Mayfield, Frank M., Jr.

English

Washington University St. Louis: Open Scholarship

Washington University Law Review Volume 1950 Issue 4 January 1950 Contracts—Consideration—Generous Wartime Promise Enforced as Unilateral Contract Frank M. Mayfield Jr. Washington University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview  Part of the Contracts Commons Recommended Citation Frank M. Mayfield Jr., Contracts—Consideration—Generous Wartime Promise Enforced as Unilateral Contract, 1950 WASH. U. L. Q. 642 (1950). Available at: https://openscholarship.wustl.edu/law_lawreview/vol1950/iss4/9 This Case Comment is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact digital@wumail.wustl.edu. 642 WASHINGTON UNIVERSITY LAW QUARTERLYCONTRACTS-CONSIDERATION-GENEROUS WARTIME PROMISEENFORCED AS UNILATERAL CONTRACT. On October 1, 1940, thefollowing editorial appeared in the Sharon Herald.The Coca-Cola Bottling Co., Inc. of Sharon to-day took aplace among the outstanding firms of the Shenango Valley.William Feinberg, Manager, announced that any employeecalled to the colors through the conscription law will notlose a cent in wages. The company is prepared to pay thedifference between the government wages and the amountthe employee received before he went to camp.The editorial offer was repeated by the manager of the corpora-tion before the plaintiff and other employees and was affirmedby the Board of Directors. Plaintiff was employed by defendantat the time of the offer, and remained with the defendant forthe next two years; then, having received notice to report for hisselective service physical examination, he enlisted in the UnitedStates Coast Guard. After thirty-seven months of service hereturned to the Coca-Cola Company for two more years, and atthe end of this period resigned and began this action of assump-sit to recover his employer's promised subsidy. On appeal thecourt affirmed pudgment for plaintiff holding that the employerwas obligated by his" promise to pay the employee for his pecuni-ary loss incurred during his term of service.'The court's reasoning drew no distinction between voluntaryenlistment and conscription though the latter was originallyspecified in the newspaper editorial.2 The appellant's principalobjection to the finding of contract was founded on absence ofconsideration. This question was resolved in the plaintiff's favorby a finding that a forbearance on'his part was exercised whenhe remained for two years in defendant's employ under the in-fluence of defendant's offer.3 Judicial notice was taken of thefact that a large number of lucrative' war-created jobs wereavailable at the time. The court assumed that this forbearancewas asked by the defendant as the price for its promise to paythe proposed subsidy and that a valid unilateral contract therebywas created.41. Mickshaw v. Coca-Cola Bottling Co., Inc. of Sharon, Pa., 166 Pa.Super. 148, 70 A.2d 467 (1950).2. But see RESTATEMENT, CONTRACTS § 24, comment (a), and § 19 (1932).3. No attempt is made to treat plaintiff's act of enlistment as the con-sideration for defendant's promise.4. 166 Pa. Super. 148, 70 A.2d 467, 468 (1950). The court early regardsWashington University Open ScholarshipCOMMENTSThe court in the instant case was faced with the vexing dis-tinction between a gratuitous promise and a legally enforce-able contract. The difference between the two rests uponthe presence or absence of consideration. To support its findingof consideration the court cites two British cases.5 However, theact which constituted consideration in each British case was theofferee's enlistment in the armed forces; thus they are notauthority for the proposition expounded by the court in thepresent case.6The court refers the meaning of consideration to Section 75 ofthe Restatement of the Law of Contracts.7 Assuming that theother elements essential to the Restatement's definition are pres-ent, there is no evidence in the opinion of the appellate court thatplaintiff's act was bargained for and given in exchange for de-fendant's promise, i.e., that the promise was given to induceplaintiff's forbearance or that plaintiff remained with defen-dant because of defendant's promise. The bargaining is takenfor granted by the court8 Such an assumption is unwarrantedunder the strict definition of consideration incorporated in theRestatement.9 Thereunder the parties must agree that a specificthis transaction as a unilateral contract. However, it does not specify thetime at which the plaintiff accepted defendant's offer.5. Budgett v. Stratford Cooperative and Industrial Society, 32 T.L.R.378 (1916) ; Davis v. Rhondda District Urban Council, 87 Law Journal Rep.