This section is from the book "A Treatise On The Law Of Contracts", by William W. Story. Also available from Amazon: A Treatise On The Law Of Contracts.
§ 542. We now come to that incident of a simple contract, which distinguishes it from a specialty, and without which it cannot exist, namely, the consideration.
§ 543. An agreement, without consideration, is utterly void, and no action can be maintained thereupon; "Ex nudo pacto non oritur actio" l In the case of a contract under seal, the law always presumes a sufficient consideration, which the parties, except in special cases, are estopped2 from deny-
1 The same rule obtains in the Roman law, and the foreign commercial law. 1 Potliier on Oblig. p. 42; Story on Bills, § 180, p. 200; Chitty on Cont. 27; Doc. & Stu. Dial. 2, c. 24; Rann v. Hughes, 7 T. R. 350, n.; Myddleton v. Lord Kenyon, 2 Ves. Jr. 391; Sharington v. Strotton, Plowd. 302, 308; Pothier, Pand. Lib. 2, tit. 14, n. 33; 2 Pothier on Oblig. by Evans, n. 2, p. 19-25. Of course, although a contract when made may not be valid, for want of mutuality of obligation, yet it becomes valid and binding upon a due subsequent performance by the promisee of that which was the consideration of the promise. Willetts v. Sun Mut. Ins. Co., 45 N. Y. 45 (1871).
2 Cooch v. Goodman, 2 Q. B. 580, 599, where, in delivering the opinion of the court, Lord Denman said: "It should, however, be observed, that a covenant, being under seal, does not by law require any consideration to support it, and though an illegal consideration may be shown and will vitiate it, and, if a consideration be stated on the face of a deed, a different one may be proved in order to raise a legal defence; yet a mere failure of consideration which once existed, may have no more effect than a total want of consideration in the first instance. Several cases are cited in Com. Dig. tit. Covenant, F., to show, that, under circumstances, a failure of consideration will prevent an action of covenant from being maintainable; and we are by no means prepared to deny this proposition. But in the present case, there has not been any such failure; and therefore, we are of opinion, that the case comes within the general rule laid down in Com. Dig. Fait, C. 2, and the cases there cited; namely, that if one party executes his part of an indenture, it shall be his deed, though the other does not execute his part." ing;1 while in the case of a simple contract (under which term is included all contracts not under seal, whether oral or written),2 a sufficient consideration must not only exist in fact, and be averred in the pleadings, but must also be proved, in order to entitle either party to recover. Nor is the case of a promissory note or a bill of exchange ordinarily an exception to this rule; for, as between the original parties to the bill or note, although the presumption is, that the consideration is sufficient, so that it is unnecessary for the plaintiff to establish a consideration, yet failure or illegality of consideration may be insisted upon by the defendant, as a defence or bar to the action by the original payee; and the only difference between the case of a bill or note and any other contract, as to the immediate parties, is, that the burden of proof is shifted.3 The doctrine that the failure or illegality of consideration is no defence or bar to the title of a bond fide holder of negotiable paper for a valuable consideration, without notice of the defect, must, indeed, be regarded as an exception. It stands upon grounds of public policy and convenience, and is indispensable in order to give to negotiable paper that security and facility of circulation, without which it would be nearly useless to the community.4
§ 544. By the Roman law a naked agreement, without a cause, gave no right to an action; but where there was a cause the agreement became an obligation, and gave birth to a right of action. "Quum nulla subest causa praeter conventionem, hic constat non posse constitui obligationem. Igitur nuda pactio obligationem non parit." 1 By the common law the cause is carefully discriminated from the motive; a good motive not being sufficient to support a contract. The causa of the Roman law is equivalent to the consideration of the common law; and by the latter term is to be understood some cause which has a value susceptible of legal appreciation, and not merely a moral motive.2 Yet, although the least consideration that is appreciable in value will be sufficient to support a contract, it must appear not to be utterly valueless. For if the contract be founded upon a consideration mistakenly supposed to be of value, yet if it turn out afterwards to be utterly worthless, the contract cannot be enforced.3
1 In some of the States in this country, the want of consideration is, by local usage or by statute, rendered a complete defence to a sealed contract. Swift v. Hawkins, 1 Dall. 17; Solomon v. Kimmel, 5 Binn. 232; Case v. Boughton, 11 Wend. 106; Leonard v. Bates, 1 Blackf. 173; Walker v. Walker, 13 Ired. 335; Coyle v. Fowler, 3 J. J. Marsh. 473.
2 Cook v. Bradley, 7 Conn. 57; People v. Shall, 9 Cow. 778; Burnet v. Bisco, 4 Johns. 235; Thacher v. Dinsmore, 5 Mass. 301.
3 3 Kent, Comm. 80-82; Jackson v. Warwick, 7 T. R. 121; Story on Part. § 178, 187, and cases cited, p. 200; Chitty on Bills, ch. 3, § 1, p. 78-85, 8th ed.; ib. p. 90-92; Collins v. Martin, 1 Bos. & Pul. 651; Holliday v. Atkinson, 5 B. & C. 501.
