Allegheny College v. National Chautauqua County Bank of Jamestown

Brief Fact Summary. Mary Yates Johnston, now deceased, responded to a request from Plaintiff, Allegheny College, for contributions by promising to give $5,000 payable thirty days after her death. Johnston, while still living gave Plaintiff $1,000, but later gave notice to Plaintiff that she was repudiating her promise.

Synopsis of Rule of Law. A promise to contribute to a charity may be enforceable where there is consideration.

Facts. In response to a request for contributions, Johnston promised to give Plaintiff $5,000 payable 30 days after her death. The money was to create a memorial fund to be “used to educate students preparing for the ministry.” Johnston paid Defendant $1,000, payment on account, while still alive. Later Johnston told Defendant she repudiating her promise.

Issue. Is the promise to Plaintiff enforceable?

Held. Yes. The Court finds sufficient consideration to enforce the promise.
A promised contribution to a charity is unenforceable without consideration; however, that consideration may be supplied by promissory estoppel.
When Plaintiff received the $1,000, it was under a duty to use the money in accordance with the terms of the memorial fund. Plaintiff was not free to use the money for general purposes. This assumption of duty by Plaintiff constituted consideration and created an enforceable bilateral agreement.
The Court discusses whether the restrictions on the use of the funds were conditions to a gratuitous promise or a request for consideration. Because the restrictions on the use of the funds benefited Johnston, and Plaintiff could not accept the $1,000 and later decide whether to set up the fund, the Court determined that it was a request for consideration.

Dissent. The dissent seems to focus on the argument that Plaintiff had not acted yet to fulfill any of the conditions of the memorial fund. In characterizing the promise, the dissent instead calls it a unilateral contract with conditions.

Discussion. Although the Court mentions promissory estoppel, it indicates that in the present case the agreement can be enforced as a bilateral agreement so there is no need to address promissory estoppel. The Court finds that Plaintiff’s assumption of the duty to use the money for the memorial fund is valid consideration to enforce Johnston’s promise.