Drake v. Bell

Unknown Court
55 N.Y.S. 945 (1899)
ELI5:

Rule of Law:

A subsequent promise to pay for a material benefit that the promisor previously received is enforceable, as the moral obligation to pay for the benefit constitutes sufficient consideration.


Facts:

  • A plaintiff performed work for a defendant.
  • The work conferred a valuable benefit upon the defendant.
  • The defendant had no prior legal obligation to pay for this work, as it was not initially requested.
  • After receiving the benefit of the work, the defendant made a promise to pay the plaintiff for it.
  • The defendant later refused to honor this promise to pay.

Procedural Posture:

  • The plaintiff sued the defendant in a court of first instance to enforce the defendant's promise to pay for work already performed.

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Issue:

Does a subsequent promise to pay for a previously received, unrequested material benefit constitute an enforceable contract, despite the absence of a pre-existing legal obligation?


Opinions:

Majority - Gaynor, J.

Yes, a subsequent promise to pay for a previously received benefit is an enforceable contract. The court holds that a promise to pay for antecedent value received by the promisor from the promisee is binding, even if no enforceable obligation ever existed before the promise was made. The court distinguishes between two classes of enforceable promises based on moral obligation: (1) those that revive a former, legally enforceable obligation (e.g., a debt barred by the statute of limitations), and (2) those where the promisor received a past valuable consideration, creating a moral obligation that supports the new promise. This case falls into the second category. The court rejects the narrow view that only promises reviving once-enforceable debts are valid, arguing that promises based on a received material benefit are not 'naked pacts' (promises to pay something for nothing) and that justice requires their enforcement.



Analysis:

This decision represents a significant exception to the traditional contract law rule that 'past consideration is no consideration.' By enforcing a promise based on a previously conferred benefit, the court broadens the 'moral obligation' doctrine beyond merely reviving debts that were once legally enforceable. This establishes a precedent that a material benefit received in the past can serve as valid consideration for a subsequent promise to pay. This principle, often called the 'material benefit rule,' influences modern contract law by allowing courts to enforce promises that prevent unjust enrichment, thereby aligning legal outcomes more closely with principles of equity and fairness.

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