1. PLEASE BRIEF HAMER V. SIDWAY ( I DONT KNOWWHAT SUBJECT TO PUT THIS UNDER AS. THIS...
Question:
1. PLEASE BRIEF HAMER V. SIDWAY ( I DONT KNOWWHAT SUBJECT TO PUT THIS UNDER AS. THIS IS A BUSINESS LAWCLASS)
Brief Hamer v. Sidway
Louisa W. Hamer, Appellant,
v
Franklin Sidway, as Executor, etc., Respondent.
Court of Appeals of New York
Argued February 24, 1981
Decided April 14, 1891
124 NY 538
CITE TITLE AS: Hamer v Sidway
[*544] OPINION OF THE COURT
PARKER, J.
The question which provoked the most discussion by counsel onthis appeal, and which lies at the foundation of plaintiff'sasserted right of recovery, is whether by virtue of a contractdefendant's testator William E. Story became indebted to his nephewWilliam E. Story, 2d, on his twenty-first birthday in the sum offive thousand dollars. The trial court found as a fact that 'on the20th day of March, 1869, * * * William E. Story agreed to and withWilliam E. [*545] Story, 2d, that if he would refrainfrom drinking liquor, using tobacco, swearing, and playing cards orbilliards for money until he should become 21 years of age then he,the said William E. Story, would at that time pay him, the saidWilliam E. Story, 2d, the sum of $5,000 for such refraining, towhich the said William E. Story, 2d, agreed,' and that he 'in allthings fully performed his part of said agreement.'
The defendant contends that the contract was withoutconsideration to support it, and, therefore, invalid. He assertsthat the promisee by refraining from the use of liquor and tobaccowas not harmed but benefited; that that which he did was best forhim to do independently of his uncle's promise, and insists that itfollows that unless the promisor was benefited, the contract waswithout consideration. A contention, which if well founded, wouldseem to leave open for controversy in many cases whether that whichthe promisee did or omitted to do was, in fact, of such benefit tohim as to leave no consideration to support the enforcement of thepromisor's agreement. Such a rule could not be tolerated, and iswithout foundation in the law. The Exchequer Chamber, in 1875,defined consideration as follows: 'A valuable consideration in thesense of the law may consist either in some right, interest, profitor benefit accruing to the one party, or some forbearance,detriment, loss or responsibility given, suffered or undertaken bythe other.' Courts 'will not ask whether the thing which forms theconsideration does in fact benefit the promisee or a third party,or is of any substantial value to anyone. It is enough thatsomething is promised, done, forborne or suffered by the party towhom the promise is made as consideration for the promise made tohim.' (Anson's Prin. of Con. 63.)
'In general a waiver of any legal right at the request ofanother party is a sufficient consideration for a promise.'(Parsons on Contracts, 444.)
'Any damage, or suspension, or forbearance of a right will besufficient to sustain a promise.' (Kent, vol. 2, 465, 12th ed.)
Pollock, in his work on contracts, page 166, after citing thedefinition given by the Exchequer Chamber alreadyquoted, [*546] says: 'The second branch of this judicialdescription is really the most important one. Consideration meansnot so much that one party is profiting as that the other abandonssome legal right in the present or limits his legal freedom ofaction in the future as an inducement for the promise of thefirst.'
Now, applying this rule to the facts before us, the promiseeused tobacco, occasionally drank liquor, and he had a legal rightto do so. That right he abandoned for a period of years upon thestrength of the promise of the testator that for such forbearancehe would give him $5,000. We need not speculate on the effort whichmay have been required to give up the use of those stimulants. Itis sufficient that he restricted his lawful freedom of actionwithin certain prescribed limits upon the faith of his uncle'sagreement, and now having fully performed the conditions imposed,it is of no moment whether such performance actually proved abenefit to the promisor, and the court will not inquire into it,but were it a proper subject of inquiry, we see nothing in thisrecord that would permit a determination that the uncle was notbenefited in a legal sense. Few cases have been found which may besaid to be precisely in point, but such as have been support theposition we have taken.
In Shadwell v. Shadwell (9 C. B. [N. S.]159), an uncle wrote to his nephew as follows:
'MY DEAR LANCEY—I am so glad to hear of your intended marriagewith Ellen Nicholl, and as I promised to assist you at starting, Iam happy to tell you that I will pay to you 150 pounds yearlyduring my life and until your annual income derived from yourprofession of a chancery barrister shall amount to 600 guineas, ofwhich your own admission will be the only evidence that I shallrequire.
