Allegheny College v. National Chautauqua County Bank
246 N.Y. 369, 159 N.E. 173 (N.Y. 1927)
A college was having a pledge
drive. Ms. Johnston responded in writing that she would donate $5k once
she was dead.
The letter mentioned that
the pledge was only valid on the condition that the provisions of her
will were met.
Johnston actually sent the
college $1k while she was alive, as a partial payment. The college put
the money aside to start a Memorial Fund in her name.
Johnston later repudiated the
promise to the college. Then died. The college proceeded to sue the
estate for the unpaid $4k.
Trial Court found for the
estate, on the basis that this was an unenforceable naked promise. The college appealed.
The Appellate Court reversed
"The promise and the
consideration must purport to be the motive each for the other, in whole
or at least in part. It is not enough that the promise induces the
detriment of that the detriment induces the promise if the other half is
The Court found that naming
a fund after Johnston was sufficient consideration to make her promise binding. This is
especially true in this case, since she gave part of the money and the
college started the fund.
The estate argued that the
scholarship naming rights were not worth $5k, but remember, the adequacy
of consideration is not relevant.
It is enough that there was some bargained-for agreement.
Even if that weren't the
case, courts tend to enforce promises to give gifts to charity.
In a dictum, it was
suggested that promissory estoppel
will in the future be a ground for enforcing promises that is really part
of the theory of consideration.
The doctrine of promissory
estoppel prevents one party from
withdrawing a promise made to a second party if the latter has
reasonably relied on that promise and acted upon it.
In a dissent it was argued
that the college naming the fund after Ms. Johnston did not meet the minimum requirements of a consideration.