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St. Louis Court of Appeals - 322 S.W.2d 163
tl;dr:
A company promised to pay a loyal worker a pension for the rest of her life, but when the company leadership changed hands, the payments stopped.Video Summary
Case Summary
Feinberg v. Pfeiffer Co. (1959) involved a woman suing her previous employer for breach of contract, alleging that the company guaranteed her a lifetime monthly pension upon retirement. She had worked for the company for 37 years and was rewarded by the board of directors with a salary increase and a $200 monthly pension for life after retirement.
After retiring at 65, the company stopped the pension payments after 13 months, arguing that the pension promise lacked consideration and thus wasn't legally binding. The woman filed a lawsuit, and the trial court ruled in her favor; the appellate court upheld this decision.
The appellate court based its ruling on promissory estoppel, a legal principle used to enforce a promise even when it lacks consideration. Promissory estoppel stops a promise-maker from breaking the promise if the other party reasonably relied on the promise and suffered harm. It focuses on fairness and justice.
This case is significant because it demonstrates how promissory estoppel works and how the intent and behavior of the parties involved are considered by the courts when determining if a promise and reliance exist.
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The case involves a dispute over whether the plaintiff has a legally binding contractual right to receive $200 per month for life from the defendant. The lower court awarded the plaintiff $5,100 plus interest, which was the amount of unpaid pension as of the trial date. On appeal, the defendant argued that the trial court wrongly admitted inadmissible evidence related to the plaintiff's age and inability to work due to medical reasons. However, the court must evaluate the law and evidence and deliver a judgment based on what the court below should have given, taking only admissible evidence into consideration. The court agrees with the plaintiff that the defendant promised to pay her $200 per month upon her retirement, which constitutes consideration for a promise under the Restatement of the Law of Contracts. The doctrine of "promissory estoppel" applies, which holds that a promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can only be avoided by enforcing the promise.
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