Brief Fact Summary.
Duncan (Plaintiff) purchased farm land from Black (Defendant) and was promised a 65 acre cotton allotment under the terms of the contract. When Plaintiff’s county allotment was less during the first year, Defendant made up the difference from his own allotment. The second year, Defendant refused to make up the difference and the Plaintiff claimed damages for breach of contract.
Synopsis of Rule of Law.
. Forbearance may be valid consideration if the claim upon which settlement is based was made in good faith and the claim has some legal foundation. Inherently illegal contracts and contracts against public policy are unenforceable.
In the absence of bad faith or collusion, of which there is no contention here, the court will look only so far as to detect a bona fide dispute of even colorable merit in order to uphold the resolution of differences reached by the parties themselves, comprehensively defines the essential nature of a doubtful claim which is subject to binding compromise as follows: for one thing, and by all authority, the claim upon which the settlement is based must be one made in good faith.View Full Point of Law
The allotment system was set up by federal legislation to prevent overproduction of cotton.
The Defendant gave up some of his own allotment during the first year so that the Plaintiff could farm the 65 acres referred to in the contract. However, he refused to comply with the Plaintiff’s demand the second year, but sought to settle the claim by giving the Plaintiff a $1500 note. The lower court gave judgment for the Defendant.
Could the Plaintiff recover?
The only thing the parties could contract for was the amount of acres (65) for the ensuing crop year. There was uncontradicted evidence that Black made up that acreage out of the acreage on his own land, so the Plaintiff got all he could possibly have bargained for.
The very nature of a cotton acreage allotment is that it is for one year. Plaintiff’s claim of a nonexistent future allotment was baseless and “did not rise to the dignity of consideration.”
An additional reason the Plaintiff was barred from recovery was that the contract was unenforceable because it was against public policy.
The trial court correctly found no valid consideration for the note. The Plaintiff was seeking to do something illegal by farming more land than permitted under the allotment Act, and illegal consideration is void as against public policy.