Murphy, John W., Jr.

English

University of Kentucky

Kentucky Law JournalVolume 42 | Issue 1 Article 61953Contracts--Forbearance of Suit as SufficientConsiderationJohn W. Murphy Jr.University of KentuckyFollow this and additional works at: https://uknowledge.uky.edu/kljPart of the Contracts CommonsRight click to open a feedback form in a new tab to let us know how this document benefitsyou.This Note is brought to you for free and open access by the Law Journals at UKnowledge. It has been accepted for inclusion in Kentucky Law Journal byan authorized editor of UKnowledge. For more information, please contact UKnowledge@lsv.uky.edu.Recommended CitationMurphy, John W. Jr. (1953) "Contracts--Forbearance of Suit as Sufficient Consideration," Kentucky Law Journal: Vol. 42 : Iss. 1 , Article6.Available at: https://uknowledge.uky.edu/klj/vol42/iss1/6KENTucKy LAw JouRNALremoval of her appendix awakened from anesthesia to discover thehorrible fact that her Fallopian tubes were gone. With this fact be-fore it, the jury might believe that, had the woman's stepmother beenconsulted, she would not have consented to the removal of theFallopian tubes at that time by that doctor, that she would have de-sired further medical consultation, possibly with a specialist, beforeaccepting the fact that the tubes could not be saved. Certainly prob-able consent would be difficult to prove in a case like this. Still thedoctor is entitled to the instruction, as he would be in a closer case,such as the Bennan case.RECAPITULATIONThe primary purpose of this note has been to emphasize the needfor a new and defined area in the surgical operations cases, that areabeing here denominated "probable consent." However, two other im-portant proposals are incidentally made. First, that the courts shoulddefine emergency cases so as to emphasize the certainty and not thetime of death or serious bodily ham should the doctor fail to operate.Second, that the courts no longer imply that consent of a parent isnecessary before operating on a child in a case of strict emergency ifit is practicably procurable, it being unjust to suggest that consentcould be denied in such a case.The reader may have inferred that the whole purpose and effectof this note is to give the doctor greater immunity from liability whenhe decides to swing his scalpel. On the contrary, the writer feels thatthe surgeon is notoriously able to bear any financial loss which hemight suffer by reason of the present rule. However, the patientswould be the ultimate beneficiaries of the rules here advanced, forunder these rules they are more nearly assured of maximum surgicalskill.WIIAM A. RicECONTRACTS-FORBEARANCE OF SUIT AS SUFFICIENTCONSIDERATIONConsideration as a requisite for the enforceability of a promise'requires a detriment incurred by the promisee, or a benefit received bythe promisor which has been bargained for as the agreed exchange. 21 GJSMOBE, PRINCIPLES OF THE LA-,v OF CONTRACTS, 81 (1947; Note, 26HAuv. L. REv. 429 (1913).- 1 WILLISTON & THOmpSON, WILLISTON ON CONTRACTS 823, (rev. ed. 1936).NoTEs AND COMMENTSIt is well settled that forbearance or an agreement to forbear prosecu-tion or institution of legal or equitable proceedings to enforce a legalor equitable demand, either absolutely or for a certain time or for areasonable time is sufficient consideration.3 Thus, whenever a claimantis lawfully entitled to sue, his release, promise to accept a satisfaction,promise not to sue, or actual forbearance from suit is sufficient con-sideration for any promise thereby induced. Likewise, whenever onewho is lawfully entitled to defend foregoes such defense and yieldsto the demands of a claimant, any release, promise not to defend, orpromise to give satisfaction which is thereby induced is supported bysufficient consideration. The difficult question for determination is:When, if at all, does one have the right to bring suit on such a claim?Since there is nothing to prevent any person from bringing suit, evenfor purposes of extortion, it might be argued that the forbearance ofany suit is sufficient detriment to establish good consideration. How-ever, merely because one has the power to maintain a suit, even onehe knows to be groundless, does not mean that he has a legal rightto do so. Thus, it would seem that if a claimant honestly believesthat he has the right to prosecute his claim and makes his claim ingood faith without fraud, duress or other illegal purposes, he has givengood consideration by his promise not to