2 Q.B. 851
114 Eng. Rep. 330

ELEANOR THOMAS
against
BENJAMIN THOMAS

Saturday, February 5th, 1842.

Declaration for non-performance of an agreement stated to be, that defendant, when required, should convey a certain house and premises to plaintiff for her life, and that plaintiff, at all times during her possession thereof, should pay defendant and S. T. (since deceased), their executors, &c., £1 yearly towards the ground rent payable in respect of the said house and other premises, and keep the house in repair. Pleas: 1. Non assumpsit; 2. That there was not the consideration alleged. Issues thereon. The agreement was between plaintiff, who was the widow, and defendant and S. T., the executors, of J. T. After reciting that J. T., shortly before his death, had verbally expressed his desire that plaintiff, in addition to his other provision for her, should have the house, &c. during her life, and reciting that defendant and S. T. were desirous that such intention should be carried into effect, it was witnessed that, "in consideration of such desire and of the premises," the executors would convey the house, &c. to the plaintiff for [114 Eng. Rep. 331] her life; "provided nevertheless, and it is hereby further agreed and declared," that the plaintiff should during her possession pay to the executors £1 yearly towards the ground rent payable in respect of the said house and adjoining premises, and should keep the said house, &c. in repair. Held, that the agreement so to pay, and to keep the premises in repair, was a consideration for the agreement by the defendant and S. T.; and that respect for the wishes of the testator was no part of the legal consideration for their agreement, and need not be stated in the declaration.

[8. C. 2 G. & D. 226; 11 L. J. Q. B. 104; 6 Jur. 645. Discussed, Gardiner v. Gardiner, 1861, 12 Ir. C. L. R. 573; Lee v. Mathews, 1880, 6 L. R. Ir. 534.]

Assumpsit. The declaration stated an agreement between plaintiff and defendant that the defendant should, when thereto required by the plaintiff, by all necessary deeds, conveyances, assignments, or other [2 Q.B. 852] assurances, grants, &c., or otherwise, assure a certain dwelling house and premises, in the county of Glamorgan, unto plaintiff for her life, or so long as she should continue a widow and unmarried, and that plaintiff should, at all times during which she should have possession of the said dwelling house and premises, pay to defendant and one Samuel Thomas (since deceased), their executors, administrators or assigns, the sum of £1 yearly towards the ground rent payable in respect or the said dwelling house and other premises thereto adjoining, and keep the said dwelling house and premises in good and tenantable repair: that, the said agreement being made, in consideration thereof, and of plaintiff's promise to perform the agreement, Samuel Thomas and the defendant promised to perform the same: and that, although plaintiff afterwards and before the commencement of the suit, to wit, &c., required of defendant to grant, &c., by a necessary and sufficient deed, &c., the said dwelling house, &c. to plaintiff for her life, or whilst she continued a widow, and though she had then continued, &c., and still was, a widow and unmarried, and although she did, to wit on, &c., tender to the defendant for his execution a certain necessary and sufficient deed, &c., proper and sufficient for the conveyance, &c., and although, &c. (general readiness of plaintiff to perform), yet defendant did not nor would then or at any other time convey, &c.

Pleas. 1. Non assumpsit. 2. That there was not the consideration alleged in the declaration for the defendant's promise. 3. Fraud and covin.

Issues thereon.

At the trial, before Coltman J., at the Glamorganshire Lent Assizes, 1841, it appeared that John Thomas, the [2 Q.B. 853] deceased husband of the plaintiff, at the time of his death, in 1837, was possessed of a row of seven dwelling houses in Merthyr Tidvil, in one of which, being the dwelling house in question, he was himself residing; and that by his will he appointed his brother Samuel Thomas (since deceased) and the defendant executors thereof, to take possession of all his houses, &c., subject to certain payments in the will mentioned, among which were certain charges in money for the benefit of the plaintiff. In the evening before the day of his death, he expressed orally a wish to make some further provision for his wife; and on the following morning he declared orally, in the presence of two witnesses, that it was his will that his wife should have either the house in which he lived and all that it contained, or an additional sum of £100. Instead thereof.

This declaration being shortly afterwards brought to the knowledge of Samuel Thomas and the defendant, the executors and residuary legatees, they consented to carry the intentions of the testator so expressed into effect; and, after the lapse of a few days, they and the plaintiff executed the agreement declared upon; which, after stating the parties, and briefly reciting the will, proceeded as follows.

"And, whereas the said testator, shortly before his death, declared, in the presence of several witnesses, that he was desirous his said wife should have and enjoy during her life, or so long as she should continue his widow, all and singular the dwelling house," &c., "or £100 out of his personal estate," in addition to the respective legacies and bequests given her in and by his said will; "but such declaration and desire was not reduced to writing in the lifetime of the said John Thomas [2 Q.B. 854] and read over to him; but the said Samuel Thomas and Benjamin Thomas are fully convinced and satisfied that such was the desire of the said testator, and are willing and desirous that such intention should be carried into full effect: now these presents witness, and [114 Eng. Rep. 332] it is hereby agreed and declared by and between the parties, that, in consideration of such desire and of the premises;" the executors would convey the dwelling house, &c. to the plaintiff and her assigns during her life, or for so long a time as she should continue a widow and unmarried: "provided nevertheless, and it is hereby further agreed and declared, that the said Eleanor Thomas, or her assigns, shall and will, at all times during which she shall have possession of the said dwelling house, &c., pay to the said Samuel Thomas and Benjamin Thomas, their executors, &c., the sum of £1 yearly towards the ground rent payable in respect of the said dwelling house and other premises thereto adjoining, and shall and will keep the said dwelling house and premises in good and tenantable repair:" with other provisions not affecting the questions in this case.

The plaintiff was left in possession of the dwelling house and premises for some time: but the defendant, after the death of his co-executor, refused to execute a conveyance tendered to him for execution pursuant to the agreement, and, shortly before the trial, brought an ejectment, under which he turned the plaintiff out of possession. It was objected for the defendant that, a part of the consideration proved being omitted in the declaration, there was a fatal variance. The learned Judge overruled the objection, reserving leave to move to enter a nonsuit. Ultimately a verdict was found for the plaintiff on all the issues; and, in Easter term [2 Q. B. 855] last, a rule nisi was obtained pursuant to the leave reserved.

Chilton and W. M. James now shewed cause. It is sufficient if there be any legal consideration for this agreement. [E. V. Williams conceded that, in a Court of Law, he could not go into the adequacy of the consideration, and that, if the consideration was in part a legal and in part only a moral one, the latter part need not be stated in the declaration^[a].] The objection taken at the trial was, that the consideration for the agreement, instead of being that which is alleged in the declaration, was, as stated in the agreement itself, a respect for the testator's intentions, in which case this would be a mere voluntary agreement: the defendant now appears to contend that respect for the testator's intentions is a part of the legal consideration, and ought to have been set out. But it could not be so characterized. All that a plaintiff is required to do is to set out the legal effect of the contract, and to shew performance on the plaintiff's part: here she was in possession for three or four years, paying rent, under an undertaking to pay rent and keep the premises in repair: that is a good consideration: and, if so; it cannot be necessary in pleading it to allege additional motives, which, in the eye of the law, do not enter into the consideration. Thus, in debt for rent on a demise of a messuage with the furniture, though in fact the furniture forms an important item in estimating the rent, yet, as, in point of [2 Q.B. 856] law, the rent issues out of the real property, and not out of the furniture, it is sufficient to allege a demise of the real property; Farewell v. Dickenson (6 B. & C. 251). Parties are often influenced by motives which form no part of the legal consideration, such as the character of a tenant, or the merits or distresses of the party intended to be benefited; and the circumstance that such motives happen to be stated in the agreement cannot affect the legal rights of the parties, nor make it necessary to state those motives in the declaration.

E. V. Williams, contra. The consideration alleged in the declaration is solely the promise to pay rent and repair: therefore it lay on the plaintiff to prove that to have been the true and sole consideration; Beech v. White (12 A. & E. 668). But the evidence shews that the testator's declaration, as brought before and recognized by the executors, was part, if not the whole, of the consideration. It is conceded that where there is a good legal consideration conjoined with a moral one, it is not necessary to state both; but here regard for the testator's intentions was not, under the circumstances, a mere moral consideration; for the declaration had been made and reduced to writing so formally that it might well be thought valid in law, and so the agreement be made by the executors and residuary legatees to buy peace^[c]. If the testator's expressed wish was part or the whole of the consideration, the declaration should have so alleged it, and a nonsuit ought to be entered. But, in fact, if it be not the consideration, there is no [2 Q.B. 857] legal consideration at all: this is a mere gift cum onere; and, had it been stated truly, the declaration would have been bad on [114 Eng. Rep. 333] general demurrer. [Patteson J. The rent, if issuing out of the house, might follow the gift; but the obligation to repair does not.] The expressions in the agreement with reference to the ground rent, and the evidence of one of the witnesses, shew that the property was held under a superior landlord: the assignee's obligation to pay rent and repair would therefore be implied from the very nature and state of things which existed between the parties; Bayley J. in Burnett v. Lynch^[a1]. [Lord Denman C.J. There is nothing to shew who was liable to pay the ground rent. Coleridge J. The £1 is reserved payable to the executors: it is quite different from an assignee's liability.] Still the annexing of such a payment cannot be regarded as the consideration. What is meant by the consideration for a promise, but the cause or inducement for making it? Plowden^[b], commenting on Sharington v. Stratton, says, "Note: That by the civil law nudum pactum is defined thus, Nudum pactum est ubi nulla subset causa praeter conventionem; sed ubi subest causa, fit obligatio, et parit actionem." In Chitty on Contracts^[c] the following passage is cited from the Code Civil: "L'obligation sans cause, ou sur une fausse cause, ou sur une cause illicite, ne peut avoir aucun effet." The rent and repairs cannot be said to have been the cause or motive which induced the executors to make this agreement: it must have been such a belief as is recited in the [2 Q.B. 858] agreement itself, which, though a good moral consideration, and perhaps sufficient to raise a use, is not sufficient to support a promise. The proviso merely causes the donee to take the gift charged with the burthen of paying the rent and keeping the premises in repair; and she cannot turn these conditions into a consideration. It is clear that, if the proviso had not existed, the executors might have retracted at any moment; their right to do so cannot be qualified by the circumstance that the gift was cum onere; otherwise, when carried out to conveyance, it would be a conveyance on good, as distinguished from valuable, consideration. Suppose a subsequent sale; a purchaser for value would have been entitled, though he had purchased with notice of the gift. A consideration, to be sufficient against such a purchaser within the saving clause of the 27 Eliz. c. 4, s. 4^[a2], must be such a consideration as would support an assumpsit. Were it otherwise, donees by voluntary gift would confirm their estates by covenanting to repair a monument, maintain a plantation, or the like. Here the donors, in effect, say, that the donee is to pay no purchase money, but is to do what a purchaser for full consideration would have to do, pay the rent and maintain in repair. And it is to be observed that, in that part of the agreement where the purchase money is usually mentioned, instead of any valuable consideration there is a mere reference to the testator's wishes; which is followed in a different part of the deed by a simple provision for the burthens commonly belonging and incident to the subject matter. The defendant is therefore entitled to a verdict on the first issue.

[2 Q.B. 859] Lord Denman C.J. There is nothing in this case but a great deal of ingenuity, and a little wilful blindness to the actual terms of the instrument itself. There is nothing whatever to shew that the ground rent was payable to a superior landlord; and the stipulation for the payment of it is not a mere proviso, but an express agreement. (His Lordship here read the proviso.) This is in terms on express agreement, and shews a sufficient legal consideration quite independent of the moral feeling which disposed the executors to enter into such a contract. Mr. Williams's definition of consideration is too large: the word causa in the passage referred to means one which confers what the law considers a benefit on the party. Then the obligation to repair is one which might impose charges heavier than the value of the life estate.

Patteson J. It would be giving to causa too large a construction if we were to adopt the view urged for the defendant: it would be confounding consideration with motive^[a3]. Motive is not the same thing with consideration. Consideration means something which is of some value in the eye of the law, moving from the plaintiff: it may be some benefit to the plaintiff, or some detriment to the defendant; but at all [114 Eng. Rep. 334] events it must be moving from the plaintiff. Now that which is suggested as the consideration here, a pious respect for the wishes of the testator, does not in any way move from the plaintiff; it moves from the testator; therefore, legally speaking, it forms no part of the consideration. Then it is said that, if that be so, there [2 Q.B. 860] is no consideration at all, it is a mere voluntary gift: but when we look at the agreement we find that this is not a mere proviso that the donee shall take the gift with the burthens; but it is an express agreement to pay what seems to be a fresh apportionment of a ground rent, and which is made payable not to a superior landlord but to the executors. So that this rent is clearly not something incident to the assignment of the house; for in that case, instead of being payable to the executors, it would have been payable to the landlord. Then as to the repairs: these houses may very possibly be held under a lease containing covenants to repair; but we know nothing about it: for any thing that appears, the liability to repair is first created by this instrument. The proviso certainly struck me at first as Mr. Williams put it, that the rent and repairs were merely attached to the gift by the donors; and, had the instrument been executed by the donors only, there might have been some ground for that construction; but the fact is not so. Then it is suggested that this would be held to be a mere voluntary conveyance as against a subsequent purchaser for value: possibly that might be so: but suppose it would: the plaintiff contracts to take it, and does take it, whatever it is, for better or worse: perhaps a bona fide purchase for a valuable consideration might override it; but that cannot be helped.

Coleridge J. The concessions made in the course of the argument have, in fact, disposed of the case. It is conceded that mere motive need not be stated: and we are not obliged to look for the legal consideration in any particular part of the instrument, merely because [2 Q.B. 861] the consideration is usually stated in some particular part: ut res magis valeat, we may look to any part. In this instrument, in the part where it is usual to state the consideration, nothing certainly is expressed hut a wish to fulfil the intentions of the testator: but in another part we find an express agreement to pay an annual sum for a particular purpose; and also a distinct agreement to repair. If these had occurred in the first part of the instrument, it could hardly have been argued that the declaration was not well drawn, and supported by the evidence. As to the suggestion of this being a voluntary conveyance, my impression is that this payment of £1. annually is more than a good consideration: it is a valuable consideration: it is clearly a thing newly created, and not part of the old ground rent.

Rule discharged^[a].

[a] On this point Chilton cited Bul. N. P. 147, and 1 Chitt. Plead. 295, 300, 6th ed.

[c] See Haigh v. Brooks, 10 A. & E. 309, and Brooks v. Haigh, 10 A. & E. 323.

[a1] 5 B. & C. 589, 605. See also the judgments of Holroyd J. and Littledale J. in the same case.

[b] Note to Sharington v. Strotton, Plowd. 309.

[c] P. 28. 3d ed., 1841. Code Civil, liv. 3, tit. 3, ch. 2, sect. 4, § 1131. As to the passage from the Code, see p. 861, note (a), post.

[a2] See Newland on Contracts, c. 24, p. 392, et seq.

[a3] See note (a), p. 861, post.

[a] In a commentary on the Code Civil, in "Codes Francais Expliques," &c., by J. A. Rogron, Paris, 1836, the words of the Code, "L'obligation sans cause, ou sur un fausse cause, ou sur un cause illicite, ne peut avoir aucun effet" (ante, p. 857), are discussed; and the note upon "sans cause" is as follows.

"La cause est ce qui determine l'engagement que prend une partie dans un contrat; il ne faut pas la confondre avec la cause implicite du contrat, autrement le motif qui porte a contracter. La cause de l'engagement d'une partie est le fait ou la promesse de l'autre partie; elle peut aussi consister dans une pure liberalite de la part de l'une des parties: ainsi, lorsque je m'oblige a payer mille francs a Paul, pour tels services que son pere m'a rendus, la cause determinante du contrat, ce sont les services qui m'ont ete rendus; le motif qui m'a porte a contracter, c'est le desir de m'acquitter envers lui des services de son pere; si celui-ci ne m'a jamais rendu les services dont il a ete parle dans l'acte, le contrat est sans cause. Je m'oblige a donner mille franc a Paul pour qu'il suive une affaire pendante devante le tribunal de la Seine: la cause determinante est la promesse de Paul qu'il suivra mon affaire; si elle est jugee irrevocablement au moment ou nous avons stipule, le contrat est sans cause. Autre exemple: je vous vends ma maison; la cause de la vente est, d'un cote, la maison elle-meme, de l'autre, le prix. Enfin je donne, dans la forme des dispositions entre vifs, ma maison a Paul, qui l'accepte: ma liberalite est ici la seule cause du contrat."

P. 209.

138 Mich. 612

FISCHER
v.
UNION TRUST CO.

1. GIFTS—CONVEYANCES-DELIVERY.

After a deed of gift was signed and acknowledged, the grantor made manual delivery of it to the grantee, who took it and handed it to her brother, evidently to be kept for her. He put it away without recording it. Held, that the delivery was complete.

2. SAME—AGREEMENT BY DONOR TO PAY MORTGAGE—ENFORCEMENT.

Where the only consideration for a deed by a father to his daughter was love and affection, the daughter could not enforce a provision in the deed that the grantor would pay certain mortgages on the property conveyed when the same became due, and therefore his failure to do so, resulting in an enforcement of one of them by foreclosure, gave her no claim against the estate of her father based on the appropriation of her property to pay the mortgage.

Error to Wayne; Hosmer, J. Submitted June 9, 1904. (Docket No. 6.) Decided December 30, 1904.

Bertha Fischer presented a claim against the estate of William Fischer, Sr., deceased, for damages for an alleged breach of a covenant in a deed. The claim was allowed by the commissioners, and the Union Trust Company, administrator, appealed to the circuit court. There was judgment for claimant on a verdict directed by the court, and defendant brings error. Reversed.

