Story Case

Having been arrested for confidence game alleged to have been played upon a stranger in the town, James Howell employed Simon Sawyer, a friend, to defend him in court. Howell agreed to pay Sawyer $100 in return for Sawyer's promise to conduct the defense in court. Howell, however, knew at the time of making the contract that Sawyer was not a lawyer and in no way qualified to act. When Sawyer failed to comply with his contract, Howell brought suit for its breach. Sawyer put in defense that Howell knew at the time of making the contract, that he, Sawyer, was not a lawyer.

Is this a good defense?

Ruling Court Case. Kelley Vs. The Mutual Life Insurance Company, Volume 109; Federal Reporter, Page 56

Edward Kelley made application to the Mutual Life Insurance Company to have his life insured; and a policy was granted to him. By the contract made between them, if all the premiums were paid, the Company agreed to pay Mrs. Kelley the amount of the policy at the death of Edward Kelley. In the policy there was the statement made by Kelley: "I will not die by my own hand, sane or insane."Thereafter, however,. Kelley became insane, and committed suicide. His wife, Mrs. Kelley, brought this action to recover the amount of the policy.

The defense of the company was that Kelley had promised not to die by his own act, sane or insane; and having done so, the policy was void. But she contended that this promise was not binding because it was impossible of performance.

The Court said: "When Kelley agreed not to commit suicide while insane, he was agreeing to do that which was impossible to observe. He knew this when he so agreed and the company knew it equally well. It was an impossible contract, impossible to observe; and an impossibility known by both parties when they so agreed. A learned text writer says: 'A mutual understanding between parties to do what both know to be impossible, is vain and idle, lacking the elements of a contract.'"

Accordingly, it was held that Mrs. Kelley might recover.

Ruling Law. Story Case Answer

A promise to do some act which is legally or physically impossible does not constitute a good consideration necessary to create a legally binding contract. This impossibility must be known, however, to both parties. A promise by one person to sell me land not belonging to him, when I am aware that he does not own it, does not create a contract between us. Here, there is a legal impossibility. A promise by one to go from New York to London in one day, in consideration of a certain sum of money, is a physical impossibility and creates no contract between the parties.

The defense of Sawyer, in the Story Case, is effective, since Howell knew at the time the alleged contract was made, that Sawyer could not perform.