Question 1:

Do you think your local water company is a monopoly in that area?Use 2 of the basic characteristics of monopolies (number of sellers, type of product, and barriers to entry) in your answer.

Question 2:

Case Briefing

To fully understand the law with respect to business, need to be able to read and understand court decisions. Can use a method of case analysis that is calledbriefing. There is a fairly standard procedure that can follow when "brief" any court case. Must first read the case opinion carefully. Understand the case, and then make a brief of it.

Although the format of the brief may vary, typically it will present the essentials of the case under headings such as those listed below.

1. Citation.Give the full citation for the case, including the name of the case, the date it was decided, and the court that decided it.
2. Facts.Briefly indicate (a) the reasons for the lawsuit; (b) the identity and arguments of the plaintiff(s) and defendant(s), respectively; and (c) the lower court's decisionif appropriate.
3. Issue.Concisely phrase, in the form of a question, the essential issue before the court. (If more than one issue is involved, may have twoor even morequestions here.)
4. Decision.Indicate herewith a "yes" or "no," if possiblethe court's answer to the question (or questions) in the Issue section above.
5. Reason.Summarize as briefly as possible,in own words, the reasons given by the court for its decision (or decisions) and the case or statutory law relied on by the court in arriving at its decision.

Instructions:

Make a Case Brief forCase 3:Hammer v Sidway

LouisaW.Hamer,Appellant,vFranklinSidway,asExecutor,etc.,Respondent.

Court of Appeals of New York Argued February 24, 1981 Decided April 14, 1891

124 NY 538 CITE TITLE AS: Hamer v Sidway

OPINION OF THE COURT

PARKER, J.

The question which provoked the most discussion by counsel on this appeal, and whichlies at the foundation of plaintiff's asserted right of recovery, is whether by virtue of a contractdefendant's testator William E. Story became indebted to his nephew William E. Story, 2d, onhis twenty-first birthday in the sum of five thousand dollars. The trial court found as a factthat 'on the 20th day of March, 1869, * * * William E. Story agreed to and with William E.[*545] Story, 2d, that if he would refrain from drinking liquor, using tobacco, swearing, andplaying cards or billiards for money until he should become 21 years of age then he, the saidWilliam E. Story, would at that time pay him, the said William E. Story, 2d, the sum of $5,000for such refraining, to which the said William E. Story, 2d, agreed,' and that he 'in all thingsfully performed his part of said agreement.'

The defendant contends that the contract was without consideration to support it, and,therefore, invalid. He asserts that the promisee by refraining from the use of liquor andtobacco was not harmed but benefited; that that which he did was best for him to doindependently of his uncle's promise, and insists that it follows that unless the promisor wasbenefited, the contract was without consideration. A contention, which if well founded, wouldseem to leave open for controversy in many cases whether that which the promisee did oromitted to do was, in fact, of such benefit to him as to leave no consideration to support theenforcement of the promisor's agreement. Such a rule could not be tolerated, and is withoutfoundation in the law. The Exchequer Chamber, in 1875, defined consideration as follows: 'A valuable consideration in the sense of the law may consist either in some right, interest, profitor benefit accruing to the one party, or some forbearance, detriment, loss or responsibilitygiven, suffered or undertaken by the other.' Courts 'will not ask whether the thing which formsthe consideration does in fact benefit the promisee or a third party, or is of any substantialvalue to anyone. It is enough that something is promised, done, forborne or suffered by theparty to whom the promise is made as consideration for the promise made to him.' (Anson'sPrin. of Con. 63.)

'In general a waiver of any legal right at the request of another party is a sufficientconsideration for a promise.' (Parsons on Contracts, 444.)

'Any damage, or suspension, or forbearance of a right will be sufficient to sustain apromise.' (Kent, vol. 2, 465, 12th ed.)

Pollock, in his work on contracts, page 166, after citing the definition given by theExchequer Chamber already quoted, [*546] says: 'The second branch of this judicialdescription is really the most important one. Consideration means not so much that one partyis profiting as that the other abandons some legal right in the present or limits his legalfreedom of action in the future as an inducement for the promise of the first.'

Now, applying this rule to the facts before us, the promisee used tobacco, occasionallydrank liquor, and he had a legal right to do so. That right he abandoned for a period of yearsupon the strength of the promise of the testator that for such forbearance he would give him$5,000. We need not speculate on the effort which may have been required to give up the useof those stimulants. It is sufficient that he restricted his lawful freedom of action withincertain prescribed limits upon the faith of his uncle's agreement, and now having fullyperformed the conditions imposed, it is of no moment whether such performance actuallyproved a benefit to the promisor, and the court will not inquire into it, but were it a propersubject of inquiry, we see nothing in this record that would permit a determination that theuncle was not benefited in a legal sense. Few cases have been found which may be said to beprecisely in point, but such as have been support the position we have taken.