On December 21, 1895, William Fischer, Sr., conveyed by warranty deed certain property in the city of Detroit to the claimant, Bertha Fischer, his daughter, who had been incompetent for a number of years, and so remains, and is at present at the retreat for the insane at Dearborn. [613] The deed was a warranty deed, in the usual form, with a covenant against all incumbrances, excepting two mortgages, which the grantor "agrees to pay when the same become due." The land described in the deed comprised the homestead where the father and daughter lived, and the adjoining lot, with the house thereon. Mr. Fischer, after signing and acknowledging it, handed it to claimant, saying, "Here is a deed of the Jefferson and Larned street property." He said it was a "nice Christmas present." She took it and read it. One of her brothers gave her a dollar, which she gave to her father, who took it. She then handed the deed to her brother Alexander, and asked him to take care of it. He put it in his safe, and did not record it until June 30, 1902, about a year after the grantor's death, and 6 1/2 years after its date. The reason given by the son for not recording is that there were unpaid taxes, in consequence of which, under the statute, it could not be recorded.

After the delivery of the deed, both grantor and grantee continued to live together on part' of the property so conveyed. Mr. Fischer continued until his death to manage and control it, and to receive the rents therefrom, just as he had done before the giving of the deed. During that time he took care of his daughter the same as before. At the time of the execution of the deed, the grantor was considered by his sons to be worth about $50,000. He had no debts except the two mortgages, one of $3,000 and the other of $5,000. If he was then worth that amount, the larger part of it was in some way disposed of in his lifetime. The $3,000 mortgage was foreclosed for nonpayment, and satisfied out of part of the property conveyed. The claim at bar is based upon this appropriation of her property to pay the mortgage.

Russel & Campbell, for appellant.

Alfred J. Ducharme (John O. Donnelly, of counsel), for appellee.

[614] GRANT, J. (after stating the facts). 1. The facts and circumstances of the delivery of the deed are not in dispute. Counsel differ only in the conclusion to be drawn from them. We think that the conceded facts show a delivery. After the deed was signed and acknowledged, the grantor made manual delivery of it to the grantee. She took it and handed it to her brother, evidently to be kept by him for her. The grantor reserved no control over it, and retained no right to withdraw or cancel it. He never attempted to. Under those circumstances the delivery was complete.

2. The meritorious question in the case is: Was the claimant in position to enforce the executory contract in the deed against her father while living, and to enforce it against his estate now that he is dead, or to recover damages at law for nonperformance? To say that the one dollar was the real, or such valuable consideration as would of itself sustain a deed of land worth several thousand dollars, is not in accord with reason or common sense. The passing of the dollar by the brother to his sister, and by her to her father, was treated rather as a joke than as any actual consideration. The real and only consideration for the deed and the agreement, therein contained, to pay the mortgages, was the grantor's love and affection for his unfortunate daughter, and his parental desire to provide for her support after he was dead. The consideration was meritorious, but is not sufficient to compel the performance of a purely executory contract. The deed was a gift, and the gift was consummated by its execution and delivery. The title to the land, subject to the mortgages, passed as against all except the grantor's creditors. The gift was expressly made subject to the mortgages, and coupled with it was a promise to pay them. This promise has no additional force because it is contained in the deed. It has no other or greater force than would a promise by him to pay mortgages upon her own land, or to pay her $8,000 in money, or his promise to her evidenced by a [615] promissory note for a like amount, and given for the same purpose and the same consideration.

"The doctrine of meritorious consideration originates in the distinction between the three classes of consideration on which promises may be based, viz., valuable consideration, the performance of a moral duty, and mere voluntary bounty. The first of these classes alone entitles the promisee to enforce his claim against an unwilling promisor; the third is for all legal purposes a mere nullity until actual performance of the promise.

"The second or intermediate class, is termed the meritorious and is confined to the three duties of charity, of payment of creditors, and of maintaining a wife and children and under this last head are included provisions made for persons, not being children of the party promising, but in relation to whom he was manifested an intention to stand in loco parentis in reference to the parental duty of making provision for a child.

"Considerations of this imperfect class are not distinguished at law from mere voluntary bounty, but are to a modified extent recognized in equity. And the doctrine with respect to them is that, although a promise made without a valuable consideration cannot be enforced against the promisor, or against anyone in whose favor he has altered his intention, yet if an intended gift on meritorious consideration be imperfectly executed, and if the intention remains unaltered at the death of the donor, there is an equity to enforce it, in favor of his intention, against persons claiming by operation of law: Without an equally meritorious claim." Adams on Equity (8th Ed.), 97.

This court held that a promissory note given by a father to his son, intended as his share of the estate, could not be enforced against the estate. Conrad v. Manning’s Estate, 125 Mich. 77. The opinion in that case, written by my Brother MOORE, cites many authorities which need not be recited here. Duvoll v. Wilson, 9 Barb. 487, is exactly in point, both in the facts and conclusion reached.

"The consideration of natural love and [616] affection is sufficient in a deed; but a mere executory contract, that requires a consideration, as a promissory note, cannot be supported on the consideration of blood or natural love and [616] affection—there must be something more, a valuable consideration, or it is not good and cannot-be enforced at law but may be broken at the will of the party." Pennington v. Gittings, 2 Gill & J. 208.

See, also, West v. Cavins, 74 Ind. 265; Hadley v. Reed, 12 N. Y. Supp. 163.

The learned counsel for the claimant cite numerous authorities, but we do not think them applicable to this case.
In Ferguson's Appeal, 117 Pa. St. 426, a father had deeded to his daughter a lot of land according to a plat which called for a street thereon. The rights of the grantee in the street were the subject of the suit. One of the defenses set up was, the conveyance was voluntary. To this contention the court replied that the conveyance was fully executed. That decision is based upon the obvious principle that, when a grant of land or gift of personalty is consummated by a deed of the land or delivery of the personalty, the grantee or promisee succeeds to all the rights in the property which the grantor or promisor had. Third parties, except creditors, cannot contest the consideration.

So, where the contract of conveyance is fully executed, the grantee may maintain a suit in equity to correct the description in the deed. Hutsell v. Crewse, 138 Mo. 1. In that case the father deeded to his minor child the land for the same purpose as did Mr. Fischer in this case. He had also deeded certain other lands to his other children. His wife died, after which he remarried. After his death, suit was brought against the widow and her children to reform the deed. The basis of the decision is that the contract was executed, the title had passed, and the land was susceptible of identification aliunde. Pickett v. Garrard, 131 N. C. 195; Mason v. Moulden, 58 Ind. 1; Brown v. Whaley, 58 Ohio St. 654; and Ohmer v. Boyer, 89 Ala. 273—are similar cases.

In Lawrence v. McCalmont, 2 How. 426, the consideration was the sum of $1 and the extension of credit, which was held sufficient to sustain a contract of guaranty for the payment of accounts.

[617] In Harvey v. Alexander, 1 Rand. 233, the consideration was natural love and affection. Creditors attacked the conveyance on the ground of fraud. It was held that the deed was not per se voluntary. The question in the case was whether it was competent to show that full value was paid by the grantee. The holding of the case clearly is that love and affection would not be a sufficient consideration to sustain the deed.

In Ross' Appeal, 127 Pa. St. 10, a man gave a note of $5,000 to a trustee for his children named therein, due five years after date, with interest. It was sought to enforce the note after his death, and the transaction was sustained as an executory gift inter vivos. That is clearly in conflict with Conrad v. Manning's Estate, supra, unless it can be distinguished on the ground that in the Ross Case the payee was a trustee. Conover v. Brown, 49 N. J. Eq. 156, is in direct conflict with Conrad v. Manning's Estate, supra.

If claimant had no promise which she could specifically enforce against her father, or upon which she could base a claim for damages, it follows that she is not entitled to subrogation as against her father or his estate. A void promise cannot be made the basis of subrogation against an unwilling promisor. The same reason that is a bar to the one claim is also a bar to the other. However commendable was the promise of Mr. Fischer to give a larger share of his property to his unfortunate daughter than to his other children, it was a promise absolutely null and void until it became merged in his voluntary execution of it. His promise to pay was, for some unknown reason, left unexecuted. She paid no valuable consideration for the promise, and cannot, therefore, enforce it. It is, however, urged that Mr. Fischer's primary liability to pay the debt was unaffected by the deed of gift, and, as the subject of the gift has paid the debt, therefore claimant is entitled to subrogation. This claim cannot be maintained upon any other theory than that there was a valid gift of the entire land free from all incumbrances. If the prom [618] ise made by Mr. Fischer to his daughter to pay these incumbrances had been omitted from the deed, clearly he would have been under no obligation as to her to pay them, although the mortgagee could enforce his (Fischer's) primary liability. In such case the gift would have been only that of the equity of redemption. She would not in that event, by paying the mortgage, have been in position to recover the amount from her father or from his estate, for she would have taken title subject to the mortgage.

It is urged that "the father is already obligated to pay the debt [the debt secured by the mortgage), so that the question is not whether he may agree to pay it, but it is whether he may make a gift of his property without affecting this already existing agreement to pay it." If this logic is sound, it must, in my judgment, follow that every grantee who buys land subject to a mortgage can buy up the note evidencing the debt and sue the mortgagor therefor. This, evidently, is not the law. When a grantee purchases subject to a mortgage which is expressly exempted from his covenant of warranty, his undertaking with his grantor is to pay the mortgage if he desires to save his land. The amount of the mortgage is deducted from the purchase price. When such grantee pays the mortgage, he pays only what he, as against his grantor, has assumed to pay. One by a deed of gift certainly can acquire no more than one acquires by deed of purchase. The conveyance subject to the mortgage entails upon both grantees the same obligation to pay the mortgage, so far as the grantor is concerned. No arrangement between the grantee and the grantor can, of course, change the liability of the grantor and mortgagor to the mortgagee. His already "existing agreement" remains the same in either case, and is always unaffected by any subsequent transfers of the land. But where he sells and conveys, land by deed, subject to a mortgage, the primary obligation to pay the mortgage, as between the grantor and grantee, rests upon the grantee. If the mortgagee abandons his security and sues upon the note or obligation to which the [619] mortgage is collateral, and by his suit compels payment, such grantor (the mortgagor) is clearly entitled to recover from his grantee the amount thereof, and should be subrogated to the rights of the mortgagee against the land. Our attention has been called to no case where a mortgagee has pursued so extraordinary a course. The universal course in such cases has been to foreclose the mortgage, sell the land, and obtain a personal decree against the mortgagor for the deficiency.

If Mr. Fischer had voluntarily paid the mortgages, he would then simply have carried out his nonenforceable contract and have completed his gift, as, perhaps, he then intended to do. For some reason, perhaps a good one, he chose not to pay them. A void promise is no more effective than no promise, and the void promise in the deed had no more effect than if it had been omitted therefrom. If it is void for one purpose, it is void for all, and cannot be made available, either directly or indirectly. Only performance of the promise can be of any avail to the claimant.

A gift of personalty can be consummated only by an unconditional delivery of the thing. A gift of realty can be consummated only by the execution and delivery of a deed. If either is incumbered, the donor gives only what he had to give. He cannot give the interest of a third party in the property. However clear may be the intention of the donor to pay the incumbrances and thus give the entire property, he can accomplish this only by actually paying them. Neither his promise without a valuable consideration, nor his intention as evidenced by such promise, is of any avail to the donee.

Other interesting questions are raised, but they become immaterial in view of the conclusion we have reached.

Judgment is reversed, and new trial ordered.

The other Justices concurred.

125 Ky. 585

Murphy, Thompson & Co.
v.
Reed, &c.
Same
v.
Addington
Same
v.
Ingleheart, &c.

Court of Appeals of Kentucky.
May 3, 1907.

Appeal from Ohio Circuit Court.

T. F. BIRKHEAD, Circuit Judge.

Judgment for defendants. Plaintiffs appeal. Reversed.

[586] J. S. GLENN for appellants.

R. E. L. SIMMERMAN of counsel.

[588] W. H. BARNES, BARNES & ANDERSON and J. E. FOGLE, for appellee.

OPINION OF THE COURT BY CHIEF JUSTICE O'REAR — Reversing.

These cases involve a common principle of law, viz., the binding force, of an option to sell real estate. The options describe the land, and recite a consideration of $1 paid. They obligate the owners of the soil to convey the coal in the land by general warranty deed to the optionee within a specified future period, on notice by the optionee to the owners of the acceptance of the option and the payment of $5 per acre cash. During the life of the options the optionee did accept their terms, notified the owners thereof, and tendered the contract price recited in the options. The owners having refused to accept the money or to convey the lands, these actions were brought by the optionees to have a specific execution of the contracts. Demurrers were sustained to the petitions, on the ground that the contracts were unilateral, lacking in mutuality, and unenforceable, and the petitions were dismissed.

It is generally said that one essential of every executory contract is mutuality of obligation and remedy. That there must be mutuality of obligation, by which is meant an undertaking on one side and a consideration upon the other, is true always. But it is not true always that there must be mutuality of remedy. One example is a contract for a sufficient consideration between an adult and an infant may be [589] enforced against the adult, although he might not enforce it against the infant. And there are others. An option to sell is a standing offer to sell to the person and upon the terms named in the option, and an agreement to keep the proposition open for acceptance for the time stated. If its terms are fair, and have been understandingly entered into, there appears no reason why it should not be enforced, if accepted and offered to be complied with by the payment of the consideration within the time stipulated. If the same proposition had been made by the owner for immediate acceptance, and it had been immediately accepted, there would be no doubt that it was binding upon the offerer. The only difference between the one imagined and the contracts in suit is, instead of an offer for immediate acceptance, there is one left open for acceptance for a certain period, within which it is accepted. The option is said to contain two contracts, as it were: One, the contract to sell the land, which is the main contract, and which is uncompleted till accepted; and the other, the agreement to give the optionee a certain time within which to exercise his option of accepting and becoming bound upon the first contract, which is a completed contract. Each must have a consideration to support it. The consideration for the main contracts in this case is the price per acre stipulated to be paid upon the execution of the deeds. When the contract was accepted by the optionee, he became bound for the payment of the purchase price, and by tendering it complied fully with the element of mutual obligation upon his part.

The consideration for the agreement to give the optionee the definite time within which to exercise his choice, called the "option," is in these cases, the [590] $1 recited. It might have been more, or an entirely different consideration. Though there are authorities holding a consideration of $1 as sufficient to uphold such an agreement, we are not disposed to go so far. Such consideration is so flagrantly disproportionate to the value of the privilege in these cases — the options extending over a year — that it is merely nominal. It is not substantial, and the parties could not have regarded it as in any sense an equivalent of the privilege which was being contracted for. While upon demurrer the courts will be slow to say that a recited consideration is no consideration, if it has any appearance of having been regarded by the parties as the agreed value of the thing contracted for, where the stated consideration is so manifestly inadequate and disproportionate to the value of the thing being sold (the privilege or option) as to represent no value, or only a nominal value, it will be construed on demurrer, as a matter of law, as not having a consideration at all. If there is doubt about the matter, then the question of its value or adequacy is a defense to be pleaded. An option, to be binding upon the owner, in the sense that it is irrevocable upon him during the period for which it was given, must be upon a valuable and sufficient consideration. It may consist in money paid or to be paid for it, or in property, services, or counter benefits accruing to the owner, or disadvantage incurred by the optionee. In short, it may be such consideration as will support any other sort of contract. In this view of the matter, the options in these cases were not supported by sufficient consideration to have bound the owners not to withdraw them during the term for which they were given. They could have been withdrawn before acceptance, without liability [591] to the givers of the options. But, as they were not withdrawn, they constituted, instead of binding options, voluntary offers to sell, which, like any other valid offer, were, when accepted, binding upon the person making them. The statute of frauds is not involved in these cases. Tyler v. Ontzs, 93 Ky. 331, 14 Ky. Law Rep. 321, 20 S. W. 256.

This conclusion is reached after a careful consideration of the cases heretofore in this court and of the state of authorities elsewhere. The great weight of authority, and what seems to us to be the right of the matter, is in favor of upholding and enforcing such contracts. While formerly there was a marked difference of opinions as to the validity of pure options, there seems to have been but little divergence among the courts as to the enforcibility of such options when connected with leases. However, this court in its early history took the contrary view in Boucher v. Vanbuskirk, 2 A. K. Marshall (Ky.) 345. But in the later case of Bank of Louisville v. Baumeister, 87 Ky. 12, 9 Ky. Law Rep. 845, 7 S. W. 170, and Bacon v. Ky. Cent. Ry. Co., 95 Ky. 373, 16 Ky. Law Rep. 77, 25 S. W. 747, the principle of the Boucher-Vanbuskirk case was repudiated. The real underlying principle of the case where the option is given as part of a lease, and is enforced, is that it was based upon a sufficient valuable consideration. Therefore any other sufficient valuable consideration ought to support an option contract to sell. In Litz v. Goosling, 93 Ky. 185, 14 Ky. Law Rep. 91, 19 S. W. 527, 21 L. R. A. 127, the option in suit was substantially the same as those now under consideration. It does not appear that the court considered the effect of an acceptance of the option during its term and before its withdrawal by the owner of the land. The [592] court said:

"If the contract for an option to purchase real estate at a certain price within a certain time be based upon a sufficient consideration, which may consist, of course, either in an advantage moving to the one party, or a disadvantage to the other, then it is enforceable; but where a mere naked option, destitute of consideration, is given to one, it is not enforceable, because there is no mutuality of right and remedy."

