&S expectation damages. We disagree.
Standard of review
Whether a party is “entitled to a particular measure of damages is a question of law” reviewed de novo. Toscano v. Greene Music, 21 Cal. Rptr. 3d 732, 736 (Ct. App. 2004).
Measure of damages for promissory estoppel claims
Broadly speaking, Nevada follows the doctrine of promissory estoppel articulated in the Restatement (Second) of Contracts. See *484 Vancheri v. GNLV Corp., 105 Nev. 417, 421, 111 P.2d 366, 369 (1989).
The Restatement describes promissory estoppel as follows:
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.
Restatement (Second) of Contracts § 90(1) (1981).
Comment d elaborates further upon the remedies available for promissory estoppel:
A promise binding under this section is a contract, and full-scale enforcement by normal remedies is often appropriate. But the same factors which bear on whether any relief should be granted also bear on the character and extent of the remedy. In particular, relief may sometimes be limited to restitution or to damages or specific relief measured by the extent of the promisee’s reliance rather than by the terms of the promise.
Id. § 90 cmt. d (emphasis added).
Thus, under the Restatement, an award of expectation damages 4 is often an appropriate remedy for promissory estoppel claims. But, in other instances, reliance damages 5 or restitutionary damages 6 may be more suitable.
Following the lead of the Restatement, we hold that the district court may award expectation, reliance, or restitutionary damages for promissory estoppel claims. 7 Although the doctrine of promis *485 sory estoppel is conceptually distinct from traditional contract principles, there is no rational reason ‘“for distinguishing the two situations in terms of the damages that may be recovered.’ ’ ’ Toscano, 21 Cal. Rptr. 3d at 737 (quoting Signal Hill Aviation Co., Inc. v. Stroppe, 158 Cal. Rptr. 178, 185 (Ct. App. 1979)). In sum, no single measure of damages will apply to each and every promissory estoppel claim; instead, to determine the appropriate measure of damages for promissory estoppel claims, the district court should consider the measure of damages that justice requires and that comports with the Restatement’s general requirements that damages be foreseeable and reasonably certain. 8 See Restatement (Second) of Contracts §§ 351, 352 (1981).
Whether the district court used the appropriate measure of damages
We now consider whether the district court used the appropriate measure of damages when it awarded C&S promissory estoppel damages representing the difference between Dynalectric’s bid and the amount that the three replacement contractors charged C&S to complete the same work.
Drennan v. Star Paving Company, 333 P.2d 757, 761 (Cal. 1958), the seminal promissory estoppel case in the subcontract bidding context, illustrates how damages should typically be computed in this situation. In Drennan, a general contractor was preparing a bid for a construction project. Id. at 758. Before the general contractor submitted its bid, a subcontractor submitted a *486 bid of $7,131.60 to the general contractor to perform the paving portion of the project. Id. The general contractor then incorporated the subcontractor’s bid into its own bid for the project. Id. Shortly thereafter, the subcontractor informed the general contractor that it would not perform the work for the price it had originally quoted in its bid. Id. at 758-59. Ultimately, the general contractor obtained a replacement pavement subcontractor to complete the work at a cost of $10,948.60. Id. at 759. The Drennan court affirmed the trial court’s determination that the general contractor was entitled to $3,817, the difference between the subcontractor’s bid and the amount that the general contractor had to pay the replacement subcontractor to complete the work. Id. at 759, 761.