(K.B. Div.) 166 (1915).6. The court cites no parallel case in Pennsylvania or in any other juris-diction in the United States.7. RESTATEMENT, CONTRACTS § 75. (1932):(1) Consideration for a promise isa. an act other than a promise, orb. a forbearance, orc. the creation, modification or destruction of a legal relation, ord. a return promise,bargained for and given in exchange for the promise.8. "It may very well be supposed-without in the least impairing themotives of the appellant in making the offer or of the appellee in enlisting-that some part of the acts and forbearances mentioned was bargainedfor and given in exchange for the promise made." 166 Pa. Super. 148, 70A.2d 467, 469 (1950).9. See note 7 svpra. Fink v. Cox, 18 Johns. 145, 9 Am. Dec. 191 (N.Y.1820) ; Pershall v. Elliott, 249 N.Y. 183, 163 N.E. 554 (1928). In Wisconsinand Michigan Railway v. Powers, 191 U.S. 379 (1903), Mr. Justice Holmesexpressed the concept in the following language: ".... the other elementsare that the promise and the detriment are the conventional inducementseach for the other. No matter what the actual motive may have been, bythe express or implied terms of the alleged contract, the promise and theconsideration must purport to be the motive each for the other, in whole orat least in part. It is not enough that the promise induces the detriment orthat the detriment induces the promise, if the other half is wanting."https://openscholarship.wustl.edu/law_lawreview/vol1950/iss4/9WASHINGTON UNIVERSITY LAW QUARTERLYconsideration shall be the price for a definite promise, and abargain relationship must exist. The fact is that the court hasnot interpreted Section 75 correctly. A prerequisite to validconsideration as therein defined, bargaining, is lacking sincethere never was a contractual understanding reached betweenthese two parties. As explained by Cardozo, J.:The fortuitous presence in the transaction of some possibil-ity of detriment latent but unthought of is not enough (toconstitute consideration).'°Defendant simply made a promise unsupported by considerationas so defined.Two possible explanations for the courts' reasoning can befound through a review of the Pennsylvania cases on the subjectof consideration. They are both related to the fact that Pennsyl-vania courts have had a broader conception of consideration thanthat codified in the Restatement. First, within the scope of thislarger conception, Pennsylvania courts have, at times, includedpromissory estoppel as defined in the Restatement Section 90.11They have characterized such estoppel in terms of consideration.But these terms are obviously not synonymous. However, sincetheir functions have been to achieve identical results, i.e., theenforcement of the alleged contract, they have been considredcomplementary. Their product being identical, their separateboundaries have not been precisely drawn. 2 The Restatement,on the other hand, has arranged consideration and promissory es-toppel into two distinct and mutually exclusive categories, theformer with the bargaining requirement included under theSee Corbin, Recent Developments in the Law of Contracts, 50 HARV. L.REv. 449 (1937). On the general topic of consideration see Ames, TwoThebries of Consideration, 12 HARV. L. REV. 515 (1899), 13 HARV. L. REV.29 (1899); also Corbin, Mr. Cardozo and the Law of Contracts, 52 HARV. L.REV. 408 (1939); Wright, Ought the Doctrine of Consideration Be Abol-ished from the Common Law, 49 HARv. L. REv. 1225 (1936).10. McGovern v. New York, 234 N.Y. 377, 138 N.E. 26 (1923).11. RESTATEMENT, CONTRACTS § 90 (1932)."A promise which the promisor should reasonably expect to induce actionor forbearance of a definite and substantial character on the part of thepronmisee, and which does induce such action or forbearance is binding ifinjustice can be avoided only by enforcing the promise."12. Presbyterian Board of Foreign Missions v. Smith, 209 Pa. 361 58Atl. 689 (1904); In re Converse's Estate, 240 Pa. 458, 87 Atl. 849 (1913) ;Langer v. Superior Steel Corp., 105 Pa. Super. 579, 161 Atl. 571 (1932);University of Pennsylvania's Trustees v. Coxe's Exrs., 277 Pa. 512, 121Atl. 314 (1923); Riegel v. Haberstro, 151 Pa. Super. 539, 30 A.2d 645(1943); Thompson v. McEalerney, 82 Pa. 174 (1876); Rerick v. Kern, 14S. & R. 267, 16 Am. Dec. 497 (Pa. 1826).Washington University Open ScholarshipCOMMENTSformal head of "consideration" and the latter under the title"informal contracts without assent or consideration." The Penn-sylvania court, apparently under the influence of the confusedconcepts of prior cases, missed the Restatement's distinction andrelied upon Section 75 in the belief that it was as broad in scopeas Pennsylvania's traditional view that "conideration" can com-prehend what is more precisely known as "promisory estoppel."There is, however, no mention of promissory estoppel in theMickshaw opinion.13A second and more probable explanation for the court's misuseof Section 75 is found in the different degrees of importancewhich the Pennsylvania courts and the Restatement have placedupon the "bargain" requirement. This element in the formationof a contract has been emphasized by the Restatement.14 Pennsyl-vania courts prior to the Restatement have given this require-ment a position of only minor, if any, importance. 