East Providence Credit Union v. Geremia
103 R.I. 597, 239 A.2d 725 (R.I. 1968)
Geremias took out a loan and used their car as collateral.They promised to insure the car.One time, their payments were
late, and they received notice from the creditor that if the insurance
didn't get paid, the creditor would pay the premiums and apply them toward
the balance of the loan.
Geremias felt it was simpler to just let East Providence pay the
Providence did not pay the premiums.
car was damaged in an accident, but it wasn't insured because nobody had
made the insurance payments. East Providence sued for the balance of the
loan, and the Geremias counterclaimed on the basis that they were relying
on East Providence to pay the insurance premiums.
Trial Court found for the Geremias.
Appellate Court affirmed.
Court noted that paying the Geremias' policy premiums would have been
a profitable venture for East Providence because they were going to
charge interest on those payments.That interest constitutes valid consideration which made it an enforceable contract.
Court found it unnecessary to consider promissory estoppel in this case, but, in dicta, it says that it
would if it had to.