Dougherty v. Salt

Brief Fact Summary. Plaintiff Dougherty, at eight years old received a promissory note from his aunt for $3,000 payable at her death. Defendant Salt is representing Aunt’s estate.

Synopsis of Rule of Law. Although a note states that value has been received, if value has not in fact been received, the note is unenforceable as a contract for lack of consideration.

Facts. Aunt was visiting Plaintiff, her eight-year-old nephew, and stated that she thought Plaintiff was a nice boy. Aunt then expressed a desire to take care of Plaintiff by issuing him a promissory note. When she handed the note to Plaintiff she said “[y]ou have always done for me, and I have signed this note for you.” The note was written on a form containing the words “value received.”

Issue. Is the note enforceable?

Held. No. The promissory note is not enforceable because there is no consideration. Although the form indicated that the note was for value, the Court determined that no value had in fact been given. Because Plaintiff was not a creditor of Aunt and there was no other value given, the note is unenforceable due to lack of consideration.

Discussion. In the present case, the promissory note was not given for value. Without value, the note was unenforceable because it lacked consideration