Fried v. Fisher
196 A. 39, 115 A.L.R. 147, 328 Pa. 497 (1937)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A promise lacking consideration may be legally enforceable under the doctrine of promissory estoppel if the promisor reasonably expected it to induce definite and substantial action or forbearance, the promisee indeed relied upon it, and injustice can only be avoided by enforcing the promise.
Facts:
- On October 6, 1932, Fried leased a store in Bryn Mawr to Robert H. Fisher and J. Edward Brill, as partners, for a term of three years and eleven months from November 1, 1932.
- Fisher and Brill operated a florist business in the leased premises.
- In December 1933, Fisher desired to withdraw from the partnership and start his own business in another locality, stating he wanted to be released from lease obligations.
- Fried told Fisher that he was "perfectly satisfied" if Brill and his son "assumed the balance of the lease," to "just forget about it," and later explicitly stated, "I release you... so long as you are finished here, through here, and your responsibility is ended here."
- Fisher subsequently dissolved his partnership with Brill and embarked on a new restaurant business in Ardmore.
- Brill and his son continued the florist business in the demised premises under the name “Brill Flowers, Florists,” and paid the monthly rent with checks signed by them.
Procedural Posture:
- On August 19, 1935, Fried entered judgment by confession on the lease against both Fisher and Brill in a Pennsylvania court for rent from July 1, 1935, to September 30, 1936.
- Fisher petitioned the court to open the judgment as to him.
- The issue of Fisher's liability was presented to a jury, which returned a verdict in favor of Fisher.
- The trial court (court below) sustained the jury's verdict.
- Fried appealed to the Supreme Court of Pennsylvania.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a landlord's promise to release a tenant from future lease obligations become legally enforceable, despite lacking consideration, if the tenant reasonably relies on that promise to his definite and substantial detriment by changing his business venture?
Opinions:
Majority - Mr. Justice Stern
Yes, a landlord's promise to release a tenant from future lease obligations can be legally enforceable under the doctrine of promissory estoppel, even without consideration, if the tenant relied on it to his detriment. The court affirmed the jury's verdict, acknowledging that a promise by a creditor to release one partner from liability, without qualifying facts, is typically unenforceable for want of consideration. However, the court applied the principle of promissory estoppel, as formulated in Section 90 of the Restatement of the Law of Contracts, which states that a promise is binding if the promisor reasonably expects it to induce definite and substantial action or forbearance, and it does induce such action or forbearance, and injustice can only be avoided by enforcement. The court found that Fried's statements clearly induced Fisher to dissolve his partnership and embark on a new business venture, constituting a definite and substantial change of position in reliance on Fried's promise. The court noted that Fried's counsel objected to testimony regarding the consequences of Fisher's reliance, thus precluding Fried from arguing that such proof was vital. All the safeguarding features of promissory estoppel — that the promise is likely to induce action, that the action is definite and substantial, and that enforcement is necessary to avoid injustice — were present.
Analysis:
This case significantly solidified the application of the doctrine of promissory estoppel in Pennsylvania, demonstrating its utility as a substitute for consideration to enforce promises where a party has detrimentally relied. It highlights the principle that good faith and fairness can override strict contractual requirements if one party induces another to act to their prejudice. The ruling expands the enforceability of promises beyond traditional contract law, providing a remedy to prevent injustice in situations where formal consideration is absent but reliance is clear and substantial, impacting future cases involving informal agreements and assurances.