In the decades since Drennan, courts have consistently and uniformly applied the same measure of damages for promissory estop-pel claims arising from a subcontractor’s repudiation of its obligations to a general contractor. See, e.g., John Price Associates, Inc. v. Warner Elec., Inc., 723 F.2d 755, 756-57 (10th Cir. 1983) (appropriate measure of damages for general contractor’s promissory estoppel claim was the difference between nonperforming electrical subcontractor’s bid and the bid of the substituted subcontractor that completed the work); Preload Technology v. A.B. & J. Const. Co., Inc., 696 F.2d 1080, 1091, 1093 (5th Cir. 1983) (damages were properly calculated as the difference between the original subcontractor’s bid and the replacement subcontractor’s bid); Janice Const. Co., Inc. v. Vulcan Materials Co., 527 F.2d 772, 780 (7th Cir. 1976) (general contractor was entitled to award representing the difference between subcontractor’s quoted prices for certain construction materials and the cost of replacement materials); Double AA Builders v. Grand State Const., 114 P.3d 835, 837, 843 (Ariz. Ct. App. 2005) (upholding award consisting of the difference between nonperforming insulation subcontractor’s bid and the cost of a replacement subcontractor); Riley Bros. Constr., Inc. v. Shuck, 704 N.W.2d 197, 204 (Minn. Ct. App. 2005) (damages were properly computed as the difference between masonry subcontractor’s unperformed bid and the amount paid to two replacement subcontractors to complete the work); Branco Enterprises v. Delta Roofing, 886 S.W.2d 157, 158, 161 (Mo. Ct. App. 1994) (award based upon the difference between roofing subcontractor’s bid and the amount a substitute subcontractor charged was necessary to prevent injustice). We see no reason to depart from the well-established measure of damages used in Drennan.
Interestingly, despite the consensus that the measure of damages adopted in Drennan is appropriate in the type of situation presented here, courts have not definitively labeled this measure “expectation” or “reliance” damages. See Edward Yorio & Steve *487 Thel, The Promissory Basis of Section 90, 101 Yale L.J. 111, 146 (1991) (noting the ambiguity in the caselaw with respect to classifying this measure of damages). Scholars appear to agree, however, that the Drennan measure of damages is, in fact, expectation damages. See id. (concluding that this measure represents expectation damages, even if occasionally labeled “reliance damages”); W. David Slawson, The Role of Reliance in Contract Damages, 76 Cornell L. Rev. 197, 221-22 (1990) (discussing the near impossibility of proving true reliance damages in the subcontract-bidding context and indicating that the Drennan measure of damages represents expectation damages); Charles L. Knapp, Reliance in the Revised Restatement: The Proliferation of Promissory Estoppel, 81 Colum. L. Rev. 52, 57 n.35 (1981) (noting the ambiguity in the caselaw on this issue and stating that an award of damages based upon the difference between the nonperforming subcontractor’s bid and the amount paid to a replacement subcontractor is “the classic expectation remedy”).
As previously noted, Dynalectric’s bid was for $7,808,983. C&S was forced to pay $10,310,598 to three replacement subcontractors to complete the work that Dynalectric refused to perform. Thus, the district court awarded C&S $2,501,615, the difference between Dynalectric’s bid and the amount C&S paid to the replacement subcontractors. This measure of damages placed C&S in the same position that it would have occupied if Dynalectric had performed as it promised, and thus, it constitutes expectation damages.
It is plain that justice required this measure of damages and that the damages the district court awarded were foreseeable and reasonably certain. As the district court found, Dynalectric made an unequivocal promise by submitting a bid to C&S for the electrical subcontracting of the Project. Dynalectric thereafter repeatedly assured C&S of the accuracy of the bid that it had submitted. The record demonstrates that Dynalectric fully anticipated that C&S would rely on its bid by incorporating it into its own bid for the Prime Contract. The record also shows that Dynalectric is an experienced and sophisticated subcontractor that could readily anticipate that C&S would be forced to use replacement electrical subcontractors at a higher cost to complete the work that it refused to perform. Finally, the damages that the district court awarded were reasonably certain because C&S presented detailed evidence showing that $2,501,615 represented the difference between Dynalec-tric’s original bid and the amount that the three replacement subcontractors charged.
*488 CONCLUSION
The district court correctly determined that C&S was entitled to expectation damages. Justice required using this measure of damages, and the damages that the district court awarded were foreseeable and reasonably certain. Accordingly, we affirm the district court’s judgment granting C&S expectation damages.
NRS 338.141 is Nevada’s anti-bid-shopping statute. It prohibits a general contractor from substituting a named subcontractor on a public works project before first providing the named subcontractor with a subcontract containing the same general terms offered to all other subcontractors on the project. NRS 338.141(5)(b)(l).