Nor do we say now that such an option is enforceable as to the terms of the option (independent of the terms of the contract to sell the land); that is to say, the owner could not be compelled to keep the option open for acceptance for its full term, and that is the only contract embraced in the option, strictly speaking. The other contract, the one to buy the land, is yet to be consummated, and is not a contract at all until it is accepted within the time and terms stated in the agreement. What was said in Litz v. Goosling, supra, as to the binding validity of the option without consideration, is adhered to; but, if it should be deducible from the opinion that it was also intended to hold that the optionee could acquire no right in the contract by accepting it during its term and before notice of its withdrawal, then we disavow the principle, and to that extent the case will no longer be regarded as authority.

The judgment in each case is reversed, and each cause is remanded, with directions to overrule the demurrers and for proceedings not inconsistent herewith.

153 A. 438
301 Pa. 502

REAL ESTATE CO. OF PITTSBURGH, for Use of Epstein
v.
RUDOLPH.

Supreme Court of Pennsylvania.
Nov. 24, 1930.

Appeal from Court of Common Pleas, Allegheny County; James R. Macfarlane, President Judge.

Suit by the Real Estate Company of Pittsburgh, for the use of B. Epstein, against J. A. Rudolph. On exceptions to a decree nisi in favor of plaintiff, court in banc decreed dismissal of the bill, and plaintiff appeals.

Reversed and remanded with directions.

Argued before MOSCHZISKER, C. J., and FRAZER, WALLING, SIMPSON, KEIHART, SADLER, and SCHAFFER, JJ.

John C. Bane, Jr., George D. Wick, and Reed, Smith, Shaw & McClay, all of Pittsburgh, for appellant.

Harold R. Stadtfeld, of Pittsburgh, for appellee.

SIMPSON, J.

[153 A. 439] Defendant executed and delivered to the legal plaintiff an option as follows:

"April 18th, 1928.

"Real Estate Company of Pittsburgh,

"Wood and Fourth,

"Pittsburgh, Pennsylvania.

"Gentlemen:

"In consideration of One ($1.00) Dollar in hand paid, I hereby give you the option to purchase my property situate 1628 Penn Ave., at the price of $15000.00. This option to expire at 12 o'clock noon, April 21th, 1928.

"If this option is accepted by you and transaction closed, I agree to pay you a commission of 3% on the sale price. It is understood that the property is free and clear of encumbrances excepting a mortgage in the amount of $6,000.00.

"Very truly yours, J. A. Rudolph."

The next day, and before he was formally notified of the acceptance of the option, defendant informed plaintiffs that he would not sell the property because his wife would not join in the conveyance. They were willing, however, to accept a title without the joinder of the wife, as, of course, they had the right to do (Corson v. Mulvany, 49 Pa. 88, 88 Am. Dec. 485; Medoff v. Vandersaal, 271 Pa. 169, 116 A. 525); but he persisted in his revocation, and refused even to discuss the matter with them, whereupon they filed the present bill in equity for specific performance. The learned president judge of the court below, who sat as chancellor, found all the disputed facts in favor of plaintiffs, and reported a decree nisi awarding specific performance, the deed to be executed by defendant alone, without the joinder of his wife. On exceptions filed, the court in banc decreed a dismissal of the bill, solely because the one dollar, specified in the option as having been paid, had not in fact been paid, and hence the optioner was well within his right in revoking it before acceptance. This raises the only point to be considered by us on plaintiffs' appeal from the decree. It must be admitted that the authorities elsewhere are not harmonious, but in our judgment the final decree is wrong.

It is of course true that, if an option has no actual or legal consideration to support it, it may be revoked by the optioner at any time prior to acceptance. Defendant's answer does not aver a lack of consideration, however, and hence neither the fact nor effect of a want of it should have been considered by the court below. Moreover, this option has a legal consideration to support it. In Lawrence v. McCalmont, 2 How. (43 U. S.) 426, 452, 11 L. Ed. 326, it is said in an opinion by Mr. Justice Story:

"The second [defense] is, that the payment of the one dollar is merely nominal and not sufficient to sustain the guarantee, if it had been received; and it is urged that it was not received. As to this last point, we feel no difficulty. The guarantor acknowledged the receipt of the one dollar, and is now estopped to deny it. If she has not received it, she would now be entitled to recover it. A valuable consideration, however small or nominal, if given or stipulated for in good faith, is, in the absence of fraud, sufficient to support an action on any parol contract; and this is equally true as to contracts of guarantee as to other contracts. A stipulation in consideration of one dollar is just as effectual and valuable a consideration as a larger sum stipulated for or paid. * * * But, independently of all authority, we should arrive at the same conclusion. The receipt of the one dollar is acknowledged; no fraud is pretended or shown; and the consideration, if standing alone in a bona fide transaction would sustain the present suit."

That case is apposite here, since the traditional statement in the option of the "$1 in hand paid" can only mean that appellant acknowledges the receipt of that sum.

If this is so as concerns a guarantor, in whose favor the law leans, it must be so in cases like the present, and so it, has been held in Watkins v. Robertson, 105 Va. 269, 284, 285, 54 S. E. 33, 5 L. R, A. (N. S.) 1194, 115 Am. St. Rep. 880; Hagen v. Lehmann, 317 Ill. 227, 230, 148 N. E. 57; Horbach v. Coyle (C. C. A.) 2 F.(2d) 702; and in the cases cited in those authorities. So also in 21 C. J. 1113, § 115, it is said that, "While an acknowledgment of receipt of consideration as part of the contract in which it occurs may not be contradicted for the purpose of defeating the operation of the contract, yet it may as a simple receipt be contradicted for collateral purposes." This also is stated in 22 C. J. 1169, § 1566, and a number of eases supporting the text are cited in the footnotes thereto.

We need not elaborate upon these authorities, however, Since the point, is so ruled, in an opinion by the retiring Chief Justice, in Piper v. Queeney. 282 Pa. 135, 142, 127 A. 474, 477. We there said:  

"When, in point of fact, a valuable consideration is relied on to support a deed or contract, under seal or otherwise, it may be inquired into by parol, although the result of the admission of such evidence is to show that the consideration set forth in the writing is not the real or exclusive one (Nichols v. Nichols, 133 Pa. 438, 454, 455, 19 A. 422), so long as nothing is permitted to be proved that is 'directly inconsistent' with the consideration named [in the instrument itself] (Buckley's Appeal, 48 Pa. 491, 496, 88 Am. Dec. 468; Lewis v. Brewster, 57 Pa. 410, 414; McGary v. McDermott, 207 Pa. 620, 623, 57 A. 46), or which directly changes the character of the writing or its covenants (Henry v. Zurflieh, 203 Pa. 440, 450, 53 A. 243)."

[153 A. 440] The cases cited in that opinion bear out the text, and there are a number of others, both before and since (see those referred to in Martin v. Berens, 67 Pa. 459, 461-463), but we need only call attention to our latest case, Fidelity Title & Trust Co., Trustee, v. Garland, 291 Pa. 297, 303, 139 A. 876. It is elementary that the consideration imported from the use of a seal on such a paper may not be contradicted by proof. Storm v. United States, 94 U. S. 76, 83, 84, 24 L. Ed. 42. In the light of this, it, would be neither logical nor consistent to hold that the intentional insertion of an actual consideration may be overthrown whenever one of the parties desires to escape liability.

Either of the foregoing points is conclusive of the present controversy, but it may not be inappropriate to refer to two others. There is no pretense here that defendant's signature to the agreement was obtained by any inducement other than as expressed in it, or that anything was added to or omitted from it by fraud, accident or mistake. Consequently it must be construed just as it is written, and every clause must be given its plain meaning. McHenry Lumber Co. v. Second National Bank of Wilkes-Barre, 281 Pa. 52, 126 A. 189. The insertion of the words, "In consideration of One Dollar in hand paid," could have had no other purpose than to state a consideration, which was necessary to make the agreement effective during the term of the option. To ignore them would be, therefore, to eliminate from the agreement words intentionally put in it, in order to reach a conclusion which their insertion was intended to render impossible. This is never permitted. Irvin v. Irvin, 142 Pa. 271, 21 A. 816; Union Storage Co. v. Speck, 194 Pa. 126, 133, 45 A. 48.

Moreover, it is quite possible, when taken in conjunction with a finding of the chancellor that defendant knew the agreement was sought because of a hoped-for resale to a third party, that its true interpretation is that defendant gave to the legal plaintiff an option until "12 o'clock noon April 24th, 1928," to find a purchaser for the property at $15,000, and said to him, "if this option is accepted by you and transaction closed, I agree to give you a commission of three per cent on the sale price." No other construction satisfactorily explains why the vendor agreed to pay the vendee for buying the property, instead of merely stating that the sales price is to be $14,550. If that construction is correct, then the agreement contemplated services to be rendered by plaintiff to defendant forthwith which the former impliedly agrees to render, and hence an additional valuable consideration appears.

The decree of the court below is reversed, at the cost of appellee, and the record is remitted that the decree nisi may be entered as the decree of the court.

197 Cal.App.2d 203 (1961)

ANDY WHEAT, Plaintiff and Respondent,
v.
GEORGE W. MORSE, as Administrator, etc., Defendant and Appellant.

Civ. No. 8.
California Court of Appeals. Fifth Dist.
Nov. 21, 1961.

Clarence H. Pease and William E. Dopkins for Defendant and Appellant.

Crowe, Mitchell, Hurlbutt & Clevenger and Sidney J. W. Sharp for Plaintiff and Respondent.

CONLEY, P. J.

This is an appeal from a decree of specific performance of a written option executed by Ethel Upson Lee, who died prior to its exercise, in favor of Andy Wheat. The real property involved consists of approximately three hundred acres in Tulare County near the City of Corcoran.

Appellant urges three grounds for reversal, claiming (1) that the option itself was void in that it never was consented to by the decedent; (2) that there was a lack of adequate consideration for the option as such (appellant conceding, however, that the consideration for the purchase of the land—$75 per acre—is to be considered as technically adequate for the purpose of the appeal); (3) that there was undue influence exercised by the respondent because of the "grossly inadequate consideration" coupled with (a) a breach of confidential relationship and (b) a weak mental and physical condition of the decedent.

The facts, stated most strongly in favor of the respondent where there was a conflict of evidence, (Clark v. Redlich, 147 Cal.App.2d 500, 504 [305 P.2d 239]) are as follows: Ethel Upson Lee, a widow, acquired ownership of the land by will from a stranger. Not desiring to operate the property herself, she leased it to respondent, an experienced farmer in the same [205] territory. At the same time she gave respondent an oral option to purchase the land at $75 per acre, and on February 10, 1948, this option was reduced to writing; by its terms it was to expire on February 1, 1955. On April 11, 1952, decedent and respondent entered into a second crop share lease for a period of ten years.

On June 1, 1953, decedent executed the exclusive option here in question for a period of eleven years and eight months; the recited consideration was the sum of $1.00, which was in fact paid. At that time the decedent was a 69-year-old widow suffering, as found by the court, from ". . . illness which included difficulty with her vision." When the document was executed, as found by the court on substantial evidence, ". . . she was mentally alert and in all respects fully competent to read, understand and execute the instrument in writing and option. . . ." She had come to Corcoran alone from Sacramento County to discuss the existing situation with Mr. Wheat. The parties went together to a real estate office where at their request the typewritten document was prepared; it followed practically word for word the form of the previous option which had been executed by Mrs. Lee; she read the instrument and understood it and signed it freely and voluntarily; and her health appeared at that time to three competent witnesses to be good.

On August 18, 1955, the decedent signed, served on the respondent and recorded an attempted rescission and withdrawal of the option. This purported rescission was found by the trial court to be ". . . wholly ineffectual for any purpose. . . ."

Mrs. Lee died on October 24, 1955, and the option was exercised on January 29, 1957.

The trial court found in favor of plaintiff and respondent on all issues, and a decree of specific performance followed. The record supports the findings in every respect. Appellant relies strongly upon Herbert v. Lankershim, 9 Cal.2d 409 [71 P.2d 220]. But that case does not change the general rule that if findings are supported by substantial evidence an appellate court cannot reassess the weight of conflicting evidence or presume to pass upon the credibility of witnesses. (Taylor v. Wright, 69 Cal.App.2d 371, 387 [159 P.2d 980]; Roeder v. Roeder, 118 Cal.App.2d 572, 582 [258 P.2d 581]; Ferrari v. Mambretti, 58 Cal.App.2d 318, 323 [136 P.2d 326]; Ventimiglia v. Hodgen, 112 Cal.App.2d 658, 662 [247 P.2d 123]; New v. New, 148 Cal.App.2d 372, 383 [306 P.2d 987]; [206] Shearer v. Cooper, 21 Cal.2d 695, 703 [134 P.2d 764]; Petersen v. Dynes, 103 Cal.App.2d 5, 11 [228 P.2d 616].)

In Herbert v. Lankershim, supra, 9 Cal.2d 409, 476 [71 P.2d 220] the Supreme Court stated after a minute and painstaking analysis of the entire record that ". . . it is a very serious question whether, as a matter of law, the evidence adduced by the plaintiff is sufficiently substantial to support the judgment," and that errors of the trial court, which in other circumstances might conceivably be considered insufficient to reverse, (Const., art. VI, 4 1/2) should be deemed sufficient in the light of the doubtful proof to constitute a miscarriage of justice. The Lankershim opinion, supra, 9 Cal.2d at page 471 [71 P.2d at p. 251] reasserts the ". . . often applied rule that an appellate court will not interfere with the judgment entered by a fact-finding body when there exists a substantial conflict in evidence."

The contention made by appellant that there was a lack of consent on the part of decedent to the execution of the option is based upon the line of authorities which hold that a signed release is void and of no effect if there was actually no assent to the instrument by the party sought to be held (Tyner v. Axt, 113 Cal.App. 408, 412 [298 P. 537]; Wetzstein v. Thomasson, 34 Cal.App.2d 554, 559 [93 P.2d 1028]; and Smith v. Occidental & Oriental Steamship Co., 99 Cal. 462, 471 [34 P. 84]). It is elementary that if there is no actual assent to a signed writing, the alleged release, or contract, never becomes effective. But in this case the trial court found on substantial evidence that at the time of the execution of the document the decedent was fully competent to read, understand and execute the instrument, that she did read and understand it and that there was no fraud involved. Appellant's contention is thus without merit.

The uncontradicted evidence shows that the sum of $1.00, the consideration alleged in the option, was in fact paid. But appellant urges that "[I]t is time that our appellate courts take another long, hard and exhaustive look into the problem of the adequacy of nominal money consideration to support a long term option." The law, however, is firmly fixed that "[A]n option given for a consideration, however small, is irrevocable and cannot be terminated, without the consent of the other party, during the time named in the option." (Stough v. Hanson, 46 Cal.App.2d 504, 506 [116 P.2d 77].) (See also Marsh v. Lott, 8 Cal.App. 384, 390 [97 P. 163]; Smith v. Bangham, 156 Cal. 359 [104 P. 689, 28 L.R.A. N.S. [207] 522]; W. G. Reese Co. v. House, 162 Cal. 740, 745 [124 P. 442]; Chrisman v. Southern Cal. Edison Co., 83 Cal.App. 249, 254 [256 P. 618]; Glascock v. Sukumlyn, 131 Cal.App.2d 587, 595 [281 P.2d 90]; 1 Corbin on Contracts, 263, p. 868; 1 Williston on Contracts (3d ed.) 115, p. 455.) We would be legislating if we were to change a rule of law so clearly established.

Defendant suggests that the court did not make findings on the issue of undue influence. He relies for his pleading of undue influence upon the allegations contained in defendant's "Separate, Distinct Answer and Affirmative Defense"; the words "undue influence" are not used in the pleading, but the facts which he claims constitute undue influence are alleged, and they unquestionably constitute what counsel relies upon as a statement of that defense; undoubtedly, the pretrial conference order stating undue influence as one of the issues is based upon the same pleading. The trial court specifically found that all of these allegations of fact were untrue except where affirmatively found to the contrary, and further determined that ". . . it is not true that said Ethel Upson Lee executed or delivered said instrument in writing and option to said plaintiff as the result of any fraud on the part of said plaintiff or as the result of any mistake on the part of said Ethel Upson Lee; and that it is not true that said plaintiff was guilty of any fraud whatsoever in connection with the execution and delivery to him of said instrument in writing and option."

Inasmuch as the court on substantial evidence found that the factual allegations contained in the separate defense which is relied on by defendant as a pleading of undue influence were untrue, it is clear that the trial court has in fact found against any claim of undue influence, and it further appears that such finding is based upon substantial evidence.

The affirmative defense in the answer contains the allegation: "That decedent knew plaintiff and plaintiff's wife for some period of time prior to June 1953; that she believed plaintiff to be an honest and trustworthy person and had confidence in his truthfulness and integrity."

The record, fairly considered, does not show that a confidential relationship existed between the parties. No doubt, the decedent enjoyed a general friendship with the lessee and his wife through the many years of doing business at arm's length with him; she doubtless also had confidence in his [208] honesty and integrity in the same sense that people dealing with each other for many years as lessor and lessee usually do; she had visited with the respondent and his wife, though at infrequent intervals, and received normal social kindnesses on her visits, but the record is wholly insufficient to establish confidential relationship or any undue influence on the part of the respondent. In Williams v. Williams, 163 Cal.App.2d 144, 147 [329 P.2d 70], the court quotes with approval the following statement from Webb v. Saunders, 79 Cal.App.2d 863, 871 [181 P.2d 43]:

"'Undue influence has been defined to be that kind of influence or supremacy of one mind over another by which that other is prevented from acting according to his own wish or judgment, and whereby the will of the person is overborne and he is induced to do or forbear to do an act which he would not do, or would do, if left to act freely.'"

The court legitimately found on the evidence that there was no fraud or undue influence.

We find no error in the record.

The judgment is affirmed.

Brown, J., concurred.

Stone, J., being disqualified, did not participate.

