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Hamer v. Sidway - 11 N.Y.S. 182 (Sup. Ct. 1890)

Rule:

Only a valuable consideration upholds an executory contract. The consideration must be something of value--something either beneficial to one party or disadvantageous to the other, in a pecuniary sense.

Facts:

The testator and his nephew, William E. Story were attending the golden wedding of the father of the testator, when he said to William: "Willie, I am going to make you a proposition. If you will not drink any liquor, will not smoke, will not play cards or billiards until you are 21, I will give you $ 5,000 that day. Of course, if you want to play for fun, that I don't consider playing cards." William agreed. When the testator passed, his nephew sought to claim the $ 5,000. The circuit court held that the testator's inter vivos promise to give his nephew money for abstaining from enumerated bad habits until he became an adult constituted a binding contract, and that the nephew was entitled her to those funds. On appeal, appellant beneficiary argued that there had been simply a promise by the testator to make his nephew a gift of the sum of $ 5,000 when he became 21 years of age and had refrained from the activities.

Issue:

Did the proposition between a testator and his nephew, where the latter agreed to refrain from tobacco and alcohol, form a legal and binding contract between the parties sufficient to uphold the recovery by the nephew?

Answer:

No

Conclusion:

The Supreme Court of New York reversed that judgment and granted a new trial, finding that what occurred between the parties was not intended as a legal and binding contract. The court reasoned that the testator merely promised to "give" his nephew the money in return for abstaining from bad habits, and that the record did not show that the nephew provided sufficient consideration to allow the claimant to enforce that promise. The court also held that the correspondence between the testator and the nephew showed that the testator did not consider the promise to have created a legal liability, and that the failure to deliver that gift invalidated it. The court also found that no trust existed because none was ever declared.

(Procedural note: In the New York state court system, the Supreme Court is an appellate court. The Court of Appeals of New York is the state's highest court. This case will later be overturned on appeal to the highest court in a landmark contracts law decision, Hamer v. Sidway, 124 N.Y. 538).

 

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