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Allegheny College v. National Chautauqua County Bank

(1927)

New York Court of Appeals - 159 N.E. 173, 246 N.Y. 369

tl;dr:

College sues executor of woman's will after she reneges on her promise to posthumously endow a scholarship in her name. College's acceptance of partial donation and agreement to name fund after her was sufficient consideration for formation.

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Facts & HoldingAllegheny College v. National Chautauqua County Bank case brief facts & holding

Facts:Yates promised to donate $5k upon her death to Allegheny...

Holding:Judgments of the trial and appellate courts are reversed. The...

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Allegheny College v. National Chautauqua County Bank | Case Brief DeepDive
Majority opinion, author: Cardozo, Ch. J.
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The legal case involves a charitable subscription made by Mary Yates Johnston to Allegheny College, which was valid only if the provisions of her Will were first met. Although the subscription was not payable until thirty days after her death, the promisor paid $1,000 while still alive. After thirty days following her death, the promisor repudiated the promise, and the college brought an action against the executor of her will to recover the unpaid balance. The case raises issues regarding the enforceability of charitable subscriptions made without consideration and has led to controversy and differing opinions among courts in various states. The doctrine of consideration in contract law requires mutual motivation between the promise and consideration, and the doctrine of "promissory estoppel" has emerged as a substitute for consideration or an exception to its requirements. In New York, the exception of promissory estoppel has been recognized in cases involving charitable subscriptions, where the promisee incurs expenses in reasonable belief that the promise will be kept. These decisions expand the traditional concept of consideration and are supported by public policy.

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Dissenting opinion, author: Kellogg, J.
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In this legal case, Judge Kellogg dissented from the majority opinion that the expression "In loving memory this gift shall be known as the Mary Yates Johnston Memorial Fund" constituted an offer to contract with Allegheny College. Judge Kellogg argued that the expression did not request any act from the college and was simply a gift. Even if it was an offer, it was a unilateral contract offer that was never accepted by the college. Judge Kellogg also disagreed with the majority's finding of consideration, stating that the ancient rule requiring consideration for every contract was not in danger of being effaced. The judges Pound, Crane, Lehman, and O'Brien agreed with the Chief Justice Cardozo's opinion, while Judge Kellogg was supported by Judge Andrews. The judgment was made accordingly. It should be noted that Judge Kellogg's dissenting opinion highlights a potential error in the majority's decision.

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