5 Johns. 239 (N.Y. 1810)

WARREN
against
LYNCH

New-York State Supreme Court Of Judicature
February Term, 1810.

Albany, February, 1810 An instrument for the payment of money, executed in Virginia, but payable in New York and which by the manner of its execution was regarded by the laws of Virginia as a scaled instrument, was, in a suit here, held to be governed by the laws of this state and to be a negotiable note, or simple contract. A scrawl, with the pen, or L.S. at the end of the name is not a seal. A seal is a an impression upon wax or wafer, or some other tenacious substance capable of being impressed. Where A, The Debtor of B, gave a note to C for the amount of the debt, in order to prevent its being attached by a creditor of B, and before any attachment had issued, and C, endorsed the note to D, who had advanced money for A., it was held that D. not being privy to any fraud in A, could not be affected by it, and might recover the note as a bona fide endorsee with consideration.

THIS was an action of assumpsit brought by the plaintiff, as the first endorsor of a promissory note, against the defendant, as maker. The note was as follows:

"Petersburg, (Virginia,) August 27, 1807. Four months after date, I promise to pay Hopkins Robertson or order, the sum of seven hundred and nineteen dollars, 12 1-2 cents, witness my hand and seal, Payable in New-York.

THOMAS LYNCH, [L. S.]"

The flourish, and initials L. S. at the end of the maker's name, constituted what was called his seal. The defendant pleaded non assumpsit, with notice of matter to be given in evidence at the trial.

[240] In a conversation between the plaintiff and defendant, at the office of the plaintiff's attorney, before any suit was commenced, the defendant admitted the execution of the note. but said he did not consider himself answerable, having paid the amount to Mason and Smedes, of New-York, under certain proceedings against him in Virginia. On its being suggested that some difficulty might arise in declaring on the note, as it purported to be sealed, and a suit was in contemplation, the defendant signed a written agreement, dated 15th April, 1808, entitled in the cause, declaring that the note upon which the suit was brought, though it purported to be sealed, had, in fact, no wafer or wax thereto, and was to be considered as a common promissory note, and that all objections as to form were to be waived.

It was admitted by the plaintiff's counsel, that by the laws of Virginia, a note executed in the manner this was, had all the efficacy of an instrument sealed with a wafer or wax.

The judge, at the trial, was of opinion, on this evidence, that the note was to be considered as a negotiable promissory note, and the plaintiff as an innocent holder, for a valuable consideration.

To prove that the defendant had paid the amount of the note to Mason and Smedes, of New-York,and to impeach the title of the plaintiff, the following evidence, though objected to by the plaintiff, was admitted by the judge.

1. An exemplification of a statute of the state of Virginia, authorizing the creditors of absent debtors to attach the effects and credits of such absent debtor in the hands of the debtors of such absent debtor.

2. An exemplification of the record of the proceedings in the court of chancery of the state of Virginia, under the said statute, by which it appeared that Mason and Smedes, merchants of the city of New-York, in September, 1807, instituted a suit against the defendant, [241] Hopkins Robertson,and William Rose, in order to attach the sum due on the said instrument, for the payment of a debt due from William Rose toMason and Smedes; and it further appeared that Rose had been insolvent, and while insolvent, went to Virginia; and under a representation that he had transferred all his claims against Lynch to Hopkins Robertson, and that he was authorized by Robertson to settle the said claim with Lynch, prevailed on him to execute the instrument above mentioned; and that on the belief that this was a scheme adopted to prevent the creditors of Rose from attaching the said claim against Lynch, for the payment of the debts of Rose, and that it was fraudulent, the court in Virginia decreed that Lynch, the defendant in the suit, should, after deducting the costs of suit, pay over to Mason and Smedes, the balance of the sum due on the said instrument, under their indemnification against the same, which was accordingly done. The decree was made in January, 1 808, and was taken pro confesso against Rose and Robertson, in consequence of their not appearing.

It was also proved that the plaintiff had been employed by Rose to settle his debts with his creditors, and that he had settled some of them, and procured some the creditors to sign a petition of Rose to be discharged under the insolvent act; that an attachment was issued against Rose in Virginia, in the summer of 1807, and that early in August, 1807, the plaintiff settled several claims of the creditors of Rose, by giving his own notes to the amount of 400 dollars and upwards, and the attachment was dismissed. These transactions were previous to the giving of the instrument in question.

The defendant offered Hopkins Robertson, as a witness to prove that he had given no consideration to Lynch for the note, and that he had endorsed it to the plaintiff without consideration, and that the representation made by Rose to Lynch to induce him to execute the instrument was false. The judge rejected the testimony of the [242] witness, as to the consideration of the note, on the ground of his being an endorsor, and so far incompetent; but permitted him to testify as to the truth of the representation by Rose to Lynch. The witness stated that he had no knowledge of Lynch; that the claim of Rose had not been transferred to him; that Rose brought him the instrument in question; that he put his name on the back to give it negotiability, and returned it to Rose.

On this evidence, the judge was of opinion that this plaintiff was entitled to recover; and under his direction, the jury found a verdict for the plaintiff, for the amount of the note with interest.

Baldwin, for the defendant. 1. The agreement made by Lynch, the defendant, ought not to be held valid, so as to produce the effect given to it by the judge. Mason and Smedes are the real owners of the note, and their rights ought to be protected equally with those of an assignee. The effect of this paper is to defeat the rights of Mason and Smedes, by destroying the defence set up in the cause in Virginia, and, by obliging the defendant to pay the money a second time, to render Mason and Smedes liable on the bond of indemnity given by them. The defendant must have signed the paper through ignorance or fraud, either of which ought to be sufficient to invalidate it.

2. But admitting the agreement to be unobjectionable, it cannot have the effect to render a sealed instrument a negotiable note. If it is a specialty, it must be declared on as such; and the legal objection is valid, notwithstanding the agreement. A sealed instrument cannot be given in evidence to support a count on a simple contract.

The initials L. S. with a flourish, at the end of the name, by the laws of Virginia must be considered as a seal.^[1] The instrument having been made there, it ought [243] to be governed by the laws of that state. The law of the place where the contract is made is to govern as to the nature, construction and effect of it; but the mode of enforcing the payment or execution of the contract is regulated by the law of the place where the suit is brought.

3. Robinson ought to have been admitted to prove that the defendant received no consideration for the note, and that the same was endorsed without consideration. The rule which excludes endorsors, or persons whose names appear on negotiable paper, from being witnesses to invalidate such paper, does not apply to the present case.

T. L. Ogden, contra. 1. There is no ground for any imputation of fraud in the conduct of the plaintiff. He is a holder of the note for a valuable consideration. The arrangement by which it was made payable in New-York was bona fide and proper. The plaintiff has more equity on his side than Mason and Smedes, and having also the legal right, he ought to prevail.

The note, on the face of it, being made payable in New-York, is to be governed by the laws of New-York.^[2] It has every form and quality of a common negotiable promissory note. The letters L. S. added to the name of the maker cannot destroy that negotiability, or make it a sealed instrument. The case of Meredith v. Hinsdale^[3] went no farther than to give effect to an instrument made in Pennsylvania and to be executed there, according to the laws of that state. In Virginia there is a statute declaring the mark of L. S. at the end of the name to be a seal; and in Pennsylvania, long usage and the decisions of their courts have made the same law. But in this state there is no such statute or usage.

2. The agreement entered into by the defendant in regard to the note was voluntary. Ignorance is not pretended; and if there be any fraud in the defendant, he cannot wake advantage of it. If this agreement is valid, [244] it puts an end to the question; and the instrument must be taken to be a common promissory note.

3. If the paper in question is to be considered as a negotiable note, the evidence of Robertson was properly rejected; but, in fact, it did go to the jury. The possession of the note is prima facie evidence that the plaintiff came fairly by it, and for a valuable consideration. Again, the plaintiff had advanced money for Rose, and this was a sufficient consideration for the note taken from the defendant.

Baldwin, in reply, observed, that there was sufficient evidence to show that the plaintiff and defendant had colluded together to defraud Mason and Smedes; and that the note was drawn in the manner in which it appears, in order to defeat the operation of the attachment in Virginia; and that such a fraud ought not to be countenanced, nor the parties suffered to profit by it in this suit.

KENT, Ch. J. delivered the opinion of the court. The two questions made upon this case are, 1. What is the legal import of the instrument upon which the suit is brought ? and, 2. Was the evidence sufficient to entitle the plaintiff to recover?

1. The note was given in Virginia, and by the laws of that state it was a sealed instrument or deed. But it was made payable in New-York, and according to a well settled rule, it is to be tested and governed by the law of this state. (4 Johns. Rep. 285.) Independent then of the written agreement of the parties, (and on the operation of which some doubt might possibly arise,) this paper must be taken to be a promissory note, without seal, as contradistinguished from a specialty. We have never adopted the usage prevailing in Virginia and in some other states, of substituting a scrawl for a seal; and what was said by Mr. Justice Livingston, in the case of [245] Meredith v. Hinsdale, (2 Caines, 362.) in favour of such a substitute, was his own opinion, and not that of the court. A seal, according to Lord Coke, (3 Inst. 169.) is wax with an impression. Sigillum est cera impressa, quia cera sine impressione non est sigillum. A scrawl with a pen is not a seal, and deserves no notice. The law has not indeed declared of what precise materials the wax shall consist; and whether it be a wafer or any other paste or matter sufficiently tenacious to adhere and receive an impression, is perhaps not material. But the scrawl has no one property of a seal. Multum abludit imago. To adopt it as such would be at once to abolish the immemorial distinction between writings sealed, and writings not sealed. Forms will frequently, and especially when they are consecrated by time and usage, become substance. The calling a paper a deed will not make it one, if it want the requisite formalities. "Notwithstanding, says Perkins, (sect. 129.) that words obligatory are written on parchment or paper, and the obligor delivereth the same as his deed, yet if it be not sealed, at the time of the delivery, it is but an escrowl, though the name of the obligor be subscribed." I am aware that ingenious criticism may be indulged at the expense of this and of many of our legal usages; but we ought to require evidence of some positive and serious public inconvenience, before we, at one stroke, annihilate so well established and venerable a practice as the use of seals in the authentication of deeds. The object in requiring seals, as I humbly presume, was misapprehended both by President Pendleton, and by Mr. Justice Livingston. It was not, as they seem to suppose, because the seal helped to designate the party who affixed it to his name. Ista ratio nullius pretii, (says Vinnius, in Inst. 2. 10. 5.) nam et alieno annulo signare licet. Seals were never introduced or tolerated in any code of law, because of any family impression, or image, or initials which they might contain. One person might always use another's seal, both in the English and in the [246] Roman law. The policy of the rule consists in giving ceremony and solemnity to the execution of important instruments, by means of which the attention of the parties is more certainly and effectually fixed, and frauds less likely to be practised upon the unwary. President Pendleton, in the case of Jones and Temple v. Logwood, (1 Wash. Rep. 42.) which was cited upon the argument, said that he did not know of any adjudged case that determines that a seal must necessarily be something impressed on wax; and he seemed to think that there was nothing but Lord Coke's opinion to govern the question. He certainly could not have examined this point with his usual diligence. The ancient authorities are explicit, that a seal does, in legal contemplation, mean an impression upon wax. "It is not requisite," according to Perkins, (sect. 134.) "that there be for every grantor who is named in the deed a several piece of wax, for one piece of wax may serve for all the grantors, if every one put his seal upon the same piece of wax." And Brooke, (tit. Faits, 30. and 17.) uses the same language. In Lightfoot and Butler's case, which was in the Exchequer, 29 Eliz. (2 Leon. 21.) the Barons were equally explicit, as to the essence of a seal, though they did not all concur upon the point, as stated in Perkins. One of them said that twenty men may seal with one seal upon one piece of wax only, and that should serve for them all, if they all laid their hands upon the seal; but the other two Barons held that though they might all seal a deed with one seal, yet it must be upon several pieces of wax. Indeed this point, that the seal was an impression upon wax, seems to be necessarily assumed and taken for granted in several other passages which might be cited from Perkins and Brooke, and also in Mr. Seidell's Notes to Fortescue; (De Laud. p. 72.) and the nature of a seal is no more a matter of doubt in the old English law, than it is that a deed must be written upon paper or parchment, and not upon wood or stone. Nor has the common law ever been altered in Westmin [247] ster Hall, upon this subject; for in the late case of Adam v. Keer, (1. Bos. and Puller, 360.) it was made a question whether a bond executed in Jamaica, with a scrawl of the pen, according to the custom of that island, should Operate as such in England, even upon the strength of that usage.

The civil law understood the distinction and solemnity of seals as well as the common law of England. Testaments were required not only to be subscribed, but to be sealed by the witnesses. Subscriptione testium, et ex edicto praetoris, signacula testamentis imponerentur. (Inst. 2. 10. 3.) The Romans generally used a ring, but the seal was valid in law, if made with one's own or another's ring; and, according to Heineccius, (Elementa juris civilis secundum ord. Inst. 497.) with any other instrument, which would make an impression, and this, he says, is the law to this day throughout Germany. And let me add, that we have the highest and purest classical authority for Lord Coke's definition of a seal; Quid si in ejusmodi cera centum sigilla hoc annulo impressero? (Cicero. Academ. Qua e st. Lucul. 4. 26.)

2. The instrument being a promissory negotiable note, the next point is, whether the plaintiff did not show enough to entitle him to recover as a bona fide endorsee for a valuable consideration. There were circumstances to induce an opinion, that as between the defendant and Rose, the note was given for the purpose of placing the debt due from the defendant to Rose, out of the reach of the creditors of Rose, who was insolvent. But there is no evidence to bring this fraud (if any there was) home to the knowledge of the plaintiff. He was the agent of Rose for the purpose of settling with his creditors, and just before the note was given, he was in advance upwards of 400 dollars for Rose. The note was drawn before the existence of the attachment of Mason and Smedes; and being a creditor of Rose to such an amount, I think [248] the plaintiff showed enough to rebut the presumption, of his having taken the note without consideration; and that upon both grounds the motion for a new trial ought to be denied.

Rule refused.

[1] Wash. Rep. 42. 2 Caines, 362.

[2] Thompson v. Ketcham, 4 Johns. Rep. 285.

[3] 2 Caines, 362.

154 Mass. 454

PAUL K. L. E. KRELL & another
vs.
ROBERT CODMAN.

Suffolk.
November 12, 13, 1890. — October 24, 1891.

[454] Present: ALLEN, HOLMES, KNOWLTON, LATHROP, & BARKER, JJ.

Voluntary Covenant — Public Policy — Enforcement

A voluntary covenant, in an indenture under seal executed in England, by which a testatrix, who afterwards dies domiciled in this Commonwealth, promises that her executors shall within six months after her death pay to the other parties thereto, upon certain trusts, a specified sum, with interest from the day of her death, is not contrary to the policy of the laws of this State, and is enforceable here after her decease.

CONTRACT, against the executor of the will of Martha G. Wheelwright, upon a covenant in an indenture under seal, dated February 13, 1885. The case was heard in January, 1890, by Field, J., and reported by him for the consideration of the full court, and was as follows.

The indenture was executed by "Martha Gerrish Wheelwright, of Roslyn House, Oatlands Park, in the county of Surrey, widow, of the one part, and Paul Karl Ludwig Emil Krell of the same place, Esquire, and Charles Watkins of No. 19 Oakley Square in the parish of St. Pancras in the county of Middlesex, Esquire, of the other part," and provided as follows: "Whereas the said Martha Gerrish is desirous of making some provision for Constance Hope Eagle, the adopted child of the said Paul Karl Ludwig Emil Krell, and of his wife, Maria Augusta Krell, the daughter of the said Martha Gerrish Wheelwright, the said Constance Hope Eagle being now seven years of age and residing at Roslyn House, Oatlands Park, aforesaid, — Now this indenture witnesseth that in consideration of the love and affection of the said Martha Gerrish Wheelwright for the said Constance Hope Eagle, and for divers other good causes and considerations, the said Martha Gerrish Wheelwright doth hereby covenant with the said Paul Karl Ludwig Emil Krell and Charles Watkins, or the survivor of them or the executors or administrators of such survivor, or other the trustees or trustee for the time being of these presents (hereinafter called the trustees or trustee), that, in case the said Constance Hope Eagle [455] shall survive her the said Martha Gerrish Wheelwright, the executors or administrators of her the said Martha Gerrish Wheelwright shall, within six calendar months after her death, pay to the trustees or trustee the sum of £2500, with interest thereon at the rate of four per cent per annum from the day of her death: provided always that the said Martha Gerrish Wheelwright shall be at liberty to pay the said sum of £2500, or any part thereof, to the trustees or trustee at any time during her lifetime." The indenture then provided that the trustees should invest the sum above named only in English or Colonial securities, and should hold the same for the benefit of Constance Hope Eagle; but it was further agreed that, "if the said Constance Hope Eagle shall not survive the said Martha Gerrish Wheelwright, or surviving her shall not live to attain the age of twenty-one years, nor to marry under that age, then subject to the trusts and powers hereinbefore declared and contained, or by law vested in the trustees or trustee, shall stand possessed of the trust premises and the income thereof, in trust for the said Martha Gerrish Wheelwright, her executors, administrators, and assigns absolutely."

This indenture was drawn and settled on behalf of all parties by a firm of English solicitors, and executed at Walton-on-Thames, Surrey, England. By the law of England a covenant such as that contained in this instrument constitutes a debt of the covenantor legally chargeable upon his or her estate, ranking after debts for value, but before legacies. At the date of the indenture Mrs. Wheelwright was living with her daughter, who was the wife of the first named plaintiff, and the child Constance Hope Eagle was living with and supported by Mr. and Mrs. Krell, but was never legally adopted by them. She was still a minor, and lived with them in England. Mrs. Wheelwright died on August 30, 1888, and at the time of her death was domiciled in Newburyport in this Commonwealth, and her will, which was executed in this Commonwealth on October 10, 1881, was duly proved here.

