Hamer v. Sidway
Encyclopedia
| Hamer v. Sidway | ||||||||
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 New York Court of Appeals |
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| Argued February 24, 1891 Decided April 14, 1891 |
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| Holding | ||||||||
| Respondent's forbearance of legal rights on the promises of future benefit made by Petitioner could constitute valid consideration. | ||||||||
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Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891), was a noted decision by the New York Court of Appeals
New York Court of Appeals
The New York Court of Appeals is the highest court in the U.S. state of New York. The Court of Appeals consists of seven judges: the Chief Judge and six associate judges who are appointed by the Governor to 14-year terms...
(the highest court in the state), New York, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Hamer v. Sidway is an important case in American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
law which established that forbearence of legal rights (voluntarily abstaining from one's legal rights) on promise
Promise
A promise is a commitment by someone to do or not do something.In the law of contract, an exchange of promises is usually held to be legally enforceable, according to the Latin maxim pacta sunt servanda.- Types :...
s of future benefit
Benefit
Benefit or Benefits may refer to:* Benefit concert, any activity performed for a charitable purpose* Benefit , an album by Jethro Tull* "Benefits" , a 2009 episode of the show How I Met Your Mother...
made by other parties can constitute valid consideration
Consideration
Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
(the element of exchange generally needed to establish a contract's enforceability 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).
Facts
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...
), brought suit against Franklin Sidway, the executor
Executor
An executor, in the broadest sense, is one who carries something out .-Overview:...
of the estate
Estate (law)
An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person...
of William E. Story I, (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...
), for the sum of $5,000. On March 20, 1869, William E. Story had promised his nephew, William E. Story II, $5,000 if his nephew would abstain from drinking alcohol
Alcohol
In chemistry, an alcohol is an organic compound in which the hydroxy functional group is bound to a carbon atom. In particular, this carbon center should be saturated, having single bonds to three other atoms....
, using tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
, swearing
Profanity
Profanity is a show of disrespect, or a desecration or debasement of someone or something. Profanity can take the form of words, expressions, gestures, or other social behaviors that are socially constructed or interpreted as insulting, rude, vulgar, obscene, desecrating, or other forms.The...
, and playing cards or billiards
Billiards
Cue sports , also known as billiard sports, are a wide variety of games of skill generally played with a cue stick which is used to strike billiard balls, moving them around a cloth-covered billiards table bounded by rubber .Historically, the umbrella term was billiards...
for money until the nephew reached 21 years of age. Story II accepted the promise of his uncle and did refrain from the prohibited acts until he turned the agreed-upon age of 21. After celebrating his 21st birthday on January 31, 1875, Story II wrote to his uncle and requested the promised $5,000. The uncle responded to his nephew in a letter dated February 6, 1875 in which he told his nephew that he would fulfill his promise. Story I also stated that he would prefer to wait until his nephew was older before actually handing over the (then) extremely large sum of money (according to an online inflation calculator, $5000 in 1890 would be worth approximately $118,000). The elder Story also declared in his letter that the money owed to his nephew would accrue interest while he held it on his nephew's behalf. The younger Story consented to his uncle's wishes and agreed that the money would remain with his uncle until Story II became older. William E. Story I died on January 29, 1887 without having transferred any of the money owed to his nephew. Story II had meanwhile transferred the $5,000 financial interest to his wife; Story II's wife had later transferred this financial interest to Louisa Hamer on assignment
Assignment (law)
An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee...
. The elder Story's estate refused to grant Hamer the money, believing there was no binding contract due to a lack of consideration. As a result, Hamer sued the estate's executor, Franklin Sidway.
Opinion of the court
The Court of Appeals reversed and directed that the judgment of the trial court be affirmed, with costs payable out of the estate. JudgeJudge
A judge is a person who presides over court proceedings, either alone or as part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open...
Alton Parker (later Chief Judge of the Court of Appeals), writing for a unanimous court, wrote that the forbearance of legal rights by Story II, namely the consensual abstinence from "drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should become 21 years of age" constituted consideration in exchange for the promise given by Story I. Because the forbearance was valid consideration given by a party (Story II) in exchange for a promise to perform by another party (Story I), the promisee was contractually obligated to fulfill the promise.
Parker cited the Exchequer
Exchequer
The Exchequer is a government department of the United Kingdom responsible for the management and collection of taxation and other government revenues. The historical Exchequer developed judicial roles...
Chamber’s 1875 definition of consideration: "A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other." The executor of Story I’s estate, Sidway, was therefore legally bound to deliver the promised $5,000 to whoever currently held the 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....
in the sum, which by the time of the trial was Hamer.
Influence of the case
Hamer is very common reading in first-year contracts courses at AmericanUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
law schools. The view of contracts operative in Hamer was grounded in a particular theory of consideration, the "benefit-detriment theory" (as exemplified in the Exchequer Chamber's 1875 definition). However, since the early twentieth century (especially as embodied in the First and Second Restatements of Contracts), a dominant view has been the "bargain theory." According to the "bargain theory," a typical contract must consist of a bargained-for exchange where the consideration offered by one party (promisee) induces the making of a promise by another party (promisor), and the promisee, having been induced by the promise, gives this consideration. Thus Hamer was decided on the basis of a legal theory that has largely been replaced or supplemented by newer theory, meaning that similar cases may be viewed differently by contemporary courts.