Allegheny Coll. v. Nat'l Chautauqua Cnty. Bank of Jamestown

• Citation: 159 N.E. 173,246 N.Y. 369
• Parties: ALLEGHENY COLLEGE v. NATIONAL CHAUTAUQUA COUNTY BANK OF JAMESTOWN.
• Decision Date: 22 November 1927
• Court: New York Court of Appeals Court of Appeals

246 N.Y. 369

159 N.E. 173

ALLEGHENY COLLEGE

v.NATIONAL CHAUTAUQUA COUNTY BANK OF JAMESTOWN.

Court of Appeals of New York.

Nov. 22, 1927.

Action by Allegheny College against the National Chautauqua County Bank of Jamestown, as executor of the last will and testament of Mary Yates Johnston, deceased. From a judgment of the Appellate Division of the Supreme Court in the Fourth Judicial Department (219 App. Div. 852,221 N. Y. S. 784), affirming a judgment entered upon a decision of the Trial Term of the Supreme Court in favor of the defendant a jury having been waived, plaintiff appeals.

Judgments of Appellate Division and Trial Term reversed, and judgment ordered for plaintiff.

See, also, 220 App. Div. 805, 222 N. Y. S. 762.

Kellogg and Andrews, JJ., dissenting.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Clarence G. Pickard and C. A. Pickard, both of Jamestown, and Arthur L. Bates, of Meadville, Pa., for appellant.

Robert H. Jackson, Harry R. Lewis, and Benjamin S. Dean, all of Jamestown, for respondent.

CARDOZO, C. J.

The plaintiff, Allegheny College, is an institution of liberal learning at Meadville, Pa. In June, 1921, a ‘drive’ was in progress to secure for it an additional endowment of $1,250,000. An appeal to contribute to this fund was made to Mary Yates Johnston, of Jamestown, New York. In response thereto, she signed and delivered on June 15, 1921, the following writing:

‘Estate Pledge, Allegheny College Second Century Endowment.

‘Jamestown, N. Y., June 15, 1921.

‘In consideration of my interest in Christian education, and in consideration of others subscribing, I hereby subscribe and will pay to the order of the treasurer of Allegheny College, Meadville, Pennsylvania, the sum of five thousand dollars; $5,000.

‘This obligation shall become due thirty days after my death, and I hereby instruct my executor, or administrator, to pay the same out of my estate. This pledge shall bear interest at the rate of ___ per cent. per annum, payable annually, from ___ till paid. The proceeds of this obligation shall be added to the Endowment of said Institution, or expended in accordance with instructions on reverse side of this pledge.

‘Name: Mary Yates Johnston,

‘Address: 306 East 6th Street, Jamestown, N. Y.

‘Dayton E. McClain, Witness,

‘T. R. Courtis, Witness,

‘To authentic signature.’

On the reverse side of the writing is the following indorsement:

‘In loving memory this gift shall be known as the Mary Yates Johnston memorial fund, the proceeds from which shall be used to educate students preparing for the ministry, either in the United States or in the Foreign Field.

‘This pledge shall be valid only on the condition that the provisions of my will, now extant, shall be first met.

Mary Yates Johnston.'

The subscription was not payable by its terms until 30 days after the death of the promisor. The sum of $1,000 was paid, however, upon account in December, 1923, while the promisor was alive. The college set the money aside to be held as a scholarship fund for the benefit of students preparing for the ministry. Later, in July, 1924, the promisor gave notice to the college that she repudiated the promise. Upon the expiration of 30 days following her death, this action was brought against the executor of her will to recover the unpaid balance.

[1] The law of charitable subscriptions has been a prolific source of controversy in this state and elsewhere. We have held that a promise of that order is unenforceable like any other if made without consideration. Hamilton College v. Stewart, 1 N. Y. 581;Presbyterian Church v. Cooper, 112 N. Y. 517, 20 N. E. 352, 3 L. R. A. 468, 8 Am. St. Rep. 767; Twenty-Third St. Baptist Church v. Cornell, 117 N. Y. 601, 23 N. E. 177,6 L. R. A. 807. On the other hand, though professing to apply to such subscriptions the general law of contract, we have found consideration present where the general law of contract, at least as then declared, would have said that it was absent. Barnes v. Perine, 12 N. Y. 18;Presbyterian Soc. v. Beach, 74 N. Y. 72;Keuka College v. Ray, 167 N. Y. 96, 60 N. E. 325; cf. Eastern States League v. Vail, 97 Vt. 495, 508, 124 A. 568, 38 A. L. R. 845, and cases cited; Young Men's Christian Ass'n v. Estill, 140 Ga. 291, 78 S. E. 1075,48 L. R. A. (N. S.) 783, Ann. Cas. 1914D, 136;Amherst Academy v. Cowles, 6 Pick. (Mass.) 427, 17 Am. Dec. 387;Ladies Collegiate Institute v. French, 16 Gray (Mass.) 196;Martin v. Meles, 179 Mass. 114, 60 N. E. 397;Robinson v. Nutt, 185 Mass. 345, 70 N. E. 198;University of Pennsylvania v. Coxe, 277 Pa. 512, 121 A. 314; Williston, Contracts, § 116.

