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.

125 N.E. 94 (N.Y. 1919)

Dougherty v. Salt

New York Court of Appeals

November 18, 1919

CARDOZO, J.

The plaintiff, a boy of eight years, received from his aunt, the defendant's testatrix, a promissory note for $3,000 payable at her death or before. Use was made of a printed form, which contains the words "value received." How the note came to be given, was explained by the boy's guardian, who was a witness for his ward. The aunt was visiting her nephew. "When she saw Charley coming in, she said `Isn't he a nice boy?' I answered her, yes, that he is getting along very nice, and getting along nice in school, and I showed where he had progressed in school, having good reports, and so forth, and she told me that she was going to take care of that child, that she loved him very much. I said, `I know you do, Tillie, but your taking care of the child will be done probably like your brother and sister done, take it out in talk.' She said: `I don't intend to take it out in talk, I would like to take care of him now.' I said, `Well, that is up to you.' She said, `Why can't I make out a note to him?' I said, `You can, if you wish to.' She said, `Would that be right?' And I said, `I do not know, but I guess it would; I do not know why it would not.' And she said, `Well, will *Page 202 you make out a note for me?' I said, `Yes, if you wish me to,' and she said, `Well, I wish you would.'" A blank was then produced, filled out, and signed. The aunt handed the note to her nephew with these words, "You have always done for me, and I have signed this note for you. Now, do not lose it. Some day it will be valuable."

The trial judge submitted to the jury the question whether there was any consideration for the promised payment. Afterwards, he set aside the verdict in favor of the plaintiff, and dismissed the complaint. The Appellate Division, by a divided court, reversed the judgment of dismissal, and reinstated the verdict on the ground that the note was sufficient evidence of consideration.

We reach a different conclusion. The inference of consideration to be drawn from the form of the note has been so overcome and rebutted as to leave no question for a jury. This is not a case where witnesses summoned by the defendant and friendly to the defendant's cause, supply the testimony in disproof of value (Strickland v. Henry, 175 N.Y. 372). This is a case where the testimony in disproof of value comes from the plaintiff's own witness, speaking at the plaintiff's instance. The transaction thus revealed admits of one interpretation, and one only. The note was the voluntary and unenforcible promise of an executory gift (Harris v. Clark, 3 N.Y. 93; Holmes v. Roper,141 N.Y. 64, 66). This child of eight was not a creditor, nor dealt with as one. The aunt was not paying a debt. She was conferring a bounty (Fink v. Cox, 18 Johns. 145). The promise was neither offered nor accepted with any other purpose. "Nothing is consideration that is not regarded as such by both parties" (Philpot v. Gruninger, 14 Wall. 570, 577; Fire Ins. Assn. v. Wickham, 141 U.S. 564, 579; Wisconsin M. Ry. Co. v.Powers, 191 U.S. 379, 386; DeCicco v. Schweizer, 221 N.Y. 431,438). A note so given is not made for "value received," however its maker may have *Page 203 labeled it. The formula of the printed blank becomes, in the light of the conceded facts, a mere erroneous conclusion, which cannot overcome the inconsistent conclusion of the law (Blanshan v. Russell, 32 A.D. 103; affd., on opinion below, 161 N.Y. 629; Kramer v. Kramer,181 N.Y. 477; Bruyn v. Russell, 52 Hun, 17). The plaintiff, through his own witness, has explained the genesis of the promise, and consideration has been disproved (Neg. Instr. Law, sec. 54; Consol. Laws, chap. 43).

We hold, therefore, that the verdict of the jury was contrary to law, and that the trial judge was right in setting it aside. He went too far, however, in dismissing the complaint. He might have dismissed it if he had reserved his ruling on the defendant's motion for a nonsuit or for the direction of a verdict (Code Civ. Pro. secs. 1185, 1187). Instead of reserving his ruling, he denied the motion absolutely. Upon the return of the verdict, he should have granted a new trial.

A new trial was also necessary because of error in rejecting evidence. The defendant attempted to prove that the signature to the note was forged. The court refused to hear the evidence, because forgery had not been pleaded as a defense. The answer did deny the execution of the note. The evidence of forgery was admissible under the denial (Schwarz v. Oppold, 74 N.Y. 307;Farmers' L. T. Co. v. Siefke, 144 N.Y. 354).

The judgment of the Appellate Division should be reversed, and the judgment of the Trial Term modified by granting a new trial, and as modified affirmed, with costs in all courts to abide the event.

HISCOCK, Ch. J., CHASE, COLLIN, HOGAN, CRANE and ANDREWS, JJ., concur.

Judgment accordingly.

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.

