Batsakis v. Demostis PDF

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Batsakis v. Demostis Friday, September 16, 2011

10:15 AM

Citation Batsakis (π) v. Demotsis (∆) Texas Court of Civil Appeals 226 S.W.2d 673 (1949)

Procedural Posture 1. Texas Court of Civil Appeals; appellant has appealed on grounds that the amount the jury ordered he be paid is a fair amount less than what the actual contract stipulated. Trial Court was 57th Judicial district court of Bexar county.

Facts 1. Mr. Batsakis (π) loaned Ms. Demotsis (∆) 500,000 drachmae (Greek currency) on 04/02/1942. 2. She sent him a reply letter stating that she would pay him $2,000 dollars with 8% interest per year when she had access to her funds in Texas again. 3. This was during World War II. The Germans had systematically looted Greece resulting in a devastating famine that probably killed around or more than 400,000 people. Inflation during this time drove the price of bread from 70 drachmas to 2,350. The value of the drachmas compared to the dollar was at the point that 500,000 drachmae was equivalent to $25 USD. 4. π knew of ∆’s plight. That’s why she wrote the letter to pay him so much money. She needed it to survive. 5. When she was able to pay him, she ended up giving him back his $25 dollars – he sued. 6. Trial court founded for π stating that he should be owed $750 principal with the 8% interest per annum making it a total of $1163. Π appealed. He wanted more.

Question 1. Was there consideration under these circumstances in the letter ∆ sent to π considering that he brought up how much should have to repay him for the money? a. Defense stated that since it was only $25 for 500,000 drachmae and she needed it – it should not count.

Answer 1. Yes there was consideration. The ∆ got exactly what she wanted (500,000 drachmae), giving back any less than what is originally agreed upon is breach of contract. a. Not a plea of “want of consideration” as that needs the instrument to never become a valid obligation in the first place.  This did become a valid obligation. b. The drachmae had value. He was not asking for $2000 dollars in exchange for nothing – they were worth $25 dollars. She purchased the money from him for far more than what it was worth but it was still a purchase. 2. Inadequacy of consideration is not enough to break a contract. a. Just because it’s unfair does not mean it’s not binding.

Holding 1. Reformed and affirmed. The ∆ will receive $2000 dollars with 8% interest.

Courts will not look at the value of an exchange typically. Sometimes though if things are really out of balance, the court will look at the backend to see if it was really a bargain. IF it wasn't coercive.

Weird case because it is the value of consideration. --> adequacy of consideration.

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What is the allegation here? Why doesn't D want to pay? Identify the alleged consideration here… Should the court have paid more attention to relative bargaining power of the parties and possible coercion or duress? • Illusory Promises ○ If I promise to sell you my book in the future if I feel like it, g me $10 dollars now.  Not a contract. At this point you have retained comple control of your desires and rights. You still don't have t give up the book.  "if I feel like it" -- does this count as a good faith obligation? That's where this idea for illusory promises reigned in eventually. • Adequacy of Consideration (peppercorns)...