The judge found that, at the time Mrs. Wheelwright executed the indenture, her place of residence and home were in England, but her political domicil was in Massachusetts. If the plaintiffs were entitled to maintain the action, judgment was to be entered [456] for them for the sum named in the indenture, with interest; otherwise, judgment was to be entered for the defendant.

The case was argued at the bar in November, 1890, and afterwards, in October, 1891, was submitted on the briefs to all the judges except Field, C. J. and Morton, J.

C. K. Cobb, (F. E. Brooks with him,) for the plaintiffs.

R. Codman, Jr., for the defendant.

HOLMES, J. This is an action on a voluntary covenant in an indenture under seal, executed by the defendant's testatrix in England, that her executors, within six months after her death, should pay to the plaintiffs, upon certain trusts, the sum of £2,500, with interest at four per cent from the day of her death.

It is agreed that by the law of England such a covenant constitutes a debt of the covenantor legally chargeable upon his or her estate, ranking after debts for value, but before legacies. But it is contended by the defendant that a similar instrument executed here would be void. The testatrix died domiciled in Massachusetts, and the only question is whether the covenant can be enforced here. If a similar covenant made here would be enforced in our courts, the plaintiffs are entitled to recover, and in the view which we take on that question it is needless to examine with nicety how far the case is to be governed by the English law as to domestic covenants, and how far by that of Massachusetts.

In our opinion, such a covenant as the present is not contrary to the policy of our laws, and could be enforced here if made in this State. If it were a contract upon valuable consideration, there is no doubt it would be binding. Parker v. Coburn, 10 Allen, 82. We presume that, in the absence of fraud, oppression, or unconscionableness, the courts would not inquire into the amount of such consideration. Parish v. Stone, 14 Pick. 198, 207. This being so, consideration is as much a form as a seal. It would be anomalous to say that a covenant in all other respects unquestionably valid and binding (Comstockv. Son, ante, 889, and Mather v. Corliss, 103 Mass. 568, 571) was void as contravening the policy of our statute of wills, but that a parol contract to do the same thing in consideration of a bushel of wheat was good. So, again, until lately an oral contract founded on [457] a sufficient consideration to make a certain provision by will for a particular person was valid. Wellington v. Apthorp, 145 Mass. 69. Now, by statute, no agreement of that sort shall be binding unless such agreement is in writing, signed by the party whose executor is sought to be charged, or by an authorized agent. St. 1888, c. 372. Again, it would be going a good way to say by construction that a covenant did not satisfy this statute.

The truth is, that the policy of the law requiring three witnesses to a will has little application to a contract. A will is an ambulatory instrument, the contents of which are not necessarily communicated to any one before the testator's death. It is this fact which makes witnesses peculiarly necessary to establish that the document offered for probate was executed by the testator as a final disposition of his property. But a contract which is put into the hands of the adverse party, and from which the contractor cannot withdraw, stands differently. See Perry v. Cross, 132 Mass. 454, 456, 457. The moment it is admitted that some contracts which are to be performed after the testator's death are valid without three witnesses, a distinction based on the presence or absence of a valuable consideration becomes impossible with reference to the objection which we are considering. A formal instrument like the present, drawn up by lawyers and executed in the most solemn form known to the law, is less likely to be a vehicle for fraud than a parol contract based on a technical detriment to the promisee. Of course, we are not now speaking of the rank of such contracts inter sese. Stone v. Gerrish, 1 Allen, 175, cited by the defendant, contains some ambiguous expressions, but was decided on the ground that the instrument did not purport to be and was not a contract. Cover v. Stem, 67 Md. 449, was to like effect. The present instrument indisputably is a contract. It was drawn in English form by English lawyers, and must be construed by English law. So construed, it created a debt on a contingency from the covenantor herself, which if she had gone into bankruptcy would have been provable against her. Ex parte Tindal, 8 Bing. 402; S. C. 1 D. & Ch. 291, and Mont. 375, 462. Robson, Bankruptcy, (5th ed.) 274. The cases of Parish v. Stone, 14 Pick. 198, and Warren v. Durfee, 126 Mass. 338, were actions on promissory notes, [458] and were decided on the ground of a total or partial want of consideration.

There is no question here of any attempt to evade or defeat rights of third persons, which would have been paramount had the covenantor left the sum in question as a legacy by will. There is no ground for suggesting an intent to evade the provisions of our law regulating the execution of last wills, — if such intent could be material when an otherwise binding contract was made. See Stone v. Hackett, 12 Gray, 227, 232, 233. There was simply an intent to make a more binding and irrevocable provision than a legacy could be, and we see no reason why it should not succeed.

Judgment for the plaintiffs.

[192 A.2d 626]

192 A.2d 626
105 N.H. 51

Marie L. GOULET
v.
William GOULET.

Supreme Court of New Hampshire.
Argued June 4, 1963.
Decided July 9, 1963.

Fisher, Parsons, Moran & Temple, Dover (Robert H. Temple, Dover orally), for plaintiff.

Burns, Bryant & Hinchey and Joseph P. Nadeau, Dover, for defendant.

[105 N.H. 52] BLANDIN, Justice.

The first issue before us is whether the effect of the covenant not to sue the defendant, which was signed by the plaintiff, is governed by the laws of Maine or New Hampshire. The material portions of the instrument read as follows:

"In consideration of the payment of one dollar ($1.00) receipt of which is hereby acknowledged the undersigned hereby expressly covenants and agrees not to sue or to proceed after the date of the execution hereof with any suit or proceeding of any kind against William Goulet, either severally or jointly with any other person, on account of injuries claimed to have been sustained by me on March 21, 1954 at Raymond, N. H. and that undersigned will execute a full release of all claims and demands against my husband Wm. Goulet growing out of said alleged accident on demand.

"Dated April 2, 1954.

"Marie L. Goulet (Seal)"

While the accident from which these proceedings arose happened in New Hampshire, the covenant was signed in Maine by a party domiciled there. As we interpret its terms they are inclusive to the end that the plaintiff wife agreed not to sue her defendant husband on account of the accident anywhere or at any time. In these circumstances and in the absence of any reasonably clear indication of the parties' intention that the laws of any other jurisdiction should control, we believe that the validity and effect of the instrument is to be governed by the law of the place where it was signed and where both parties were domiciled. Hinchey v. National Surety Company, 99 N.H. 373, 377, 111 A.2d 827. Restatement, Conflicts, ss. 332, 335. We therefore hold that the law of the state of Maine is controlling.

The defendant bases his defense on the sole proposition that the plaintiff 'for consideration' executed this covenant not to sue him and further agreed to sign a full release of all claims and demands against him. Although the Court found that no consideration was given for the covenant not to sue yet under the law of Maine a seal implies a consideration and the want of it cannot be averred against an instrument under seal. Tucker v. Smith, 4 Me. 415, 419; Wing v. Chase, 35 Me. 260; see Shaw v. Philbrick, 129 Me. 259, 151 A. 423, 74 A.L.R. 290. The case of Goodwin v. Cabot Amusement Company, 129 Me. 36, 149 A. 574 also states that neither the absence nor the failure of consideration avails to overcome the binding legal effect of a seal. Id., 129 Me. 42, 149 A. 577-578. No Maine cases have been called to our attention which indicate any departure [105 N.H. 53] from this established rule.

What we have said renders unnecessary consideration of other issues and the order is

Exception sustained.

All concurred.

40 N.J.L. 446

ALLER
v.
ALLER.

November Term, 1878.

1. The statutes concerning evidence (Rev., p. 380, § 16,) which permit a defendant to plead and set up fraud in the consideration, and (Rev., p. 387, § 52,) to show want of sufficient consideration as a defence to a sealed instrument, establish new rules of evidence, but were not intended to abolish all distinction between simple contracts and specialties.

2. It is not a good defence to a promise in writing, under seal, to pay a sum of money, for value received, that it was voluntary.

On rule to show cause why a new trial should not be granted on verdict for the plaintiff in Hunterdon county Circuit Court.

The action was brought on the following instrument, viz.:

"One day after date, I promise to pay my daughter, Angeline H. Aller, the sum of three hundred and twelve dollars and sixty-one cents, for value received, with lawful interest from date, without defalcation or discount, as witness my hand and seal this fourth day of September, one thousand eight hundred and seventy-three. $312.61. This note is given in lieu of one-half of the balance due the estate of Mary A. Aller, deceased, for a note given for one thousand dollars to said deceased by me. Peter H. Aller. [L.S.] Witnesses present, John J. Smith, John F. Grandin."

Both subscribing witnesses were examined at the trial, and it appeared that there was a note for $1000, dated May 1st; 1858, given by said Peter H. Aller to Mary Ann Aller, upon which there were endorsements of payments—April 1st, 1863, $50; April 1st, 1866, $46; April 1st, 1867, $278.78.

Mary Ann Aller, the wife, died, and on the day after her burial, Peter H. Aller told his daughter, the plaintiff, to get the note, which he said was among her mother's papers. She brought it, read the note j he said there was more money endorsed on it than he thought; requested the witness John F. Grandin to add up the endorsements and subtract [447] them from the principal, to divide the balance by two, and draw a note to each of her daughters, Leonora and Angelina, for one-half. After they were drawn by the witness, Peter H. Aller said: "Now here, girls, is a nice present for you," and gave them the notes. Angelina was directed to put the old note back among her mother's papers. Grandin was afterwards appointed administrator of Mary A. Aller, and as such, he says, he destroyed the old note.

The letters of administration; a copy of the original note and endorsements thereon; a deed of release by Peter H. Aller to Leonora Sharp and Angelina H. Aller, in which, for the consideration of one dollar, and of natural love and affection, he released all his right and interest, "by the curtesy," to all the real and personal estate of said Mary A. Aller, deceased, which is dated September 8th, 1873; and the last will and testament of Peter H. Aller, were offered in evidence.

The action was brought by Angelina H. Aller, now Angelina H. McPherson, against Peter H. Aller in his lifetime, and, after his death, continued against his executor, Michael Shurts.

The defendant, Peter H. Aller, was aged and feeble, and the plea was, therefore, filed in his lifetime, by consent, without affidavit.

Argued at June Term, 1878, before BEASLEY, CHIEF JUSTICE, and Justices DEPUE, SCUDDER and KNAPP.

For plaintiff, G. A. Allen and J. R. Emery.

For defendant, J. T. Bird.

The verdict was for the plaintiff, and a rule to show cause was allowed at the Circuit.

The opinion of the court was delivered by

SCUDDER, J. Whether the note for $1000 could have been enforced in equity as evidence of an indebtedness by the husband to the wife during her life, is immaterial, for after her death he was entitled, as husband of his deceased wife, to [448] administer on her estate, and receive any balance due on the note, after deducting legal charges, under the statute of distribution. The daughters could have no legal or equitable claim on this note against their father after their mother’s decease. The giving of these two sealed promises in writing to them by their father was therefore a voluntary act on his part. That it was just and meritorious to divide the amount represented by the original note between these only two surviving children of the wife if it was her separate property, and keep it from going into the general distribution of the husband's estate among his other children, is evident, and such appears to have been his purpose.

The question now is, whether that intention was legally and conclusively manifested, so that it cannot now be resisted.

This depends on the legal construction an effect of the instrument which was given by the father to his daughter.

It has been treated by the counsel of the defendant in his argument, as a promissory note, and the payment was resisted at the trial on the ground that it was a gift. Being a gift inter vivos, and without any legal consideration, it was claimed that the action could not be maintained. But the instrument is not a promissory note; having the properties of negotiable paper by the law merchant; nor is it a simple contract, with all the latitude of inquiry into the consideration allowable in such a case; but it is in form and legal construction a deed under seal. It says in the body of the writing “as witness my hand and seal,” and a seal is added to the name of Peter H. Aller. It is not therefore an open promise for the payment of money, which is said to be the primary requisite of a bill or promissory note, but it is closed or sealed, whereby it loses its character as a commercial instrument and becomes a specialty governed by the rules affecting common law securities. 1 Daniell's Neg. Inst., §§ 1, 31, 34.

It is not at this time necessary to state the distinction between this writing and corporation bonds and other securities which have been, held to have the properties of negotiable paper by commercial usage. This is merely an individual [449] promise "to pay my daughter, Angeline H. Aller, the sum of $312.61, for value received," &c. It is not even transferable in form, and there is no intention shown upon its face to make it other than it is clearly expressed to be, a sealed promise to pay money to a certain person or a debt in law under seal. How then will it be affected by the evidence which was offered to show that it was a mere voluntary promise, without legal consideration, or, as it was claimed, a gift unexecuted?

Our statute concerning evidence (Rev., p. 380, § 16,) which enacts that in any action upon an instrument in writing, under seal, the defendant in such action may plead and set up as a defence therein fraud in the consideration, is not applicable for here there is no fraud shown.

But it is said that the act of April 6th, 1875, (Rev., p. 387, § 52,) opens it to the defence of want of sufficient consideration, as if it were a simple contract, and, that being shown, the contract becomes inoperative.

The statute reads—"that in every action upon a sealed instrument, or where a set-off is founded on a sealed instrument, the seal thereof shall be only presumptive evidence of a sufficient consideration, which may be rebutted as if such instrument was not sealed," &c.

Suppose the presumption that the seal carries with it, that there is a sufficient consideration, is rebutted, and overcome by evidence showing there was no such consideration, the question still remains, whether an instrument under seal, without sufficient consideration, is not a good promise, and enforceable at law. It is manifest that here the parties intended and understood that there should be no consideration. The old man said: "Now here, girls, is a nice present for each of you," and so it was received by them. The mischief which the above quoted law was designed to remedy; was that where the parties intended there should be a consideration, they were prevented by the common law from showing none, if the contract was under seal. But it would be going too far to say that the statute was intended to abrogate all voluntary con [450] tracts, and to abolish all distinction between specialties and simple contracts.

It will not do to hold that every conveyance of land, or of chattels, is void by showing that no sufficient consideration passed when creditors are not affected. Nor can it be shown by authority that an executory contract, entered into intentionally and deliberately, and attested in solemn form by a seal, cannot be enforced. Both by the civil and the common law, persons were guarded against haste and imprudence in entering into voluntary agreements. The distinction between "nudum pactum" and "pactum vestitum," by the civil law, was in the formality of execution and not in the fact that in one case there was a consideration, and in the other none, though the former term, as adopted in the common law, has the signification of a contract without consideration. The latter was enforced without reference to the consideration, because of the formality of its ratification. 1 Parsons on Cont. (6th ed.) *427.

The opinion of Justice Wilmot, in Pillans v. Van Mierop, 3 Burr. 1663, is instructive on this point.

The early case of Sharington v. Strotton, Plow. 308, gives the same cause for the adoption of the sealing and delivery of a deed. It says, among other things,

"because words are oftentimes spoken by men unadvisedly and without deliberation, the law has provided that a contract by words shall not bind without consideration. And the reason is, because it is by words which pass from men lightly and inconsiderately, but where the agreement is by deed there is more time for deliberation, &c. So that there is great deliberation used in the making of deeds, for which reason they arc received as a lien final to the party, and are adjudged to bind the party without examining upon what cause or consideration they were made. And therefore in the case put in 17 Ed. IV., if I by deed promise to give you £20 to make your sale de novo, here you shall have an action of debt upon the deed, and the consideration is not examinable, for in the deed there is sufficient consideration, viz., the will of the party that made the [451] deed."

It would seem by this old law, that in case of a deed the saying might be applied, stat pro ratione voluntas.

In Smith on Contracts, the learned author, after stating the strictness of the rules of law, that there must be a consideration to support a simple contract to guard persons against the consequences of their own imprudence, says: "The law does not absolutely prohibit them from contracting a gratuitous obligation, for they may, if they will, do so by deed."

This subject of the derivation of terms and formalities from the civil law, and of the rule adopted in the common law, is fully described in Fonb. Eq. 335, note a. The author concludes by saying:

"If, however, an agreement be evidenced, by bond or other instrument, under seal, it would certainly be seriously mischievous to allow its consideration to be disputed, the common law not having pointed out any other means by which an agreement can be more solemnly authenticated. Every deed, therefore, in itself imports a consideration, though it be only the will of the maker, and therefore shall never be said to be nudum pactum."

See, also, 1 Chitty on Cont. (11th ed.) 6; Morly v. Boothby, 3 Bing. 107; Rann v. Hughes, 7 T. R. 350, note a.

These statements of the law have been thus particularly given in the words of others, because the significance of writings under seal, and their importance in our common law system, seem in danger of being overlooked in some of our later legislation. If a party has fully and absolutely expressed his intention in a writing sealed and delivered, with the most solemn sanction known to our law, what should prevent its execution where there is no fraud or illegality? But because deeds have been used to cover fraud and illegality in the consideration, and just defences have been often shut out by the conclusive character of the formality of sealing, we have enacted in our state the two recent statutes above quoted. The one allows fraud in the consideration of instruments under seal to be set up as defence, the other takes away the conclusive evidence of a sufficient consideration heretofore accorded to a sealed writing, and makes it only presumptive [452] evidence. This does not reach the case of a voluntary agreement, where there was no consideration, and none intended by the parties. The statute establishes a new rule of evidence, by which the consideration of sealed instruments may be shown, but does not take from them the effect of establishing a contract expressing the intention of the parties, made with the most solemn authentication, which is not shown to be fraudulent or illegal. It could not have been in the mind of the legislature to make it impossible for parties to enter into such promises; and without a clear expression of the legislative will, not only as to the admissibility, but the effect of such evidence, such construction should not be given to this law. Even if it should be held that a consideration is required to uphold a deed, yet it might still be implied where its purpose is not within the mischief which the statute was intended to remedy. It was certainly not the intention of the legislature to abolish all distinction between simple contracts and specialties, for in the last clause of the section they say that all instruments executed with a scroll, or other device by way of scroll, shall be deemed sealed instruments. It is evident that they were to be continued with their former legal effect, except so far as they might be controlled by evidence affecting their intended consideration.