I. M. Singer, Corpus Christi, for appellant.

Chas. F. Guenther, Jr., San Antonio, R. G. Harris, San Antonio, W. Pat Camp, San Antonio, for appellee.

McGILL, Justice.

This is an appeal from a judgment of the 57th judicial District Court of Bexar County. Appellant was plaintiff and appellee was defendant in the trial court. The parties will be so designated.

Plaintiff sued defendant to recover $2,000 with interest at the rate of 8% per annum from April 2, 1942, alleged to be due on the following instrument, being a translation from the original, which is written in the Greek language:

'Peiraeus

April 2, 1942

'Mr. George Batsakis

Konstantinou Diadohou #7

Peiraeus

'Mr. Batsakis:

'I state by my present (letter) that I received today from you the amount of two thousand dollars ($2,000.00) of United States of America money, which I borrowed from you for the support of my family during these difficult days and because it is impossible for me to transfer dollars of my own from America.

'The above amount I accept with the expressed promise that I will return to you again in American dollars either at the end of the present war or even before in the event that you might be able to find a way to collect them (dollars) from my representative in America to whom I shall write and give him an order relative to this You understand until the final execution (payment) to the above amount an eight per cent interest will be added and paid together with the principal.

'I thank you and I remain yours with respects.

'The recipient,

(Signed) Eugenia The. Demotsis.'

Trial to the court without the intervention of a jury resulted in a judgment in favor of plaintiff for $750.00 principal, and interest at the rate of 8% per annum from April 2, 1942 to the date of judgment, totaling $1163.83, with interest thereon at the rate of 8% per annum until paid. Plaintiff has perfected his appeal.

The court sustained certain special exceptions of plaintiff to defendant's first amended original answer on which the case was tried, and struck therefrom paragraphs II, III and V. Defendant excepted to such action of the court, but has not cross-assigned error here. The answer, stripped of such paragraphs, consisted of a general denial contained in paragraph I thereof, and of paragraph IV, which is as follows:

'IV. That under the circumstances alleged in Paragraph II of this answer, the consideration upon which said written instrument sued upon by plaintiff herein is founded, is wanting and has failed to the extent of $1975.00, and defendant pleads specially under the verification hereinafter made the want and failure of consideration stated, and now tenders, as defendant has heretofore tendered to plaintiff, $25.00 as the value of the loan of money received by defendant from plaintiff, together with interest thereon.

'Further, in connection with this plea of want and failure of consideration defendant alleges that she at no time received from plaintiff himself or from anyone for plaintiff any money or thing of value other than, as hereinbefore alleged, the original loan of 500,000 drachmae. That at the time of the loan by plaintiff to defendant of said 500,000 drachmae the value of 500,000 drachmae in the Kingdom of Greece in dollars of money of the United States of America, was $25.00, and also at said time the value of 500,000 drachmae of Greek money in the United States of America in dollars was $25.00 of money of the United States of America. The plea of want and failure of consideration is verified by defendant as follows.'

The allegations in paragraph II which were stricken, referred to in paragraph IV, were that the instrument sued on was signed and delivered in the Kingdom of Greece on or about April 2, 1942, at which time both plaintiff and defendant were residents of and residing in the Kingdom of Greece, and

'Plaintiff (emphasis ours) avers that on or about April 2, 1942 she owned money States of America, but was then and there States of America, but was then and there in the Kingdom of Greece in straitened financial circumstances due to the conditions produced by World War II and could not make use of her money and property and credit existing in the United States of America. That in the circumstances the plaintiff agreed to and did lend to defendant the sum of 500,000 drachmae, which at that time, on or about April 2, 1942, had the value of $25.00 in money of the United States of America. That the said plaintiff, knowing defendant's financial distress and desire to return to the United States of America, exacted of her the written instrument plaintiff sues upon, which was a promise by her to pay to him the sum of $2,000.00 of United States of America money.'

Plaintiff specially excepted to paragraph IV because the allegations thereof were insufficient to allege either want of consideration or failure of consideration, in that it affirmatively appears therefrom that defendant received what was agreed to be delivered to her, and that plaintiff breached no agreement. The court overruled this exception, and such action is assigned as error. Error is also assigned because of the court's failure to enter judgment for the whole unpaid balance of the principal of the instrument with interest as therein provided.

Defendant testified that she did receive 500,000 drachmas from plaintiff. It is not clear whether she received all the 500,000 drachmas or only a portion of them before she signed the instrument in question. Her testimony clearly shows that the understanding of the parties was that plaintiff would give her the 500,000 drachmas if she would sign the instrument. She testified:

'Q. ..... who suggested the figure of $2,000.00?

