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.
The promise on consideration of performing a pre-existing contract may be made by a third person, who was not a party to the original contract. If the act which B performs or promises to perform is one which he is bound to do under a contract which he has already entered into with X, we find again a divergence of authority as to the sufficiency of such act or promise on the part of B, as consideration for a promise made by A to B, to induce B to perform his contract with X. Here, again, the great weight of authority is that such act or promise is not a consideration, since B is doing only what he is already bound to do by his contract with X, although he has also attempted to bind himself by a promise to A to perform such contract with X.1 A promise by A to B to induce B to pay for stock for which he repurchase the stock under certain circumstances, made to induce B to perform a prior contract with X, by which B bought such stock and agreed to pay for it thereafter;6 a promise by A to B to assign a patent to X, a corporation, on consideration that B would pay his subscription to X;7 A's promise to B to renew a note on consideration that B will give to X, a corporation, his note on which A is accommodation indorser, 'for B's subscription to such corporation, of which A was president;8 a promise by A to B to pay to B a part of a subscription which B has made to X, and which has become valid and enforceable before A has made such promise to B;9 a promise by A to B to execute a mortgage on certain land, in consideration that B would pay to X a judgment rendered against B as principal and X as surety;10 a promise by A to B to insure A's life for the benefit of B's child, in consideration that B would pay to X a debt upon which A was liable as surety;11 a promise by A to B to surrender certain notes signed by B, which A held, on consideration that B would secure another surety for a debt which B owed to X, and upon which A was surety;12 A's promise to accept a draft drawn by B on A, on consideration that B would use the proceeds of such draft to pay a debt due from B to X as indorser;13 a promise by A to surrender his claim against B on consideration that B would pay a debt due from B to X;14 a note given by A to B to induce B to deliver goods to X under a prior contract of sale, whereby B had no right to compensation until the goods were all delivered;15 A's promise to B to convey in consideration of B's performing a prior contract to convey certain land to X;16 a bond given by A to B to indemnify B against a claim made by C, on consideration that B would pay to X, a building contractor, the amount due under the contract;17 a promise by A to guaranty payment of the price of certain buildings to be erected by B, under a contract with X, on consideration that B would complete the performance of such building contract;18 a promise by A to B to pay B on consideration of B's performing a contract with X, whereby B was to excavate a ditch,19 or build a house;20 or to perform legal services under a contract with the State of Texas, whereby B was to recover the proceeds of certain bonds;21 a promise by A to B to pay to B a certain sum of money, if B would perform an existing contract with a school, of which A was a trustee, whereby B and his wife were to teach in such school;22 a promise by A to pay a sum of money to B, in consideration that B would perform his contract with X, a township, to enter into the service of the United States;23 a promise by A to pay a certain sum in installments to B, the overseer of the poor, in consideration of his supporting X and releasing A from a contract with X to support her,.A having paid to B the cost of supporting and burying X, and B having no power to release such contract to A;24 or a promise by A, a postmaster, to B, a mail contractor, to pay B for carrying mail over a part of the route over which B was under contract with the United States to carry it, even if A did not know that B was thus bound to the United States,25 have all been held to be insufficient. A promise by B to X to pay A's debt to X, is no consideration for X's promise to release A, if B has already, by contract with A, assumed A's debt to X, in a jurisdiction where X can enforce such promise;26 according to the great weight of authority in the United States, therefore, B's performance of his contract with X is not consideration for A's promise to B.27
7 Agel v. F. R. Patch Mfg. Co., 77 Vt. 13, 58 Atl. 792.
8 Agel v. F. R. Patch Mfg. Co., 77 Vt. 13, 58 Atl. 792.
9 Agel v. F. R. Patch Mfg. Co., 77 Vt. 53, 58 Atl. 792.
1 United States. National Electric Signaling Co. v. Fessenden, 207 Fed. 915.
Alabama. Prickett v. Bates, 4 Ala. 390; Johnson v. Sellers, 33 Ala. 265.
California. Ellison v. Jackson Water Co., 12 Cal. 542; Marinovich v. Kil-burn, 153 Cal. 638, 96 Pac. 303.
District of Columbia. Merrick v. Giddings, 12 D. C. Mackey), 394.
Illinois. Havana Press Drill Co. v. Ashhurst, 148 111. 115, 35 N. E. 873.
