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.
It is often said that the rule which permits the introduction of extrinsic evidence to contradict the recital of a consideration is limited to cases in which such contradiction of such recitals will not defeat the legal effect and operation of the contract. The authorities which are cited in support of this proposition are cases which involve deeds or other conveyances, sealed contracts, and executory covenants, as well as recitals of the consideration as a fact to support executory covenants on the part of the adversary party. These cases are governed by different principles and should be considered separately. The recital of a valuable consideration in a deed or other conveyance can not be contradicted for the purpose of destroying the legal effect and operation of the deed.1 This principle, however, is limited to cases in which the only attack upon the validity of the deed or other conveyance is the want of consideration. It has no application to cases in which it is sought to have the deed set aside in equity on the ground of fraud or undue influence and in which it is sought to show the lack of consideration or of the inadequacy of consideration for the purpose of establishing such fraud or undue influence.2 This principle has sometimes been applied so as to exclude extrinsic evidence which tends to show that a valuable consideration which is recited in a deed was not the real consideration intended by the parties, but that the consideration was love and affection, in order to cause the deed, which purports to be a deed upon a valuable consideration, to operate as a deed of gift.3 In other jurisdictions, however, the general principle that the recital of a consideration in a deed can not be so contradicted as to destroy its legal effect, is regarded as not preventing the introduction of extrinsic evidence to show that such a deed is really a deed of gift and not a deed for value,4 although the fact of such evidence may be to change the line of descent of such realty.5 The principle that extrinsic evidence can not be introduced to contradict a recital in a conveyance of realty, so as to contradict its legal effect, applies in equity as well as in law, as long as such evidence is not offered for the purpose of establishing fraud or undue influence.6 The correctness of the rule that a recital of a consideration in a conveyance can not be contradicted so as to defeat the instrument, is especially clear where the realty has been conveyed to a bona fide purchaser for value.7 The principles which apply to the contradiction of the recital of consideration of a deed or other conveyance are radically different from those which apply to the contradiction of a similar recital in a simple executory contract. The term "consideration," if applicable to a deed, represents in many respects a different idea from the term "consideration" as applied to simple executory contracts. A common-law deed was under seal and in the classic period of the common law did not require a valuable consideration, although at an earlier period it was probably felt that something of value should be given by the grantee to the grantor, and even at a very early period to the prospective heirs of the grantor. In deeds which, like the bargain and sale, operated under the Statute of Uses, the recital of a consideration was necessary to rebut the presumption of a resulting trust. The presumption is that a gratuitous conveyance creating a resulting trust in favor of the grantor could be rebutted by any kind of evidence tending to establish that fact, as far as the principles of equity were concerned; and, accordingly, the recital of a valuable consideration in a deed was regarded as conclusive in the absence of fraud, undue influence, mistake, and the like, of the fact that the grantor did not intend a resulting trust in his own favor. In addition the principles of estoppel have been invoked to prevent the grantor or those who claim under him from denying such a recital of consideration, especially if the deed is under seal.8
6 Union Machinery & Supply Co. v. Darnell, 89 Wash. 226, 154 Pac. 183.
1 Stotts v. Stotts, 198 Mich. 605, 165 N. W. 761.
Contra, Cheda v. Bodkin, 173 Cal. 7, 158 Pac. 1025; Chapman v. Schroeder, 166 Wis. 330, 165 N. W. 295.
2 Chapman v. Schroeder, 166 Wis. 330, 165 N. W. 295.
3 Stotts v. Stotts, 198 Mich. 605, 165 N. W. 761.
4 Boise Valley Construction Co. v. Kroeger, 17 Ida. 384, 28 L. R. A. (N.S.) 968, 105 Pac. 1070.
5 Boise Valley Construction Co. v. Kroeger, 17 Ida. 384, 28 L. R. A. (N.S.) 968, 105 Pac. 1070.
1 United States. Lindlay v. Baydure, 239 Fed. 928.
Arkansas. Davis v. Jernigan, 71 Ark. 494, 76 S. W. 554; Hampton v. Haneline, 125 Ark. 441, 189 S. W. 40.
California. Feeney v. Howard, 79 Gal. 525, 12 Am. St. Rep. 162, 4 L. R. A 826, 21 Pac. 984.
Georgia. Anderson v. Continental Ins. Co., 112 Ga. 532, 37 S. E. 766.
Illinois. Stannard v. Aurora E. & C. Ry. Co., 220 111. 469, 77 N. E. 254; Redmond v. Cass, 226 111. 120, 80 N. E. 708; Fleming v. Reheis, 275 111. 132, 113 N. E. 923.
Iowa. Luckhart v. Luckhart, 120 Ia. 248, 94 N. W. 461; Maxwell v. McCall, 145 Ia. 687, 124 N. W. 760; Shelangow-ski v. Schrack, 162 Ia. 176, 143 N. W. 1081.
Massachusetts. Trafton v. Hawes, 102 Mass. 533, 3 Am. Rep. 494.
Missouri Strong v. Whybark, 204 Mo. 341, 12 L. R. A. (N.S.) 240, 102
S. W. 968; Weissengels v. Cable, 208 Mo. 515, 106 S. W. 1028.
Washington. Grubb v. House, 98 Wash. 200, 160 Pac. 421.
2 See Sec. 2180 et seq.
3 Brown v. Whaley, 58 O. S. 654, 65 Am. St. Rep. 793, 49 N. E. 479; Groves v. Groves, 65 O. S. 442, 62 N. E. 1044; Latimer v. Latimer, 53 S. Car. 483, 31 S. E. 304.
4Rockill v. Spraggs, 9 Ind. 30, 68 Am. Dec. 607; Harman v. Fisher, 90 Neb. 688, 39 L. R. A. (N.S.) 157, 134 N. W. 246; Bradley v. Love, 60 Tex. 472.
5 Harman v. Fisher, 90 Neb. 688, 39 L. R. A. (N.S.) 157, 134 N. W. 246.