Illegal Contracts. - Restraints Of Trade

I endeavoured to explain in the last lecture what it is that the law of England recognizes as a consideration sufficient to support a promise without deed. I stated that any benefit to the person who makes the promise, or any loss, trouble, or disadvantage undergone by or charge imposed upon the person to whom it is made, will satisfy the rule of law in this respect. In order to render this as clear as possible, I am about, before proceeding to the next branch of the subject, to illustrate it by mentioning a few decided cases, in which certain considerations have been held sufficient to support the promises founded on them.

It has been frequently decided, that, if one man have a legal or equitable right of suit against another, his forbearance to enforce that legal or equitable right of suit is a sufficient consideration for a promise either by the person liable to him or *by any third person, either to satisfy the claim on which that light of suit is founded, or to do some other and collateral act. Thus, where (a) the plaintiff in an action of assumpsit stated in his declaration that he was the assignee of a bond for 728 2s. 6d., in which the defendant was the obligor, and that, in consideration that the plaintiff would receive payment on certain specified days, and forbear proceeding in the meanwhile, the defendant had promised to pay on those days; after a verdict for the plaintiff, it was objected, in arrest of judgment, that there was no consideration for the promise; for that, if an action had been brought in the name of the obligee of the bond, the agreement of the assignee to forbear would have been no defence, upon a ground which I have already sufficiently explained, namely, that an obligation by deed cannot be discharged by an agreement without deed. The Court, however, decided that the consideration was sufficient; "for," said the Lord Chief Justice, "although the agreement to forbear would not be pleadable to an action in the name of the obligee, yet, unless the plaintiff did forbear according to his agreement, he would not be able to sue on the defendant's promise." Thus, again, where (b) the plaintiff, who had been appointed by the Court of Chancery a receiver of the debts and *moneys of a firm, agreed to give time of payment to a person who owed money to the firm, in consideration of which a third person promised to guarantee the debt; in an action againt the third person, it was objected that there was no sufficient consideration for his promise; the Court of Common Pleas, however, decided that there was. In another case the plaintiff had obtained judgment against Elizabeth Mackenzie for 57 debt, and 65s. costs; and, in consideration that the plaintiff would forbear to execute a fieri facias on her goods, the defendant undertook to pay him 107 in three days. It was objected, that there was no consideration, or, at least, no sufficient consideration : but Lord Tenterden said, "It is true the plaintiff might not perhaps have been entitled to recover to the full extent of 107, though, it is to be observed, he might have levied the cost of the execution in addition to the sum given by the verdict. But he had a right at least to levy 60; and if, in consideration of his forbearing that, the defendant promised to pay him the larger sum;-if the inconvenience of an execution against these goods at the time in question was so great, that the defendant thought proper to buy it off at such an expense, I do not see that the consideration is insufficient for the promise" (c)1

(a) Morton v. Burn, 7 A. & E. (34 E. C. L. R.) 19.

(b) Willatts v. Kennedy, 8 Bing. (21 E. C. L. R.) 5; Parker v. Leigh, 2 Stark. (3 E. C. L. R.) 229 : Atkinson v. Bayntun, 1 Bing. N. C. (27 E. C. L. R.) 444.

(c) Smith v. Algar, 1 B. & Ad. (20 E. C. L. R.) 603.

1 Forbearance to sue or proceed, has always been held a sufficient consideration: Hamaker v. Eberly, 2 Binn. 506; Johns v. Potter, 5 S. & R. 519; Lonsdale v. Brown, 4 Wash. C. C. 148; Clark v. Russell, 3 Watts 213; Downing v. Funk, 5 Rawle, 69; Silvis v. Ely, 3 W. & S. 420; Kean v. M'Kinsey, 2 Pa. St. 30; Dundas v. Sterling, 4 lb. 73. But if the creditor has not the legal right to sue, at any time during which he promises to forbear suit, the promise to pay in consideration of such forbearance is without consideration, and consequently void: Martin v. Black, 20 Ala. 309. In Caldwell v. Heitshu, 9 W. & S. 51, the term " further forbearance," as the consideration expressed in a written guarantee, was construed to mean forbearance, for a convenient or reasonable time, taking into view in its computation as an element the period which had heretofore been permitted to elapse, without enforcing payment; and what is a reasonable or convenient time, the Court must determine. Forbearance to sue a debt due and payable, upon receiving a personal promise of payment from the assignee in pais of the debtor, is evidence from which a jury may infer an agreement to forbear which is a good consideration for the promise : Boyd v. Freize, 5 Gray, 553. In order to constitute a valid contract of forbearance of suit, it is necessary that it should be definite and certain as to the terms of forbearance and the period of it: Garnett v. Kirkman, 33 Miss. 389. The promise of A. to pay the debt of B. in consideration of forbearance is not binding, unless accepted by the promisee. To make it binding both must be bound: Shupe v. Galbraith, 32 Pa. St. 10. A promise in consideration of forbearance to pay the debt of an infant, who ratifies the contract after arriving at full age, is valid and binding on the promisor: Kuns v. Young, 34 lb. 60. If the promisee perform the thing required, though not bound by the agreement to do it, the performance is a consideration and the promisor is bound: Crawford v. Avery, 35 Miss. 205. A promise to pay money in consideration of forbearance to sue when there is no legal cause of action is void: Palfrey v. Portland R. R. Co., 4 Allen,55. See also Steadman v. Guthrie, 4 Metc. (Ky.) 147; McCelvy v. Noble, 13 Rich. 330; Sharpe v. Rogers, 12 Minn. 174: Mechanics'Bank v. Wixson, 42 N. Y. 438.-s. 198