'Your affectionate uncle,
'CHARLES SHADWELL.'
It was held that the promise was binding and made upon goodconsideration.
[*547] In Lakota v. Newton, anunreported case in the Superior Court of Worcester, Mass., thecomplaint averred defendant's promise that 'if you (meaningplaintiff) will leave off drinking for a year I will give you$100,' plaintiff's assent thereto, performance of the condition byhim, and demanded judgment therefor. Defendant demurred on theground, among others, that the plaintiff's declaration did notallege a valid and sufficient consideration for the agreement ofthe defendant. The demurrer was overruled.
In Talbott v. Stemmons (a Kentucky case notyet reported), the step- grandmother of the plaintiff made with himthe following agreement: 'I do promise and bind myself to give mygrandson, Albert R. Talbott, $500 at my death, if he will nevertake another chew of tobacco or smoke another cigar during my lifefrom this date up to my death, and if he breaks this pledge he isto refund double the amount to his mother.' The executor of Mrs.Stemmons demurred to the complaint on the ground that the agreementwas not based on a sufficient consideration. The demurrer wassustained and an appeal taken therefrom to the Court of Appeals,where the decision of the court below was reversed. In the opinionof the court it is said that 'the right to use and enjoy the use oftobacco was a right that belonged to the plaintiff and notforbidden by law. The abandonment of its use may have saved himmoney or contributed to his health, nevertheless, the surrender ofthat right caused the promise, and having the right to contractwith reference to the subject-matter, the abandonment of the usewas a sufficient consideration to uphold the promise.' Abstinencefrom the use of intoxicating liquors was held to furnish a goodconsideration for a promissory note in Lindell v.Rokes (60 Mo. 249).
The cases cited by the defendant on this question are not inpoint. In Mallory v. Gillett (21 N. Y.412); Belknap v. Bender (75 id. 446),and Berry v. Brown (107 id. 659), the promisewas in contravention of that provision of the Statute of Frauds,which declares void all promises to answer for the debts of thirdpersons unless reduced to writing.InBeau [*548] mont v.Reeve (Shirley's L. C. 6), and Porterfield v.Butler (47 Miss. 165), the question was whether a moralobligation furnishes sufficient consideration to uphold asubsequent express promise. In Duvoll v.Wilson (9 Barb. 487), and In re Wilber v.Warren (104 N. Y. 192), the proposition involved waswhether an executory covenant against incumbrances in a deed givenin consideration of natural love and affection could be enforced.In Vanderbilt v. Schreyer (91 N. Y. 392), theplaintiff contracted with defendant to build a house, agreeing toaccept in part payment therefor a specific bond and mortgage.Afterwards he refused to finish his contract unless the defendantwould guarantee its payment, which was done. It was held that theguarantee could not be enforced for want of consideration. For inbuilding the house the plaintiff only did that which he hadcontracted to do. And in Robinson v. Jewett (116N. Y. 40), the court simply held that 'The performance of an actwhich the party is under a legal obligation to perform cannotconstitute a consideration for a new contract.' It will be observedthat the agreement which we have been considering was within thecondemnation of the Statute of Frauds, because not to be performedwithin a year, and not in writing. But this defense the promisorcould waive, and his letter and oral statements subsequent to thedate of final performance on the part of the promisee must be heldto amount to a waiver. Were it otherwise, the statute could not nowbe invoked in aid of the defendant. It does not appear on the faceof the complaint that the agreement is one prohibited by theStatute of Frauds, and, therefore, such defense could not be madeavailable unless set up in the answer.(Porter v.Wormser, 94 N. Y. 431, 450.) This was not done.
In further consideration of the questions presented, then, itmust be deemed established for the purposes of this appeal, that onthe 31st day of January, 1875, defendant's testator was indebted toWilliam E. Story, 2d, in the sum of $5,000, and if this action werefounded on that contract it would be barred by the Statute ofLimitations which has been pleaded, but on that date the nephewwrote to his uncle as follows:
[*549] 'DEAR UNCLE—I am now 21 years old to-day, and I amnow my own boss, and I believe, according to agreement, that thereis due me $5,000. I have lived up to the contract to the letter inevery sense of the word.'
