of illegality." In most of these cases the right of the privileged party is to avoid the whole agreement, restoring the original status of both parties, but in case of infancy, and sometimes in other cases the privileged party may avoid performance of his own promise though keeping the benefit of the performance of the other party.

The rule exemplified by these cases must be regarded as an exception to the general principles of consideration. This may readily be seen by supposing that the terms of a voidable obligation such as the law imposes on promisors of the classes just enumerated, be put in words and then made as a promise by an adult under no disability. It will be obvious that the promise is insufficient to support a counter-promise. Whether the infant's promise be translated as meaning-I promise to perform if I choose, or I promise to perform if I conclude to ratify, or I promise to perform unless I choose to avoid the whole agreement on both sides, in any event it is clear that the promise is illusory since its performance is by its very terms at the option of the promisor, and he can exercise this option without depriving himself of anything to which he was entitled before the formation of the agreement. The same line of argument is applicable to any voidable or unenforceable promise. That a promise which in terms reserves the option of performance to the promisor is insufficient to support a counter-promise is well settled.98 And the promise is no more effectual because the condition contained in it is in the form a condition subsequent rather than a condition precedent. As has been seen an agreement which one party reserves the right to cancel at his pleasure, cannot create a contract.99

97 See infra, §§ 1630, 1631.

98 Roberts v. Smith, 4 H. & N. 315; Montreal Gas Company v. Vasey, [1900] A. C. 595; Oakland Motor Car Co. v. Indiana Automobile Co., 201 Fed. 499, 121 C. C. A. 319; Velie Motor Car Co. v. Kopmeier Motor Co.,

194 Fed. 324, 114 C. C. A. 284; Vogel v. Pekoc, 157 Ill. 339, 42 N. E. 386, 30 L. R. A. 491; Lydick v. Baltimore & Ohio R. Co., 17 W. Va. 427.

99 Velie Motor Car Co. v. Kopmeier Motor Co., 194 Fed. 324, 114 C. C. A. 284. See supra, § 45.

§ 106. An insufficient bilateral agreement may sometimes by performance on one side become a valid unilateral contract.

As is shown elsewhere 1 each promise in a bilateral contract must be sufficient consideration for the other, or both promises are invalid. Accordingly if either promise is too indefinite for enforcement, or if either promise for any reason is insufficient consideration, both promises fail. But a promise that was originally too indefinite, may by performance become definite and as the other party to the bargain must be regarded as continuously assenting to receive such performance in return for his own promise, a valid unilateral contract arises on receipt of such performance. So a bilateral agreement illegal in the inception, because it was made on Sunday, may by performance on one side on Monday become a valid unilateral contract. So if the promise on one side of a bilateral agreement is invalid as consideration because it promises nothing detrimental to the promisor or beneficial to the promisee, though both promises are consequently invalid, yet if performance is made of the counter-promise and that performance was something detrimental to the promisor or beneficial to the promisee, the promise which was itself insufficient as consideration, thereupon becomes binding, since sufficient consideration has now been received for it, and it is no longer necessary that the promise which was insufficient as consideration, should serve as such. This is because only promises need consideration. Transfers, or other actual performances may be made without consideration. Unilateral contracts must be supported by consideration only on one side. So in the case supposed, the performance which has been rendered needs no consideration though the promise to give it originally did. Since the performance has been rendered under no mistake of fact, it cannot be recovered back, and being received as the consideration for a promise, that promise now becomes binding. It certainly cannot lie in the mouth of the promisor to say that since the promise, which he has made is of such slight value he will not perform 3 See infra, §§ 1704, 1707.

1 Supra, § 103.

See supra, § 49.

it at all though he has been paid for doing so. So while a promise void for incapacity of the promisor will not support a counter-promise, if the void promise is actually performed, the performance may become sufficient consideration to support the counter-promise. And other instances may be found where a bilateral agreement originally unenforceable gives rise, when performed on one side, to a binding unilateral contract.

