Batsakis v. Demotsis
Encyclopedia
Batsakis v. Demotsis, 226 S.W.2d 673 (Court of Appeals of Texas, El Paso), was a 1949 decision by the Texas Court of Appeals, United States
which was an appeal from a judgment of the 57th judicial District Court of Bexar County, Texas
. In the case, Batsakis (Plaintiff
) sued Demotsis (Defendant
) to collect on a promise Demotsis had made, in 1942 in war
-torn Greece
, to pay at a later date to Batsakis $2,000 dollars with interest
at the rate of 8% per annum from April 2, 1942 in exchange for 500,000 drachmae
given at the time of the execution of the contract. On appeal, the court found for Batsakis.
occupation
of Greece
in World War II
, Demotsis was in severe financial straits. This period in Greek history was marked by extensive starvation
and malnutrition
. Hundreds of thousands of Greeks died as a result of wartime living conditions. http://lawprofessors.typepad.com/contractsprof_blog/2005/11/today_in_histor_11.html According to scholars, the apparent contract made between the two parties would most likely have resulted in punishment
or even death
at the hands of the Germans
.http://www.aalscontracts.org/Cases/Batsakis.htm
Demotsis asked Batsakis for money
, which she needed to buy food
for her family
. In exchange, Demotsis promised in writing (in the form of a letter) to give Batsakis $2,000 dollars, plus 8% annual interest, after the war, or sooner, if she was able to regain access to her assets in the United States
(Demotsis held property and funds in Texas but had no direct access to them as a result of the war). In the putative letter from Demotsis to Batsakis, written in the Greek language
, Demotsis stated that she had received $2,000 from Batsakis. The following is an English translation of the letter:
What she actually received however was 500,000 Greek drachmae which had a market exchange value of approximately $25 at the time of the execution of the contract. After Demotsis refused to repay the loan once the war was over, Batsakis sued and Demotsis asserted as her defense that the contract was unenforceable due to a lack of consideration (the element of exchange generally necessary to make a contract valid in common law
systems) and that Batsakis's delivery of 500,000 drachmae, with a putative value of $25, could not be adequate consideration for her promise of $2,000, making the contract unenforceable. The trial court declared the contract enforceable and awarded Batsakis $750 plus interest and Batsakis appealed the judgment at which time the Court of Appeals affirmed the trial court's decision but modified the damages to $2,000 "with interest thereon at the rate of 8% per annum from April 2, 1942 and ordered that such judgment will bear interest at the rate of 8% per annum until paid on $2,000.00 thereof and on the balance interest at the rate of 6% per annum." The Court of Appeals reasoned that the consideration given by Demotsis for Batsakis's promise of 500,000 drachmae could not be considered inadequate under state
law as she had received "exactly what she contracted for." The appellate court found the consideration legally sufficient and went on to state that the adequacy or inadequacy of the consideration did not bear on the enforceability, since mere inadequacy of consideration will not void a contract. The appellate court noted that, in common law systems including the American
system, courts generally review the legal sufficiency of the consideration in a contract but have historically refused ordinarily to inquire into the adequacy of the consideration, whether the transaction was generally a fair or equivalent exchange.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
which was an appeal from a judgment of the 57th judicial District Court of Bexar County, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
. In the case, Batsakis (Plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
) sued Demotsis (Defendant
Defendant
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...
) to collect on a promise Demotsis had made, in 1942 in war
War
War is a state of organized, armed, and often prolonged conflict carried on between states, nations, or other parties typified by extreme aggression, social disruption, and usually high mortality. War should be understood as an actual, intentional and widespread armed conflict between political...
-torn Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
, to pay at a later date to Batsakis $2,000 dollars with interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
at the rate of 8% per annum from April 2, 1942 in exchange for 500,000 drachmae
Greek drachma
Drachma, pl. drachmas or drachmae was the currency used in Greece during several periods in its history:...
given at the time of the execution of the contract. On appeal, the court found for Batsakis.
Facts and case history
In 1942, during the GermanNazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
occupation
Military occupation
Military occupation occurs when the control and authority over a territory passes to a hostile army. The territory then becomes occupied territory.-Military occupation and the laws of war:...
of Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
in World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, Demotsis was in severe financial straits. This period in Greek history was marked by extensive starvation
Starvation
Starvation is a severe deficiency in caloric energy, nutrient and vitamin intake. It is the most extreme form of malnutrition. In humans, prolonged starvation can cause permanent organ damage and eventually, death...
and malnutrition
Malnutrition
Malnutrition is the condition that results from taking an unbalanced diet in which certain nutrients are lacking, in excess , or in the wrong proportions....
