Plowman v. Indian Refining Co.

Plowman v. Indian Refining Co.
United States District Court
20 F. Supp. 1 (E.D. Ill. 1937)

Facts: Several employees were relieved of their duties at IR Co. but remained on the payroll in respect for their long service to the company (they were downsizing for economic reasons). The company maintains that the extended payroll was a gift; the employees maintain that it was contract and supposed to last their entire life. Controverted fact is whether anyone ever mentioned that the payments would go on for life.

Procedure: District Court level.

Issue: Do the past actions of the employees count as consideration?

Holding: No.

Reasoning: It cannot be consideration for a new contract if it has already been given and without reference to the contract. Plus traveling to the office to pick up the check was simply a condition, not consideration.

Baksakis v. Demotsis

Baksakis v. Demotsis
Texas Court of Civil Appeals
226 S.W.2d 673 (1949)

Facts: Defendant borrowed some money from plaintiff during the war; it is claimed that there was no consideration, so it wasn't paid back. (The amount delivered to the plaintiff was worth $25 US Dollars, but the letter in question treats it at worth $2k US Dollars).

Procedure: Plaintiff sued to recover the $2k with interest. Trial court (without a jury) found in favor for the plaintiff to the amount of $750, with interest. Plaintiff appealed.

Issue: Was there consideration?

Holding: Yes.

Reasoning: Just because the consideration was inadequate does not mean it is not consideration. "Defendant got exactly what she contracted for."

Dougherty v. Salt

Dougherty v. Salt
New York Court of Appeals
227 N.Y. 200, 125 N.E. 94 (1919)

Facts: Aunt gives a boy a note for $3k, payable on her death or any time before.

Procedure: Trial judge found for the defendant; appellate court reversed the dismissal; defendant appeals.

Issue: Is there a consideration if the giver of a gift/promise says so?

Holding: No.

Reasoning: The consideration must exist in reality somewhere, and besides, the story pretty much proves that it was just a gift.

Pennsy Supply, Inc. v. American Ash Recycling Corp. of Pennsylvania

Pennsy Supply, Inc. v. American Ash Recycling Corp. of Pennsylvania
Pennsylvania Superior Court
895 A.2d 595 (2006)

Facts: Pennsy Supply was subcontracted to do some paving; the people who put up the contract mentioned that American Ash had some free AggRite for the project. Pennsy used it; the paving cracked, and they had to redo it and dispose of the AggRite, which is classed as toxic waste. Pennsy sued American Ash for the disposal costs, which it only incurred because the product was defective, and which it saved American Ash by using it for the project.

Procedure: Trial court dismissed; Pennsy appealed.

Issue: Was there consideration?

Holding: Yes. (Remanded for further proceedings.)

Reasoning: It wasn't a gift because American Ash received a benefit from the arrangement, which was the reason they were offering it free in the first place. "Complaint alleges facts which, if proven, would show the promise induced the detriment and the detriment induced the promise. This would be consideration."

Hamer v. Sidway

Hamer v. Sidway
New York Court of Appeals
124 N.Y. 538, 27 N.E. 256 (1891)

Facts: A boy's uncle said that if refrained from certain vices until his 21st birthday, the uncle would give him $5k. Upon the boy's 21st birthday, the uncle said that he would hold it with interest for the boy until some unspecified time; he then died. The boy brought the suit against his uncle's estate.

Procedure: New York trial court found for the estate; special term of the trial court found for the boy; estate appealed.

Issue: Was the giving up of a legal right which may never the less benefited the one who gave it up a consideration?

Holding: Yes.

Reasoning: Giving up a legal right is a consideration, no matter if the act of giving it up confers some "benefit."