## Facts

- Edwin Farnham Greene, a married man, had an extramarital relationship with Leila G. Trudel and provided substantial financial support, including funding a Long Island house titled in her name.
- After the relationship ended, Greene and Trudel executed a written instrument under seal dated April 28, 1926, purporting to settle their financial affairs.
- The instrument required Greene to (1) pay Trudel $1,000 per month for their joint lives, (2) assign and maintain a $100,000 life insurance policy for her benefit (or pay $100,000 if it lapsed), and (3) pay her apartment rent for four years.
- The instrument recited nominal consideration ($1 (or $3)) and “other good and valuable considerations,” and stated that Trudel released Greene from “all claims” against him; it also stated Greene had no interest in the Long Island house and would have no further obligations regarding it.
- Greene made payments for a period but stopped in August 1928.
- After Greene filed bankruptcy, Trudel filed a proof of claim for approximately $375,700 based on alleged breach of the instrument.
- The trustee objected that the instrument lacked valid consideration; a bankruptcy referee allowed the claim, and the trustee sought district-court review.

## Issues

1. Whether the April 28, 1926 instrument created an enforceable obligation supported by legally sufficient consideration, making Trudel’s asserted debt provable in bankruptcy.
2. Whether past illicit cohabitation, nominal consideration, and a release of claims supplied valid consideration under applicable law.
3. Whether the seal on the instrument established consideration conclusively or only presumptively, and whether any presumption was rebutted.

## Decision

- The district court granted the trustee’s petition for review and reversed the referee’s order.
- The court held the instrument was not supported by valid consideration and did not create an allowable claim against the bankruptcy estate.
- The court rejected past illicit cohabitation as consideration, found the nominal dollar payment insufficient for the large executory promises, and concluded the purported release did not surrender bona fide enforceable claims.
- The court treated the seal as only presumptive evidence of consideration and found the record rebutted any presumption.

## Legal Principles

- Past services or conduct, including past illicit cohabitation, do not constitute consideration for a later executory promise.
- A merely nominal payment recited to formalize an agreement may be insufficient to support substantial executory obligations when it is not the real bargained-for exchange.
- A release can be consideration only if it relinquishes bona fide legal claims; releasing nonexistent claims or claims void as a matter of law or public policy does not supply consideration.
- Under New York law, a seal creates only a rebuttable presumption of consideration; evidence showing no real exchange defeats enforceability.

## Conclusion

The court disallowed Trudel’s bankruptcy claim because Greene’s post-relationship promises were not supported by actual consideration: the asserted bases—past cohabitation, nominal payment, and a release not tied to enforceable claims—could not sustain the agreement, and the seal did not prevent inquiry into the absence of consideration.


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