Case: In Re Green

Parties: Claimant - woman who had a relationship with respondent, a married man
(who is now bankrupt)

Procedural History: Claimant filed proof of claim for $375,700 based on an

alleged contract, against respondent's (bankrupt) estate. Trustee in bankruptcy
objected to the claim. Hearing was held before a referee, and referee held in
favor of the claimant, that the claim was valid & dismissed the objections.
Bankrupt petitioned for review by a judge.

Facts: Claimant and bankrupt had an illicit relationship. They discontinued

their relationship in April 1926, and executed a contract where bankrupt would (1)
pay claimant $1k/month, (2) assign a $100k life insurance policy on his life to
her, (3) pay rent for 4 years on an apt she leased. In the contract, it stated
that the bankrupt was no longer responsible for paying the mortgage interest,
taxes, etc. on claimant's property, that was purchased by respondent. Claimant
released respondent from all claims she had on him. As consideration, claimant
paid bankrupt $1, and other good and valuable considerations. Bankrupt paid per
the contract, but stopped in August 1928.

Issue: Although the contract is legal, was their consideration to validate it?

Holding: No Consideration. Referee's order reversed.

Reasoning: (1) $1 nominal consideration, and it was never shown to have actually
been paid
(2) "other good and valuable considerations" - none were shown to exist
(3) Claimant released bankrupt from all claims - never had any claims on him (he
promised to marry her, but this promise is unenforceable because it is illegal -
he was already married)
(4) Claimant says bankrupt no longer had to pay interest/taxes on property, but it
was never his responsibility to begin with b/c property belonged to her.
(5) Although parties intended on making a valid agreement, there was no
consideration.