Citation. 322 S.W.2d 163 (Mo. Ct. App. 1959).
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The board of the Defendant, Pfeiffer, Co. (Defendant), agreed to a give the Plaintiff, Feinberg (Plaintiff), a retirement package upon her retirement. After two additional years of working, the Plaintiff retired. Defendant ceased payment and Plaintiff sued to enforce the agreement.
Synopsis of Rule of Law.
A promise that induces an action or forbearance is binding if injustice can be avoided only by enforcement of the promise.
Facts.
Plaintiff was the treasurer and longtime bookkeeper for her employer Defendant. The board of directors adopted a resolution in recognition of Plaintiff’s longtime and valuable service. The resolution provided Plaintiff with an increase in salary and retirement benefits in the amount of $200 per month for life, available to her whenever she should see fit to retire. Plaintiff continued to work for two more years, then she retired and Defendant began paying the benefit. The chairman of the company died and his widow succeeded him. She soon retired and was succeeded by her son-in-law Harris. Upon the recommendation of the company’s accounting firm and attorney, Harris discontinued the payments. The attorney advised that they were gifts. Plaintiff later developed cancer and became unemployable.
Issue.
Was there a contract based on promissory estoppel?
Held.
Yes. Affirmed.
Restatement sec.90 Promissory Estoppel: A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.
Under a reliance theory of recovery, it is a matter of common knowledge that it is virtually impossible for a woman at the age of 63 to find satisfactory employment, much less a position comparable to that which Plaintiff enjoyed at the time of her retirement. Therefore, by retiring she gave up the opportunity to continue to work based on the $200 per month stipend.
Discussion.
Here, the court does not look to her past services because past consideration does not count for consideration. Therefore, the court applies the alternate theory of promissory estoppel to reach the desired outcome.