A. That was how he asked me from the beginning. He said he will give me five hundred thousand drachmas provided I signed that I would pay him $2,000.00 American money.'

The transaction amounted to a sale by plaintiff of the 500,000 drachmas in consideration of the execution of the instrument sued on, by defendant. It is not contended that the drachmas had no value. Indeed, the judgment indicates that the trial court placed a value of $750.00 on them or on the other consideration which plaintiff gave defendant for the instrument if he believed plaintiff's testimony. Therefore the plea of want of consideration was unavailing. A plea of want of consideration amounts to a contention that the instrument never became a valid obligation in the first place. National Bank of Commerce v. Williams, 125 Tex. 619, 84 S.W.2d 691.

Mere inadequacy of consideration will not void a contract. 10 Tex.Jur., Contracts, Sec. 89, p. 150; Chastain v. Texas Christian Missionary Society, Tex.Civ.App., 78 S.W.2d 728, loc. cit. 731(3), Wr. Ref.

Nor was the plea of failure of consideration availing. Defendant got exactly what she contracted for according to her own testimony. The court should have rendered judgment in favor of plaintiff against defendant for the principal sum of $2,000.00 evidenced by the instrument sued on, with interest as therein provided. We construe the provision relating to interest as providing for interest at the rate of 8% per annum. The judgment is reformed so as to award appellant a recovery against appellee of $2,000.00 with interest thereon at the rate of 8% per annum from April 2, 1942. Such judgment will bear interest at the rate of 8% per annum until paid on $2,000.00 thereof and on the balance interest at the rate of 6% per annum. As so reformed, the judgment is affirmed.

Reformed and affirmed.

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.

R. Scott Cunningham, Dalton, for Wright.

Dianne Cook, Dalton, Michael J. Bowers, Atty. Gen., Kevin M. O'Connor, Asst. Atty. Gen., Department of Law, Atlanta, for Newman et al.

CARLEY, Justice.

Seeking to recover child support for her daughter and her son, Kim Newman filed suit against Bruce Wright. Wright's answer admitted his paternity only as to Newman's daughter and DNA testing subsequently showed that he is not the father of her son. The trial court nevertheless ordered Wright to pay child support for both children. As to Newman's son, the trial court based its order upon Wright's "actions in having himself listed on the child's birth certificate, giving the child his surname and establishing a parent-child relationship...." According to the trial court, Wright had thereby

allow[ed] the child to consider him his father and in so doing deterr[ed Newman] from seeking to establish the paternity of the child's natural father[,] thus denying the child an opportunity to establish a parent-child relationship with the natural father.

We granted Wright's application for a discretionary appeal so as to review the trial court's order requiring that he pay child support for Newman's son.

Wright does not contest the trial court's factual findings. He asserts only that the trial court erred in its legal conclusion that the facts authorized the imposition of an obligation to provide support for Newman's son. If Wright were the natural father of Newman's son, he would be legally obligated to provide support. OCGA § 19-7-2. Likewise, if Wright had formally adopted Newman's son, he would be legally obligated to provide support. OCGA § 19-8-19(a)(2). However, Wright is neither the natural nor the formally adoptive father of the child and "the theory of `virtual adoption' is not applicable to a dispute as to who is legally responsible for the support of minor children." Ellison v. Thompson, 240 Ga. 594, 596, 242 S.E.2d 95 (1978).

Although Wright is neither the natural nor the formally adoptive father of Newman's son and the theory of "virtual adoption" is inapplicable, it does not necessarily follow that, as a matter of law, he has no legal obligation for child support. A number of jurisdictions have recognized that a legally enforceable obligation to provide child support can be "based upon parentage or contract...." (Emphasis supplied.) Albert v. Albert, 415 So. 2d 818, 819 (Fla.App.1982). See also Anno., 90 A.L.R. 2d 583 (1963). Georgia is included among those jurisdictions. Foltz v. Foltz, 238 Ga. 193, 194, 232 S.E.2d 66 (1977). Accordingly, the issue for resolution is whether Wright can be held liable for child support for Newman's son under this state's contract law.

There was no formal written contract whereby Wright agreed to support Newman's son. Compare Foltz v. Foltz, supra. Nevertheless, under this state's contract law,

[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.

OCGA § 13-3-44(a). This statute codifies the principle of promissory estoppel. Insilco Corp. v. First Nat. Bank of Dalton, 248 Ga. 322(1), 283 S.E.2d 262(1981). In accordance with that principle,

"[a] party may enter into a contract invalid and unenforceable, and by reason of the covenants therein contained and promises made in connection with the same, wrongfully cause the opposite party to forego a valuable legal right to his detriment, and in this manner by his conduct waive the right to repudiate the contract and become estopped to deny the opposite party any benefits that may accrue to him under the terms of the agreement." [Cits.]

