Sell v. Steller

53 N.J. Eq. 397

• Court: New Jersey Court of Chancery
• Decided: May 15, 1895
• Status: Published

Opinion

The Chancellor.

The case, shortly stated, is that the complainant’s husband was indebted, to the defendant, and the defendant desired to obtain the security which life insurance of h.is debtor would afford him, and, being aware that he could not get that security without the co-operation of his debtor, proposed that the debtor should apply for and obtain such insurance in an indicated association, for a designated sum and in a specified manner, promising him that if he would do so, he, the defendant, would pay the assessments necessary to keep the insurance alive, and, upon the death of the debtor and the receipt of the proceeds of the insurance by the defendant, would first, out of such proceeds, reimburse himself his expenditures in keeping the insurance alive with interest, and next pay himself his debt with interest, and then pay the complainant whatever remained of the proceeds. The debtor agreed to the proposition, and, relying upon the promise of the defendant, applied for and obtained the ini surance in the association, for the sum and in the manner proposed. He died. The proceeds of the insurance have come to the defendant, and, after paying the agreed payments to himself, he has a balance in his hands which the debtor’s widow demands from him.

His promise to pay her that balance was not a mere voluntary undertaking. It was conditioned upon the debtor doing that which he hoped would secure his debt — that is, apply for and obtain insurance. In performing that condition the debtor gave valuable consideration for the promise, because he secured that which benefited the defendant in providing a possible means for the recovery of his debt, and, at the same time, at the defendant’s. request, he put himself to the inconvenience, trouble and expenditure of time in applying for and securing the insurance.

Mr. Justice Depue, in Conover v. Stillwell, 5 Vr. 57, said that “ a consideration emanating from some injury or inconvenience to the one party, or from some benefit to the other party, is a valuable consideration.” And in Traphagen v. Voorhees, 17 Stew. Eq. 31, Vice-Chancellor Van Fleet said, “a very slight advantage to one party, or a trifling inconvenience to the other, is a sufficient consideration to support a contract.” Prior to the latter decision the same distinguished judge had, in Day v. Gardner, 15 Stew. Eq. 202, defined consideration in the same way.

The courts will not inquire into the adequacy of consideration in absence of the suggestion of fraud or deceit.

I think that, in this instance, there was sufficient consideration, both in the benefit the defendant received and in the inconvenience the complainant’s husband suffered, to support the promise' in question.

When the proceeds of the insurance reached the defendant’s hands they became' a trust fund which he was to apply to the satisfaction of his demands already specified and to the payment of the surplus thereof to the complainant. The enforcement of this trust by a beneficiary under it is sought in this suit. That she may maintain this action is consequent upon her beneficial interest, and is a well-recognized right. In Cubberly v. Cubberly, 6 Stew. Eq. 86; affirmed on appeal, 6 Stew. Eq. 591, Chancellor Runyon said : “ If one person makes a promise to another, on lawful consideration, for the benefit of a third person, such third person may maintain an action, even at law, upon it. Joslin v. Car Company, 7 Vr. 141." The citation of other cases in support of this principle is unnecessary.

The demurrer will be overruled.