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.
If a contract is fully performed on both sides and each has received what he agreed to take, the question of consideration becomes immaterial. While it is sometimes said that an executed contract needs no consideration, this is a misuse of language. If no consideration ever existed, there never was a contract. It is more correct to say that a promise, if fully performed,1 even of a promise to make a gift,2 can not after performance be rescinded by the promisor, although he could have resisted performance successfully. This is true in gifts executed by delivery, even if the donor subsequently regains possession of the gift.3
If A has rendered services to B under an agreement that they are to be gratuitous, A can not recover reasonable compensation therefor after performance.4 If A promises to furnish free storage to B, A can not compel B to pay for storage which has been furnished under such contract, nor can A withhold B's goods until such storage charges are paid;5 and if B is compelled to pay such storage charges to secure such goods, he can recover such payment from A.6 If A is appointed receiver under an agreement to charge no fees, it is said that he can not recover compensation for his services.7 In these cases it is assumed that the promise to render gratuitous service is not contrary to the public policy of that particular jurisdiction, and that such services are not of the sort the value of which is fixed in money by the law. Different consequences would follow if either were the case.
1 Maxwell v. Graves, 59 Ia. 613, 13 N. W. 758; Lamb's Estate v. Morrow, 140 la. 89, 18 L. R. A. (N.S.) 226, 117 N. W. 1118; Oregon, etc., Ry. v. Forrest, 128 N. Y. 83, 28 N. E. 137.
2 Arkansas. Williams v. Smith, 66 Ark. 299, 50 S. W. 513; Smith v. Young-blood, 68 Ark. 255, 58 S. W. 42.
California. Soberanes v. Soberanes, 97 Cal. 140, 31 Pac. 910.
Connecticut. Camp's Appeal, 36 Conn. 88, 4 Am. Rep. 39; Minor v. Rogers, 40 Conn. 512, 16 Am. Rep. 69.
Illinois. Welsch v. Belleville Savings Bank, 94 111. 191.
Indiana. Martin v. McCullough, 136 Ind. 331, 34 N. E. 819.
Kentucky. Gault v. Trumbo, 56 Ky. (17 B. Mon.) 682; Besry v. Kinnaird (Ky.), 20 S. W. 511.
Massachusetts. Grover v. Grover, 41 Mass. (24 Pick.) 261, 35 Am. Dec. 319; Rockwood v. Wiggin, 82 Mass. (16 Gray) 402.
Michigan. Ellis v. Secor, 31 Mich. 185, 18 Am. Rep. 178; Holmes v. McDonald, 119 Mich. 563, 75 Am. St Rep.
430, 78 N. W. 647; Richmond v. Nye, 126 Mich. 602, 85 N. W. 1120.
New Jersey. Walker v. Crucible Co., 47 N. J. Eq. 342, 20 Atl. 885.
New York. Pickslay v. Starr, 149 N. Y. 432, 52 Am. St. Rep. 740, 32 L. R. A. 703, 44 N. E. 163.
Pennsylvania. Fasset's Appeal, 167 Pa. St. 448, 31 Atl. 686.
South Carolina. Thompson v. Gordon, 3 Strobh. (S. Car.) 196.
Tennessee. Marshall v. Russell, 93 Tenn. 261, 25 S. W. 1070.
Vermont. Williamson v. Johnson, 62 Vt. 378, 22 Am. St, Rep. 117, 9 L. R. A. 277, 20 Atl. 279.
Virginia. Brown v. Handley, 34 Va. (7 Leigh) 119.
West Virginia. Fleshman v. Hoyl-man, 27 W. Va. 728.
Wisconsin. Miller v. Slater, 154 Wis. 35, 142 N. W. 124.
3 Whiting v. Ralph, 75 Conn. 41, 52 Atl. 406; Whitford v. Horn, 18 Kan. 455; Grover v. Grover, 41 Mass. (24 Pick.) 261, 35 Am. Dec. 319; Allen v. Knowlton, 47 Vt. 512.
It has been said that property pledged for the debt of another is prima facie pledged on valuable consideration.8 It is more accurate, possibly, to say that a pre-existing debt is sufficient consideration for a pledge,9 although it would be a past consideration for an executory contract,10 as, indeed, it is for an executory promise to make a pledge in the future.11 After the pledge has actually been made, it is governed, as far as consideration is concerned, by the principles which govern transactions which are performed fully on both sides, rather than by the principles which govern executory promises.