Pepsi Cola Bottling Co. of Dothan, Ala., Inc. v. First Nat. Bank of Columbus, 248 Ga. 114, 116-117(2), 281 S.E.2d 579 (1981).

The evidence authorizes the finding that Wright promised both Newman and her son that he would assume all of the obligations and responsibilities of fatherhood, including that of providing support. As the trial court found, this promise was evidenced by Wright's listing of himself as the father on the child's birth certificate and giving the child his last name. Wright is presumed to know "the legal consequences of his actions. Since parents are legally obligated to support their minor children, [he] accepted this support obligation by acknowledging paternity." Marshall v. Marshall, 386 So. 2d 11, 12 (Fla. App.1980). There is no dispute that, at the time he made his commitment, Wright knew that he was not the natural father of the child. Compare NPA v. WBA, 8 Va.App. 246, 380 S.E.2d 178 (1989). Thus, he undertook his commitment knowingly and voluntarily. Moreover, he continued to do so for some 10 years, holding himself out to others as the father of the child and allowing the child to consider him to be the natural father.

The evidence further authorizes the finding that Newman and her son relied upon Wright's promise to their detriment. As the trial court found, Newman refrained from identifying and seeking support from the child's natural father. Had Newman not refrained from doing so, she might now have a source of financial support for the child and the child might now have a natural father who provided emotional, as well as financial, support. If, after 10 years of honoring his voluntary commitment, Wright were now allowed to evade the consequences of his promise, an injustice to Newman and her son would result. Under the evidence, the duty to support which Wright voluntarily assumed 10 years ago remains enforceable under the contractual doctrine of promissory estoppel and the trial court's order which compels Wright to discharge that obligation must be affirmed. See Nygard v. Nygard, 156 Mich. App. 94, 401 N.W.2d 323 (1986); Marshall v. Marshall, supra; In re Marriage of Johnson, 88 Cal. App. 3d 848, 152 Cal. Rptr. 121 (1979); Hartford v. Hartford, 53 Ohio App. 2d 79, 7 O.O.3d 53, 371 N.E.2d 591 (1977).

Judgment affirmed.

All the Justices concur, except BENHAM, C.J., who dissents.

SEARS, Justice, concurring.

I concur fully with the majority opinion. I write separately only to address the dissenting opinion's misperception that Newman has not relied upon Wright's promise to her detriment.

It is an established principle in Georgia that 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.^[1] This doctrine, known as "promissory estoppel," prevents a promisor from reneging on a promise, when the promisor should have expected that the promisee would rely upon the promise, and the promisee does in fact rely upon the promise to her detriment.^[2] Sufficient consideration to enforce a contractual promise pursuant to promissory estoppel may be found in any benefit accruing to the promisor, or any reliance, loss, trouble, disadvantage, or charge imposed upon the promisee.^[3]

Bearing these principles in mind, and as explained very well in the majority opinion, it is clear that Wright's commitment to Newman to assume the obligations of fatherhood as regards her son are enforceable. Specifically, it is abundantly clear that Wright should have known that Newman would rely upon his promise, especially after he undertook for ten years to fulfill the obligations of fatherhood. In this regard, it could hardly have escaped Wright's notice that Newman refrained from seeking to identify and obtain support from the child's biological father while Wright was fulfilling his commitment to her. Moreover, Newman did in fact rely upon Wright's promise, to her detriment when, ten years after he undertook the obligations of fatherhood, Wright reneged on his promise.

Promissory estoppel requires only that the reliance by the injured party be reasonable.^[4] In this case, it cannot seriously be argued that Newman's reliance was anything other than reasonable, as she had absolutely no indication that Wright would ever renege, especially after he fulfilled his promise for such a long time. Moreover, contrary to the dissent's implicit assertion, promissory estoppel does not require that the injured party exhaust all other possible means of obtaining the benefit of the promise from any and all sources before being able to enforce the promise against the promisor. In this regard, it is illogical to argue that Newman, after reasonably relying upon Wright's promise for ten years, can now simply seek to determine the identity of the biological father and collect support from him. First, there is nothing in the case law that requires Newman to do so before being entitled to have Wright's promise enforced. Second, this requirement would be an imposing, if not an impossible, burden, and would require Newman not only to identify the father (if possible), but also to locate him, bring a costly legal action against him, and to succeed in that action. Imposing this requirement would effectively penalize Newman for no reasons other than (1) her reasonable reliance upon a promise that was not kept, and (2) for allowing herself to be dissuaded by Wright from seeking the identity of the biological father. As noted, nowhere does the case law support imposing such a requirement, and none of the facts in this case support doing so now.

