Ricketts v. Scothorn

57 Neb. 51, 77 N.W. 365 (1898)

 

RULE:

Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, as against another person who in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right.

FACTS:

The grandfather of the payee made and delivered to the payee a promissory note. The note was given as a gratuity, to enable the payee to give up her employment. Upon the grandfather's death, the payee sought recovery on the note from the executor, who refused to comply on the basis that essential elements of a valid contract were lacking, for lack of consideration. The trial court awarded judgment to the payee. The case was appealed to the Supreme Court of Nebraska.

ISSUE:

Was there a valid contract?

ANSWER:

Yes.

CONCLUSION:

It held that, although there was no valuable consideration for the note, there was an equitable estoppel, which precluded the executor from alleging that the note in controversy was lacking in one of the essential elements of a valid contract. The payee's grandfather intentionally influenced the payee to alter her position for the worse on the faith of the note being paid when due. Thus, it would be grossly inequitable to permit the maker, or his executor, to resist payment on the ground that the promise was given without consideration.

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