Re Casey’s Patents [1892] 1 Ch 104

When past consideration can be good consideration.

Facts:

The defendant, Casey, managed some patents owned by the plaintiffs, Stewart and Charlton. The plaintiffs later signed a document that read: ‘In consideration of your services… we hereby agree to give you one-third share of the patents’. This payment was in return for work Casey had already done. When Casey registered this document on the patent register in order to claim his 1/3 interest in the patents, the plaintiffs applied to have the document expunged from the register. 

Issues:

The plaintiffs stated that the document was not a deed and therefore was required to be supported by consideration before it became a valid agreement. The issue was whether what Casey had already done was past consideration, in which case it would not be good consideration, and the agreement to give him an interest in the patents would be void.

Held:

The Court of Appeal held that Casey must have assumed his work was to be paid for in some way. The work done was not just a matter of goodwill but something a manager would have expected to have been paid for. The promise to pay was, therefore, just a crystallization of this reasonable expectation. Bowen LJ said (ay 116):

‘a past service raises an implication that at the time it was entered it was to be paid for, and…  when you get in the subsequent document a  promise to pay that promise may be treated… as an admission which… fixes the amount of that reasonable remuneration’.

Therefore, Casey’s past work was good consideration and the agreement was enforceable.