Maryland National Bank v. United Jewish Appeal Federation of Greater Washington, Inc.

Court of Appeals of Maryland · Contracts

ContractsCharitable subscriptionsConsiderationPromissory estoppelcharitable pledgesubscriptiongratuitous promiseconsideration

Facts

Milton Polinger signed a pledge card promising to pay UJA $200,000 for 1975, divided between UJA generally and the Israel Emergency Fund, and $133,500 remained unpaid when he died. UJA made allocations to beneficiary organizations based on pledges generally, but it executed no formal commitment agreements and historically collected about 95% of pledges over three years while accounting for expected noncollection in making allocations. UJA used Polinger's pledge as an example in fundraising and had intended him to be a "pacesetter" during an Israel mission, but there was no evidence that others pledged in consideration of his pledge or that UJA borrowed money, entered binding agreements, or incurred specific liabilities on the faith of his particular pledge. UJA was able to fulfill all of its allocations despite the unpaid balance.

Issue

Does a pledge to a charitable institution survive the death of the pledgor and become an enforceable obligation of the estate when the charity used the pledge in fundraising and generally planned its activities around pledged funds? More specifically, was Polinger's pledge supported by consideration or enforceable reliance under Maryland law?

Rule

Maryland follows Restatement of Contracts § 90 (1932): a promise the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise. For charitable subscriptions, enforceability requires consideration or reliance of that sort; Maryland does not adopt a special rule favoring charities or enforce charitable pledges merely because they were used in fundraising or because philanthropy is socially desirable.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Baltimore, Nora Feld signed a written pledge promising $150,000 to Harbor Light Arts Foundation for renovation of a community theater. After receiving Nora's pledge, the foundation signed a fixed-price construction contract and personally guaranteed a bridge loan to begin demolition, and it did so expecting Nora's payment as part of the project funding. Nora died before paying anything, and her estate refused to honor the pledge.

Under Maryland law as stated in the majority opinion, is the pledge most likely enforceable against Nora's estate?

Explanation. Maryland enforces a charitable subscription only if supported by consideration or by reliance satisfying Restatement § 90 as adopted in Maryland. The strongest basis here is reliance of a definite and substantial character: the charity signed a construction contract and undertook loan obligations on the faith of the pledge. The majority stressed that enforceability exists where the charity enters binding engagements, borrows money, incurs liabilities, or faces economic loss because of the subscription. (Derived from Maryland National Bank v. United Jewish Appeal Federation of Greater Washington, Inc. (n.d.).)