Finally, there can be no doubt that, unless Wright's promise to Newman is enforced, injustice will result. Given the approximately ten years that have passed since the child's birth, during which time Wright, for all purposes, was the child's father, it likely will be impossible for Newman to establish the identity of the child's biological father, bring a successful paternity action, and obtain support from that individual. Consequently, if Wright is allowed to renege on his obligation, Newman likely will not receive any support to assist in the cost of raising her son, despite having been promised the receipt of such by Wright. Furthermore, an even greater injustice will be inflicted upon the boy himself. A child who has been told by any adult, regardless of the existence of a biological relationship, that he will always be able to depend upon the adult for parenting and sustenance, will suffer a great deal when that commitment is broken. And when a child suffers under those circumstances, society-at-large suffers as well.^[5]

Because Wright's promise is capable of being enforced under the law, and because I believe that Wright's promise must be enforced in order to prevent a grave miscarriage of justice, I concur fully in the majority opinion.

BENHAM, Chief Justice, dissenting.

I respectfully dissent. While I agree with the majority opinion's statement that liability for child support may be based on promissory estoppel in a case where there is no statutory obligation or express contract, I first note that this issue was not brought by either of the parties. Further, there is a critical element that must be shown for promissory estoppel to apply. In addition to making a showing of expectation and reasonable reliance, a person asserting liability on the theory of promissory estoppel must show that she relied on the promise to her detriment. Nickell v. IAG Federal Credit Union, 213 Ga.App. 516, 445 S.E.2d 335 (1994); Lake Tightsqueeze, Inc. v. Chrysler First Financial Services Corp., 210 Ga.App. 178, 435 S.E.2d 486 (1993). The majority states that Newman and her son incurred detriment by refraining from identifying and seeking support from the child's natural father. However, the record is completely bereft of any evidence that Newman met her burden of proof as to promissory estoppel, and the majority fails to state how she is prevented from now instituting a child support action against the natural father. Newman has not alleged, nor does the record reveal, that she does not know the identity of the natural father, nor does she show that the natural father is dead or unable to be found. Consequently, Newman has not shown that she is now unable to do what she would have had to do ten years ago—seek support from the natural father.

In fact, Wright contends, and Newman does not refute, that Newman severed the relationship and all ties with Wright when the child was approximately three years old. For approximately the next five years, until the child was eight, Newman and Wright did not communicate. Only for the past two years has Wright visited with the child. Importantly, Wright contends that during the past seven years he did not support the child. Thus, taking Wright's undisputed contentions as true, any prejudice incurred by Newman because of the passage of ten years in time is not due to Wright's actions, since, at least for the past seven years, Newman has been in the same situation—receiving no support payments from Wright. Thus, although Wright may be morally obligated to support the ten-year-old child, he is not legally obligated to do so because Newman has failed to show that she or the child incurred any detriment by Wright's failure to fulfill his promise made ten years ago.

For the foregoing reasons, I dissent.

NOTES

[1] OCGA § 13-3-44; Insilco Corp. v. First Nat'l Bank of Dalton, 248 Ga. 322, 322-23, 283 S.E.2d 262 (1981); see Pepsi Cola Bottling Co. v. First Nat'l Bank of Columbus, 248 Ga. 114, 116, 281 S.E.2d 579 (1981); Restatement (Second) of Contracts, § 90 (1981 and Supp.1992).

[2] Doll v. Grand Union Co., 925 F.2d 1363, 1371 (11th Cir.1991).

[3] Pepsi Cola Bottling Co., 248 Ga. at 116, 281 S.E.2d 579; see Zachos v. C & S Nat. Bank, 213 Ga. 619, 624, 100 S.E.2d 418 (1957); Folks, Inc. v. Dobbs, 181 Ga.App. 311, 352 S.E.2d 212 (1986).

[4] Fidelity & Deposit Co. v. West Point Construction Co., 178 Ga.App. 578, 344 S.E.2d 268 (1986); see Doll, supra.

[5] Wright is also morally obligated to provide support for Newman's son. Merely because an obligation may not be capable of legal enforcement, one is not necessarily free to act in any way that he might choose. In addition to our legal duties, we are also bound by a consciousness of duty that is based upon fundamental values such as honor, truth, and responsibility. The "non-legal" obligations that we undertake are no less sacrosanct merely because they may not be capable of legal enforcement. The moral (as opposed to the legal) dilemma faced by Wright lies within his conscience, heart, and soul. He need have looked no further than there to determine what he must do in this case.

1092Keven A. McKenna, Cheryl A. Asquino, Providence, for plaintiff.

