Johnson v. Otterbein Univ.

41 Ohio St. 527 (1885)

 

RULE:

The creation of a fund with which to pay a previously incurred indebtedness of an institution is not a consideration in law for a promise to make a donation. The acceptance of the writing containing the direction to apply the fund, does not, in a legal sense, give rise to a case of mutual promises.

FACTS:

The contested writing contained a distinct promise to pay a certain sum at a fixed time, a direction as to the application of the fund, and a provision that it was to be refunded in case of misapplication. The university's charter authorized the trustees to procure funds for specified purposes, and required them to apply what they received by donation or otherwise to those purposes. It also required that all donations and bequests be applied in accordance with the designs expressed by the donors. The university argued that there was a valid consideration in order to enforce the donor's promise. Alternatively, by force of the charter provisions, the university claimed that the promise was binding. The district court ruled against the donor. On appeal, the court overturned the judgment.

ISSUE:

Was the creation of a fund with which to pay the previously incurred indebtedness of the institution a consideration in law?

ANSWER:

No.

CONCLUSION:

The creation of the fund with which to pay the university's indebtedness was not a consideration for the promise. Nor did the trustees' acceptance of the writing containing the direction to apply the fund give rise to a case of mutual promises. Moreover, gratuitous promises were not named in the charter and were left to the control of the law.

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