In re Greene

United States District Court for the Southern District of New York · 1930 · Contracts

ContractsConsiderationconsiderationpast considerationillicit cohabitationexecutory promisesealnominal consideration

Facts

After several years of an adulterous relationship with the bankrupt, the claimant and the bankrupt ended their intimate relations and then executed a written instrument under seal in New York. The bankrupt promised to pay her $1,000 per month during their joint lives, assign and maintain a $100,000 life insurance policy, and pay rent on her apartment for four years; in return, the claimant released him from all claims she had against him. The instrument recited $1 and 'other good and valuable considerations,' and also stated that the bankrupt had no interest in the claimant's Long Island house and would no longer be liable for charges on it. After making payments until August 1928, the bankrupt stopped, and the claimant sought damages from the estate for breach.

Issue

Was the sealed agreement enforceable against the bankrupt estate where the parties' prior illicit cohabitation had ended before the agreement was made, and the claimant asserted consideration in the form of nominal payment, general recitals, release of claims, and the bankrupt's freedom from house-related expenses? If not, could the claim be allowed in bankruptcy?

Rule

A promise made because of past illicit cohabitation, after the cohabitation has ceased, is void for want of consideration because the consideration is past, not because the agreement is illegal. Such a promise is enforceable only if supported by some consideration other than the past intercourse; nominal recitals, general statements of consideration, release of nonexistent or unlawful claims, or supposed relief from obligations the promisor never owed do not suffice. In New York, a seal on an executory instrument creates only a presumption of consideration, which may be rebutted by proof that no consideration actually existed.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In New York City, Daniel Mercer and Alina Ortiz ended a years-long adulterous affair. Two weeks later, Daniel signed a written promise to pay Alina $4,000 per month for ten years, stating that it was made in appreciation of their past relationship; Alina gave nothing else in exchange.

If Alina sues to enforce Daniel's promise, what is the strongest argument against enforcement under the governing rule?

Explanation. The majority rule distinguishes between an agreement for future illicit cohabitation, which is unlawful, and a promise made after cohabitation has ceased, which is not illegal but fails for want of consideration unless supported by new consideration. Here the only basis is the past affair, which is merely past consideration and will not support Daniel's executory promise.