DeSimone & Del Sesto, Herbert F. DeSimone, Ronald W. Del Sesto, Providence, for defendant.

OPINION

SHEA, Justice.

The defendant employer, Plantations Steel Company (Plantations), appeals from a Superior Court judgment for the plaintiff employee, Edward J. Hayes (Hayes). The trial justice, sitting without a jury, found that Plantations was obligated to Hayes on the basis of an implied-in-fact contract to pay him a yearly pension of $5,000. The award covered three years in which payment had not been made. The trial justice ruled, also, that Hayes had made a sufficient showing of detrimental reliance upon Plantations's promise to pay to give rise to its obligation based on the theory of promissory estoppel. The trial justice, however, found in part for Plantations in ruling that the payments to Hayes were not governed by the Employee Retirement Income Security Act, 29 U.S.C.A. §§ 1001-1461 (West 1975), and consequently he was not entitled to attorney's fees under § 1132(g) of that act. Both parties have appealed.

We reverse the findings of the trial justice regarding Plantations's contractual obligation to pay Hayes a pension. Consequently we need not deal with the cross-appeal concerning the award of attorney's fees under the federal statute.

Plantations is a closely held Rhode Island corporation engaged in the manufacture of steel reinforcing rods for use in concrete construction. The company was founded by Hugo R. Mainelli, Sr., and Alexander A. DiMartino. A dispute between their two families in 1976 and 1977 left the DiMartinos in full control of the corporation. Hayes was an employee of the corporation from 1947 until his retirement in 1972 at age of sixty-five. He began with Plantations as an "estimator and draftsman" and ended his career as general manager, a position of considerable responsibility. Starting in January 1973 and continuing until January 1976, Hayes received the annual sum of $5,000 from Plantations. Hayes instituted this action in December 1977, after the then company management refused to make any further payments.

Hayes testified that in January 1972 he announced his intention to retire the following July, after twenty-five-years of continuous service. He decided to retire because he had worked continuously for fifty-one years. He stated, however, that he would not have retired had he not expected to receive a pension. After he stopped working for Plantations, he sought no other employment.

Approximately one week before his actual retirement Hayes spoke with Hugo R. Mainelli, Jr., who was then an officer and a stockholder of Plantations. This conversation was the first and only one concerning payments of a pension to Hayes during retirement. Mainelli said that the company "would take care" of him. There was no mention of a sum of money or a percentage of salary that Hayes would receive. There was no formal authorization for payments by Plantations's shareholders and/or board of directors. Indeed, there was never any formal provision for a pension plan for any employee other than for unionized employees, who benefit from an arrangement through their union. The plaintiff was not a union member.

Mr. Mainelli, Jr., testified that his father, Hugo R. Mainelli, Sr., had authorized the first payment "as a token of appreciation for the many years of [Hayes's] service." Furthermore, "it was implied that that check would continue on an annual basis." Mainelli also testified that it was his "personal intention" that the payments would continue for "as long as I was around."

Mainelli testified that after Hayes's retirement, he would visit the premises each year to say hello and renew old acquaintances. During the course of his visits, Hayes would thank Mainelli for the previous check and ask how long it would continue so that he could plan an orderly retirement.

The payments were discontinued after 1976. At that time a succession of several poor business years plus the stockholders' dispute, resulting in the takeover by the DiMartino family, contributed to the decision to stop the payments.

The trial justice ruled that Plantations owed Hayes his annual sum of $5,000 for the years 1977 through 1979. The ruling implied that barring bankruptcy or the cessation of business for any other reason, Hayes had a right to expect continued annual payments.

The trial justice found that Hugo Mainelli, Jr.'s statement that Hayes would be taken care of after his retirement was a promise. Although no sum of money was mentioned in 1972, the four annual payments of $5,000 established that otherwise unspecified term of the contract. The trial justice also found that Hayes supplied consideration for the promise by voluntarily retiring, because he was under no obligation to do so. From the words and conduct of the parties and from the surrounding circumstances, the trial justice concluded that there existed an implied contract obligating the company to pay a pension to Hayes for life. The trial justice made a further finding that even if Hayes had not truly bargained for a pension by voluntarily retiring, he had nevertheless incurred the detriment of foregoing other employment in reliance upon the company's promise. He specifically held that Hayes's retirement was in response to the promise and held also that Hayes refrained from seeking other employment in further reliance thereon.

The findings of fact of a trial justice sitting without a jury are entitled to great weight when reviewed by this court. His findings will not be disturbed unless it can be shown that they are clearly wrong or that the trial justice misconceived or overlooked material evidence. Lisi v. Marra, R.I., 424 A.2d 1052 (1981); Raheb v. Lemenski, 115 R.I. 576, 350 A.2d 397 (1976). After careful review of the record, however, we conclude that the trial justice's findings and conclusions must be reversed.

