Sunday, December 1, 2013

In re Greene case brief

In re Greene case brief summary
45 F.2d 428 (S.D.N.Y. 1930)


CASE SYNOPSIS
Claimant mistress filed a proof of claim against the debtor's estate based on a written agreement, to which the trustee of the estate objected. The referee in bankruptcy held that the agreement between the mistress and the debtor was valid and dismissed the objections. The trustee petitioned for review of the referee's order, which was granted.

CASE FACTS
The debtor, who was married, had intimate relations with the mistress for several years. The mistress claimed that under a written agreement, the debtor promised to pay her $ 1,000 a month during their joint lives, to assign her a life insurance policy on his life, and to pay her rent on an apartment she leased. The referee in bankruptcy held that the mistress' claim was valid based on the agreement and the trustee's objections were dismissed.

DISCUSSION

  • On review, the court held that the entire claim was void and that the damages allowed for failure to pay the mistress $ 1,000 a month were excessive. 
  • The court found that the agreement was invalid for lack of consideration because past illicit intercourse was not sufficient consideration. 
  • There was no consideration for the debtor's promises beyond past cohabitation. 
  • The $ 1 paid by the mistress was nominal and could not support an executory promise to pay hundreds of thousands of dollars. 
  • The referee's order was reversed.

CONCLUSION
The court reversed the referee's order and issued an order declaring the agreement between the mistress and the debtor invalid for lack of consideration.

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