If the statute be anything more than a change of the rules of evidence which existed at the time the contract was made, and in effect makes a valuable consideration necessary, where such requisite to its validity did not exist at that time, then the law would he void ill this case, because it would impair the obligation of a prior contract. This cannot be done. Cooley on Const. Lim. 288, and notes.

The rule for a new trial should be discharged.

17 Ind. 29

SCHNELL
v.
NELL.

November 25, 1861.

A's wife died testate, and by her will bequeathed to B., C., and D., each, the sum of $200, but left no property out of which the legacies, or any part of them, could be satisfied. After her decease, A. entered into an agreement, in writing, with the legatees, by which he agreed to pay to them the several sums bequeathed to them by his wife, in consideration, 1. of one cent; 2. of the love and affection he bore his deceased wife, and the fact that she had done her part in the acquisition of his property; and 3. that she had expressed her desire by her will, that they should have said sums of money. Suit upon the agreement. Answer: want of consideration.

Held, that the doctrine that inadequacy of consideration will not vitiate an agreement, does not apply to a mere exchange of sums of money, the values of which are exactly fixed; but to the exchange of something of indefinite value, for money, or for some other thing of indefinite value.

Held, also, that a consideration of one cent will not support a promise to pay six hundred dollars; but such a contract is so unconscionable as to be void, on its face.

Held, also, that the wife's will imposed no obligation on A. to pay the legacies out of his property; and as his wife had none of her own, out of which they might be paid, his promise to pay them was not legally binding upon him.

Held, also, that where a claim is legally groundless, a promise made upon a compromise of it, or of a suit upon it, is not binding.

Held, also, that the love A. bore his wife, and her services in the acquisition of his property, were not good considerations to support his promise to pay the legacies, first, because they were past considerations; and, second, because they constituted no consideration for a promise to pay money to a third person.

APPEAL from the Marion Common Pleas.

PERKINS, J.—Action by J. B. Nell against Zacharias Schnell, upon the following instrument:

"This agreement, entered into this 13th day of February, 1856, between Zach. Schnell, of Indianapolis, Marion county, State of Indiana, as party of the first part, and J. B. Nell, of the same place, Wendelin Lorenz, of Stilesville, Hendricks county, State of Indiana, and Donata Lorenz, of Frickinger, Grand Duchy of Baden, Germany, as parties of the second part, witnesseth: The said Zacharias Schnell agrees as follows: whereas his wife, Theresa Schnell, now [30] deceased, has made a last will and testament, in which, among other provisions, it was ordained that every one of the above named second parties, should receive the sum of $200; and whereas the said provisions of the will must remain a nullity, for the reason that no property, real or personal, was in the possession of the said Theresa Schnell, deceased, in her own name, at the time of her death, and all property held by Zacharias and Theresa Schnell jointly, therefore reverts to her husband; and whereas the said Theresa Schnell has also been a dutiful and loving wife to the said Zach. Schnell, and has materially aided him in the acquisition of all property, real and personal, now possessed by him; for, and in consideration of all this, and the love and respect he bears to his wife; and, furthermore, in consideration of one cent, received by him of the second parties, he, the said Zach. Schnell, agrees to pay the above named sums of money to the parties of the second part, to wit: $200 to the said J. B. Nell; $200 to the said Wendelin Lorenz; and $200 to the said Donata Lorenz, in the following installments, viz., $200 in one year from the date of these presents; $200 in two years, and $200 in three years; to be divided between the parties in equal portions of $66⅔ each year, or as they may agree, till each one has received his full sum of $200.

"And the said parties of the second part, for, and in consideration of this, agree to pay the above named sum of money [one cent], and to deliver up to said Schnell, and abstain from collecting any real or supposed claims upon him or his estate, arising from the said last will and testament of the said Theresa Schnell, deceased.

"In witness whereof, the said parties have, on this 13th day of February, 1856, set hereunto their hands and seals.

"ZACHARIAS SCHNELL, [SEAL.]

“J. B. NELL, [SEAL.]

"WEN. LORENZ." [SEAL.]

The complaint contained no averment of a consideration for the instrument, outside of those expressed in it; and did [31] not aver that the one cent agreed to be paid, had been paid or tendered.

A demurrer to the complaint was overruled.

The defendant answered, that the instrument sued on was  given for no consideration whatever.

He further answered, that it was given for no consideration, because his said wife, Theresa, at the time she made the will mentioned, and at the time of her death, owned, neither separately, nor jointly with her husband, or any one else (except so far as the law gave her an interest in her husband's property), any property, real or personal, &c.

The will is copied into the record, but need not be into this opinion.

The Court sustained a demurrer to these answers, evidently on the ground that they were regarded as contradicting the instrument sued on, which particularly set out the considerations upon which it was executed. But the instrument is latently ambiguous on this point. See Ind. Dig., p. 110.

The case turned below, and must turn here, upon the question whether the instrument sued on does express a consideration sufficient to give it legal obligation, as against Zacharias Schnell. It specifies three distinct considerations for his promise to pay $600:

1. A promise, on the part of the plaintiffs, to pay him one cent.

2. The love and affection he bore his deceased wife, and the fact that she had done her part, as his wife, in the acquisition of property.

3. The fact that she had expressed her desire, in the form of an inoperative will, that the persons named therein should have the sums of money specified.

The consideration of one cent will not support the promise of Schnell. It is true, that as a general proposition, inadequacy of consideration will not vitiate an agreement. Baker v. Roberts, 14 Ind. 552. But this doctrine does not apply to a mere exchange of sums of money, of coin, whose value is exactly fixed, but to the exchange of something of, in, itself, indeterminate value, for money, or, perhaps, for some other thing of indeterminate value. In this case, had the [32] one cent mentioned, been some particular one cent, a family piece, or ancient, remarkable coin, possessing an indeterminate value, extrinsic from its simple money value, a different view might be taken. As it is, the mere promise to pay six hundred dollars for one cent, even had the portion of that cent due from the plaintiff been tendered, is an unconscionable contract, void, at first blush, upon its face, if it be regarded as an earnest one. Hardesty v. Smith, 3 Ind. 39. The consideration of one cent is, plainly, in this case, merely nominal, and intended to be so. As the will and testament of Schnell’s wife imposed no legal obligation upon him to discharge her bequests out of his property, and as she had none of her own, his promise to discharge them was not legally binding upon him, on that ground. A moral consideration, only, will not support a promise. Ind. Dig., p. 13. And for the same reason, a valid consideration for his promise can not be found in the fact of a compromise of a disputed claim; for where such claim is legally groundless, a promise upon a compromise of it, or of a suit upon it, is not legally binding. Spahr v. Hollingshead, 8 Blackf. 415. There was no mistake of law or fact in this case, as the agreement admits the will inoperative and void. The promise was simply one to make a gift. The past services of his wife, and the love and affection he had borne her, are objectionable as legal considerations for Schnell’s promise, on two grounds: 1. They are past considerations. Ind. Dig., p. 13. 2. The fact that Schnell loved his wife, and that she had been industrious, constituted no consideration for his promise to pay J. B. Nell, and the Lorenzes, a sum of money. Whether, if his wife, in her lifetime, had made a bargain with Schnell, that, in consideration of his promising to pay, after her death, to the persons named, a sum of money, she would be industrious, and worthy of his affection, such a promise would have been valid and consistent with public policy, we need not decide. Nor is the fact that Schnell now venerates the memory of his deceased wife, a legal consideration for a promise to pay any third person money.

The instrument sued on, interpreted in the light of the [33] facts alleged in the second paragraph of the answer, will not support an action. The demurrer to the answer should have  been overruled. See Stevenson v. Druley, 4 Ind. 519.

Per Curiam. — The  judgment is reversed, with costs. Cause remanded &c.

James Morrison and C. A. Ray, for the appellant.

N. B. Taylor and A. Seidensticker, for the appellee.

273 N.Y. 172

JOHN K. COCHRAN, Appellant,
v.
MABEL N. TAYLOR, Respondent.

[173] Cochran v. Taylor, 248 App. Div. 669, reversed.

Argued January 13, 1937; decided March 9, 1937.

APPEAL from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered May 27, 1936, affirming a judgment in favor of defendant entered upon a decision of the court on trial without a jury. (See 156 Misc. Rep. 750.)

John W. Hollis for appellant. The trial court erred in permitting defendant to contradict and invalidate the terms of the written agreement by parol evidence. (Fuller v. Artman, 24 N.Y. Supp. 13; Watkins v. Robertson, 105 Va. 269; McMillan v. Ames, 33 Minn. 257; Mathews Slate Co. v. New Empire Slate Co., 122 Fed. Rep. 972; Bosh v. Humboldt Mutual Fire & Marine Ins. Co., 35 N. J. L. 429; Weaver v. Burr, 31 W. Va. 736; Black v. Maddox, 104 Ga. 157; McCrea v. Purmont, [174] 16 Wend. 460; Ruppert v. Singhi, 243 N.Y. 156; Jamestown Business Collage Assn. v. Allen, 172 N.Y. 291; Olin v. Arendt, 58 N.Y. Supp. 429; Watkins Salt Co. v. Mulkey, 225 Fed. Rep. 739.) A contract under seal and reciting a nominal consideration is a valid and enforceable agreement. (Fuller v. Artman, 24 N.Y. Supp. 13; Lewis v. Bollinger, 187 N.Y. Supp. 563; Mathews Slate Co. v. New Empire Slate Co., 122 Fed. Rep. 972; Thomason v. Beecher, 176 N. C. 622; McCrea v. Purmont, 16 Wend. 460; Black v. Maddox, 104 Ga. 157; Weaver v. Burr 31 W. Va. 736; O'Brien v. Boland, 166 Mass. 481; Watkins v. Robertson, 105 Va. 269; Willard v. Taylore, 75 U. S. 557; Storm v. United States, 94 U. S. 76; Aller v. Aller, 40 N. J. L. 446.) The contract as entered into constituted a valid agreement on the part of the defendant to sell the property at any time within one hundred and twenty days at the agreed price and upon the conditions therein stated, which could not be withdrawn before the expiration of the period provided. (Fuller v. Artman, 24 N.Y. Supp. 13; McMillan v. Ames, 33 Minn. 257; Seyferth v. Groves & Sand Ridge R.R. Co., 217 Ill. 483.) The attempted revocation on the part of the defendant was ineffectual. (McMillan v. Ames, 33 Minn. 257; Watkins v. Robertson, 105 Va. 269; Seyferth v. Grove & Sand Ridge R.R. Co., 217 Ill. 483; Thomason v. Beecher, 176 N. C. 622; Willard v. Taylore, 75 U. S. 557; O'Brien v. Boland, 166 Mass. 481; Adams v. Peabody Coal Co., 230 Ill. 469.) Even were the evidence competent that the dollar recited in the agreement was not paid, it would not constitute a defense to the action, as the agreement is based upon a sufficient consideration which was tendered, payment waived and the defendant is estopped from repudiating her own act. (Seyferth v. Groves & Sand Ridge R.R. Co., 211 Ill. 482; Thomason v. Beecher, 176 N. C. 622; Kam v. Benjamin, 42, N.Y. Supp. 99; Williams v. Whiltell, 74 N.Y. Supp. 820.) An option for a specified period of time under seal, or based upon a nominal consideration, is irrevocable during the period stated, [175] and upon acceptance becomes a bilateral enforceable contract. (Fuller v. Artman, 24 N.Y. Supp. 13; Wells v. Wells, 40 N.Y. Supp. 836; Olin v. Arendt, 58 N.Y. Supp. 429; Forgotson v. Cragin, 70 N.Y. Supp. 979; Mathews Slate Co. v. New Empire Slate Co., 122 Fed. Rep. 972; Spitzli v. Guth, 183 N.Y. Supp. 743; Thomason v. Beecher, 176 N.C. 622.)

Francis B. O'Connor for respondent. The option contains no mutual covenants. The sum of one dollar or any other sum was not, in fact, paid, and there was no consideration. It was a purely gratuitous promise and standing alone was unenforceable against the will of the optioner. (Presbyterian Church of Albany v. Cooper, 112 N.Y. 517; Strobe v. Netherland Co., 245 App. Div. 573.) There having been no consideration for the alleged option, it is a mere offer to sell and could be revoked at any time before acceptance, and, having been revoked before acceptance, the plaintiff's attempted acceptance and attempt to exercise the option, after such revocation and withdrawal of the offer contained in the option, was a nullity. (Ganss v. Guffey Petroleum Co., 125 App. Div. 760; 131 App. Div. 897; 198 N.Y. 574; Quick v. Wheeler. 78 N.Y. 300; Pomeroy v. Newell, 117 App. Div. 800; Pettibone v. Moore, 75 Hun, 461; Petterson v. Pattberg, 248 N.Y. 86; Finizio v. American Steel Export Co., 192 App. Div. 571; 233 N.Y. 514; Eckstein v. Chapkewitz Fur Co., 131 Misc. Rep. 167; Poe v. Ulrey, 233 Ill. 56; Boston & Maine R.R. v. Bartlett, 3 Cush. 224; Gross v. Stampler, 165 N.Y. Supp. 214; Morrison v. Johnson, 148 Minn. 343.) Parol evidence is admissible to show want of consideration even though the purported option is under seal and recites a consideration of one dollar, the receipt of which is acknowledged and confessed. (Case v. Boughton, 11 Wend. 107; Johnson v. Miln 14 Wend. 195; Fay v. Richards & Haywood, 21 Wend. 626; Wilson v. Thompson, 10 Barb. 308; Baird v. Baird, 81 Hun, 300; 145 N.Y. 659; Stromblad v. Hanover Fire Ins. [176] Co., 121 Misc. Rep. 322; Hutchison v. Ross, 262 N.Y. 381; Harris v. Shorall, 230 N.Y. 343; Lagumis v. Gerard, 116 Misc. Rep. 471; McCreery v. Day, 119 N.Y. 1; Thomson v. Poor, 147 N.Y. 402; Ambler v. Smith, 237 App. Div. 226; Smith v. Dotterweich, 200 N.Y. 299; Bernstein v. Kritzer, 253 N.Y. 410.) The purported assignment from the optionee to plaintiff did not vest in the plaintiff any right to demand performance by the defendant or to compel the defendant specifically to perform by an action in equity, for the reason that the purported option purports to offer to the optionee the right to purchase defendant's property on credit and no one but the optionee could exercise the option, except with the consent of the defendant, and such consent has not been given by the defendant. (Lojo Realty Co. v. Estate of Johnson, 227 App. Div. 292; 253 N.Y. 579; 235 App. Div. 68; 261 N.Y. 625; 266 N.Y. 670; Epstein v. Gluckin, 233 N.Y. 490; Gargiulo v. California Wineries & Distilleries, 103 Misc. Rep. 691; Grosso v. Sporer, 123 Misc. Rep. 796; Hugel v. Habel, 132 App. Div. 327; Dittenfass v. Horsley, 177 App. Div. 143; 224 N.Y. 560; Wadick v. Mace, 191 N.Y. 1; Ide v. Brown, 178 N.Y. 26; Schuyler v. Kirk-Brown Realty Co., 193 App. Div. 269; Ferguson Contracting Co. v. Helderberg Cement Co., 135 App. Div. 494.)

RIPPEY, J. On October 20, 1934, an agreement in writing and under seal was executed in duplicate, duly acknowledged and delivered by and between defendant and one William B. Chenault, whereby the former gave to Chenault an option to buy certain real and personal property located in Allegany county, New York, for $115,000 at any time within 120 days thereafter upon terms and conditions therein specified, and agreed to sell and convey the same to Chenault on condition that Chenault should, within such period of time, give her written notice of his intention to buy. On November 13, 1934, defendant notified Chenault that she revoked, [177] rescinded and withdrew the offer to sell on the ground, as she asserted, that the contract was without consideration and was obtained from her through duress, fraud and undue influence. Chenault assigned all of his interest in the agreement to plaintiff on December 21, 1934, and on January 11, 1935, the latter served the required notice of his election to buy. Complying with the provisions of the agreement, plaintiff demanded delivery within thirty days of abstracts of title and of a suitable instrument of conveyance. Upon refusal of defendant to perform, this action for specific performance was brought.

The answer put in issue the material allegations of the complaint. Additionally, defendant set up, as defenses, (1) that the agreement was only an offer to sell, was without consideration and was revoked and withdrawn before acceptance and prior to the time of assignment to plaintiff who took the assignment with knowledge of the withdrawal and revocation, (2) that the option was not assignable and plaintiff acquired no interest by the assignment, and (3) that defendant's signature to the instrument and its delivery by her were obtained through imposition, fraud and undue influence. A counterclaim was interposed for damages arising out of the recording of the instruments which, it was asserted, prevented defendant from disposing of her property and from enjoying the full use and benefit thereof, all of which was put in issue by the reply.

The trial court found that there was no valid acceptance or tender of performance by plaintiff or by Chenault and sustained the first two defenses mentioned. No finding or decision was made on the material question of fact as to whether the execution and delivery of the instrument were procured, as defendant asserts, by plaintiff or by Chenault or by both through imposition, undue influence or fraud. The trial court specifically stated in his opinion that he limited his decision to holding that the option was nudum pactum, that defendant had a right [178] to withdraw, revoke and cancel it and that, since the option by its terms involved the extension of credit to Chenault, it was not assignable to plaintiff or, in any event, enforcible by plaintiff without a tender of a bond executed by Chenault. Judgment was entered dismissing the complaint, with costs. The Appellate Division in the fourth department affirmed by a divided court upon the findings of fact as made by the trial court. The judgment appealed from cannot be sustained unless it can be held, as matter of law, that the option was without consideration, was not assignable and was not accepted according to its terms.