sue, whatever the ultimatemerits prove to be.The early English cases did not differentiate claims except toclassify them as either good or bad and held that the forbearance toprosecute an unfounded claim was no legal detriment and was there-fore insufficient consideration to support a promise. The promisee's be-lief in the validity of his claim as well as the fact that the claim wasfairly doubtful in law or fact were irrelevant.4 The test as to whetherthe claim was good or bad was whether or not the claimant, if heproceeded to suit could actually win his suit or whether the courtwould think that he could succeed.5 Thus, the giving up of a ground-less claim was insufficient consideration under all circumstances. Thiscontinued to be the English rule until the case of Longridge v. Dor-ville6 where the court held that if the surrendered claim was in factI WULLISTON & THompsoN, WMLISTON ON CoNTRACTS, 471, (rev. ed. 1936);Carry ON CoN'muars, 49-52 (20th ed. 1947); RST.ATEMENT, CoNTRAcTs sec.75 (1) (b) (1932).'Jones v. Ashburnham, 4 East. 455, 102 Eng. Rep. 905 (1804); Lloyd v.Lee, 1 Stra. 94, 93 Eng. Rep. 406 (1718); Rosyer v. Langdale, Sty. 248, 82 Eng.Rep. 684 (1650); Smith v. Jones, Yelv. 184, 80 Eng. Rep. 122 (1610); Stone v.Wythiopol, Cro. Eliz. 126, 78 Eng. Rep. 383 (1588). A very excellent review ofthe early English cases appears in 13 GA. B. REv. 173 (1935).5 G.Ms roI, PRINcnPLES OF THm LAW OF CoNTRAcTs, 106 (1947)."5 B. & AId. 116, 106 Eng. Rep. 1136 (1821).KENTUcKY LAW JouRNALdoubtful, that is, if either the facts or the law were in doubt, that for-bearance from suit would support a promise, although the claim wasactually invalid.7 Later English cases went further in holding that ifa claim is honestly asserted, is not wholly unreasonable and is notvexatious or frivolous, the actual or promised forbearance of prosecu-tion is valid consideration.8The stages in the evolution 6f the English law are reflected in theAmerican decisions with the exception of the early English view. NoAmerican jurisdiction has ever held that the claim must actually bevalid to be sufficient consideration. A few courts still emphasize thatif forbearance is to constitute sufficient consideration for a promise,the claim must be doubtful in fact or law in the opinion of the court.9This view has little merit since it has a tendency to restrict the freedomof compromise unnecessarily by virtually requiring all who have aclaim to possess the erudition of a learned court of justice in orderto successfully settle their claims out of court. It should be instantlyrepudiated. A number of American jurisdictions have adopted themodem English rule that forbearance to sue constitutes good con-sideration if the claim be honest and bona fide.10 In these jurisdictionsit is not required that the claimant have a reasonable belief as to thevalidity of the claim asserted, only that it be known not to be absurdor importunate. Is it not possible, however, that the party be honestand make his claim in good faith and yet it be unreasonable?This suggests a fourth view that forbearance to assert an invalidclaim or defense is good consideration only if the claimant honestlybelieves his claim to be valid and his belief is reasonable. This viewis now reflected in an increasing number of American jurisdictions andmay be said to represent the weight of authority." It is easy to under-stand why the requirement of the reasonableness of the belief of the'See also Keenan v. Handley, 2 D. & J. 283, 46 Eng. Rep. 884 (1864);Wilby v. Elgee, L. R. 10 C. P. 497 (1875).8 Holsworthy Urban Council v. Holsworthy Rural Council, 2 Ch. 62 (1907);Miles v. New Zealand Co., 32 Ch. Div. 266 (1886); Callisher v. Bischoffsheim,L. R. 5 Q. B. 449 (1870).9 J. H. Gunning v. J. P. Royal, 59 Miss. 45 (1881); Throckmorton v. Robinson,83 S.W. 2d 696 (Tex. Civ. App. 1935).1°B. & W. Engineering Co. v. Beam, 23 Cal. App. 164, 137 P. 624 (1914);Henderson v. Kendrick, 82 Fla. 110, 89 So. 635 (1921); Jansi v. Cervy, 287 Ill.359, 122 N.E. 507 (1919); Sherman v. Werby, 280 Mass. 157, 182 N.E. 109(1932); Addison Miller, Ins. v. Am. Cent. Ins. Co., 189 Minn. 336, 249 N.W. 795(1933); Matter of Kilgannon, 146 Misc. 600, 262 N.Y.S. 510 (1933).'Heath v. Portlatch Lumber Co., 18 Idaho 42, 108 P. 343 (1910); Petersonv. Breitag, 88 Iowa 418, 55 N.W. 86 (1893); Emmittsburg v. Donoghue, 67 Md.383, 10 A. 233 (1887); Taylor v. Weeks, 129 Mich. 233, 88 N.W. 466 (1901);Stanley v. Sumrall, 167 Miss. 714, 147 So. 786 (1933); Flanagan v. Kolsome, 58N.H. 