Plowman v. Indian Refining Co. – Case Brief
Plowman v. Indian Refining Co., 20 F.Supp. 1 (E.D. Ill. 1937).
Facts: The plaintiffs were Plowman (P) and several others including the administrators of the estates of five deceased persons. Plowman had been an employee of Indian Refining Co. (D). Plowman alleged that the vice-president and general manager of Indian Refining called the employees individually into his office, and made a contract in which each would receive one half of their salary at the time for life.
Ps contend that consideration arose out of the relationship that existed at the time, D’s desire to provide for their future welfare, and the provision in the contracts whereby each employee would call at the office each payday. Ps remained on the pay roll, but according to their testimony, they were not to render any further services, their only obligation being to call at the office each payday. After ten months, the payments cease and Ps were advised by D’s personnel officer that the arrangement was terminated.
Ps sued D for breach of contract. D offered evidence to prove that there was no consideration for the promise to make the payments, and that it was beyond the power of any of the persons alleged to have contracted to create by agreement or by estoppel any liability of the company to pay wages to employees during the remainders of their lives if they did not render actual services. P’s alleged estoppel.
Issue: May past conduct serve as consideration to create an enforceable contract?
Holding and Rule: No. For consideration to be present there must be an inducement of current performance.
The court held that consideration is something given in exchange for a promise or in a reliance upon the promise. Something which has been delivered before the promise is executed, and, therefore, made without reference to it, cannot properly be legal consideration.
The court stated that the doctrine of validity of moral consideration is condemned because it is contrary in character to actual consideration. Appreciation of past services or pleasure afforded the employer thereby is not a sufficient consideration.
The court held that in this case Ps had proven that they were ready, willing, and able to travel to and report semimonthly to the main office, but this did not furnish a legal consideration. The court held that the act was simply a condition imposed upon them in obtaining gratuitous pensions.
Disposition: For D.