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