## Facts

- Thirteen former employees of a refinery and administrators of five deceased employees’ estates sought to enforce alleged promises of monthly payments after their employment ended.
- Plaintiffs had worked for the company for many years at fixed wages.
- Plaintiffs alleged that, around July 28, 1930, the company’s vice president and general manager made separate agreements with each employee to pay, for life, a monthly sum equal to one-half of the employee’s then-current wages.
- Plaintiffs asserted they were to perform no further services; their only obligation was to come to the office on payday to collect their checks.
- The company characterized the arrangement as reflected in a letter stating that economic conditions required removing the employees from active service and that monthly payments would be made in recognition of long service and to mitigate hardship.
- The employees were kept on the payroll for purposes of a group insurance plan; deductions continued from the payments.
- The company made payments regularly until June 1, 1931, then terminated the payments and notified recipients the arrangement had ended.

## Issues

1. Whether a promise to pay former employees one-half their wages for life is enforceable when the asserted consideration is past service and the employees’ agreement to pick up checks at the office.
2. Whether moral obligation or gratitude for long service can substitute for legal consideration to make the promise enforceable.

## Decision

- The court entered judgment for the company and denied the employees relief.
- The court held no enforceable contract existed because the alleged promise was unsupported by consideration and was therefore gratuitous and terminable.
- The court rejected moral obligation as a substitute for consideration where no prior legal duty existed.
- The court treated the requirement that employees come to the office to collect checks as a condition of receiving a gratuitous benefit, not bargained-for consideration.

## Legal Principles

- Past services rendered before a promise is made do not constitute consideration for that promise.
- Moral obligation or gratitude is not valid consideration unless the moral duty was previously a legal duty.
- An act required merely as a condition to receive a gratuitous benefit does not supply consideration absent a bargained-for benefit to the promisor or legal detriment to the promisee.

## Conclusion

The court held the company’s post-employment payment plan was a revocable gratuity, not an enforceable lifetime pension contract, because the asserted bases for enforcement—past service, moral obligation, and the requirement to pick up checks—did not amount to legal consideration.


Plowman v. Indian Refining Co., 20 F. Supp. 1 (E.D. Ill. 1937)