§ 107. Written as well as oral promises need consideration.

It was suggested in several cases in the latter part of the eighteenth century that the requirement of consideration was for the sake of evidence only, and that therefore written contracts needed no consideration. This notion, however, was promptly overthrown by the House of Lords which held that "if contracts be merely written and not specialties they are. parol and a consideration must be proved;" and except as a consequence of statutes, it is everywhere law that the same rules of consideration apply to written as well as to oral con- . tracts.9

In some States which have by statute changed the rules of the common law in regard to sealed instruments, written

4 In Ward v. Goodrich, 34 Col. 369, 82 Pac. 701, 2 L. R. A. (N. S.) 201, 114 Am. St. Rep. 167, the court said: "while it is settled that the promising to do, or the doing of that which the promisor is already legally bound to do, does not as a rule constitute consideration for a reciprocal promise, or support a reciprocal undertaking given by the promisee, it by no means follows that such promise may not be enforced against such promisor by the promisee, although its enforcement compels the performance of that which was already a legal obligation."

5 Yerkes v. Richards, 170 Pa. 346, 32 Atl. 1089; Bowker v. Harris, 30 Vt. 424.

165.

Detroit R. Co. v. Forbes, 30 Mich.

7 This suggestion was first made by Lord Mansfield in Pillans v. Van

Mierop, 3 Burr. 1663. Lord Mansfield was trained in the Civil Law; and the Common Law doctrine of Consideration was evidently distasteful to him. This is shown not simply by his suggestion in regard to written contracts but by his support of the doctrine of moral consideration. The suggestion in Pillans v. Van Mierop was followed in Williamson v. Losh, Chitty on Bills (9th ed.), 75 n. Langdell Cas. Cont. 186.

8 Rann v. Hughes, 7 T. R. 350, n. (a). See also Brown v. Adams, 1 Stew. (Ala.) 51, 18 Am. Dec. 36; Cook v. Bradley, 7 Conn. 57, 18 Am. Dec. 79; Thacher v. Dinsmore, 5 Mass. 299, 4 Am. Dec. 61; People v. Shall, 9 Cow. 778; Clark v. Small, 6 Yerg. 418; Beverleys v. Holmes, 4 Munf. 95.

9 See cases in this chapter, passim.

contracts have been partially elevated to the position of specialty agreements. 10

§ 108. The promises in negotiable paper require consideration between a promisor and his immediate prom

isee.

The rule of the common law was well settled prior to the enactment of the Negotiable Instruments Law in accordance with the statement at the head of this section, so that a drawer or maker was not liable to the payee if he proved that the instrument was given without consideration;" 11 nor was an indorser liable to his immediate indorsee; 12 nor either drawer, maker or indorser even to a remote holder who was neither himself a holder for value, nor a successor to the rights of such a holder. 13 But the promise of an acceptor of a bill even though made subsequent to the plaintiff's acquisition of the instrument is regarded as supported by the consideration received by the drawer.14 The Negotiable Instruments Law 15 was doubtless intended to codify the common law on the subject, and in the main unquestionably does so. There are, however, distinctions both at common law and under the statute between negotiable paper and ordinary simple written contracts with reference to consideration even as between immediate parties. In the first place "every negoti

10 See infra, § 218.

11 Holliday v. Atkinson, 5 B. & C. 501, s. c., 8 Dowl. & R. 163; Abbott v. Hendricks, 1 M. & G. 791; Simpson Centenary College v. Tuttle, 71 Iowa, 596, 33 N. W. 74; Loudermilk v. Loudermilk, 93 Ga. 443, 21 S. E. 77; Mader v. Cool, 14 Ind. App. 299, 42 N. E. 945, 56 Am. St. Rep. 304; Klein v. Keyes, 17 Mo. 326; Clement v. Reppard, 15 Pa. St. 111. Many decisions holding the gift of the maker's own check or note ineffectual are collected in 27 L. R. A. (N. S.) 308. A contrary decision where the court failed to observe the distinction between an attempted gift of the donor's own note and a gift of a third person's

note is Harman v. Harman's Est., 167 Ia. 106, 149 N. W. 72.

