In re Greene

Brief Fact Summary. The Claimant, Leila Trudel (Claimant), received monthly payments and a lump sum insurance policy deriving from an illicit affair with a married man. When the man was deceased and payment ceased the Claimant tried to enforce the agreement arguing actual consideration was present in the agreement.

Synopsis of Rule of Law. In order for a contract to be valid there must be valid consideration. The desire on the part of the parties of a promise to include consideration in the agreement, will not substitute for actual consideration.

Facts. Claimant was having an illicit affair with a married man, Greene. Greene made a contract with Claimant to pay her $1,000 per month for their joint lives, make her the beneficiary of a $100,000 life insurance policy and to pay her rent for four years. In return, the Claimant released Greene from all claims she had against him. The Claimant paid $1 to Greene as consideration for the agreement. Greene is now deceased and bankrupt. The bankrupt’s estate failed to make payments after August of1928.

Issue. Was there any consideration for the bankrupt’s promises?

Held. No. There is a lack of consideration
The $1 consideration is too nominal to support an executory promise to pay hundreds of thousands of dollars.
Mere words in the contract stating consideration has passed, cannot, in itself serve as consideration.
The release of claims would normally serve as valid consideration. However, the facts show that the claimant had no claims to release because a promise to marry is illegal. The court will not find consideration where the promise is against public policy.
The evidence of a seal is no longer a valid substitute for consideration. The seal is only presumptive evidence of consideration

Discussion. The court will not allow the parties to an agreement to substitute consideration through intent. “Unless actual consideration is present, there is not a legally enforceable contract”.