Assuming for the purpose of this discussion that Plantations in legal effect made a promise to Hayes, we must ask whether Hayes did supply the required consideration that would make the promise binding? And, if Hayes did not supply consideration, was his alleged reliance sufficiently induced by the promise to estop defendant from denying its obligation to him? We answer both questions in the negative.

We turn first to the problem of consideration. The facts at bar do not present the case of an express contract. As the trial justice stated, the existence of a contract in this case must be determined from all the circumstances of the parties' conduct and words. Although words were expressed initially in the remark that Hayes "would be taken care of," any contract in this case would be more in the nature of an implied contract. Certainly the statement of Hugo Mainelli, Jr., standing alone is not an expression of a direct and definite promise to pay Hayes a pension. Though we are analyzing an implied contract, nevertheless we must address the question of consideration.

Contracts implied in fact require the element of consideration to support them as is required in express contracts. The only difference between the two is the manner in which the parties manifest their assent. J. Koury Steel Erectors, Inc. v. San-Vel Concrete Corp., R.I., 387 A.2d 694 (1978); Bailey v. West, 105 R.I. 61, 249 A.2d 414 (1969). In this jurisdiction, consideration consists either in some right, interest, or benefit accruing to one party or some forbearance, detriment, or responsibility given, suffered, or undertaken by the other. See Dockery v. Greenfield, 86 R.I. 464, 136 A.2d 682 (1957); Darcey v. Darcey, 29 R.I. 384, 71 A. 595 (1909). Valid consideration furthermore must be bargained for. It must induce the return act or promise. To be valid, therefore, the purported consideration must not have been delivered before a promise is executed, that is, given without reference to the promise. Plowman v. Indian Refining Co., 20 F. Supp. 1 (E.D.Ill. 1937). Consideration is therefore a test of the enforceability of executory promises, Angel v. Murray, 113 R.I. 482, 322 A.2d 630 (1974), and has no legal effect when rendered in the past and apart from an alleged exchange in the present. Zanturjian v. Boornazian, 25 R.I. 151, 55 A. 199 (1903).

In the case before us, Plantations's promise to pay Hayes a pension is quite clearly not supported by any consideration supplied by Hayes. Hayes had announced his intent to retire well in advance of any promise, and therefore the intention to retire was arrived at without regard to any promise by Plantations. Although Hayes may have had in mind the receipt of a pension when he first informed Plantations, his expectation was not based on any statement made to him or on any conduct of the company officer relative to him in January 1972. In deciding to retire, Hayes acted on his own initiative. Hayes's long years of dedicated service also is legally insufficient because his service too was rendered without being induced by Plantations's promise. See Plowman v. Indian Refining Co., supra.

Clearly then this is not a case in which Plantations's promise was meant to induce Hayes to refrain from retiring when he could have chosen to do so in return for further service. 1 Williston on Contracts, § 130B (3d ed., Jaeger 1957). Nor was the promise made to encourage long service from the start of his employment. Weesner v. Electric Power Board of Chattanooga, 48 Tenn. App. 178, 344 S.W.2d 766 (1961). Instead, the testimony establishes that Plantations's promise was intended "as a token of appreciation for [Hayes's] many years of service." As such it was in the nature of a gratuity paid tm Hayes for as long as the company chose. In Spickelmier Industries, Inc. v. Passander, 172 Ind. App. 49, 359 N.E.2d 563 (1977), an employer's promise to an employee to pay him a year-end bonus was unenforceable because it was made after the employee to pay him a year-end bonus was unenforceable because it was made after the employee had performed his contractual responsibilities for that year.

The plaintiff's most relevant citations are still inapposite to the present case. Bredemann v. Vaughan Mfg. Co., 40 Ill. App.2d 232, 188 N.E.2d 746 (1963), presents similar yet distinguishable facts. There, the appellate court reversed a summary judgment granted to the defendant employer, stating that a genuine issue of material fact existed regarding whether the plaintiff's retirement was in consideration of her employer's promise to pay her a lifetime pension. As in the present case, the employer made the promise one week prior to the employee's retirement, and in almost the same words. However, Bredemannis distinguishable because the court characterized that promise as a concrete offer to pay if she would retire immediately. In fact, the defendant wanted her to retire. Id. 188 N.E.2d at 749. On the contrary, Plantations in this case did not actively seek Hayes's retirement. DiMartino, one of Plantation's founders, testified that he did not want Hayes to retire. Unlike Bredemann, here Hayes announced his unsolicited intent to retire.

