Pitts v. McGraw-Edison Co.

329 F.2d 412 (6th Cir. 1964)

 

RULE:

The doctrine of promissory estoppel, as explained by the authorities, is different from the well recognized principle of estoppel in pais, based on misrepresentation of fact.

FACTS:

Plaintiff, L. U. Pitts, brought this action in the District Court to recover damages in the amount of $ 15,000 for an alleged breach of a retirement contract by the defendant. Plaintiff contended that the negotiations between defendant leading to his retirement were in substance an offer on the part of defendant that if he would retire and turn over to his successor representative all of his customer account records containing valuable information on active and inactive accounts, defendant would pay him monthly thereafter a one percent overwrite commission. The court stated the parties' relationship was at will and could be terminated by either party at any time without notice and without liability.

ISSUE:

Did the court err in holding that the parties' relationship was at will and could be terminated by either party at any time without notice and without liability?

ANSWER:

No.

CONCLUSION:

It must be kept in mind that the plaintiff was an independent business man, not an employee of the defendant. His relationship with the defendant could be terminated by either party at any time without notice and without liability therefor. The plaintiff in his testimony concedes this, and it was so found as a fact by the District Judge. Unless the plaintiff is able to establish a valid contract obligating the defendant to pay the 'retirement' benefits claimed, he has no cause of action. Thus, the District Judge ruled that the payments to the plaintiff over the period of July 1, 1955, to July 1, 1960, were without consideration, were the result of voluntary action on the part of the defendant, and were mere gratuities terminable by the defendant at will.

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