United States District Court for the Southern District of New York - 45 F.2d 428
In Re Greene (1930) involved a woman suing her former, married lover for breaking their contract.
Greene, a married man, was in an adulterous relationship with a woman. He paid her substantial sums of money and paid for a $70,000 house on Long Island for her. When their relationship ended in April 1926, they came to a written agreement by which Greene would pay her $1,000 a month for the remainder of their lives, grant her a $100,000 life insurance policy on his life (and $100,000 directly to her if the policy lapsed), and pay her rent for four years on an apartment she had leased. Greene also declared that he had no interest in the Long Island house and that he would no longer be liable for taxes or other charges on the property. The woman agreed to release Greene from all claims she had against him. In return, the woman agreed to pay $1 and “other good and valuable consideration.”
Greene declared bankruptcy, prompting the woman to file a $375,000 claim on his estate based on the alleged contract. Greene objected and a hearing was held before a referee. The referee held the claim valid and dismissed Greene’s objections. Greene petitioned the court to review the referee’s decision.
The court threw out the case, deciding that a valid contract did not exist because it lacked consideration (an essential element of contracts). The court explained that the woman did not sacrifice anything significant by moving to his land and her $1 payment was insufficient to support his promise.
The court also noted that the promise went against public policy as it stemmed from an extramarital affair. This case is important because it highlights the requirement of consideration, which is the exchange of something valuable between the parties and their willingness to enter into a contract. Without consideration, a promise cannot be legally enforced, even if it is made sincerely and with good intentions. The case also shows that courts will not support promises that break public policy, such as immoral or illegal actions. Lastly, the case displays the distinction between nominal consideration (a token amount) and adequate consideration (a fair and reasonable amount that shows the promise's true value).
The trustee in bankruptcy objected to a claim filed by a woman for $375,700 against the bankrupt's estate, based on an alleged contract. The claimant and the bankrupt had lived in adultery for several years, and the bankrupt had given her substantial sums of money. They executed a written instrument under seal, alleged to be a binding contract, wherein the bankrupt agreed to pay her $1,000 a month during their joint lives, assign her a $100,000 life insurance policy, pay the rent for four years on an apartment, and release himself from liability for mortgage interest, taxes, and other charges on a Long Island property. The majority opinion found the claim invalid as the promise to pay a woman for past cohabitation is void for lack of consideration, and the motive for the promise does not validate it. The issue in the case is one of consideration, not illegality, and past illicit intercourse is not considered as consideration. The damages awarded for failure to pay $1,000 a month were excessive as the bankrupt's obligation was to pay only during his and the claimant's joint lives, not solely for the claimant's life. The promise to marry made while the bankrupt was still married is illegal, and no claim could arise from it. The bankrupt was never chargeable for taxes and other charges on the Long Island house, and such payments were either gratuitous or were the contemporaneous price of the continuance of his illicit intercourse with the claimant.
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