Hayes also argues that the work he performed during the week between the promise and the date of his retirement constituted sufficient consideration to support the promise. He relies on Ulmann v. Sunset-McKee Co., 221 F.2d 128 (9th Cir.1955), in which the court ruled that work performed during the one-week period of the employee's notice of impending retirement constituted consideration for the employer's offer of a pension that the employee had solicited some months previously. But there the court stated that its prime reason for upholding the agreement was that sufficient consideration existed in the employee's consent not to compete with his employer. These circumstances do not appear in our case. Hayes left his employment because he no longer desired to work. He was not contemplating other job offers or considering going into competition with Plantations. Although Plantations did not want Hayes to leave, it did not try to deter him, nor did it seek to prevent Hayes from engaging in other activity.

Hayes argues in the alternative that even if Plantations's promise was not the product of an exchange, its duty is grounded properly in the theory of promissory estoppel. This court adopted the theory of promissory estoppel in East Providence Credit Union v. Geremia, 103 R.I. 597, 601, 239 A.2d 725, 727 (1968) (quoting 1 Restatement Contracts§ 90 at 110 (1932)) stating:

"A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of its promise."

In East Providence Credit Union this court said that the doctrine of promissory estoppel is invoked "as a substitute for a consideration, rendering a gratuitous promise enforceable as a contract." Id. To restate the matter differently, "the acts of reliance by the promisee to his detriment [provide] a substitute for consideration." Id.

Hayes urges that in the absence of a bargained-for promise the facts require application of the doctrine of promissory estoppel. He stresses that he retired voluntarily while expecting to receive a pension. He would not have otherwise retired. Nor did he seek other employment.

We disagree with this contention largely for the reasons already stated. One of the essential elements of the doctrine of promissory estoppel is that the promise must induce the promisee's action or forbearance. The particular act in this regard is plaintiff's decision whether or not to retire. As we stated earlier, the record indicates that he made the decision on his own initiative. In other words, the conversation between Hayes and Mainelli which occurred a week before Hayes left his employment cannot be said to have induced his decision to leave. He had reached that decision long before.

An example taken from the restatement provides a meaningful contrast:

"2. A promises B to pay him an annuity during B's life. B thereupon resigns profitable employment, as A expected that he might. B receives the annuity for some years, in the meantime becoming disqualified from again obtaining good employment. A's promise is binding." (Emphasis added.) 1 Restatement Contracts § 90 at 111 (1932).

In Feinberg v. Pfeiffer Co., 322 S.W.2d 163 (Mo. App. 1959), the plaintiff-employee had worked for her employer for nearly forty years. The defendant corporation's board of directors resolved, in view of her long years of service, to obligate itself to pay "retirement privileges" to her. The resolution did not require the plaintiff to retire. Instead, the decision whether and when to retire remained entirely her own. The board then informed her of its resolution. The plaintiff worked for eighteen months more before retiring. She sued the corporation when it reduced her monthly checks seven years later. The court held that a pension contract existed between the parties. Although continued employment was not a consideration to her receipt of retirement benefits, the court found sufficient reliance on the part of the plaintiff to support her claim. The court based its decision upon the above restatement example, that is, the defendant informed the plaintiff of its plan, and the plaintiff in reliance thereon, retired. Feinberg presents factors that also appear in the case at bar. There, the plaintiff had worked many years and desired to retire; she would not have left had she not been able to rely on a pension; and once retired, she sought no other employment.

However, the important distinction between Feinberg and the case before us is that in Feinberg the employer's decision definitely shaped the thinking of the plaintiff. In this case the promise did not. It is not reasonable to infer from the facts that Hugo R. Mainelli, Jr., expected retirement to result from his conversation with Hayes. Hayes had given notice of his intention seven months previously. Here there was thus no inducement to retire which would satisfy the demands of § 90 of the restatement. Nor can it be said that Hayes's refraining from other employment was "action or forbearance of a definite and substantial character." The underlying assumption of Hayes's initial decision to retire was that upon leaving the defendant's employ, he would no longer work. It is impossible to say that he changed his position any more so because of what Mainelli had told him in light of his own initial decision. These circumstances do not lead to a conclusion that injustice can be avoided only by enforcement of Plantations's promise. 1097Hayes received $20,000 over the course of four years. He inquired each year about whether he could expect a check for the following year. Obviously, there was no absolute certainty on his part that the pension would continue. Furthermore, in the face of his uncertainty, the mere fact that payment for several years did occur is insufficient by itself to meet the requirements of reliance under the doctrine of promissory estoppel.

For the foregoing reasons, the defendant's appeal is sustained and the judgment of the Superior Court is reversed. The papers of the case are remanded to the Superior Court.