Salsbury v. Northwestern Bell Telephone Co. – Case Brief
Salsbury v. Northwestern Bell Telephone Co., 221 N.W.2d 609 (Iowa 1974).
Facts: Northwestern (D) gave a letter to Charles City College (P) promising a donation of $15,000. A pledge card was completed to represent the donation and it was treated as a normal pledge card. The pledge card was never signed by Northwestern. Charles City College assigned the pledge to a supplier of the college and gave the supplier the unsigned pledge card to reflect D’s donation.
The college was later closed and Salsbury, the chairman of the board of trustees for the college, sued D to recover the pledged amount. The court held that the pledge to P was enforceable as a matter of public policy. D appealed and asserted that the pledge was not enforceable because there had been no consideration.
Issue: Can a pledge to a charity be enforceable without consideration?
Holding and Rule: Yes. A pledge to a charity can be enforceable without consideration.
The court held that donations to charity are enforceable under the doctrine of promissory estoppel as a matter of public policy, and there need be no showing of consideration or detrimental reliance. Under the Restatement (2d) of Contracts § 90, charitable subscriptions should be enforceable under the doctrine of promissory estoppel without a showing of detrimental reliance.
Disposition: Judgment affirmed.
Notes: It was important to the outcome of this case that D had sent P his pledge in writing in the form of a letter. The courts in this jurisdiction had held previously that an unsigned pledge card did not create a binding obligation. Many jurisdictions do not enforce charitable donations absent consideration or detrimental reliance.