A few days later, and on February sixth, the uncle replied, and,so far as it is material to this controversy, the reply is asfollows:
'DEAR NEPHEW—Your letter of the 31st ult. came to hand all rightsaying that you had lived up to the promise made to me severalyears ago. I have no doubt but you have, for which you shall have$5,000 as I promised you. I had the money in the bank the day youwas 21 years old that I intended for you, and you shall have themoney certain. Now, Willie, I don't intend to interfere with thismoney in any way until I think you are capable of taking care ofit, and the sooner that time comes the better it will please me. Iwould hate very much to have you start out in some adventure thatyou thought all right and lose this money in one year. * * * Thismoney you have earned much easier than I did, besides acquiringgood habits at the same time, and you are quite welcome to themoney. Hope you will make good use of it. * * *
W. E. STORY. 'P. S.—You can consider this money on interest.'Thetrial court found as a fact that 'said letter was received by saidWilliam E. Story, 2d, who thereafter consented that said moneyshould remain with the said William E. Story in accordance with theterms and conditions of said letter.' And further, 'Thatafterwards, on the first day of March, 1877, with the knowledge andconsent of his said uncle, he duly sold, transferred and assignedall his right, title and interest in and to said sum of $5,000 tohis wife Libbie H. Story, who thereafter duly sold, transferred andassigned the same to the plaintiff in this action.'
We must now consider the effect of the letter, and the nephew'sassent thereto. Were the relations of the parties thereafter thatof debtor and creditor simply, or that oftrustee [*550] and cestui que trust? If the former, thenthis action is not maintainable, because barred by lapse of time.If the latter, the result must be otherwise. No particularexpressions are necessary to create a trust. Any language clearlyshowing the settler's intention is sufficient if the property anddisposition of it are definitely stated. (Lewin on Trusts, 55.)
A person in the legal possession of money or propertyacknowledging a trust with the assent of the cestui que trust,becomes from that time a trustee if the acknowledgment be foundedon a valuable consideration. His antecedent relation to thesubject, whatever it may have been, no longer controls. (2 Story'sEq. § 972.) If before a declaration of trust a party be a meredebtor, a subsequent agreement recognizing the fund as already inhis hands and stipulating for its investment on the creditor'saccount will have the effect to create a trust. (Day v.Roth, 18 N. Y. 448.)
It is essential that the letter interpreted in the light ofsurrounding circumstances must show an intention on the part of theuncle to become a trustee before he will be held to have becomesuch; but in an effort to ascertain the construction which shouldbe given to it, we are also to observe the rule that the languageof the promisor is to be interpreted in the sense in which he hadreason to suppose it was understood by thepromisee. (White v. Hoyt, 73 N. Y. 505, 511.) Atthe time the uncle wrote the letter he was indebted to his nephewin the sum of $5,000, and payment had been requested. The unclerecognizing the indebtedness, wrote the nephew that he would keepthe money until he deemed him capable of taking care of it. He didnot say 'I will pay you at some other time,' or use language thatwould indicate that the relation of debtor and creditor wouldcontinue. On the contrary, his language indicated that he had setapart the money the nephew had 'earned' for him so that when heshould be capable of taking care of it he should receive it withinterest. He said: 'I had the money in the bank the day you were 21years old that I intended for you and you shall have the moneycertain.' That he had set apart the money isfurther [*551] evidenced by the next sentence: 'Now,Willie, I don't intend to interfere with this money in any wayuntil I think you are capable of taking care of it.' Certainly, theuncle must have intended that his nephew should understand that thepromise not 'to interfere with this money' referred to the money inthe bank which he declared was not only there when the nephewbecame 21 years old, but was intended for him. True, he did not usethe word 'trust,' or state that the money was deposited in the nameof William E. Story, 2d, or in his own name in trust for him, butthe language used must have been intended to assure the nephew thathis money had been set apart for him, to be kept withoutinterference until he should be capable of taking care of it, forthe uncle said in substance and in effect: 'This money you haveearned much easier than I did * * * you are quite welcome to. I hadit in the bank the day you were 21 years old and don't intend tointerfere with it in any way until I think you are capable oftaking care of it and the sooner that time comes the better it willplease me.' In this declaration there is not lacking a singleelement necessary for the creation of a valid trust, and to thatdeclaration the nephew assented.The learned judge who wrote theopinion of the General Term, seems to have taken the view that thetrust was executed during the life-time of defendant's testator bypayment to the nephew, but as it does not appear from the orderthat the judgment was reversed on the facts, we must assume thefacts to be as found by the trial court, and those facts supportits judgment.
The order appealed from should be reversed and the judgment ofthe Special Term affirmed, with costs payable out of theestate.
All concur.
Order reversed and judgment of Special Term affirmed.
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31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill