Schnell v. Nell
17 Ind. 29 (1861)
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Rule of Law:
A promise is unenforceable for lack of consideration if the purported consideration is merely nominal, based on a moral obligation, or for past services already rendered.
Facts:
- Theresa Schnell, the wife of Zacharias Schnell, made a will before she died.
- In the will, Theresa expressed her desire for J. B. Nell and two others to each receive $200.
- Theresa possessed no property of her own at the time of her death, rendering her will legally inoperative.
- All property was owned by her husband, Zacharias, whom Theresa had dutifully helped in its acquisition during their marriage.
- Motivated by love for his deceased wife and her wishes, Zacharias Schnell signed a written agreement with Nell and the other two individuals.
- In the agreement, Zacharias promised to pay each of them $200.
- The agreement stated that the considerations for his promise were his love for his wife, her past assistance in acquiring property, and a promise from the beneficiaries to pay him one cent.
- The beneficiaries also agreed to relinquish any supposed claims against Zacharias's estate arising from Theresa's void will.
Procedural Posture:
- J. B. Nell filed an action against Zacharias Schnell in an Indiana trial court to enforce the written agreement.
- The trial court overruled Schnell's demurrer to the complaint.
- Schnell filed an answer asserting that the agreement was given for no consideration whatsoever.
- The trial court sustained a demurrer to Schnell's answer, holding that the consideration expressed in the instrument was sufficient.
- Zacharias Schnell, as the appellant, appealed the trial court's ruling to the Supreme Court of Indiana.
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Issue:
Is a promise to pay a sum of money enforceable when the stated considerations are one cent, love and respect for a deceased spouse, and the spouse's past, uncompensated services?
Opinions:
Majority - Perkins, J.
No. A promise to pay money is not legally enforceable when the purported consideration is merely nominal, arises from a moral obligation, or is for past actions. The court analyzed the three considerations offered and found each insufficient. First, the consideration of one cent for a promise to pay $600 is nominal and unconscionable; while inadequacy of consideration generally does not void a contract, this principle does not apply to a mere exchange of fixed-value sums of money. Second, the love and affection Zacharias bore for his deceased wife and her past services are invalid as they constitute past consideration. Third, his wife's inoperative will created no legal obligation, so his promise to fulfill her wishes was based on a moral consideration, which is insufficient to support a contract. Fulfilling the terms of a legally groundless claim, which all parties acknowledged as void, cannot be a valid consideration.
Analysis:
This case is a foundational pillar in contract law, clearly delineating what does not constitute legally sufficient consideration. It solidifies the principle that a promise to make a gift cannot be converted into an enforceable contract by merely reciting nominal or sham consideration. The court's rejection of moral obligation and past consideration reinforces the bargain theory of contracts, which requires a contemporaneous exchange of value. This decision serves as a crucial precedent for distinguishing genuine bargains from gratuitous promises, impacting how courts scrutinize agreements that appear one-sided.
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