It is the rule that an offer or an option, not under seal or given for a consideration, may be revoked at any time before acceptance (1 Williston on The Law of Contracts [Rev. ed., 1936], § 55; Petterson v. Pattberg, 248 N.Y. 86, 88; Boston & Maine R.R. v. Bartlett, 3 Cush. [Mass.] 224.) That rule has no application here. In the instant case the agreement was under seal and the receipt of a consideration was acknowledged and confessed. In the body of the instrument the parties recited that they attached their seals, thereby establishing their intention concerning the sealing of the instrument, and, at the end, added the seal in the form required by section 44 of the General Construction Law (Cons. Laws, ch. 22). It cannot be successfully argued that the agreement was not a sealed instrument carrying with it all the force and implications attributable to an instrument so executed. The cases of Matter of Pirie (198 N.Y. 209) and Empire Trust Co. v. Heinze (242 N.Y. 475) hold nothing to the contrary. In the Pirie case the seal was present but an expression of intent to make the instrument one under seal was lacking. In the Heinze case the intention was expressed but the seal was lacking.

Prior to the time the law required consideration to support a contract, the seal was used conclusively to establish the authenticity and binding effect of the instrument to which it was attached. (1 Williston on The Law [179] of Contracts [Rev. ed., 1936], §§ 109, 217.) The use and binding effect of the seal dates back to at least 2900 B.C. (Report of Law Revision Commission, Legislative Document, [1936] No. 65, p. 235.) Williston points out (§217) that long before the action of assumpsit was developed, a promise under seal but without consideration was binding  and that it was binding by its own force by the common law (§ 109.) It is agreed upon substantially universal authority that a statement of consideration in a sealed instrument is unnecessary. (Thomason v. Bescher, 176 N.C. 622; 2 A.L.R. note, p. 631.) It is also frequently stated by the courts that a sealed instrument carries with it a presumption that it is given for a valid consideration without the necessity of a recital of the consideration therein and that the party signing and sealing is estopped to assert lack of consideration. (Fuller v. Artman, 69 Hun, 546; Petrie v. Barckley, 47 N.Y. 653; Torry v. Black, 58 N.Y. 185; Stiebel v. Grosberg, 202 N.Y. 266; McMillan v. Ames, 33 Minn. 257; Watkins v. Robertson, 105 Va. 269; Weaver v. Burr, 31 W. Va. 736.) Williston asserts that though it has been expressed that a sealed instrument "imported" a consideration, "however expressed the law has always been clear that apart from changes made by statute, a sealed promise, whether absolute or in the form of an offer, is binding without consideration." (§ 217.) He adds that while there are cases where equity will not enforce a voluntary covenant, an option is not one of them. Throughout the centuries, the rule as to the binding effect of the seal has been founded in reason and based on necessity. Today, in the face of the tremendous number of business transactions open to investigation by the courts, reason continues to dictate and necessity to require more forcefully than before that a party to a sealed instrument should be estopped to assert want of consideration. (1 Williston on The Law of Contracts [Rev. ed., 1936], § 219.)

[180] The first statute in this State in any manner affecting the common law rule as to the conclusive character of the seal was the act of 1828 (2 R. S. [1st ed.] p. 406, pt. 3, ch. 7, tit. 3, § 77) which provided that the seal should be only "presumptive evidence of a sufficient consideration, which may be rebutted in the same manner, and to the same extent, as if such instrument were not sealed." That act remained in effect until amended by chapter 448 of the Laws of 1876 (Code of Remedial Justice, § 840) to read, "A seal upon an executory instrument is only presumptive evidence of a sufficient consideration, which may be rebutted, as if the instrument was not sealed." In chapter 416 of the Laws of 1877 (Code Civ. Proc. § 840) the words "hereafter executed" were inserted after the first word "instrument." In that form the statute remained until 1920, when the words "hereafter executed" were stricken out and the statute, thus amended, continued to September 1, 1935. These statutory changes in the common law rule refer only to the question of "sufficient consideration," and as to the sufficiency of the consideration, the seal, it is declared, shall be only presumptive evidence. The memorandum opinion in Baird v. Baird (145 N.Y. 659, 665), where it was said, among other things, that under section 840 of the Code of Civil Procedure "it is now open to the maker of such an instrument to allege and prove the absence of any consideration in fact as a defense," did not receive the approval of a majority of this court. The question of sufficiency of consideration has always been open to inquiry and the statute is merely declaratory of the common law, but the "consideration implied by the seal cannot be impeached for the purpose of invalidating the instrument or destroying its character as a specialty." (McMillan v. Ames, supra; Fuller v. Artman, supra.) Whether the intent and effect of chapter 708 of the Laws of 1935 (in effect September 1, 1935) was to destroy the conclusive effect of the seal on a written instrument, we are not here called upon to determine. The instrument [181] in suit was executed and delivered prior to the time that act went into effect.

The instrument in suit recited a consideration of one dollar which the defendant "acknowledged and confessed" she had received. Oral evidence was admitted, over plaintiff's objection and exception, to the effect that neither the one dollar nor any other sum was paid by Chenault to defendant. It was upon this testimony that the court found and concluded that the instrument was without consideration, a mere offer, and revocable at any time before acceptance. Such evidence did not warrant the facts found nor the conclusion drawn. (Lawrence v. McCalmont, 2 How. [U.S.] 426.) Sometimes equity will inquire into the real consideration for the purpose of applying equitable principles on questions of enforcement arising in actions for specific performance. Equity will not refuse, however, to decree specific performance solely on the ground of inadequacy of consideration. (Pomeroy on Equity Jurisprudence [4th ed.], vols. 2 and 5, §§ 926, 2212.) There must be other grounds. But parol evidence is inadmissible to question or contradict the recited consideration in the sealed instrument for the purpose of showing that it was void for lack of consideration and thus to defeat it. (Fuller v. Artman, supra; McMillan v. Ames, supra; M'Crea v. Purmort, 16 Wend. 460; Grout v. Townsend, 2 Den. 336; Ruppert v. Singhi, 243 N.Y. 156, 159; Jamestown Business College Assn. v. Allen, 172 N.Y. 291; Poe v. Ulrey, 233 Ill. 56.) In Lawrence v. McCalmont (2 How. 426, at p. 452) Mr. Justice STORY said:

"The second [defense] is, that the payment of the one dollar is merely nominal and not sufficient to sustain the guarantee, if it had been received; and it is urged that it was not received. As to this last point, we feel no difficulty. The guarantor acknowledged the receipt of the one dollar, and is now estopped to deny it. If she has not received it, she would now be entitled to recover it. A valuable consideration, however small or nominal, if given or stipulated for in good faith, is, in the absence of [182] fraud, sufficient to support an action on any parol contract; and this is equally true as to contracts of guarantee as to other contracts. A stipulation in consideration of one dollar is just as effectual and valuable a consideration as a larger sum stipulated for or paid."

It is unnecessary to discuss or decide whether an option to purchase mineral rights and the like carries with it an interest in the land itself. It is sufficient here to say that the option in suit carries with it a presently existing contract right as valuable as the property promised to be conveyed and partakes of the incident of assignability. The option was not necessarily personal in its character. It did not involve the integrity or skill of Chenault, nor was it possible to say, as found by the trial court, that, in executing and delivering the agreement, defendant relied on the credit of Chenault. Assignment was not barred by any express terms contained in the instrument and it was not forbidden by statute or public policy. It was, under the general rule prevailing in this State as to assignability of property rights, assignable by Chenault. (Devlin v. Mayor, etc., 63 N.Y. 8; Rosenthal Paper Co. v. National Folding Box & Paper Co., 226 N.Y. 313, 325.) Aside from the above, the parties asserted in the instrument that "this agreement is binding upon the respective parties, personal representatives, heirs, and assigns," and its assignability, within the clear and expressed intent of the parties, was thereby established.

Plaintiff accepted the offer in due form within the time required. For reasons that are clear, defendant could not decline to acknowledge that the acceptance was sufficient.  By the express terms of the instrument, Chenault or his assignee was not required to pay the whole or any part of the purchase price or to execute and deliver or tender a mortgage as security for any unpaid part thereof until "the time of the closing of the sale and title." As a preliminary to closing and within thirty days after plaintiff elected to buy, defendant agreed to furnish the necessary [183] evidence showing merchantable title with abstracts going back at least forty years and to prepare the necessary instruments of conveyance. Upon receipt of the evidences of title and abstracts, plaintiff thereafter had a reasonable time to perform. Before he was required to act, defendant refused to perform. He had accepted the offer and had agreed to perform according to the express terms of the contract. Further or different tender was unnecessary, for equity will not require the performance of a useless act. In plaintiff's written acceptance, he stated that he elected to pay twenty per cent of the purchase price on delivery of the deed and give back a mortgage for the unpaid balance, as he had a right to do under the terms of the contract. The contract further provided, however, that Chenault might, at his option, pay the entire purchase price. Prior to the submission of the case, a tender was made to defendant of the entire sum of $115,000 in cash, winch tender was kept alive. By the terms of the contract and because of this tender the defendant could no longer object to completing the transaction and making the conveyance, as she promised to do, upon any theory that she could not be compelled to accept a part of the purchase price and the mortgage of Cochran as security for the unpaid balance without the accompanying bond of Chenault. It is sufficient to say that the terms of the written contract between the parties are clear and unequivocal. The contract provided that a mortgage covering the property conveyed should be her security and no mention of a bond by any one is made.

The written option, being under seal and founded upon a valid consideration, could not be withdrawn, revoked or rescinded at will by defendant within the time within which she agreed that Chenault and his assigns might accept. (Fuller v. Artman, supra; Thomason v. Bescher, 176 N. C. 622; 2 A.L.R. note, p. 631, 6 R.C.L. [Contracts] § 26.) It was a unilateral contract to convey, subject only to one express condition. (Heller v. Pope, 250 N.Y. 132.) When Chenault's assignee gave written notice within [184] the time specified that he elected to buy, the condition was fulfilled and the unilateral option was thereby converted into a bilateral contract. (Heller v. Pope, supra; Thomason v. Bescher, supra.) The contract was reasonably certain in its terms, its subject-matter, its purposes and its parties. By acceptance, it became mutual in its obligations and its remedies. Upon the defendant's refusal to perform, the contract was enforcible by the assignee in an action for specific performance, in the absence of any available and satisfactorily established defense or counterclaim of an equitable character existing against the assignee or against Chenault before notice to defendant of the assignment. (Trustees of Hamilton College v. Roberts, 223 N.Y. 56; 4 Pomeroy on Equity Jurisprudence [4th ed.], § 1405; 2 Williston on The Law of Contracts [Rev. ed., 1936], § 415. Cf. State Bank v. Central Mercantile Bank, 248 N.Y. 428, 434-436.)

The judgment of the Appellate Division and that of the Trial Term should be reversed and a new trial granted, with costs to the appellant to abide the event.

CRANE, Ch. J., LEHMAN, O'BRIEN, HUBBS and LOUGHRAN, JJ., concur; FINCH, J., taking no part.

Judgments reversed, etc.

3 Burr. 1664
97 Eng. Rep. 1035

PILLANS AND ROSE
versus
VAN MIEROP AND HOPKINS.

Tuesday, 30th April 1765.

An undertaking to honour a bill of exchange, is binding upon the party so undertaking. [See 6 Ves. 9. 2 Ves. jun. 117. 5 Ves. 148, 868. 7 Durn. 351. 1 East, 101. 4, East, 68. 2 East, 327. And note, that the ground of decision in this case was the consent which the Court very properly decided to be sufficient.]

On Friday 25th of January last, Mr. Attorney General Norton, on behalf of the plaintiffs, moved for a new trial. He moved it as upon a verdict against evidence: the substance of which evidence was as follows.

One White, a merchant in Ireland, desired to draw upon the plaintiffs, who were merchants at Rotterdam, in Holland, for £800 payable to one Clifford; and proposed to give them credit upon a good house in London, for their reimbursement; or another method of reimbursement.

[3 Burr. 1664] The plaintiffs, in answer, desired a confirmed credit upon a house of rank in London; as the condition of their accepting the bill. White names the house of the defendants, as this house of rank; and offers credit upon them. Whereupon the plaintiffs honoured the draught, and paid the money; and then wrote to the defendants Van Mierop and Hopkins, merchants in London, (to whom White also wrote, about the same time,) desiring to know "whether they would accept such bills as they, the plaintiffs, should in about a month's time draw upon the said Van Mierop's and Hopkins's house here in London, for £800 upon the credit of White:" and they, having received their assent, accordingly drew upon the defendants. In the interim White failed before their draught came to hand, or was even drawn: and the defendants gave notice of it to the plaintiffs, and forbid their drawing upon them. Which they, nevertheless, did: and therefore the defendants refused to pay their bills.

On the trial, a verdict was found for the defendants.

Upon shewing cause, on Monday 11th February last, it turned upon the several letters that had respectively passed between the plaintiffs, and defendants, and White. The letters were read: 1st. Those^[1] from White and Co. in Ireland, to the plaintiffs in Holland; (by which it appeared that Pillans and Rose had then accepted the bills drawn upon them by White, payable to Clifford;) then those of the plaintiffs to the defendants; and also White's to the defendants; then those of the defendants to the plaintiffs,^[2] agreeing to honour their bill drawn on account of White; the letter from the defendants to the plaintiffs, informing them "that White had stopt payment," desiring them not to draw, as they could not accept their draught; and lastly, that which the plaintiffs wrote to the defendants, "that they should draw on them, holding them not to be at liberty to withdraw from their engagement."

The counsel for the defendants were Mr. Serjeant Davy and Mr. Wallace. They observed that the plaintiffs had given credit to White, above a month before the defendants had agreed to accept their draught. For it appears by White's letter of 16th February 1762, that Pillans and Rose had then actually accepted Clifford's bills: but Van Mierop and Hopkins did not agree to honour their draughts till 19th of March 1762. Therefore the consideration was past and done, before their promise was made. And they argued, and principally insisted, that for one [3 Burr. 1665] man to undertake “to pay another man's debt," was a void undertaking; unless there was some consideration for such undertaking: and that a mere general promise, without benefit to the promiser, or loss to the promisee, was a nudum pactum. And they cited 1 Bulstr. 120, Thorner v. Field. Dyer, 272, pl. 31, Hunt v. Bate. 2 Vern. 224, 225, Cecil et Al' v. Earl of Salisbury. 1 Ro. Abr. 11, pl. 1, letter Q. "Consideration Executed." Yelv. 40, 41, and 2 Strange, 933, Hayes v. Warren; where a past consideration was holden insufficient to raise an assumpsit.^[3]

[97 Eng. Rep. 1036] The counsel for the plaintiffs were Mr. Attorney General, Mr. Walker and Mr. Dunning. They denied this to be a past consideration; and insisted, that the liberty given to the plaintiffs, "to draw upon a confirmed house in London," (which was prior to the undertaking by the defendants,) was the consideration of the credit given by the plaintiff to White's draughts; and that this was a good and sufficient consideration for the undertaking made by the defendants. It relates back to the original transaction.

If anyone promises to pay for goods delivered to a third person; such promise, being in writing, is a good one. And here White had had £800 from the plaintiffs, upon this assurance: and the defendants undertake in writing, in pursuance and completion of this original assurance, to be answerable for White's reimbursing the plaintiffs. And a promise in writing, is out of the statute.

This case does not fall within those that have been cited: for Van Mierop and Hopkins had made themselves originally liable. An ex post facto event cannot alter the nature of an original promise. Their original promise made them liable, and bound them. And they are obliged, both by law, and in honour and honesty, to perform it.

It is a mercantile transaction: and it must be considered, upon the whole of it, as an admittance "that the defendants either had or soon would have effects of White's in their hands."

Lord Mansfield—The objection is, "that the letter whereby Van Mierop and Hopkins undertake to honour the plaintiff's bills, is nudum pactum." The other side deny it.

This is the only question, here.

But this is quite different from what passed at the trial: the nudum pactum was not mentioned at that time. The grounds [3 Burr. 1666] it was argued upon there, were, 1st. That this imported to be a credit given to Pillans and Rose, in prospect of a future credit to be given by them to White; and that this credit might well be countermanded before the advancement of any money: and this is so. 2dly. That there was a fraud; for that Van Mierop and Hopkins had reason to think that White had sent goods to Pillans and Rose; whereas this was a mere lending of credit. 3dly. That if Pillans and Rose had received goods from White, and retained them till he failed, the defendant's undertaking was revocable.

I was then of opinion, that Van Mierop and Hopkins were bound by their letter; unless there was some fraud upon them: for that they had engaged under their hands, in a mercantile transaction, "to give credit for Pillans and Rose's reimbursement." And I did not see it to be future, as had been objected: nor did I see any fraud. And nothing was then urged about its being nudum pactum.

I have no idea, that promises "for the debt of another," are applicable to the present case.

This is (as Mr. Walker said) a mercantile transaction; and it depends upon these letters from merchant to merchant about honouring bills, to such an amount: and this credit is given upon a supposition "that the person who is to draw upon the undertakers within a certain time, has goods in his hands, or will have them." Here, Pillans and Rose trusted to this undertaking: and there is no fraud. Therefore it is quite upon another foundation than that of a naked promise from one, "to pay the debt of another."

