Story Case

Harry Branscomb, who owned a number of fine horses, promised to give one to his brother Frank after a few weeks. Frank insisted that the promise should be put in writing, because he feared that his brother might change his mind in the meantime and he thought that by having the promise made in writing, he could enforce it, in case his brother should change his mind.

Before the time came when, according to the writing, the horse was to be delivered to Frank, Harry sold all of his horses. This action angered Frank and he decided to sue his brother for damages. In defense Harry contended that, because there was no consideration, his promise was not legally binding upon him. On the other hand it was contended by Frank that it was not material that there was no consideration, since the promise was made in writing.

Under these facts, do you think that Harry Brans-comb is liable for damages?

Ruling Court Case. Hughes Vs. Rann, Volume 7 Term Reports, Note, Page 350

During the respective life-times of Mary Hughes and J. Hughes a certain dispute arose between them. They agreed to submit the matter to arbitration. The arbitrators, having made an investigation into the controversy, decided that Mary Hughes should pay J. Hughes the sum of 983 pounds.

Thereafter she died and Rann, the present defendant, was appointed her executor. Although sufficiently able to have done so in her life time, Mary Hughes never paid the 983 pounds which the arbitrators found that she owed to J. Hughes. Rann, her executor after her death, agreed by a promise in writing to pay the sum in question. For his promise, however, there was no consideration.

J. Hughes brought this action upon the promise made by Rann, executor of the estate of Mary Hughes, deceased.

In defense, Rann contended that he was not liable upon the promise because it was not supported by a consideration. In reply to this the plaintiff contended that it was immaterial whether or not there was a consideration for this promise, because the promise was made in writing.

Decision

The defendant, Rann, cannot be held liable upon this promise, even though in writing, because it is not supported by a consideration.

Lord Chief Baron Skynner said in part: "All contracts are divided into agreements by specialty and agreements by parol - simple contracts. Nor is there any such third class as some of the counsel have endeavored to maintain, as contracts in writing. If they be merely written and not sealed, they are parol simple contracts - and a consideration must be proved".

Accordingly, judgment was given for the defendant in this action.

Ruling Law. Story Case Answer

As was stated in the foregoing section, all contracts are either simple or sealed contracts. A sealed instrument becomes a binding obligation by virtue of its form and execution, and a consideration therefor was unnecessary. On the other hand, as is illustrated more fully later, a simple contract must be supported by a consideration, before it becomes a binding obligation.

Quite frequently we speak of contracts which are written and contracts which are oral. But a contract, whether oral or written, is termed a simple contract and must always contain a consideration. In the Story Case, Frank was mistaken when he thought that a written contract would be binding, when unsupported by a consideration. By having it reduced to writing, he could no more easily have it enforced than if it had been a mere oral promise.