Sheldon v. Blackman

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Brief Fact Summary. After leaving her job, a lady cared for an elderly couple for over 30 years.  An instrument was executed by the elderly husband granting the caretaker a substantial amount of money, the consideration being the assistance the caretaker provided in the past.

Synopsis of Rule of Law. "[M]ere inadequacy [of consideration] does not amount to a failure or partial failure of consideration."

Facts. The Respondent, Julia H. Sheldon (the "Respondent"), cared for both Henry J. Wilkinson ("Mr. Wilkinson") and his wife for 34 years.  The Respondent left a career as a dress maker to do so.  At the time of this case, both Mr. & Mrs. Wilkinson were deceased.  The Appellant, Blackman (the "Appellant"), is the representative of Mr. Wilkinson's estate.  Mr. Wilkinson, on May 10, 1919, drafted an instrument promising to give the Respondent $30,000 upon her death.  The instrument stated that the consideration of the payment is the services the Respondent rendered for Mr. Wilkinson and his wife for 30 years.  Also, the Respondent was also to be compensated for her services after the instrument was executed.  Mr. Wilkinson and his wife also executed wills leaving most of their property to the Respondent, but the will were either lost or destroyed.  The probate court found that the instrument in question was a nonnegotiable promissory note, for good and sufficient consideration.

Issue. Does consideration being inadequate, amount to a failure of consideration when one promises to pay another for services rendered?

Held. No, there was "consideration of inestimable value for the execution of the note, and it was in no sense a gift."  The court first recognized that the agreement was invalid, but that it showed the Respondent "should be paid and well paid."  This attention was again manifest by the wills that were executed, but lost.  Both these proofs tend to show that the Respondent's services were not meant to be gratuitous.  The court also observes that the Respondent was to be compensated more generously than her services were worth.  However, only Mr. and Mrs. Wilkinson could have known and appreciated the actual value of the Respondent's services and they had every right to over pay for her services. 
•    As such, "where there was no element of fraud or misrepresentation, the value of the services may be measured by the wants of the persons benefited."  "The utmost that can be fairly claimed is that the consideration for the note was inadequate. But under such facts as here exist mere inadequacy does not amount to a failure or partial failure of consideration."  Further, "[t]here is abundant authority for the rule that, when the value of services is indefinite or indeterminate, or largely a matter of opinion, the courts will not substitute their judgments for that of the contracting parties."

Discussion. Generally, courts treat past consideration as no consideration at all, however, not here.  The majority of this agreement was based on passed consideration, because the $30,000 was for services provided during the past 30 years.