Hardesty v. Smith
3 Ind. 39 · Indiana Supreme Court · 1851
Facts
Hardesty sued Smith on sealed notes for the payment of money. The notes were originally made payable to Artemis Wood, then assigned to Isham, and subsequently to Hardesty. Smith pleaded that the sole consideration for the notes was the sale and assignment of a patent right for a lamp improvement from Isham to Smith. Smith claimed this lamp improvement was of no value whatsoever. Smith also alleged that Isham, combining with Wood, falsely and fraudulently represented the lamp's burning time and construction cost.
Procedural history
Hardesty brought a debt action against Smith upon sealed notes. The defendant pleaded two defenses, to which the plaintiff demurred generally. The lower court sustained the demurrer to the second plea, overruled the demurrer to the first plea, and entered a final judgment in the defendant's favor. This court reviewed that judgment, reversing it and remanding the cause.
Issue
Can a defendant avoid payment on promissory notes by claiming the purchased patent right was of no value, or by alleging fraudulent misrepresentations, without having rescinded the contract or offered to return the purchased item?
Holding
The court held that the demurrer to the second plea (fraud) was rightly sustained because the defendant did not offer to return the item. The court further held that the demurrer to the first plea (no value) was wrongly overruled, as the simple fact that the improvement was of no utility is not sufficient to bar a suit on the notes. The judgment of the lower court was reversed.
Rule
Parties of sufficient mental capacity have the right to make their own bargains, and the consideration agreed upon may indefinitely exceed the value of the thing for which it is promised, yet the bargain stands. A detriment or inconvenience, however slight, to one party, or a benefit, however slight, to the other, constitutes legal consideration. Where a purchaser examines an invention and, uninfluenced by fraud, warranty, or mistake of facts, agrees to pay for the right, that conveyance forms a valid consideration. The doctrine of failure of consideration generally rests on fraud and warranty; absent these, or a mistake of facts, parties are bound by their contracts, and a lack of utility alone is not a bar to suit.
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