Mr. Justice Wilmot—I own, the want of consideration, at first, occurred to me. But I now am satisfied, that this case has nothing to do with the cases of undertakings by one "to pay the debt of another." In those cases, it is settled, "that where the consideration is past, the action will not lie:" and yet this seems a hard case. The mere promise "to pay the debt of another," without any consideration at all, is nudum pactum: but the least spark of a consideration will be sufficient. It seems almost implied, that there must be some consideration: but if there be none at all, it is a nudum pactum. The statute must mean such a special promise as would have supported an action.

But all this is out of the present case. So also, I think, is all the precedent correspondence.

[3 Burr. 1667] It lies in a narrow compass.

White, Pillans and Rose, and Van Mierop and Hopkins had all a correspondence together: they have intercourse together, mutually, in mercantile transactions. [97 Eng. Rep. 1037] Pillans and Rose write to Van Mierop and Hopkins, to know "whether they will honour their draughts for £800 in about a month's time," They say, "they will." Now it strikes me (as Mr. Walker said) that it admits "that they either have assets or effects of White's in their hands," or "that they have credit upon him." Now by this undertaking of a good house in London, and relying upon it, they are deluded and diverted from using any legal diligence to pursue White, or even not to part with any effects of his which they might have in their hands. Therefore this seems to be an irrevocable undertaking by Van Mierop and Hopkins: and they ought to be bound by it. Consequently, there ought to be a new trial.

Lord Mansfield—A letter of credit may be given as well for money already advanced, as for money to be advanced in future.

Let it be argued again the next term: and you shall have the opinion of the whole Court.

Ulterius concilium.

Yesterday, this matter accordingly came on again; and was argued by Mr. Wallace, for the defendants; and by the same counsel as argued last term, for the plaintiffs.

The latter repeated and enforced their arguments. They said the consideration moved from White to the defendants; not from the plaintiffs Pillans and Rose, to the defendants: and as the defendants have undertaken for White, they can not revoke or retract their engagement.

This case is not like the cases cited: some of which are strange cases, and not founded on solid or sufficient reasons: and in others of them, there was no meritorious consideration at all. And Mr. Walker cited Hardres, 71, Reynolds v. Prosser; where the consideration was adjudged sufficient, notwithstanding all the reasoning of Sir Thomas Hardres, and all the cases cited by him. That was an assumpsit by a stranger, in consideration that the plaintiff would forbear to prosecute Lord Abergavenny upon a judgment, in the name of the original plaintiff, by virtue of a letter of attorney "to receive it to his own use."

[3 Burr. 1668] Serjeant Davy was heard, this morning, on behalf of the defendants; and urged, that the plaintiffs gave credit to White, upon his promising to reimburse them: and he said, there was a fraudulent concealment of facts.

White's first letter could have no influence on the plaintiffs. For they afterwards desired a confirmed credit upon a house of rank in London: so that they did not rely on White's first letter which offered credit on the defendants, or any other method of reimbursement. And nothing had then passed between White and the defendants. For the first letter between them was on the 16th of February (a fortnight after:) and then the defendants were deceived into a false opinion "that it was for a future credit, and not to secure a past acceptance of White's bills by the plaintiffs." And this concealment of circumstances is sufficient to vitiate the contract. The plaintiffs had accepted a bill of £800 of White's, a fortnight before the defendant's letter of 16th February: which bill the plaintiffs had accepted upon assurance of credit on a house in London, to reimburse them. And this transaction was fraudulently concealed, both by White and the plaintiffs, from the defendants. If this had been disclosed, the defendants would have plainly seen "that the plaintiffs doubted of White's sufficiency;" by their requiring further security for his already contracted debt.

All letters of credit relate to future credit; not to debts before incurred; nor can the advancer of money thereupon, include an old debt before incurred.

A bill can not be accepted before it is drawn. This is only a promise to accept: for it is only a promise" to honour the bill;" not a promise "to pay it."

A promise "to pay a past debt of another person" is void at common law, for want of consideration: unless there be at least an implied promise from the debtee "to forbear suing the original debtor." But here was a debt clearly contracted by White with the plaintiffs on the credit of White: and there is no promise from the plaintiffs "to forbear suing White." A naked promise is a void promise: the consideration must be executory, not past or executed.

Lord Mansfield asked, if any case could be found, where the undertaking holden to be a nudum pactum was in writing.

[3 Burr. 1669] Serjeant Davy—It was anciently doubted "whether a written acceptance of a bill of exchange was binding, for want of consideration." It is so said, somewhere in Lutwyche.

[97 Eng. Rep. 1038] Lord Mansfield—This is a matter of great consequence to trade and commerce, in every light.

If there was any kind of fraud in this transaction, the collusion and mala fides would have vacated the contract. But from these letters, it seems to me clear, that there was none. The first proposal from White, was "to reimburse the plaintiffs by a remittance, or by credit on the house of Van Mierop:" this was the alternative he proposed. The plaintiffs chose the latter. Both the plaintiffs and White wrote to Van Mierop and Company. They answered "that they would honour the plaintiffs' draughts." So that the defendants assent to the proposal made by White, and ratify it. And it does not seem at all that the plaintiffs then doubted of White's sufficiency, or meant to conceal any thing from the defendants.

If there be no fraud, it is a mere question of law. The law of merchants, and the law of the land, is the same: a witness can not be admitted, to prove the law of merchants. We must consider it as a point of law. A nudum pactum does not exist, in the usage and law of merchants.

I take it, that the ancient notion about the want of consideration was for the sake of evidence only: for when it is reduced into writing, as in covenants, specialties, bonds, &c.^[4] there was no objection to the want of consideration. And the Statute of Frauds proceeded upon the same principle.

In commercial cases amongst merchants, the want of consideration is not an objection.

This is just the same thing as if White had drawn on Van Mierop and Hopkins, payable to the plaintiffs: it had been nothing to the plaintiffs, whether Van Mierop and Co. had effects of White's in their hands, or not: if they had accepted his bill. And this amounts to the same thing:—"I will give the bill due honour," is, in effect, accepting it. If a man agrees that he will do the formal part, the law looks upon it (in the case of an acceptance of a bill) as if actually done. This is an engagement "to accept the bill, if there was a necessity to accept it; and to pay it, when due:" and they could not afterwards [3 Burr. 1670] retract. It would be very destructive to trade, and to trust in commercial dealing, if they could. There was nothing of nudum pactum mentioned to the jury; nor was it, I dare say, at all ill their idea or contemplation:

I think the point of law is with the plaintiffs.

Mr. Justice Wilmot—The question is, "whether this action can be supported, upon the breach of this agreement."

I can find none of those cases that go upon its being nudum pactum, that are in writing; they are all, upon parol.

I have traced this matter of the nudum pactum; and it is very curious.

He then explained the principle of an agreement being looked upon as a nudum pactum: and bow the notion of a nudum pactum first came into our law. He said, it was echoed from the civil law:—"Ex nudo pacto non oritur actio." Vinnius gives the reason, in lib. 3, tit. De Obligationibus, 4to edition, 596. If by stipulation, (and a fortiori, if by writing,)^[5] it was good without consideration. There was no radical defect in the contract, for want of consideration. But it was made requisite, in order to put people upon attention and reflection, and to prevent obscurity and uncertainty: and in that view, either writing or certain formalities were required. Idem, on Justinian, 4to edit. 614.

Therefore it was intended as a guard against rash inconsiderate declarations: but if an undertaking was entered into upon deliberation and reflection, it had activity; and such promises were binding. Both Grotius and Puffendorff, hold them obligatory by the law of nations. Grot. lib. 2, c. 11, De Promissis. Puffend. lib. 3, c. 5. They are morally good; and only require ascertainment. Therefore there is no reason to extend the principle, or carry it further.

There would have been no doubt upon the present case, according to the Roman law; because here is both stipulation (in the express Roman form) and writing.

Bracton (who wrote^[6] temp. Hen. 3) is the first of our lawyers that mention this. His writings interweave a great many things out of the Roman law. In his third [97 Eng. Rep. 1039] book, cap. 1, De Actionibus, he distinguishes between naked and cloathed contracts. He says that "obligatio est mater actionis;" and that it may arise ex contractu, multis modis; sicut ex conventione, &c. sicut sunt pacta, conventa, quae nuda sunt aliquando, aliquando vestita, &c. &c.

[3 Burr. 1671] Our own lawyers have adopted exactly the same idea as the Roman Law.^[7] Plowden, 308 b, in the case of Sheryngton and Pledal v. Strotton and Others, mentions it: and no one contradicted it. He lays down the distinction between contracts or agreements in words (which are more base,) and contracts or agreements in writing, (which are more high,) and puts the distinction upon the want of deliberation in the former case, and the full exercise of it in the latter. His words are the marrow of what the Roman lawyers had said. "Words pass from men lightly:" but where the agreement is made by deed, there is more stay: &c. &c. For, first, there is &c. &c. And, thirdly, he delivers the writing as his deed. "The delivery of the deed is a ceremony in law, signifying fully his good will that the thing in the deed should pass from him who made the deed, to the other. And therefore a deed, which must necessarily be made upon great thought and deliberation, shall bind without regard to the consideration."

The voidness of the consideration is the same, in reality, ill both cases: the reason of adopting the rule was the same, in both cases; though there is a difference in the ceremonies required by each law. But no inefficacy arises merely from the naked promise.

Therefore, if it stood only upon the naked promise, its being, in this case, reduced into writing, is a sufficient guard against surprise; and therefore the rule of nudum pactum does not apply in the present case.

I cannot find, that a nudum pactum evidenced by writing has been ever holden bad: and I should think it good; though, where it is merely verbal, it is bad; yet I give no opinion for its being good, always, when in writing.^[8]

Many of the old cases are strange and absurd: so also are some of the modern ones; particularly, that of Hayes v. Warren.^[9]

It is now settled, "that where the act is done at the request of the person promising, it will be a sufficient foundation to graft the promise upon."

[3 Burr. 1672] In another instance, the strictness has been relaxed: as for instance,^[10] burying a son; or^[11] curing a son; the considerations were both past; and yet holden good. It has been melting down into common sense, of late times.

However, I do here see a consideration. If it be a departure from any right, it will be sufficient to grant a verbal promise upon. Now here, White, living in Ireland, writes to the plaintiffs "to honour his draught for £800^[12] payable ten weeks after." The plaintiffs agree to it, all condition that they be made safe at all events. White offers good credit on a home in London j and draws: and the plaintiffs accept his draught. Then White writes to them, "to draw on Van Mierop and Hopkins:" to whom the plaintiffs write, "to inquire if they will honour their draught:" they engage "that they will." This transaction has prevented, stopt, and disabled the plaintiffs from calling upon White, for the performance of his engagement. For, White's engagement is complied with: so that the plaintiffs could not call upon him for this security. I do not speak of the money; for, that was not payable till after two usances and a half. But the plaintiffs were prevented from calling upon White for a performance of his engagement "to give them credit on a good house in London, for reimbursement:" so that here is a good consideration. The law does not weigh the quantum of the consideration. The suspension of the plaintiffs' right “to call upon [97 Eng, Rep. 1040] White for a compliance with his engagement" is sufficient to support an action; even if it be a suspension of the right, for a day only, or for ever so little a time.

But to consider this as a commercial case. All nations ought to have their laws conformable to each other, in such cases. Fides servanda est; simplicitas juris gentium praevaleat. Hodierni mores are such, that the old notion about the nudum pactum is not strictly observed, as a rule.

On a question of this nature, "whether by the law of nations, such an engagement as this shall bind—:" the law is to judge.

The true reason why the acceptance of a bill of exchange shall bind, is not on account of the acceptor's having or being supposed to have effects in hand; but for the convenience of trade and commerce. Fides est servanda. An acceptance for the honour of the drawer, shall bind the acceptor: so shall a verbal acceptance. And whether this be an actual acceptance, or an agreement to accept, [3 Burr. 1673] it ought equally to bind. An agreement to accept a bill "to be drawn ill future" would (as it seems to me) by connection and relation, bind on account of the antecedent relation. And I see no difference between its being before or after the bill was drawn. Here was all agreement sufficient to bind the defendants to pay the bill: agreeing "to honour it," is agreeing to pay it.

I see no sort of fraud. It rather seems as if the defendants had effects of White's in their bands. And it does not appear to me, that the defendants would have honoured the plaintiffs' draughts, even though they had known that it was future credit.

But whether the plaintiffs or the defendants had effects of White's in their hands, or not; we must determine on the general doctrine.

And I am of opinion, that there ought to be a new trial.

Mr. Justice Yates was of the same opinion. He said it was a case of great consequence to commerce; and therefore he would give both his opinion and his reasons.

The arguments on the side of the defendants terminate in its being a nudum pactum, and therefore void.

This depends upon two questions.

1st question—"Whether this be a promise without a consideration;"

2d question—If it is, then "whether this promise shall not be binding, of itself, without any consideration."

First—The draught drawn by White on the plaintiffs, payable to Clifford, is no part of the consideration of the undertaking by the defendants. The draught payable to Clifford is never mentioned to the defendants. They are asked "whether they will answer a draught from the plaintiffs upon them:" they answer "they will honour such a draught on them."

Whether the defendants bad or had not effects of White's in their hands, is immaterial.

Any^[13] damage to another, or suspension or forbearance of his right, is a foundation for an undertaking, and will make it binding; though no actual benefit accrues to the party undertaking.

Now here, the promise and undertaking of the defendants did occasion a possibility of loss to the plain [3 Burr. 1674] tiffs. It is plain that the plaintiffs would not rely on White's assurance only: but wrote to the defendants, to know if they would accept their draughts. The credit of the plaintiffs might have been hurt, by the refusal of the defendants to accept White's bills. They were or might have been prevented from resorting to him, or getting further security from him. It comes within the cases of promises, where the debtee forbears suing the original debtor.

Second question—: Whether, by the law of merchants, this contract is not binding on the defendants; though it was without consideration.

The acceptance of a bill of exchange is an obligation to pay it: the end of their institution, their currency, requires that it should be so. On this principle, bills of exchange are considered, and are declared upon as special contracts; though, legally, they are only simple contracts: the declaration sets forth the bill and acceptance specifically: and that thereby the defendants, by the custom of merchants, became liable to pay it.

[97 Eng. Rep. 1041] This agreement "to honour their bill" was a virtual acceptance of the bill. An acceptance needs not be upon the bill itself: it may be by collateral writing. Wilkinson v. Lutwidge, 1 Strange, 648.

A promise "to accept" is the same as an actual acceptance. And a small matter amounts to an acceptance; and so says Molloy, lib. 2, c. 10, § 20, and an acceptance will bind, though the acceptor has no effects of the drawer in his hands; and without any consideration. Symons v. Parminter^[14] Hil. 1747, 21 G. 2, B. R. And a bill accepted for the honour of the drawer, will also bind.

Then he applied these positions to the present case. It was an acceptance of this very draught, by relation and connexion; though the bill was not then drawn by the plaintiffs on the defendants.

But even if it did not amount to an actual acceptance, yet it would equally bind the defendants: they would be equally obliged to perform the effect of their undertaking.

The plaintiffs apprized the defendants of their intention to draw; and the defendants promised "to honour their draught;" and the plaintiffs, of course, would regulate their conduct accordingly.

[3 Burr. 1675] Therefore upon the whole circumstances of this transaction, 1st, there is a consideration: and 2dly, if there was none; yet, in this commercial case, the defendants would be bound.

Mr. Justice Aston—I am of opinion "that there ought to be a new trial."

If there be such a custom of merchants as has been alledged, it may be found by a jury: but it is the Court, not the jury, who are to determine the law.

This must be considered as a commercial transaction and is a plain case. The defendants have undertaken to honour the "plaintiffs' draught." Therefore they are bound to pay it.

This cannot be called a nudum pactum. The answer returned by the defendants is an admission of "having effects of White's in their hands," if that were necessary. And after this promise "to accept" (which is an implied acceptance) they might have applied any thing of White's that they had in their hands, to this engagement; even though White had drawn other bills upon them in the interim. The defendants voluntarily engaged to the plaintiffs; and they could not recede from their engagement.

As to its being a nudum pactum (which matter has been already so well explained)—if there be a turpitude or illegality in the consideration of a note, it will make it void, and may be given in evidence; but here nothing of that kind appears, nor any thing like fraud in the plaintiffs. Here was full notice of all the facts; a clear apprehension of them by the defendants; a question put to them, "whether they would accept;" and their answer, "that they would."

Upon the whole he concurred, "that an action will lay for the plaintiffs against them: and that the plaintiffs ought to recover."

By the Court, unanimously,

The rule "to set aside the verdict, and for a new trial," was made absolute.

[1] Dated 16th Feb. 1762.

[2] Dated 19th March, 1762.

[3] See likewise, Hardres, 72, 73, 74.

[4] V. ante, p. 1639.

[5] This was denied by Baron Eyre in Cam. Scac. Nov. 27, 1776; and so it was by all except the Ch. Bar.

[6] Sub ultima tempora Regis H. 3.

[7] This probably was Plowden's own argument. I suppose, he was himself that apprentice of the Middle Temple who argued for the defendants.

[8] This was denied by the Judges and three Barons in the Exchequer Chamber, Nov, 27th, 1776.

[9] V. 2 Sir J. S. 933. I have a very full note of this case. The reason of the reversal of the judgment was, "that it did not appear by the declaration, to be either for the benefit, or at the request of the defendant."

[10] Church and Church's case; cited in Sir T. Raym. 260.

[11] V. 2 Leon. 111.

[12] For, between Ireland and Holland, each usance is one month.

[13] V. Coggs v. Bernard, 2 Ld. Raym. 919. [See also 2 Hen. Bl. 315. 4 East, 461.]

[14] This was on a motion in arrest of judgment. The judgment was affirmed (ex parte) in Dom. Proc. with £100 costs, upon or soon after 20th Feb. 1748. [1 Wils. 185.]