In re the Estate of Field
1959 N.Y. Misc. LEXIS 4433, 15 Misc. 2d 950, 181 N.Y.S.2d 922 (1959)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Charitable pledges conditioned on the charity raising a specific aggregate sum by a certain date are treated as offers for unilateral contracts, which become binding only upon the charity's full satisfaction of the specified condition precedent and subsequent reliance by incurring liabilities.
Facts:
- On or about June 3, 1953, the decedent made an oral pledge of $125,000 to the New School for Social Research (petitioner) during a building drive, contingent on the School raising $2,000,000 within a three-year period ending June 2, 1956.
- On or about January 18, 1955, during a conversation with Dr. Hans Simons, the School's president, the decedent agreed to modify his pledge, increasing the amount to $250,000.
- The modified pledge stipulated that the first $125,000 would be contributed when the School raised $1,000,000 for a proposed building at 74-76 West 12th Street, New York City.
- The modified pledge further stipulated that the second $125,000 would be contributed when the School raised an additional $1,000,000 for a proposed building at 63-69 West 11th Street, or if the School raised $2,000,000 in total during its building drive before June 2, 1956.
- Prior to the decedent's death, he contributed $123,955.32 towards his pledge.
- The New School for Social Research did raise $1,000,000 toward the construction of the building on West 12th Street and began construction, thereby incurring liabilities in reliance on the decedent's pledge.
- Prior to June 2, 1956, the New School claimed to have raised $2,484,000 for the building fund, but a $750,000 'List Pledge' included in this sum was an indefinite 'agreement to agree' and not a firm pledge.
- On May 15, 1956, the members of the finance committee mistakenly made a resolution stating that the fundraising contingency was met, and the decedent concurred with this resolution.
Procedural Posture:
- The New School for Social Research brought a proceeding in Surrogate's Court, Nassau County, to compel payment by the decedent’s executors of the unpaid balance of an alleged charitable subscription.
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 charitable pledge, conditioned on the charity raising a specific aggregate sum by a certain date, create an enforceable unilateral contract for the full amount if the charity fails to fully satisfy the condition precedent, even if it has incurred liabilities in partial reliance?
Opinions:
Majority - Edgar F. Hazleton, S.
No, a charitable pledge conditioned on the charity raising a specific aggregate sum by a certain date does not create an enforceable unilateral contract for the full amount if the charity fails to fully satisfy the condition precedent, even if it has incurred liabilities in partial reliance. Charitable subscription agreements are generally enforced as valid contracts, often as unilateral contracts where the charity's acceptance by incurring liability in reliance makes the offer binding. However, subscriptions conditioned on reaching a certain aggregate amount by a specific date are deemed to lack consideration for the condition itself, treating it as a condition precedent rather than a reciprocal promise. The court found the decedent’s pledge constituted an offer for two divisible unilateral contracts. The first contract, for $125,000, became enforceable because the New School successfully raised the required $1,000,000 for the West 12th Street building and incurred liabilities by starting construction. The second contract, for the additional $125,000, was not enforceable because the condition precedent of raising an additional $1,000,000 or a total of $2,000,000 by June 2, 1956, was not met; the $750,000 'List Pledge' was merely an 'agreement to agree' and thus did not count towards the total. The finance committee's mistaken resolution that the contingency was met, and the decedent's concurrence, did not act as a waiver of the condition because it resulted from a mistake of material fact. The court also determined that part payment by the decedent and a memorandum in his cash projection sheets satisfied the Statute of Frauds. Therefore, only the first contract was binding, and the estate owes the remaining balance of $1,044.68 for that portion of the pledge.
Analysis:
This case clarifies the enforceability of conditional charitable pledges, establishing that such conditions are treated as conditions precedent requiring strict fulfillment, rather than part of the consideration itself. It highlights that 'agreements to agree' do not satisfy fundraising conditions, even if the charity acts in reliance on the general promise. The decision underscores the importance of clear, unambiguous fulfillment of specific conditions for the full enforceability of unilateral contracts in the context of charitable donations, providing guidance for both donors and charitable organizations.