5These two possible explanations for the court's misconstructionof Section 75 are pointed up in Langer v. Superior Steel Corp.6This case presented the question as to whether the promse of anold age penson made by the president of the corporation upon theretirement of an employee constituted an enforceable contract.Judgment was given for the employee. The reasoning of thecourt rested upon alternative grounds. Either the employee's13. A number of Pennsylvania cases have employed promissory estoppelin analogous situations involving promises of bonuses. These cases mighthave supplied convincing authority for the court's conclusion. Langer v.Superior Steel Corp., 105 Pa. Super. 579, 164 Atl. 571 (1932), reversed onother grounds, 318 Pa. 490, 178 Atl. 490 (1935), see note 16 infra; In reTrexler's Estate, 27 Pa. D. & C. 4, 17 LEHIGH Co. L. J. 410 (1936). Seealso Scholl v. Hershey Choc. Co., 71 Pa. Super. 244 (1919); Snyder v.Hershey Choc. Co., 63 Pa. Super. 528 (1916). It would seem by these casesthat the court could have found support for its conclusion. Emotionally thecoloration of injustice grows deeper when it is known that the Coca-ColaCompany received much favorable publicity from its promise. It wouldcertainly seem unjust to allow them to repudiate their own voluntary pro-posal. This bias seems to have weighed heavily with the court in the instantCase.For general discussion on promissory estoppel see Boyer, PromissoryEstoppel: Requirements and Limits of the Doctrine, 98 U. or PA. L. REv.459 (1950).14. RESTATEMENT, CONTRACTS § 75, Comment (b) (1932) "Considerationmust actually be bargained for as the exchange for the promise. A state-ment that a consideration has been bargained for does not conclusivelyprove the fact...."15. Rathfon v. Locher, 215 Pa. 571, 64 Atl. 790 (1906); Western Savingsand Deposit Bank v. Sauer, 343 Pa. 332, 22 A.2d 727 (1941).16. 105 Pa. Super. 579, 164 Atl. 571 (1932), reversed on other grounds.(president's act ultra vires) 318 Pa. 490, 178 Atl. 490 (1935).https://openscholarship.wustl.edu/law_lawreview/vol1950/iss4/9646 WASHINGTON UNIVERSITY LAW QUARTERLYfailure to get a new job constituted consideration or his relianceupon the payments (made by the corporation for four years)created sufficient basis for the use of promissory estoppel as de-fined in Section 90 of the Restatement. The first stated alterna-tive is subject to the same criticism as the instant case in so fa)"as absence of the bargain requirement is concerned. It will benoted that the boundaries between Section 90 and Section 76are blurred if, indeed, ascertainable at all in the Langer case.Pennsylvania courts generally, as in the present instance, haveat least nominally adopted the Restatement of the Law of Con-tracts. However, in the Mickshaw case the court has miscon-strued Section 75 and ignored Section 90. It may have come toa correct conclusion, but only in spite of the Restatement sectionupon which it purports to rely. The transaction presents a clearsituation in which to argue plausibly for the application of theRestatement concept of promissory estoppel. The promisor'sstatement may have induced reasonable reliance by the promisee-a matter of evidence-and injustice can perhaps be avoidedonly by enforcing the promise. Although the court could havereached the same result under Section 90, its present unhappyconstruction of the Restatement creates unfortunate confusion,and the purpose of the Restatement ".... to promote the clarifi-cation and simplification of the law . . ." here remains un-attained.17FRANK M. MAYFIELD, JR.THE PART OF THE LEGISLATURE IN DETERMINING THE QUALIFI-CATIONS FOR ADMISSION TO THE BAR.-Until recent times thecourts had consistently held that the judicial branch of govern-ment should have the sole power to admit attorneys to the bar.The legislature, employing its police power, could prescribe rea-sonable requirements for the protection of the general public,but the courts had the ultimate power to grant or deny licensesto practice law. Recently, however, the legislatures of manystates have attempted to play a more significant role in prescrib-ing qualifications requisite to admission to the bar. Typical wasa recent Idaho statute:... the following applicants shlzl be admitted as attorneysand counselors in all courts of this state without being re-17. RESTATEMENT, CONTRACTS p. IV (1932).Washington University Open Scholarship

Contracts—Consideration—Generous Wartime Promise Enforced as Unilateral Contract

https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=3775&amp;context=law_lawreview

Contracts—Consideration—Generous Wartime Promise Enforced as Unilateral Contract

Abstract

Similar works

Full text

Available Versions

Washington University St. Louis: Open Scholarship