Lang v. Johnson

Eastman, J. A good consideration is essential to the validity of all contracts. It is the foundation upon which all legal agreements and undertakings rest. Without a good considera^ tion a contract is a mere nudum pactum, not binding in law, however it may be in conscience, and cannot be enforced. The price that is paid, or the motive of the contract, which goes to form and make up the consideration, must also be in itself lawful, or else the contract is void. And such is the general doctrine, whether the agreement be verbal or in writing. 2 Black. Com. 444; Comyn on Contracts, 6, 7; 2 Kent’s Com. 463; Burnet v. Bisco, 4 Johns. 235; Rann v. Hughes, 7 Term Rep. 350; Thatcher v. Dinsmore, 5 Mass. 301; Com. Ins. Co. v. Whitney, 1 Met. Rep. 21; Cook v. Bradley, 7 Conn. Rep. 57. The items which the defendant seeks to have allowed in offset, are charged as commissions in procuring money for the plaintiffs ; but the charges are based upon a verbal agreement by the plaintiffs to pay the amount claimed; it being, as the defendant alleges, for extra interest paid by him in obtaining the money. It appears by the finding of the auditor, that on the 17th day of December, 1838, the parties entered into a written contract, by which the plaintiffs agreed to sell and deliver to the defendant all the lumber of a certain description that could be manufactured at their mills for the term of one year, at prices stipulated by the parties. The plaintiffs by this agreement bound themselves to furnish the defendant with all the lumber that they could make ; they contracted to do all within their power, and if there was any breach of this contract the defendant had his remedy on the same. About the time this contract was executed, the defendant advanced to the plaintiffs the sum of $1000, for which he took their notes, with sureties for all but $100. By this arrange — 308 — ment the defendant had procured the plaintiffs’ written obligation to furnish all the lumber they could make, and had also obtained security for most of the money advanced in anticipation of receiving the lumber. The money was, in fact, a pre-payment for the lumber, upon security given, and probably formed an inducement with the plaintiffs for entering into the written contract. But in addition to the written contract and the notes, a further agreement was entered into at the time the notes were given, by which the plaintiffs were to pay the thousand dollars in lumber, although the notes, by their terms, were to be paid in cash. This agreement, however, was verbal, and being made at the time the notes were given, can upon no princple of law be enforced. The loan was by its terms payable in money. A tender of the money would at any time have answered the demand and defeated a suit upon the notes. And parol evidence of the verbal agreement, whereby the character of the notes would be changed in a material point, was entirely inadmissible. This question has been discussed and decided' at this term, in Hoyt v. French, ante, page 198; and we then held, and applied the principle to a promissory note, that a parol agreement, made at the time of the execution of a written contract, by which the terms of the contract are changed, could not be given in evidence by the parties thereto, to change the contract. The only obligations then that could legally be enforced against the plaintiffs, were their notes payable in cash, and their written agreement to furnish all the lumber that could be manufactured by them. The verbal agreement to pay the notes in lumber Jiad no legal binding force upon them. But the plaintiffs, finding themselves unable to manufacture lumber to the extent of the thousand dollars, the defendant then, for the first time, made known the fact that he had hired the money, and was paying^ interest thereon at the rate of twelve per cent, per annum. Upon this, the plaintiffs agreed that in respect to such portion of the thousand dollars as they did not pay in lumber, they would pay to the defendant whatever he had paid and should pay for the use of it; but the only considera — 309 — tion for this agreement was, as the auditor finds, the release by the defendant of the plaintiffs’ verbal obligation to pay the notes in lumber. Inasmuch, however, as this obligation to pay the notes in lumber was not binding upon the plaintiffs, and was such as could not be enforced, it was consequently an obligation that could form no legal and valid consideration to any contract which they might make. The agreement, then, to pay the extra interest being without consideration, was, upon the principles first stated, void; and the charge for the commissions, being founded upon that agreement, is equally void. The fact that the plaintiffs agreed to pay the extra interest at a subsequent and independent time from the making of the notes, does not aid the defendant, because the agreement being without any legal consideration, the time when it was made cannot affect the character of the consideration so as to give it validity. The result then is, that there must be judgment against the defendant for the full amount found by the auditor, and interest. Judgment for the plaintiffs.