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'Equivocal acts, however, which do not clearly evince a purpose, with complete knowledge of the fraud to retain the property as his own, will not defeat the right of the person defrauded to rescind. The act must be unequivocal and must show an election to retain the property, after discovering the deceit, before the right to rescind is gone.

"In the present case the right to claim a rescission had been fully perfected by the appellee, by tendering back everything that had been received, and by offering to place the fraudulent vendor in statu quo. That the plaintiff below afterwards received money arising from the sale of some of the assets of the firm in no way militates against his right to compel the rescission since it does not appear that the property was sold in the course of the business of the firm, and the money received was fully accounted for without loss to the appellant. One who has perfected his right to rescind a fraudulent contract cannot lose it by merely taking care of the property received, or by preserving it in case it is of a perishable nature, unless what he does is done with the intent to confirm the contract. He is not bound to preserve perishable property, but if he acts in good faith in preventing reasonable apprehended loss or destruction and waste of the property, his perfected right of rescission will not be lost in a court of equity, if he fairly accounts for the property without loss to the vendor, and places him in statu quo as nearly as may be. Pierce v. Wilson, 34 Ala. 596; Neblett v. Macfarland, 92 U. S. 101 (23 L. ed. 471); Wharton, Cont. sec. 285.

"Where subsequent acts are relied upon as a defense in a case where fraud is clearly established, it is said the act must stand upon the clearest evidence, and must evince a purpose to waive or forgive the fraud, and must amount to a clear election not to rescind. If what is done is merely for the purpose of saving the plaintiff from further loss, without any purpose to give up whatever right he may have either at law or in equity to rescind, the right or rescission will not be affected. Montgomery

v. Pickering, 116 Mass. 227; Morse v. Royal, 12 Ves. Jr. 355-373,"

Question 82: As a general rule if a party who has a right to avoid a contract for fraud, deals with it as his own, may he afterwards disaffirm? Why? In the above case what qualifications are made of this rule?

(Note: Remedies for Fraud. In the current chapter, the subject of fraud or deceit is treated from its effect upon the binding character of the contract, and the thought developed that the contract is voidable only and not void, and becomes binding by ratification, and thereafter the right to rescind is gone. Rescission may, of course, be by way of defense in a suit brought upon the contract against the defrauded party, if he has not ratified the contract.

But a defrauded party has, at his election, in lieu of rescission an action in tort for the deceit, alleging damages, and recovering judgment for actual injury sustained, for instance in case of a purchase of property, the difference in the property as represented and as it is.)

A. Theory and Nature.

CHAPTER 10.

CONSIDERATION.

B. Examples of Consideration.

A. Theory and Nature.

§ 81. Consideration defined; a necessary element in simple contract. § 82. Inadequacy of consideration.

§ 81. Consideration defined; a necessary element in simple contract.

Case 83. Rann v. Hughes, 7 Term Reports (Eng.), 346.

Facts: A suit against an administratrix upon a written promise by her, not under seal, to pay a debt of the deceased, no consideration appearing to support her promise.

Point Involved: Is a written, unsealed promise, which causes no detriment to the promisee, that is, in response to which the promisee parts with nothing, and in no way sustains a change of condition, enforceable?

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LORD CHIEF BARON SKINNER: * It is undoubtedly true that every man is by the law of nature bound to fulfill his engagements. It is equally true that the law of this country supplies no means, nor affords any remedy, to compel the performance of an agreement made without sufficient consideration; such agreement is nudum pactum ex quo non oritur actio; and whatsoever may be the maxim in the civil law, it is in the last mentioned sense only that it is to be understood in our law.

"All contracts are by the law of England distinguished into agreements by specialty, [contracts under seal] and

agreements of parol [contracts not under seal]; nor is there any such third class as counsel have endeavored to maintain as contracts in writing. If they be merely written and not specialties, they are parol and a consideration must be proved.

* * *99

(Held: The defense of no consideration was good.)

Question 83: What, in early English law, were the two great classes of contracts? If a promise was in writing and not under seal, was it enforceable? What would have to be true of it to be enforceable?

(Note: Whether a promise under seal is enforceable without consideration in modern law, is a question deferred for later discussion. See Chapter 12. As most commercial contracts are not under seal, and as there is a modern tendency to ignore the distinction between sealed and unsealed agreements we may ourselves ignore it for the present and simply consider in this chapter that a promise not under seal is not enforceable without consideration.)

Case 84. Page, Contracts, Sec. 274, 276.

"A valuable consideration is some legal right acquired by the promisor in consideration of his promise, or forborne by the promisee in consideration of such promise. A common form of stating the same principle is that a valuable consideration for a promise may consist of a benefit to the promisor, or a detriment to the promisee.

"The use of 'benefit' and 'detriment' in this connection need explanation. While correct if properly understood, it is liable to misconstruction. 'Benefit' does not refer to any pecuniary gain arising out of the transaction nor 'detriment' to any pecuniary loss.

'Benefit' as used in this rule means that the promisor has, in return for his promise, acquired some legal right to which he would not otherwise have been entitled; 'detriment' means that the legal right which he would otherwise have been entitled to exercise.

(276) We observe that in most cases that something that is the 'benefit' to the promisor, is also a 'detriment' to the promisee, the former acquiring what

the latter parts with. This, however, is not necessary. It is sufficient if there is a 'benefit' to the promisor, without any 'detriment' to the promisee, *. It is equally sufficient if there is a 'detriment' to the promisee without any 'benefit' to the promisor.

Question 84: Define consideration? What is the legal meaning of the word 'benefit,' and 'detriment'? Is it necessary that there be both?

(Note to Case 84: A consideration may be simply thought of merely as a "detriment" to the promisee. It is generally of no moment whether it is a benefit to the promisor. Notice the case of Hamer v. Sidway, post, as an illustration. When we say it is a detriment to the promisee we simply mean that a party to whom a promise has been made (that is, a promisee) may enforce it if he has sustained a legal detriment, that is, has given up something to which he is legally entitled (or promised to give it up). This promisee may be also a promisor. It is that fact which confuses the student. If he is also a promisor, why not a detriment to the promisor? Because he is enforcing a promise made to him and not by him. He may show the promise made by him as the consideration for the promise made to him. The making of this promise, or its performance, is the detriment which he sustains as promisee. He may of course not be a promisor as where his side was merely an act or where he is no longer promisor because he has performed.)

Case 85. Hamer v. Sidway, 124 N. Y. 538.

Facts: A, uncle of B, promised B, who was then a minor, that if B would refrain from drinking, using tobacco, swearing and playing cards or billiards until 21 years of age, he would pay B $5,000. To this B assented. The promisor is now dead and one Sidway, who has secured B's claim, seeks to enforce it against the executor of A's estate.

Point Involved: If one induces another by a promise of reward to pursue a certain way of life, which is of no benefit of the promisor and possibly of much actual benefit to the promisee, does the acceptance of such promise constitute a legal detriment to such promisee?