322 S.W.2d 163
Anna Sacks Feinberg began her employment with Pfeiffer Co., a manufacturer of pharmaceuticals, in 1910 at the age of seventeen.1 By 1947 she had advanced to the positions of bookkeeper, office manager, and assistant treasurer while owning seventy shares of the company's stock.2 In addition to her salary she received annual bonuses ranging from three hundred to two thousand dollars between 1937 and 1949.3
On December 27, 1947, the company's board of directors held its annual meeting and adopted a resolution increasing Feinberg's monthly salary from three hundred fifty to four hundred dollars and granting her the privilege of retiring at any time she elected upon a lifetime pension of two hundred dollars per month.4 The resolution was communicated to Feinberg the same day by directors Sidney Harris and Sol Flammer, who informed her she could retire immediately if she wished.5 At that time Feinberg had no prior knowledge that such a pension plan was under consideration.6
Feinberg continued working for the company until June 30, 1949, when she retired at age fifty-seven.7 The company began making the monthly pension payments of two hundred dollars as provided in the resolution.8 Payments continued until April 1956, when the company, under new management following the death of president Max Lippman, reduced the amount to one hundred dollars.910 Feinberg refused the reduced payment and filed suit in the Circuit Court of the City of St. Louis seeking the amounts due.1112
Following a bench trial the court entered judgment for Feinberg in the amount of five thousand one hundred dollars plus interest.1314 The defendant appealed the judgment to the St. Louis Court of Appeals.15 At the time of trial Feinberg was sixty-five and a half years old and had undergone surgery for the removal of a cancer in November 1957.16 Feinberg testified that she relied on the pension in deciding to retire and would not have left her employment at that time without it.17
Whether the plaintiff proved that she has a right to recover from defendant based upon a legally binding contractual obligation to pay her $200 per month for life?18
Consideration for a promise is an act other than a promise, a forbearance, the creation, modification or destruction of a legal relation, or a return promise, bargained for and given in exchange for the promise.19 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.20
Anna Sacks Feinberg began her employment with Pfeiffer Co., a manufacturer of pharmaceuticals, in 1910 at the age of seventeen. By 1947 she had advanced to the positions of bookkeeper, office manager, and assistant treasurer while owning seventy shares of the company's stock. In addition to her salary she received annual bonuses ranging from three hundred to two thousand dollars between 1937 and 1949.
On December 27, 1947, the company's board of directors held its annual meeting and adopted a resolution increasing Feinberg's monthly salary from three hundred fifty to four hundred dollars and granting her the privilege of retiring at any time she elected upon a lifetime pension of two hundred dollars per month. The resolution was communicated to Feinberg the same day by directors Sidney Harris and Sol Flammer, who informed her she could retire immediately if she wished. At that time Feinberg had no prior knowledge that such a pension plan was under consideration.
Feinberg continued working for the company until June 30, 1949, when she retired at age fifty-seven. The company began making the monthly pension payments of two hundred dollars as provided in the resolution. Payments continued until April 1956, when the company, under new management following the death of president Max Lippman, reduced the amount to one hundred dollars. Feinberg refused the reduced payment and filed suit in the Circuit Court of the City of St. Louis seeking the amounts due.
Following a bench trial the court entered judgment for Feinberg in the amount of five thousand one hundred dollars plus interest. The defendant appealed the judgment to the St. Louis Court of Appeals. At the time of trial Feinberg was sixty-five and a half years old and had undergone surgery for the removal of a cancer in November 1957. Feinberg testified that she relied on the pension in deciding to retire and would not have left her employment at that time without it.
Yes. The board resolution promised Feinberg two hundred dollars per month for life upon her retirement at any time she elected.21 Feinberg retired on June 30, 1949, in reliance on that promise after nearly forty years of service, abandoning her position at age fifty-seven.22 The company made payments until April 1956, confirming the obligation.23 This induced action of definite and substantial character makes the promise binding under promissory estoppel because injustice can be avoided only by enforcement, as Feinberg became unable to obtain comparable employment.24
The plaintiff proved that she has a right to recover from defendant based upon a legally binding contractual obligation to pay her $200 per month for life.25
Whether the plaintiff's continuation in the employ of the defendant from December 27, 1947 until June 30, 1949 supplied consideration for the promise contained in the board resolution?
There must be mutuality of obligation for a valid contract, and a promise based upon past services is without consideration; language in a resolution that does not predicate the right to a pension upon continued employment fails to supply consideration through mere continuation of at-will employment.26
No. The resolution contained no language requiring Feinberg to continue working as a condition for the pension, and she was informed she could retire immediately upon its adoption.27 Feinberg made no promise or agreement to continue in exchange for the pension, and she remained free to quit at any time with the defendant free to discharge her.28 The absence of any requirement for continued employment means the period from December 27, 1947 to June 30, 1949 did not constitute consideration.29
The plaintiff's continuation in the employ of the defendant from December 27, 1947 until June 30, 1949 did not supply consideration for the promise contained in the board resolution.30
Whether the plaintiff's retirement from her position in reliance upon the promise contained in the board resolution supplied consideration for the promise or grounds for 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; retirement from a lucrative position at age fifty-seven in reliance on the promise constitutes such action.31
Yes. The resolution promised Feinberg two hundred dollars per month for life upon retirement at her election, and she retired on June 30, 1949, in reliance on that promise after the communication that she could retire immediately.32 This retirement was the induced action of definite and substantial character that estops the defendant and creates an enforceable obligation under promissory estoppel, as the company began payments and injustice can be avoided only by enforcement given Feinberg's age and subsequent unemployability.33
The plaintiff's retirement from her position in reliance upon the promise contained in the board resolution supplied grounds for promissory estoppel.34