A classic form of statement identifies consideration with detriment to the promisee sustained by virtue of the promise. Hamer v. Sidway, 124 N. Y. 538, 27 N. E. 256, 12 L. R. A. 463, 21 Am. St. Rep. 693; Anson, Contracts (Corbin's Ed.) p. 116; 8 Holdsworth, History of English Law, 10. So compendious a formula is little more than a half truth. There is need of many a supplementary gloss before the outline can be so filled in as to depict the classic doctrine. ‘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 or that the detriment induces the promise if the other half is wanting.’ Wisconsin & Michigan R. Co. v. Powers, 191 U. S. 379, 386, 24 S. Ct. 107, 108 (48 L. Ed. 229);McGovern v. City of New York, 234 N. Y. 377, 389, 138 N. E. 26, 25 A. L. R. 1442;Walton Water Co. v. Village of Walton, 238 N. Y. 46, 51, 143 N. E. 786; 1 Williston, Contracts, § 139; Langdell, Summary of the Law of Contracts, pp. 82-88. If A promises B to make him a gift, consideration may be lacking, though B has renounced other opportunities for betterment in the faith that the promise will be kept.

The half truths of one generation tend at times to perpetuate themselves in the law as the whole truth of another, when constant repetition brings it about that qualifications, taken once for granted, are disregarded or forgotten. The doctrine of consideration has not escaped the common lot. As far back as 1881, Judge Holmes in his lectures on the Common Law (page 292), separated the detriment, which is merely a consequence of the promise from the detriment, which is in truth the motive or inducement, and yet added that the courts ‘have gone far in obliterating this distinction.’ The tendency toward effacement has not lessened with the years. On the contrary,there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled ‘a promissory estoppel.’ Williston, Contracts, §§ 139, 116. Whether the exception has made its way in this state to such an extent as to permit us to say that the general law of consideration has been modified accordingly, we do not now attempt to say. Cases such as Siegel v. Spear & Co., 234 N. Y. 479, 138 N. E. 414, 26 A. L. R. 1205, and De Cicco v. Schweizer, 221 N. Y. 431, 117 N. E. 807, L. R. A. 1918E, 1004, Ann. Cas. 1918C, 816, may be signposts on the road. Certain, at least, it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions. So long as those decisions stand, the question is not merely whether the enforcement of a charitable subscription can be squared with the doctrine of consideration in all its ancient rigor. The question may also be whether it can be squared with doctrine of consideration as qualified by the doctrine of promissory estoppel.

We have said that the cases in this state have recognized this exception, if exception it is thought to be. Thus, in Barnes v. Perine, 12 N. Y. 18, the subscription was made without request, express or implied, that the church do anything on the faith of it. Later, the church did incur expense to the knowledge of the promisor, and in the reasonable belief that the promise would be kept. We held the promise binding, though consideration there was none except upon the theory of a promissory estoppel. In Presbyterian Society v. Beach, 74 N. Y. 72, a situation substantially the same became the basis for a like ruling. So in Roberts v. Cobb, 103 N. Y. 600, 9 N. E. 500, and Keuka College v. Ray, 167 N. Y. 96, 60 N. E. 325, the moulds of consideration as fixed by the old doctrine were subjected to a like expansion. Very likely, conceptions of public policy have shaped, more or less subconsciously, the rulings thus made. Judges have been affected by the thought that ‘defenses of that character’ are ‘breaches of faith towards the public, and especially towards those engaged in the same enterprise, and an unwarrantable disappointment of the reasonable expectations of those interested.’ W. F. Allen, J., in Barnes v. Perine, supra, p. 24; and cf. Eastern States League v. Vail, 97 Vt. 495, 505, 124 A. 568, 38 A. L. R. 845, and cases there cited. The result speaks for itself irrespective of the motive. Decisions which have stood so long, and which are supported by so many considerations of public policy and reason, will not be overruled to save the symmetry of a concept which itself came into our law, not so much from any reasoned conviction of its justice, as from historical accidents of practice and procedure. 8 Holdsworth, History of English Law, 7 et seq. The concept survives as one of the distinctive features of our legal system. We have no thought to suggest that it is obsolete or on the way to be abandoned. As in the case of other concepts, however, the pressure of exceptions has led to irregularities of form.

It is in this background of precedent that we are to view the problem now before us. The background helps to an understanding of the implications inherent in subscription and acceptance. This is so though we may find in the end that without recourse to the innovation of promissory estoppel the transaction can be...