Davis & Co. v. Morgan
43 S.E. 732, 117 Ga. 504, 61 L.R.A. 148 (1903)
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Rule of Law:
A promise to pay additional compensation for the performance of a pre-existing contractual duty is not supported by sufficient consideration and is therefore unenforceable. A past transaction for which the obligation has been fully satisfied cannot serve as consideration for a new promise.
Facts:
- Davis & Company hired Morgan under a one-year contract for a salary of $40 per month.
- During the contract period, Morgan received a job offer from another company for $65 per month.
- Morgan informed Davis of the offer, stating he would not leave without consent.
- Davis then promised to pay Morgan an extra $120 at the end of the year if Morgan stayed and completed the contract term satisfactorily.
- Two or three weeks before the end of the term, Davis & Company discharged Morgan after he took a trip to Florida, which the company claimed was without their consent.
Procedural Posture:
- Morgan sued Davis & Company in a trial court for the promised extra compensation.
- A jury returned a verdict in favor of Morgan.
- The trial court denied Davis & Company's motion for a new trial.
- Davis & Company (as exceptor/appellant) appealed the decision to the Supreme Court of Georgia.
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Issue:
Is an employer's promise to pay an employee additional compensation for completing the work required by their original employment contract supported by sufficient legal consideration?
Opinions:
Majority - Lamar, J.
No. A promise to pay more for work that one is already legally bound to perform under an existing contract is not supported by sufficient consideration and is therefore unenforceable. Morgan was already obligated by the original contract to work for the entire year at the agreed-upon salary. The subsequent promise by Davis & Company to pay more was for the exact same services Morgan was already bound to perform. The employer received no new benefit, and Morgan incurred no new detriment; thus, there was no consideration for the new promise. Such an agreement is a 'nudum pactum' (a naked promise) and is void. The court rejected the argument that a moral obligation could support the promise, clarifying that for a moral obligation to serve as consideration, it must be founded upon an antecedent legal obligation that has become unenforceable, which was not the case here.
Analysis:
This case is a classic application of the pre-existing duty rule, a fundamental concept in contract law. The ruling reinforces that a valid contract modification requires new consideration from both parties, not just a one-sided promise to pay more for the same performance. It prevents contractual extortion, where one party threatens to breach their obligations to extract a more favorable deal. The decision also narrowly defines the scope of 'moral obligation' as consideration, limiting it to situations where a prior legal duty existed, thereby maintaining a clear and predictable standard for contract enforceability.
