Brief Fact Summary.
The father gave two daughters sealed promissory notes that promised them money from their mother’s estate and said that they were “gifts.” One daughter sued to enforce the promissory note.
Synopsis of Rule of Law.
There is a presumption that consideration is valid when a promissory note is sealed, but that presumption can be rebutted by evidence to the contrary.
After Mrs. Mary Ann Aller died, Mr. Peter Aller (Defendant) gave two sealed promissory notes to two of her daughters promising them money from the estate. When he gave the promissory notes to the daughter, he told them: “Now here, girls, is a nice present for you.” Angelina Aller (Plaintiff) sued to enforce the promissory note. The verdict was for Plaintiff, and a rule to show cause was allowed at the Circuit.
Without providing evidence of consideration, can a sealed promissory note be enforced?
Yes. A sealed promissory note can be enforced under the presumption that consideration exists; however, this presumption can be rebutted. In this case, Mr. Aller’s “gift” comment is evidence that the parties understood that there would be no consideration. Therefore, the rule for a new trial should be discharged.
According to recent legislation, a sealed contract will be presumed to have consideration unless evidence shows otherwise. The court notes that it would be too far of a stretch to say that the presumption was meant to eliminate the distinction between voluntary and simple contracts. Since a written contract is more deliberate than an oral contract, it would be dangerous to overlook the significance of sealed instruments. The court notes that the legislature did not intend to abolish the distinction between simple and special contracts. Although sealed instruments should be presumptively valid, this presumption can be rebutted with evidence indicating that consideration for the instrument is lacking.