This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Maryland. Chicora Fertilizer Co. v. Dunan, 91 Md. 144, 50 L. R. A. 401, 46 Atl. 347; Prudential Ins. Co. v. Cotting-ham, 103 Md. 319, 63 Atl. 359.
Massachusetts. Gilson v. Nesson, 198 Mass. 598, 17 L. R. A. (N.S.) 1208, 84 N. E. 854.
Michigan. Leeson v. Anderson, 99 Mich. 247, 41 Am. St. Rep. 597, 58 N. W. 72; Pease v. Saginaw, 126 Mich. 436, 85 N. W. 1082.
Minnesota. Johnson v. Simmons, 76 Minn. 34, 78 N. W. 863; Hoidall v. Wood, 93 Minn. 190, 100 N. W. 1100; Foster County State Bank v. Lammers, 117 Minn. 94, 134 N. W. 501.
Missouri. Young v. Schofleld, 132 Mo. 650, 34 S. W. 497; Wetmore v. Crouch, 150 Mo. 671, 51 S. W. 738.
Nebraska. Fitzgerald v. Fitzgerald & Mallory Construction Co., 44 Neb. 463, 62 N. W. 899; Mcintosh v. Johnson, 51 Neb. 33, 70 N. W. 522; Crawford v. Darrow, 87 Neb. 494, 127 N. W. 891.
New Jersey. Murphy v. Kastner, 50 N. J. Eq. 214, 24 Atl. 564; Bourgeois v. Edwards, - N. J. Eq. - , 104 Atl. 447; 8nyder v. Insurance Co., 59 N. J. L. 69,
34 Atl. 945; Eckert v. Wallace, 75 N. J. L. 171, 67 Atl. 76.
North Carolina. Jones v. Wilson, 104 N. Car. 9, 10 S. E. 79.
Oklahoma. Sherman v. Pacific Coast Pipe Co. (Okla.), L. R. A. 1917A, 716, 159 Pac. 333.
Oregon. Schumacher v. Moffitt, 71 Or. 79, 142 Pac. 353.
Pennsylvania. Girard Fire & Marine Ins. Co. v.. Canan, 195 Pa. St. 589, 46 Atl. 115; Tustin v. Philadelphia & Reading Coal & Iron Co., 250 Pa. St. 425, 95 Atl. 595; Thomas v. Hill Top Section, 260 Pa. St. 1, 103 Atl. 504.
Rhode Island. Clark v. Summerfield Co., 40 R. I. 254, 100 Atl. 499.
South Carolina. Parker v. Mayes, 85 S. Car. 419, 137 Am. St. Rep. 912, 67 S. E. 559.
Utah. Smoot v. Checketts, 41 Utah 211, Ann. Cas. 1915C, 1113, 125 Pac. 412; Gray v. Bullen, - Utah - , 167 Pac. 683.
Washington. Sanford v. Ins. Co., 11 Wash. 653, 40 Pac. 609.
West Virginia. Nixon v. Kiddy, 66 W. Va. 355, 66 S. E. 500.
Wisconsin. Prairie Grove Cheese Mfg. Co. v. Luder, 115 Wis. 20, 89 N. W. 138, 90 N. W. 1085.
8 Deland v. Hiett, 27 Cal. 611.
9Knights Templars' & Masons' Life Indemnity Co. v. Crayton, 209 111. 550, 70 N. E. 1066.
10 Webster v. McLaren, 19 N. D. 751, 123 N. W. 395.
In two jurisdictions, the existence of the rule has been denied in very decided language, which was purely obiter in each case.12 This was held in one case,13 in which the rule itself was not involved, since the debt existed in the form of a negotiable instrument which was surrendered by the creditor to the debtor for cancellation, a fact which would operate as a discharge in any jurisdiction.14 In a subsequent case,15 the rule has been repudiated again in very strong terms, but the question arose on error to the action of the trial court in directing a verdict for the plaintiff, and the supreme court of New Hampshire said that the facts, while not fully reported, justified the suspicion that the case might be within some of the recognized exceptions, and that a consideration might be found to exist. The debt, furthermore, was evidenced by a promissory note, but it does not appear from the statement of facts whether the creditor surrendered such note on receipt of such partial payment or not.