Indiana. Peelman v. Peelman, 4 Ind. 612; Ford v. Garner, 15 Ind. 298; Reynolds v. Nugent, 25 Ind. 328; Ritenour has already subscribed;2 a subscription to a religious or charitable organization in consideration of the payment by such organization of its pre-existing debt to a third person;3 and a promise by A to B, who has entered into a contract with X, to ride X's horse at a certain race for a certain compensation, by which A promises to pay a certain sum of money to B if B wins such race, even though A would be benefited by winning such race, since he would receive a part of the prize which was offered and since the value of his horses, which were relatives of the horse which B was to ride, would be increased if such race were won by such horse,4 are all held to be unenforceable as not supported by sufficient consideration. If A has agreed with a majority stockholder, B, to remain in the employment of a corporation, his agreement to continue the performance of such contract is not consideration for the promise of the corporation to assume a debt due to A from B.5
A personal promise by A, the president of a corporation, X, to B, guaranteeing dividends up to a certain amount and binding A to v. Mathews, 42 Ind. 7; Harris v. Cass-ady, 107 Ind. 158.
Kansas. Schuler v. Myton, 48 Kan. 282, 29 Pac. 163.
Kentucky. Ford v. Crenshaw, 11 Ky. (1 Litt) 68; McDevitt v. Stokes, 174 Ky. 515, L. R. A. 1917D, 1100, 192 S. W. 681.
Maine. Putnam v. Woodbury, 68 Me. 58.
New York. Vanderbilt v. Schreyer, 91 N. Y. 392; Robinson v. Jewett, 116 N. Y. 40; Arend v. Smith, 151 N. Y. 502, 45 N. E. 872.
Ohio. Sherwin v. Brigham, 39 O. S. 137.
South Dakota. Hoeven v. Morley, 36 S. D. 421, 155 N. W. 191.
Tennessee. Hanks v. Barron, 95 Tenn. 275, 32 S. W. 195.
Texas. Kenigsberger v. Wingate, 31 Tex. 42, 98 Am. Dec. 512.
Wisconsin. Davenport v. First Con-gregational Society, 33 Wis. 387.
"Where a man has, by his own contract, become morally and legally bound to do an act, he can not maintain an action on the promise of a third person, afterwards made, to pay him for doing it." Syllabus of Ford v. Crenshaw, 11 Ky. (1 Litt) 68; as quoted in McDevitt v. Stokes, 174 Ky. 515, L. R. A. 1917D, 1100, 192 S. W. 681. See Two Theories of Consideration, by James Barr Ames, 12 Harvard Law Review, 515, 13 Harvard Law Review, 29; Notes on Consideration, by Joseph H. Beale, 17 Harvard Law Review, 71; Afterthoughts on Consideration, by Sir Frederick Pollock, 17 Law Quarterly Review, 415; Does a Pre-Existing Duty Defeat Consideration? - Recent Noteworthy Decisions, by Arthur L. Corbin, 27 Yale Law Jour. 362.
2Marinovich v. Kilburn, 153 Cal. 638, 96 Pac. 303; Havana Press Drill Co. v. Ashhurst, 148 111. 115, 35 N. E. 873; Arend v. Smith, 151 N. Y. 502, 45 N. E. 872.
3 Davenport v. First Congregational Society, 33 Wis. 390.
4 McDevitt v. Stokes, 174 Ky. 515, L. R. A. 1917D, 1100, 192 S. W. 681.
5 National Electric Signaling Co. v. Fessenden, 207 Fed. 915.
6 Marinovich v. Kilburn, 153 Cal. 638, 96 Pac. 303.
7 Havana Press Drill Co. v. Asbhurst, 148 111. 115, 35 N. E. 873.
8Arend v. Smith, 151 N. Y. 502, 45 N. E. 872.
9 Schuler v. Myton, 48 Kan. 282, 29 Pac. 163.
10 Harris v. Cassady, 107 Ind. 158, 8 N. E. 29.
11 Ford v. Garner, 15 Ind. 298.
12Ritenour v. Mathews, 42 Ind. 7.
13Sherwin v. Brigham, 39 O. S. 137.
14 Davenport v. First Congregational Society, 33 Wis. 387.
15 Kenigsberger v. Wingate, 31 Tex. 42, 98 Am. Dec. 512.
16 Peelman v. Peelman, 4 Ind. 612.
17 Hanks v. Barron, 95 Tenn. 275, 32 S. W. 195.