Case 13127 NE 256th Ct As 124 NY 538 27 NE 256 Hammer V S I

Case 13127 Ne 256cite As 124 Ny 538 27 Ne 256hamervsidway

Case 13127 Ne 256cite As 124 Ny 538 27 Ne 256hamervsidway

Case 13. N.E. 256 (Cite as: 124 N.Y. 538, 27 N.E. 256) HAMER v. SIDWAY Court of Appeals of New York, Second Division. April 14, 1891. Appeal from an order of the general term of the supreme court in the fourth judicial department, reversing a judgment entered on the decision of the court at special term in the county clerk's office of Chemung county on the 1st day of October, 1889. The plaintiff presented a claim to the executor of William E. Story, Sr., for $5,000 and interest from that time, claiming that William E. Story, 2d, agreed to pay him that amount in exchange for his refraining from certain legal rights, which he fully performed.

The defendant contends that the contract lacks consideration and is thus invalid, arguing that the promisee’s abstention from using liquor and tobacco benefited him rather than harmed him, and that legal benefit to the promisee or a third party is necessary to constitute consideration. This contention conflicts with established legal principles that consider any forbearance, detriment, or responsibility undertaken by one party as valid consideration if promised in exchange for a benefit.

The court references the 1875 definition from the exchequer chamber, which states that consideration may consist of a benefit to one party or a forbearance or detriment suffered by the other. Courts do not typically examine whether the consideration actually benefits the promisee or has substantial value; it is sufficient that a promise has been made, and something has been done, forborne, or suffered in reliance on that promise.

Applying this principle, the promisee abandoned use of liquor and tobacco—legal rights—that he had the right to exercise. He restricted his lawful conduct based on his uncle’s promise to compensate him with $5,000. The court emphasizes that performance of such acts, undertaken in reliance on the promise, constitutes sufficient consideration, regardless of the actual benefit to the promisor. It underscores that the law does not require the consideration to be of substantial value, only that legally valid rights are given up or restricted as part of the contractual exchange.

Several supporting cases are discussed, including Shadwell v. Shadwell, where a promise to support a nephew during his marriage was held binding on good consideration; Lakota v. Newton, where abstaining from drinking for a year was sufficient consideration; and Talbott v. Stemmons, where promising not to use tobacco was valid consideration. Conversely, invalid or unenforceable contracts under the statute of frauds (such as promises to answer for another's debt that are not in writing) are distinguished from valid consideration cases.

The court further explores whether the relationship between the parties became that of debtor and creditor or trustee and cestui que trust. Given the language of the uncle’s letter acknowledging the debt and indicating an intent to keep the money in trust until his nephew was capable of managing it, a trust was deemed created. The language used by the uncle was interpreted as an intent to establish a trust rather than merely an acknowledgment of debt.

The judgment of the lower court was based on the finding that the money had been set aside for the nephew’s benefit and that he had duly transferred his rights to his wife and then to the plaintiff. The court concludes that the original obligation and the subsequent arrangement support a trust relationship, not simply a debtor-creditor dynamic, and affirms the decision that the claim was valid and enforceable. The order appealed from is reversed, and the judgment affirmed, with costs.

References

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