4 Story on Bills, § 187, 188; Collins v. Martin, 1 Bos. & Pul. 651; Bramah v. Roberts, 1 Bing. N. C. 469.
§ 545. But although a consideration is absolutely essential, in order to support a parol contract, yet it is not necessary that it should be expressed in writing, even although the contract itself be written, provided it be proved, in point of fact.1 But if the consideration be stated in the written contract, it is to be taken as the actual consideration, unless the contract import others not expressed therein; as if the words "for other considerations" be used.2 The statement of the consideration in a parol contract does not, however, operate by way of estoppel, so as to prevent the parties from showing additional considerations, in like manner as in cases of specialties.3 And if a written contract do not set forth the specific consideration, but state in general terms that it is founded on a valuable consideration, such a statement will be considered as prima facie evidence of the fact.4
1 Digest, Lib. 2, tit. 14, 1. 7, § 4. Plowden, in a note to the case of Sharington v. Strotton (Plowd. 309), thus states the rule: "Nudum Pactum est ubi nulla subest causa praeter conventionem; sed ubi subest causa, fit obligatio et parit actionem." The word "propter," instead of "praeter," occurs in some editions of the Roman Digest. See also Wood's Civil Law, ch. 1, p. 205, and note. Viner's Abr. Nudum Pactum, A. pi. 1. In the Civil Code of France, the rule is thus laid down: " L'obligation sans cause, ou sur une fausse cause, ou sur une cause illicite, ne peut avoir aucun effet." Code Civil, Liv. 3, tit. 3, ch. 2, sect. 4, art. 1131.
2 In Thomas v. Thomas, 2 Q. B. 859, Mr. Justice Patteson, commenting on the term "causa," says: "It would be giving to causa too large a construction if we were to adopt the view urged for the defendant; it would be confounding consideration with motive. Motive is not the same thing with consideration. Consideration means something that is of some value in the eye of the law, moving from the plaintiff: it may be some benefit to the plaintiff, or some detriment to the defendant; but at all events it must be moving from the plaintiff. Now that which is suggested as the consideration here, a pious respect for the wishes of the testator, does not in any way move from the plaintiff; it moves from the testator; therefore, legally speaking, it forms no part of the consideration." See also Sharington v. Strotton, Plowd. 309, and note; Mouton v. Noble, 1 La. An. 192; Jennings v. Brown, 9 M. & W. 501; Beaumont v. Reeve, 8 Q. B. 483; Hol-comb v. Stimpson, 8 Vt. 141; Haven v. Hobbs, 1 Vt. 238; 2 Kent, Comm. 618, n. (1).
3 Cabot v. Haskins, 3 Pick. 83; Maull v. Vaughan, 45 Ala. 134 (1871). See post, § 437, 453, 465, 480. Warder v. Tucker, 7 Mass. 449; Freeman v. Boynton, 7 Mass. 483; White v. Bluett, 23 Law J. (n. s.) Exch. 36; 24 Eng. Law & Eq. 434; Sykes v. Dixon, 9 Ad. & El. 693; James v. Williams, 5 B. & Ad. 1109.
§ 546. The law requires not only a consideration, but that it should be valuable. A valuable consideration is distinguished from a good consideration. A good consideration is an equitable consideration, founded upon mere love, or affection, or gratitude, which, although it will support the contract as between the parties, when executed, will not support an action to enforce an executory contract; but a valuable consideration is a legal consideration emanating from some injury or inconvenience to the one party, or from some benefit to the other party.6
§ 547. The subject naturally divides itself into, 1st.. "Valuable Considerations; 2d. Insufficient Considerations. Valuable considerations are of various kinds, and for the sake of distinctness and facility of reference, we propose to divide them into the following classes:6 1st. Benefit or Injury;
1 Arms v. Ashley, 4 Pick. 71; Tingley v. Cutler, 7 Conn. 291; Patchin v. Swift, 21 Vt. 292; Thompson v'. Blanchard, 3 Comst. 335; Cummings ». Dennett, 26 Me. 397.
2 Leonard v. Vredenburgh, 8 Johns. 29; Maigley v. Hauer, 7 Johns. 341; Elliott v. Giese, 7 Harr. & J. 457.
3 Peacock v. Monk, 1 Ves. 128; Schemerhorn v. Vanderheyden, 1 Johns. 139; Emery v. Chase, 5 Greenl. 232; Clarkson t;. Hanway, 2 P. Wms. 204. But see The King v. Scammonden, 3 T. R. 474; Cutter v. Reynolds, 8 B. Monr. 596; Emmons v. Littlefield, 13 Me. 233.
4 Whitney v. Stearns, 16 Me. 394; Sloan v. Gibson, 4 Mo. 33.
5 2 Black. Comm. 297; Story on Prom. Notes, § 183; Com. Dig. Action on Case. Assumpsit, B. 1, 2, 4, 5, 9, 10; Violett v. Patton, 5 Cranch, 142. 6 "Valuable considerations," says Sir William Blackstone, " are divided
2d. Forbearance; 3d. Assignment of a Chose in Action; 4th. Mutual Promises; 5th. Consideration moving from Third Persons.