Dynalectric also contends that the district court erred in (1) determining that C&S properly substituted Dynalectric in accordance with the requirements of NRS 338.141, (2) finding that C&S accepted Dynalectric’s bid, (3) determining that C&S had proven its promissory estoppel claim, (4) determining that C&S did not have unclean hands, (5) determining that Dynalectric did not produce clear and convincing evidence that C&S committed fraud, (6) awarding C&S damages that were not supported by substantial and competent evidence, and (7) calculating prejudgment interest from the date the complaint and summons were filed rather than from the date C&S incurred its damages. After carefully reviewing the record, we conclude that substantial evidence supports the district court’s finding that the subcontract that C&S offered to Dynalectric was in reasonable conformity with the subcontracts offered to the other subcontractors on the project and that the district court correctly determined that C&S did not abridge the proscription provided in NRS 338.141. We further conclude that the district court’s remaining findings of fact were not clearly erroneous and were supported by substantial evidence and that its pertinent conclusions of law were correct. See NOLM, LLC v. County of Clark, 120 Nev. 736, 739, 100 P.3d 658, 660-61 (2004) (noting that we will not set aside the district court’s findings of fact “unless they are clearly erroneous or not supported by substantial evidence” and that we review issues of law de novo (internal quotation omitted)).
Expectation damages attempt to place the plaintiff in the position that he or she would have occupied if the contract had been performed or if the promise had been kept. See Restatement (Second) of Contracts § 344(a) (1981).
Reliance damages attempt to restore the plaintiff to the position he or she would have occupied if the breached contract or promise had never been made. See Restatement (Second) of Contracts § 344(b) (1981).
Restitutionary damages attempt to return the defendant to the position he or she would have occupied if the contract or promise had never been made. See Restatement (Second) of Contracts § 344(c) (1981).
Additionally, when a damages award would be inadequate, specific performance or injunctive relief may be appropriate remedies. See Restatement (Second) of Contracts § 359 (1981) (noting that specific performance or an injunction may be appropriate when a damages award would be inadequate); see also Skebba v. Kasch, 724 N.W.2d 408, 413 (Wis. Ct. App. 2006) (specific performance may be warranted in promissory estoppel claims to prevent injustice).
Most jurisdictions considering this issue hold, as we do today, that a flexible approach to promissory estoppel damages is optimal. See Walser v. Toyota Motor Sales, U.S.A., Inc., 43 F.3d 396, 402 (8th Cir. 1994) (promissory estoppel damages were properly limited to reliance damages where lost profits were “far from a certainty”); Merex A.G. v. Fairchild Weston Systems, Inc., 29 F.3d 821, 826 (2d Cir. 1994) (“If successful [on a promissory estop-pel claim], the plaintiff is not entitled, as of right, to expectation damages; the court retains the discretion to award relief to avoid ‘injustice,’ and can mold that relief ‘as justice requires.’ ”); Chedd-Angier Production v. Omni Publications Int., 756 F.2d 930, 937 (1st Cir. 1985) (plaintiff was properly allowed to recover expectation damages on promissory estoppel claim; “whether to charge full contract damages, or something less, is a matter of discretion delegated to the district court”); Green v. Interstate United Management Serv. Corp., 748 F.2d 827, 831 (3d Cir. 1984) (recoverable damages on promissory estoppel claim were properly limited to reliance damages given the “manifestly contingent nature” of the promises in question); Toscano, 21 Cal. Rptr. 3d at 737, 739 (explaining that because promissory estoppel is rooted in equity, trial courts have the power to “fashion remedies in the interests of justice” and award damages that are “proven with reasonable certainty”); Hunter v. Hayes, 533 P.2d 952, 954 (Colo. Ct. App. 1975) (“When a plaintiff’s recovery is predicated on findings of a promise and detrimental reliance thereon, there is no fixed measure of damages to be applied in every case. Rather, the amount of damages should be tailored to fit (lie facts of each case and should be only that amount which justice requires.”).