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Hardesty v. Smith - 3 Ind. 41 (1851)

Rule:

Parties of sufficient mental capacity for the management of their own business, have a right to make their own bargains. The owner of a thing has the right to fix the price at which he will part with it, and a buyer's own judgment ought to be his best guide as to what he should give to obtain it. The consideration agreed upon may indefinitely exceed the value of the thing for which it is promised and still the bargain stand.

Facts:

Hardesty bought the rights to a lamp improvement from a certain Cyrus Isham. As a consideration thereof, Hardesty issued a promissory note, which was then assigned to Smith. When Smith collected the amount owed under the promissory note, Hardesty refused to pay, alleging that the supposed improvement of the lamp was of no utility. During trial for the collection of money, Hardesty presented two arguments: (i) that the sole consideration of the notes in question was the sale of the rights to a lamp improvement, which turned out to be of no value whatever; and (ii) that the sale was effected fraudulently through the misrepresentations of the seller. Smith filed a demurrer to Hardesty’s pleas. The trial court sustained the demurrer as regards the second plea, and overruled the first. The final judgment was, however, rendered for Hardesty. Smith appealed.

Issue:

Did the trial court err in: (i) sustaining the demurrer as regards Hardesty’s second plea; and (ii) overruling the demurrer as regards the first plea?

Answer:

(i) No; (ii) Yes.

Conclusion:

The Supreme Court of Indiana held that the demurrer to the second plea was rightly sustained. According to the court, although the plea alleged fraud, it still did not allege that the right purchased was of no value, and showed no offer to return it to the vendor. In the case at bar, the contract was not rescinded, and Hardesty retained an article which could be regarded of value. However, as regards the first plea, the court held that the trial court erred in not sustaining the same. The court held that the simple fact that the improvement in the lamp was of no utility was not sufficient to bar a suit on the promissory notes. The court reasoned that parties of sufficient mental capacity for the management of their own business had a right to make their own bargains. The owner of a thing has the right to fix the price at which he will part with it, and a buyer’s own judgment ought to be his best guide as to what he should give to obtain it. In the case at bar, the court held that Hardesty judged that the improvements on the lamp may be of value when he purchased the rights to the same; thus, he cannot now be prevented to return the same.

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