443 (1878); In re Miller's Estate, 279 Pa. 30, 123 A. 646 (1924); Simmonsv. Yoho, 92 W. Va. 703, 115 S.E. 851 (1923).NoTEs AND COwmMNTsclaimant has been added. This makes it more difficult and practicallyimpossible for a dishonest claimant to use his claim for extortion orother illegal purposes and yet does not put any serious impediment inthe path of the honest claimant.A prominent writer has pointed out that even in those jurisdictionswhere the principal stress is upon the honesty and good faith of theclaimant, forbearance is insufficient consideration if the claim re-linquished is so lacking in foundation as to make its assertion incom-patible with both honesty and a reasonable degree of intelligence.' 2Thus, some element of reasonableness in the claim seems to be a factoreven in those jurisdictions using the "good faith" test. This test ofreasonableness should not be based on the ability of the claimant him-self to judge the validity of the claim since he may have no knowledgewhatever of law and may not even be thoroughly acquainted with allthe pertinent facts of the case. It has been suggested that the test tobe applied should be whether a reasonable man with an elementaryknowledge of legal principles, under the circumstances would regardthe claim as a possibly valid one.13The Restatement of Contracts asserts that "the surrender of, or for-bearance to assert an invalid claim or defense by one who has not ahonest and reasonable belief in its possible validity"' 4 is insufficientconsideration. This rule combines the subjective requisite of a bonafide claim with the objective requisite that it must be reasonablydoubtful.It was early settled in Kentucky that an agreement to forbear suiton a clearly groundless claim is not a sufficient consideration for apromise founded thereon, but that it is essential that the claim bedoubtful in law or equity and asserted in good faith.' 5 It was notuntil 1930 that this rule was modified by the famous and leading caseof Forsythe v. Rexroat.16 In that case the plaintiff while walking on asidewalk was struck with a bicycle by the defendant's son. In con-sideration of plaintiff's forbearance, defendant agreed to pay all ex-penses of caring for plaintiffs injuries. Upon the faith of this agree-ment, plaintiff incurred hospital and other expenses amounting to"I WnrM rON & ThomnsoN, WILSTON oN CoNTRcrs, 475-476 (rev. ed.1936).I Id. at 472."lRestatement, Contracts, sec. 76(b) (1932).'Taylor v. Patrick, 4 Ky. (1 Bibb) 168 (1808); Kennedy v. Davis, 5 Ky.(2 Bibb) 343 (1811); Fisher v. May's Heirs, 5 Ky. (2 Bibb) 448 (1811); Sellarsv. Jones, 164 Ky. 458, 175 S.W. 1002 (1915); Spriggs v. Spriggs 28 Ky. L. Rep.944, 90 S.W. 985 (1906); Fain, etc. v. Turner's Admr., 96 Ky. 634, 29 S.W. 629(1895); Gaither v. Bland, 7 Ky. L. Rep. 518 (1886); Cline & Co. v. Templeton,78 Ky. 550 (1880).234 Ky. 173, 27 S.W. 2d 695 (1980).114 KENrcKy LAW JouRNAL$705.00 of 'which defendant only partially reimbursed her. In a suitfor the balance, defendant set up the defense of no consideration. Onappeal, the Kentucky Court of Appeals held that the agreement ofplaintiff to forbear suit was good consideration in that the partiesthemselves in good faith believed that there was liability on the partof the father and that the plaintiffs claim was not so lacking in meritthat it could be declared free of doubt by reasonable men under thesame circumstances.' 7 Considerable weight was placed upon the factthat the son might have been on an errand for the father and thus thefather might have been liable for the negligence of the son, as a prin-cipal under the family purpose doctrine.The Kentucky cases uniformly require an honest belief in theclaim. In a few cases there seems to be an implication that good faithalone may be sufficient' 8 but this is emphatically denied in the caseof Baker v. Vanderpool'9 where the court said:[M]ere good faith and honest belief in an asserted claimis not sufficient to support a compromise. In addition to good faithand honest belief there must be an element of doubt as to the validityof the claim-'the compromise claim must be one about which reason-able men at the time may have entertained substantial doubt.'nThe court does not inquire into the actual merits of the suit for-borne or the claim surrendered, the real test being the reasonablenessof the belief of the claimant and not the actual validity of the claim.The claim may be groundless, but it must not be clearly groundless to'7It should be noted here that the court