Batsakis v. Demotsis

226 S.W.2d 673 · Court of Appeals of Texas · 1949

Facts

Defendant Eugenia Demotsis signed an instrument acknowledging a $2,000 loan from plaintiff George Batsakis, promising repayment with 8% interest. Demotsis claimed she only received 500,000 drachmae, which she valued at $25, and pleaded want or failure of consideration. The transaction occurred in Greece during WWII when Demotsis was in financial distress.

Issue

Did the defendant's receipt of 500,000 drachmae, which she valued at $25, in exchange for a promise to pay $2,000, constitute a want or failure of consideration sufficient to invalidate the contract?

Holding

No. The court reformed the judgment, holding that the plaintiff was entitled to recover the full $2,000 with 8% interest from the date of the instrument, as mere inadequacy of consideration does not void a contract.

Rule

A plea of want of consideration asserts the instrument never became a valid obligation, while mere inadequacy of consideration, where something of value was exchanged, will not void a contract. A failure of consideration occurs when a party does not receive what they contracted for.

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Case brief last reviewed 2026-05-06. Prepared by CaseReader from the published opinion.