III. NOTES ON THE ENGLISH DOCTRINE OF CONSIDERATION AND THE HISTORY OF THE STATUTE OF FRAUDS.1 I. THE DOCTRINE OF CONSIDERATION. Consideration applies to what are known in English law as "simple contracts," but these form a very wide class, embracing almost all contracts, whether written or verbal, except such as are constituted by a formal deed under seal. It is said to consist "either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other." 2 This definition, however, is of little value apart from more detailed characteristics, which may be stated as follows: 1. Adequacy of value is in no degree essential.-It was early settled that, no matter how trifling the value, be it a sheet of paper, a stick of sealing-wax, or a grain of corn, it is sufficient to give efficacy to an obligation of any value or amount. "When a thing is to be done by the plaintiff, be it ever so small, this is a sufficient consideration to ground an action." 3 2. No merely moral obligation has effect as consideration.-This was fixed law as early as the end of the sixteenth century, though there are indications that earlier in that century the line between a moral and a legal obligation was not definitely marked. As 1 These notes are extracted from two lectures delivered by the present author in Glasgow in October 1890 and October 1892 respectively. 2 Currie v. Misa (1875), L. R. 10 Ex. 153 at p. 162. 3 Sturlyn v. Albany (1586), 1 Croke 67. 4 Year-Book 20, Henry VII. (1505), fol. 11; Doctor and Student (1528), Dial. 2 ch. 24; Sharington v. Strotton (1566), 1 Plow. 298. DOCTRINE SIDERATION. now settled the law holds that, although a person may be bound by the strongest natural ties to provide for the support of others, no engagement short of a covenant under seal will transform the moral obligation into a legal one.1 3. Consideration may be present or future but it must not be past.— A man may believe himself to be under obligation on account of past benefits received by him, but such sentiments of gratitude or friendship do not form a consideration in the eye of the law.2 Thus an agreement to pay £5 to the plaintiff on his marriage in consideration that the plaintiff had delivered to the defendant twenty sheep, was held invalid as devoid of consideration.3 So also a promise to pay a certain amount in consideration that the plaintiff had on some former occasion voluntarily paid a similar amount to the defendant, or a warranty of a horse in consideration that the plaintiff had bought it of the defendant at a certain price. For the same reason a promissory note given as remuneration for past services rendered without agreement for reward cannot be enforced. In such cases if the promise founded on can be thrown back to the alleged consideration it will be valid but not otherwise.7 5 6 4 4. It is no consideration for a promise that the person receiving it has given a counter promise to do something which he is already under legal obligation to perform. Thus an agreement to give a debtor time in consideration of his paying the interest already stipulated is inoperative, but if additional security is offered it validates an agreement to accept even less interest. It was established by the case of Pinnel 9 in 1602, and affirmed by the House of Lords so recently as 1884,10 that if the day of payment of a debt has arrived, an agreement by the creditor to accept at the proper place of payment a smaller sum of money in full of the whole debt, is not binding, but if instead of money he agrees to accept at the place of payment a trifling article 1 Bret v. J. S. and Wife (1600), 1 Croke 756. 2 Eastwood v. Kenyon (1840), 11 Ad. and El. 438. 3 Jeremy v. Goochman (1596), 1 Croke 442. 4 Doggett v. Vowell (1602), Moore 643. 5 Roscorla v. Thomas (1842), 3 Q.B. 234. 6 Hulse v. Hulse (1856), 17 C. B. 711. 7 Thornton v. Jenyns (1840), 1 M. & G. 166. 8 Orme v. Galloway (1854), 9 Ex. 544. 9 3 Coke 238. 10 Foakes v. Beer (1884), 9 App. Ca. 605. OF CON- in satisfaction, or if he accepts a smaller sum of money at another DOCTRINE place, it will be binding. If the day of payment has not arrived an agreement to accept part for the whole will be binding no matter where or how it is paid.1 2 By the law of Scotland consideration is not essential to contract. Adequacy of value may be an important element in questions of reduction on the ground of fraud or error, but, per se, consideration, whether nominal or valuable, is not taken into account. The Scottish law recognises the validity of unilateral obligations or promises where there is no counterpart or corresponding obligation on the part of the recipient. Stair quotes the Bible, the civil law and the canon law, to show that "promises or naked pactions are morally obligatory by the law of nature," and that "there is nothing so congruous to human trust as to perform what is agreed among men." 3 Erskine "The obvious reason why all verbal agreements and promises must be obligatory in every nation where no special exception is made by positive institution, is that by a common rule of law every agreement in a lawful matter, though constituted only verbally, induces a full or proper obligation." + says, II. THE HISTORY OF THE STATUTE OF FRAUDS. (29 Car. II. c. 3.) The Statute of Frauds was passed in 1677 in the 29th year of the reign of Charles II. It is a purely English statute, but nearly twenty years later its principal provisions were enacted for Ireland. It is in force in most of the British colonies and generally throughout the United States, but no other country has any similar statutory provision. It is entitled "An Act for 1 66 According to the English common law a creditor may accept anything in satisfaction of his debt except a less amount of money. He may take a horse, or a canary, or a tomtit if he chooses, and that is accord and satisfaction; but by a most extraordinary peculiarity of the English common law the creditor cannot take nineteen shillings and sixpence in the pound; if he does so it is nudum pactum (i.e. an agreement without any binding force). Therefore, although the creditor may take a canary, yet if the debtor did not give him a canary together with his nineteen shillings and sixpence, there was no accord and satisfaction. This is one of the mysteries of English common law."-Sir George Jessel. 2 Law v. Humphrey (1874), 3 Ret. 1192. 3 Stair's Inst. i. 10. 10. 5 Irish statutes, 1695, 7 Wm. III. c. 12. 4 Ersk. Inst. iii. 2. 1. |