based their determination as to thereasonableness of plaintiff's belief on the fact that well informed lawyers andreasonable men could and doubtless would have been unable to say that therewas no liability resting on defendant. Earlier cases set forth this test, Robb v.Sherril Russell Lumber Co., 194 Ky. 835, 241 S.W. 64 (1922); Simmons' Exr.v. Hunt, 171 Ky. 897, 188 S.W. 495 (1916); Gray v. U. S. Savings and Loan Co.,116 Ky. 967, 77 S.W. 200 (1903); Bunnell v. Bunnell, 111 Ky. 566, 64 S.W.420 (1901); Creutz v. Heil, 89 Ky. 429, 483, 12 S.W. 926 (1890), but latercases require only that the compromise claim be one about which reasonablemen at the time may have entertained substantial doubt. Baker v. Vanderpool,296 Ky. 663, 178 S.W. 2d 189 (1944); Posey v. Lambert-Grisham Co 197 Ky373, 380, 247 S.W. 30 (1923). It is believed that this "well informeA lawyer"test did not affect the decision of the Forsythe case and was only dictum sincethe court only said that plaintiff's claim was one which well informed lawyerscould regard as doubtful and did not say that they must entertain some doubt asto the validity of plaintiff's claim.'Barr v. Gilmour, 204 Ky. 582, 265 S.W. 6 (1924); Ripy Bros. DistillingCo., v. Lillard, 149 Ky. 726, 149 S.W. 1009 (1912).1296 Ky. 663, 666, 178 S.W. 2d 189, 190 (1944).'Baker v. Vanderpool, 296 Ky. 663, 178 S.W. 2d 189 (1944). SEE ALSO,Murphy v. Henry, 311 Ky. 799, 225 S.W. 2d 662 (1950); Davenport v. Anderson,216 Ky. 22, 287 S.W. 25 (1926); Hardin's Adm'r. v. Hardin, 201 Ky. 310, 256S.W. 417 (1923); Sellars v. Jones, 164 Ky. 458, 175 S.W. 1002 (1915); Creutzv. Heil, 89 Ky. 429, 12 S.W. 926 (1890); Cline & Co. v. Templeton, 78 Ky. 550(1880).NoTEs AND COMNmNTSa reasonable man at the time2l and it is immaterial that the parties insettling the controversy reach a different result than the law wouldhave reached or that the merits ultimately prove to be on the otherside.22It is submitted that the Kentucky court is in line with the majorityand better view and that it follows the rule of the Restatement of Con-tracts in requiring both the subjective requisite of a bona fide claimand the objective requisite that it must be reasonably doubtful. It hasbeen said that it is the duty of courts to encourage rather than dis-courage parties in resorting to a compromise as a mode of adjustingconflicting claims and the nature or extent of the rights of each partyshould not be closely scrutinized.23 So far as it can be done legally andproperly, the courts should support such agreements having as theirobject an amicable settlement of doubtful rights. Litigation is alwaysburdensome and the courts should look favorably upon settlement outof court.JOHN W. MURPHY, JR.UNINCORPORATED ASSOCIATIONS AS BENEFICIARIES OFPRIVATE TRUSTSIt is generally recognized that an unincorporated association canbe the beneficiary of a private trust,' although the courts have usedseveral theories to reach this conclusion. Courts are faced with twoproblems in upholding a private trust made in favor of an unin-corporated association. First, since the trust is a private one and musthave a definite beneficiary, who holds the equitable title? Secondly,does such a trust contravene the rule against private indestructibleAdequacy of the consideration given is not inquired into so long as thereis something of detriment to one party or benefit to the other, however slight,Nuckols v. Nuckols, 293 Ky. 603, 169 S.W. 2d 828 (1943); Dexter v. Duncan,205 Ky. 344, 265 S.W. 832 (1924); Barr v. Gilmour, 204 Ky. 582, 265 S.W. 6(1924); even though the amount is greatly disproportionate to what a partywould be legally bound to pay. Bates v. Todd's Heirs, 14 Ky. 177 (1823)."Murphy v. Henry, 311 Ky. 799, 225 S.W. 2d 662 (1949); Forsythe v.Rexroat, 234 Ky. 173, 27 S.W. 2d 695 (1930); Berry v. Berry, 183 Ky. 481, 209S.W. 855 (1919); Gray v. U. S. Savings and Loan Co., 116 Ky. 967, 77 S.W.200 (1903); Mills Heirs v. Lee, 22 Ky. (6 Mon.) 91, 97 (1827).Moore v. Sutton, 311 Ky. 174, 223 S.W. 2d 737 (1949); Childs v. Hamilton,308 Ky. 203, 214 S.W. 2d 106 (1948); Nuckols v. Nuckols, 293 Ky. 603, 169 S.W.2d 828 (1943); Provident Life and Accident Ins. Co., of Chattanooga, Tenn., v.Ramsey, 256 Ky. 126, 75 S.W. 2d 781 (1934).'P-H Wi.LLs, ESTATES AND TRUSTS SEV. see. 3663 (1950).

Contracts--Forbearance of Suit as Sufficient Consideration

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Contracts--Forbearance of Suit as Sufficient Consideration

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