. Hundreds of thousands of Greeks died as a result of wartime living conditions. http://lawprofessors.typepad.com/contractsprof_blog/2005/11/today_in_histor_11.html According to scholars, the apparent contract made between the two parties would most likely have resulted in punishment
Punishment
Punishment is the authoritative imposition of something negative or unpleasant on a person or animal in response to behavior deemed wrong by an individual or group....
or even death
Death
Death is the permanent termination of the biological functions that sustain a living organism. Phenomena which commonly bring about death include old age, predation, malnutrition, disease, and accidents or trauma resulting in terminal injury....
at the hands of the Germans
Germans
The Germans are a Germanic ethnic group native to Central Europe. The English term Germans has referred to the German-speaking population of the Holy Roman Empire since the Late Middle Ages....
.http://www.aalscontracts.org/Cases/Batsakis.htm
Demotsis asked Batsakis for money
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
, which she needed to buy food
Food
Food is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
for her family
Family
In human context, a family is a group of people affiliated by consanguinity, affinity, or co-residence. In most societies it is the principal institution for the socialization of children...
. In exchange, Demotsis promised in writing (in the form of a letter) to give Batsakis $2,000 dollars, plus 8% annual interest, after the war, or sooner, if she was able to regain access to her assets in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
(Demotsis held property and funds in Texas but had no direct access to them as a result of the war). In the putative letter from Demotsis to Batsakis, written in the Greek language
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...
, Demotsis stated that she had received $2,000 from Batsakis. The following is an English translation of the letter:
Piraeus - April 2, 1942
Mr. George Batsakis
Konstantinou Diadohou #7
Piraeus
Mr. Batsakis:
I state by my present (letter) that I received today from you the amount of two thousand dollars ($2,000.00) of United States of America money, which I borrowed from you for the support of my family during these difficult days and because it is impossible for me to transfer dollars of my own from America.
The above amount I accept with the expressed promise that I will return to you again in American dollars either at the end of the present war or even before in the event you might be able to find a way to collect them (dollars) from my representative in America whom I will write and give him an order relative to this. You understand until the final execution (payment) to the above amount an eight per cent interest will be added and paid together with the principal.
I thank you and I remain yours with respects.
The recipient,
(Signed) Eugenia The. Demotsis.
What she actually received however was 500,000 Greek drachmae which had a market exchange value of approximately $25 at the time of the execution of the contract. After Demotsis refused to repay the loan once the war was over, Batsakis sued and Demotsis asserted as her defense that the contract was unenforceable due to a lack of consideration (the element of exchange generally necessary to make a contract valid in common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
systems) and that Batsakis's delivery of 500,000 drachmae, with a putative value of $25, could not be adequate consideration for her promise of $2,000, making the contract unenforceable. The trial court declared the contract enforceable and awarded Batsakis $750 plus interest and Batsakis appealed the judgment at which time the Court of Appeals affirmed the trial court's decision but modified the damages to $2,000 "with interest thereon at the rate of 8% per annum from April 2, 1942 and ordered that such judgment will bear interest at the rate of 8% per annum until paid on $2,000.00 thereof and on the balance interest at the rate of 6% per annum." The Court of Appeals reasoned that the consideration given by Demotsis for Batsakis's promise of 500,000 drachmae could not be considered inadequate under state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
law as she had received "exactly what she contracted for." The appellate court found the consideration legally sufficient and went on to state that the adequacy or inadequacy of the consideration did not bear on the enforceability, since mere inadequacy of consideration will not void a contract. The appellate court noted that, in common law systems including the American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
system, courts generally review the legal sufficiency of the consideration in a contract but have historically refused ordinarily to inquire into the adequacy of the consideration, whether the transaction was generally a fair or equivalent exchange.
See also
- Chappell & Co Ltd v Nestle Co LtdChappell & Co Ltd v Nestle Co LtdChappell & Co Ltd v Nestle Co Ltd [1960] AC 87 is an important English contract law case, where the House of Lords confirmed the traditional doctrine that consideration must be sufficient but need not be adequate.-Facts:...
[1960] AC 87, an equivalent case confirming the rule in English contract lawEnglish contract lawEnglish contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States... - Evans v Llewellin (1787) 1 Cox CC 333, where a man's share in his sister's estate was sold for very little without advice or reflection, the transaction was set aside.
External references
- ContractsProf Blog: Today in History: Batsakis v. Demotsis
- Batsakis v. Demotsis (at University of California, BerkeleyUniversity of California, BerkeleyThe University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
Law School - Boalt Hall) - Batsakis (discussion on Association of American Law Schools, Section on Contracts website)
- Case Brief at Lawnix.com