Dougherty v. Salt

227 N.Y. 200, 125 N.E. 94 (1919)

 

RULE:

Nothing is consideration that is not regarded as such by both parties.

FACTS:

The boy's aunt told his guardian, who was a witness for him at trial, that she loved the boy and wanted to take care of him, so she gave him a note payable at her death, which had the words "value received" on it. She died, and in the boy's action against his aunt's executrix for payment of the note, the trial court submitted the question of whether there was consideration for the promised payment to the jury, who returned a verdict in the boy's favor. The trial court set aside the verdict and dismissed the complaint. The appellate court reversed the judgment, and reinstated the verdict, holding that the note was sufficient evidence of consideration.

ISSUE:

Whether a promissory note with the label “value received” issued by the aunt out of her love to her nephew sufficiently establishes consideration.

ANSWER:

No.

CONCLUSION:

On appeal, the court reversed the appellate court's judgment, modified the trial court's judgment by granting a new trial, and affirmed the judgment as modified. The court held that the inference of consideration was so overcome and rebutted that there was no question for a jury because the boy's guardian testified, in effect, that the note was the unenforceable promise of an executory gift. The court concluded that the boy was not a creditor, that his aunt was not paying a debt, and that the note was not given for "value received" even if the maker may have labeled it. Nothing is consideration that is not regarded as such by both parties.

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