In Shadwell v. Shadwell (9 C. B. [N. S.] 159), an uncle wrote to his nephew as follows:

'MY DEAR LANCEYI am so glad to hear of your intended marriage with EllenNicholl, and as I promised to assist you at starting, I am happy to tell you that I will pay to you 150 pounds yearly during my life and until your annual income derived from yourprofession of a chancery barrister shall amount to 600 guineas, of which your own admissionwill be the only evidence that I shall require.

'Your affectionate uncle,

'CHARLES SHADWELL.

'It was held that the promise was binding and made upon good consideration.

In Lakota v. Newton, an unreported case in the Superior Court of Worcester,Mass., the complaint averred defendant's promise that 'if you (meaning plaintiff) will leaveoff drinking for a year I will give you $100,' plaintiff's assent thereto, performance of thecondition by him, and demanded judgment therefor. Defendant demurred on the ground,among others, that the plaintiff's declaration did not allege a valid and sufficient considerationfor the agreement of the defendant. The demurrer was overruled.

In Talbott v. Stemmons (a Kentucky case not yet reported), the step- grandmother of theplaintiff made with him the following agreement: 'I do promise and bind myself to give mygrandson, Albert R. Talbott, $500 at my death, if he will never take another chew of tobaccoor smoke another cigar during my life from this date up to my death, and if he breaks thispledge he is to refund double the amount to his mother.' The executor of Mrs. Stemmonsdemurred to the complaint on the ground that the agreement was not based on a sufficientconsideration. The demurrer was sustained and an appeal taken therefrom to the Court ofAppeals, where the decision of the court below was reversed. In the opinion of the court it issaid that 'the right to use and enjoy the use of tobacco was a right that belonged to the plaintiffand not forbidden by law. The abandonment of its use may have saved him money orcontributed to his health, nevertheless, the surrender of that right caused the promise, andhaving the right to contract with reference to the subject-matter, the abandonment of the usewas a sufficient consideration to uphold the promise.' Abstinence from the use of intoxicatingliquors was held to furnish a good consideration for a promissory note in Lindell v. Rokes (60Mo. 249).

The cases cited by the defendant on this question are not in point. In Mallory v. Gillett(21 N. Y. 412); Belknap v. Bender (75 id. 446), and Berry v. Brown (107 id. 659), the promisewas in contravention of that provision of the Statute of Frauds, which declares void all promises to answer for the debts of third persons unless reduced to writing. In Beau[*548]mont v. Reeve (Shirley's L. C. 6), and Porterfield v. Butler (47 Miss. 165), the question waswhether a moral obligation furnishes sufficient consideration to uphold a subsequent expresspromise. In Duvoll v. Wilson (9 Barb. 487), and In re Wilber v. Warren (104 N. Y. 192), theproposition involved was whether an executory covenant against incumbrances in a deedgiven in consideration of natural love and affection could be enforced. In Vanderbilt v.Schreyer (91 N. Y. 392), the plaintiff contracted with defendant to build a house, agreeing toaccept in part payment therefor a specific bond and mortgage. Afterwards he refused to finishhis contract unless the defendant would guarantee its payment, which was done. It was heldthat the guarantee could not be enforced for want of consideration. For in building the housethe plaintiff only did that which he had contracted to do. And in Robinson v. Jewett (116 N. Y.40), the court simply held that 'The performance of an act which the party is under a legalobligation to perform cannot constitute a consideration for a new contract.' It will be observedthat the agreement which we have been considering was within the condemnation of theStatute of Frauds, because not to be performed within a year, and not in writing. But thisdefense the promisor could waive, and his letter and oral statements subsequent to the date offinal performance on the part of the promisee must be held to amount to a waiver. Were itotherwise, the statute could not now be invoked in aid of the defendant. It does not appear onthe face of the complaint that the agreement is one prohibited by the Statute of Frauds, and,therefore, such defense could not be made available unless set up in the answer. (Porter v.Wormser, 94 N. Y. 431, 450.) This was not done.

In further consideration of the questions presented, then, it must be deemed establishedfor the purposes of this appeal, that on the 31st day of January, 1875, defendant's testator wasindebted to William E. Story, 2d, in the sum of $5,000, and if this action were founded on thatcontract it would be barred by the Statute of Limitations which has been pleaded, but on thatdate the nephew wrote to his uncle as follows:

'DEAR UNCLEI am now 21 years old to-day, and I am now my own boss, andI believe, according to agreement, that there is due me $5,000. I have lived up to the contractto the letter in every sense of the word.'