Relying on these doubtful authorities and these adverse criticisms, although recognizing that the rule laid down as the majority rule is in accord with by far the greater number of decisions, Minnesota has given some recognition to the contrary rule,18 at least to the extent of holding that as far as a tenant has actually paid rent under a gratuitous promise by the landlord to reduce the rent below the amount reserved in a valid and existing lease, the landlord can not thereafter recover the difference between the rent reserved in tHe lease and the rent paid under the gratuitous promise.17
11 Pearson v. Thomason, 15 Ala. 700, 50 Am. Dec. 159; Beaver v. Fulp, 136 Ind. 595, 36 N. E. 418; Foster County State Bank v. Lammera, 117 Minn. 94, 134 N. W. 501; Davis v. Barwick, 88 S. Car. 355, 70 S. E. 1007.
Contra, that under such circumstances a technical consideration exists. Engbretson v. Seiberling, 122 la. 522, 101 Am. St. Rep. 279, 64 L. R. A. 75, 98 N. W. 319. See obiter in Curtis v. Martin, 20 111. 557; Rice v. London & Northwest American Mortgage Co., 70 Minn. 77, 72 N. W. 826.
12Clayton v. Clark, 74 Miss. 499, 60 Am. St. Rep. 521, 37 L. R. A. 771, 21 So. 565, 22 So. 189; Frye v. Hubbell, 74 N. H. 358, 17 L. R. A. (N.S.) 1197, 68 Atl. 325.
13 Clayton v. Clark, 74 Miss. 499, 60 Am. St. Rep. 521, 37 L. R. A. 771, 21 So. 565, 22 So. 189.
14 See Sec. 601.
15Frye v. Hubbell, 74 N. H. 358, 17 L. R. A. (N.S.) 1197, 68 Atl. 325.
16 C. S. Brackett Co. v. Lofgren, 140 Minn. 52, L. R. A. 1918F, 998, 167 N. W. 274.
In some states the rule has been modified or abolished by statute.18 The acceptance of a less sum than that reserved in a lease discharges the debt if it is accepted in full.19 Under such statute, however, the creditor's promise to accept a lesser sum in satisfaction of a greater sum, is not binding upon him if such promise is caused by his financial necessities, of which the debtor takes advantage.20
Why this particular rule should have especially been singled out for attack it is hard to say, unless because it brings into strong relief the absurd results that follow from permitting considerations which are utterly inadequate,21 or purely nominal,22 in contracts in which the right on each side is not money or measured by law in money; while if the right on each side is money or measured by law in money, the consideration must be not merely substantial, but absolutely adequate - that is, equivalent.23 As far as ethics is concerned, the violation of a promise to accept a part of a debt in full satisfaction is, no doubt, inethical and immoral, but no more so than the violation of any other deliberate promise which lacks consideration and upon which the adversary party has acted or relied. As far as it runs counter to the notions of modern business, it does not seem that modern business attaches much more sanctity to a promise of this sort than to any other solemn deliberate promise, assuming that modern business standards demand the voluntary performance of promises which the law will not enforce.
17 C. S. Brackett Co. v. Lofgren, 140 Minn. 52, L. R. A. 1918F, 998, 167 N. W. 274.
18 United States. Schuessler v. Lund-strom, 246 Fed. 439.
Alabama. Cowan v. Sapp, 74 Ala. 44; Eufaula Natl. Bank v. Passmore,
102 Ala. 370, 14 So. 683.
Georgia. Tyler Cotton Press Co. v. Chevalier, 56 Ga. 494.
Maine. Anderson v. Standard Granite Co., 92 Me. 429, 69 Am. St. Rep. 522, 43 Atl. 21; Knowlton v. Black, 102 Me. 503, 67 Atl. 563.
North Carolina. Koonce v. Russell,
103 N. Car. 179, 9 S. E. 316; Kerr v. Sanders, 122 N. Car. 635, 29 S. E. 943.
Virginia. Standard Sewing Machine Co. v. Gunter, 102 Va. 568, 46 S. E. 690.
Some of the earlier statutes to this effect have since been modified so as to re-enact the statutory rule. See South Dakota Civil Code of 1913, Sec. 1177; Eggland v. South, 22 S. D. 467, 118 N. W. 719.
19 Schuesaler v. Lundstrom, 246 Fed. 439.
20 Thomas v. Brown, 116 Va. 233, 81 S. E. 56.
21 See Sec. 635 et seq.
22 See Sec. 644 et seq.
23 See Sec. 643.