Maryland National Bank v. United Jewish Appeal Federation of Greater Washington, Inc.
286 Md. 274, 407 A.2d 1130 (1979)
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Rule of Law:
A pledge to a charitable organization is an unenforceable gratuitous promise unless the charity can demonstrate that it incurred a definite and substantial liability in specific reliance upon that pledge.
Facts:
- Milton Polinger was an active and substantial contributor to the United Jewish Appeal Federation of Greater Washington, Inc. (UJA).
- In the fall of 1974, UJA organized a fundraising 'mission' to Israel, which Polinger attended.
- During the mission, UJA officials pre-solicited Polinger to be a 'pacesetter' and make a large pledge at a fundraising caucus in Jerusalem to influence other potential donors.
- On November 9, 1974, at the caucus, Polinger signed a pledge card promising to pay UJA $200,000 for the year 1975.
- The pledge card stated it was made 'In consideration of the obligation incurred based upon this pledge.'
- UJA made financial allocations to its various beneficiary organizations based on the total amount of money pledged, but it historically built in a 5% allowance for uncollected pledges.
- UJA's practice for its 'Israel Emergency Fund' was to pay over only the funds it actually collected, not the amounts pledged.
- Milton Polinger died on December 20, 1976, with $133,500 of his pledge still unpaid.
Procedural Posture:
- After Milton Polinger's death, the personal representatives of his estate, Melvin R. Oksner and Maryland National Bank, disallowed a claim from the United Jewish Appeal Federation (UJA) for the $133,500 unpaid balance of his pledge.
- UJA filed a petition in the Orphans' Court for Montgomery County (the court of first instance for probate) to have its claim allowed.
- UJA and the personal representatives both filed cross-motions for summary judgment.
- The Orphans' Court granted UJA's motion, allowed the claim against the estate, and denied the personal representatives' motion.
- The personal representatives, as appellants, filed an appeal with the Court of Special Appeals of Maryland (the intermediate appellate court).
- Prior to a decision by the intermediate appellate court, the Court of Appeals of Maryland (the state's highest court) granted a writ of certiorari to hear the case directly.
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Issue:
Is a charitable pledge an enforceable obligation against the pledgor's estate when the charity did not take action or forbearance of a definite and substantial character in reliance on the specific pledge?
Opinions:
Majority - Orth, J.
No. A charitable pledge is not an enforceable obligation against the pledgor's estate unless it is supported by legal consideration or the charity has incurred a definite and substantial liability in reliance on it. The court determined that Maryland law follows the doctrine of promissory estoppel as articulated in the Restatement of Contracts § 90, which requires that a promise induce action or forbearance of a definite and substantial character to be binding. The court rejected the argument that public policy demands a special, more lenient standard for enforcing charitable subscriptions. In this case, UJA failed to demonstrate the requisite detrimental reliance on Polinger's specific pledge. UJA did not borrow money, enter into binding agreements, or otherwise incur liabilities on the strength of this individual promise. Its budgetary process of making allocations to beneficiaries already accounted for a percentage of uncollected pledges, and its use of Polinger's pledge as a fundraising tool to solicit others did not constitute the kind of definite and substantial action required to make the promise enforceable.
Analysis:
This decision reaffirms Maryland's adherence to traditional contract law principles for charitable pledges, specifically the requirement of promissory estoppel with tangible, detrimental reliance. The court explicitly rejects the trend in some jurisdictions to enforce such pledges on public policy grounds alone or by finding consideration in the mutual promises of other donors. This ruling establishes a significant precedent in Maryland, placing a high burden on charities seeking to enforce pledges against an estate. They must prove not just general reliance, but that they incurred a specific, substantial liability as a direct result of the deceased's individual promise, making it more difficult to collect on unpaid pledges that were merely part of a general fundraising campaign.
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