12 Hoopes v. Northern Nat. Bank, 102 Fed. 448, 450, 42 C. C. A. 436; Platt v. Snipes, 43 Ark. 21; Peale v. Addicks, 174 Pa. 543, 34 Atl. 201; Bank of the Ohio Valley v. Lockwood, 13 W. Va. 392, 425, 31 Am. Rep. 768.

13 Russ Lumber, etc., Co. v. Muscupiabe Land, etc., Co., 120 Cal. 521, 52 Pac. 995, 65 Am. St. Rep. 186; Skinner v. Raynor, 95 Iowa, 536, 64 N. W. 601; Hale v. Aldaffer, 5 Kan. App. 40, 47 Pac. 320, 52 Pac. 194.

14 Spurgin v. McPheeters, 42 Ind. 527; National Park Bank v. Saitta, 127 N. Y. App. Div. 624, 111 N. Y. Supp. 927.

15 Secs. 24-28. See infra, § 1146.

able instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value," 16 though when evidence is introduced tending to show that no consideration was given some courts hold that the ultimate burden of establishing its existence is upon the holder." Further, though any consideration sufficient to support a simple contract is also sufficient for a promise on a negotiable instrument, 18 some things are sufficient to support a promise on negotiable paper which are not sufficient consideration for other promises. Thus an ordinary oral or written promise to pay an antecedent debt does not create a new obligation; 19 but a negotiable instrument is unquestionably sufficiently supported by an agreement to receive it in discharge of an antecedent debt.20

Whether an instrument, or a signature on an instrument, given to secure a prior debt of a third party is binding if the creditor makes no agreement to extend or discharge the indebtedness or to forbear action upon it is not clear from the words of the statute.21 If under the statute such a instrument or signature is binding, the law to that extent has been changed; for prior to the enactment of the statute it was clear that after a negotiable instrument had been delivered for sufficient consideration, one who subsequently

16 N. I. L., Sec. 24, infra, § 1146; Carter v. Butler, 264 Mo. 306, 174 S. W. 399; First Nat. Bank v. Stallo, 160 N. Y. App. Div. 702, 145 N. Y. Supp. 747; Murphy v. Skinner's Estate, 160 Wis. 554, 152 N. W. 172.

17 Lombard v. Byrne, 194 Mass. 236, 238, 80 N. E. 489; Connors Bros. v. Sullivan, 220 Mass. 600, 108 N. E. 503; Abrahamson v. Steele, 176 N. Y. App. D. 865, 163 N. Y. S. 827; Ginn v. Dolan, 81 Ohio St. 121, 90 N. E. 141, 135 Am. St. Rep. 761; First Nat. Bank v. Paff, 240 Pa. 513, 87 Atl. 841. In these cases the Negotiable Instruments Law was not cited. There are, however, contrary decisions. In re Chismore's Est., 175 Iowa, 495, 496, 157 N. W. 139; Piner v. Brittain, 165 N. C. 401, 81 S. E. 462; State Bank v.

Morrison, 85 Wash. 182, 147 Pac. 875; and under Secs. 24 and 28 of the Negotiable Instruments Law it seems clear that whatever the law may have been previously, the burden is now thrown upon the defendant not only of introducing some evidence of lack of consideration, but of ultimately establishing such lack by a preponderance of evidence. See infra, § 1146. 18 N. I. L., Sec. 25, infra, § 1146.

19 Though doubtless formerly it did. See infra, § 143.

20 N. I. L. Sec. 25, infra, § 1146; Wallabout Bank v. Peyton, 123 N. Y. App. Div. 727, 108 N. Y. 42; infra, § 1922.

21 See In re Thompson, 165 Cal. 290, 131 Pac. 1045, also infra, § 1146, for a discussion of the point.