A few days later, and on February sixth, the uncle replied, and, so far as it is material tothis controversy, the reply is as follows:

'DEAR NEPHEWYour letter of the 31st ult. came to hand all right saying that you hadlived up to the promise made to me several years ago. I have no doubt but you have, forwhich you shall have $5,000 as I promised you. I had the money in the bank the day you was21 years old that I intended for you, and you shall have the money certain. Now, Willie, Idon't intend to interfere with this money in any way until I think you are capable of takingcare of it, and the sooner that time comes the better it will please me. I would hate very muchto have you start out in some adventure that you thought all right and lose this money in oneyear. * * * This money you have earned much easier than I did, besides acquiring good habitsat the same time, and you are quite welcome to the money. Hope you will make good use ofit. * * *

W. E. STORY. 'P. S.You can consider this money on interest.'The trial court found as afact that 'said letter was received by said William E. Story, 2d, who thereafter consented thatsaid money should remain with the said William E. Story in accordance with the terms andconditions of said letter.' And further, 'That afterwards, on the first day of March, 1877, withthe knowledge and consent of his said uncle, he duly sold, transferred and assigned all hisright, title and interest in and to said sum of $5,000 to his wife Libbie H. Story, who thereafterduly sold, transferred and assigned the same to the plaintiff in this action.'

We must now consider the effect of the letter, and the nephew's assent thereto. Were therelations of the parties thereafter that of debtor and creditor simply, or that of trustee [*550]and cestui que trust? If the former, then this action is not maintainable, because barred bylapse of time. If the latter, the result must be otherwise. No particular expressions arenecessary to have a trust. Any language clearly showing the settler's intention is sufficient ifthe property and disposition of it are definitely stated. (Lewin on Trusts, 55.)

A person in the legal possession of money or property acknowledging a trust with theassent of the cestui que trust, becomes from that time a trustee if the acknowledgment befounded on a valuable consideration. His antecedent relation to the subject, whatever it mayhave been, no longer controls. (2 Story's Eq. 972.) If before a declaration of trust a party bea mere debtor, a subsequent agreement recognizing the fund as already in his hands andstipulating for its investment on the creditor's account will have the effect to have a trust.(Day v. Roth, 18 N. Y. 448.)

It is essential that the letter interpreted in the light of surrounding circumstances mustshow an intention on the part of the uncle to become a trustee before he will be held to have become such; but in an effort to ascertain the construction which should be given to it, we arealso to observe the rule that the language of the promisor is to be interpreted in the sense inwhich he had reason to suppose it was understood by the promisee. (White v. Hoyt, 73 N. Y.505, 511.) At the time the uncle wrote the letter he was indebted to his nephew in the sum of$5,000, and payment had been requested. The uncle recognizing the indebtedness, wrote thenephew that he would keep the money until he deemed him capable of taking care of it. Hedid not say 'I will pay you at some other time,' or use language that would indicate that therelation of debtor and creditor would continue. On the contrary, his language indicated that hehad set apart the money the nephew had 'earned' for him so that when he should be capable oftaking care of it he should receive it with interest. He said: 'I had the money in the bank theday you were 21 years old that I intended for you and you shall have the money certain.' Thathe had set apart the money is further [*551] evidenced by the next sentence: 'Now, Willie, Idon't intend to interfere with this money in any way until I think you are capable of takingcare of it.' Certainly, the uncle must have intended that his nephew should understand that thepromise not 'to interfere with this money' referred to the money in the bank which he declaredwas not only there when the nephew became 21 years old, but was intended for him. True, hedid not use the word 'trust,' or state that the money was deposited in the name of William E.Story, 2d, or in his own name in trust for him, but the language used must have been intendedto assure the nephew that his money had been set apart for him, to be kept withoutinterference until he should be capable of taking care of it, for the uncle said in substance andin effect: 'This money you have earned much easier than I did * * * you are quite welcome to.I had it in the bank the day you were 21 years old and don't intend to interfere with it in anyway until I think you are capable of taking care of it and the sooner that time comes the betterit will please me.' In this declaration there is not lacking a single element necessary for thecreation of a valid trust, and to that declaration the nephew assented.The learned judge whowrote the opinion of the General Term, seems to have taken the view that the trust wasexecuted during the life-time of defendant's testator by payment to the nephew, but as it doesnot appear from the order that the judgment was reversed on the facts, we must assume thefacts to be as found by the trial court, and those facts support its judgment.

The order appealed from should be reversed and the judgment of the Special Termaffirmed, with costs payable out of the estate.

All concur.

Order reversed and judgment of Special Term affirmed.