Robert Mallery Lumber Corp. v. B. & F. Associates, Inc.

*513CAVANAUGH, Justice,

dissenting:

I dissent from the court’s approval of the grant of judgment on the pleadings by the court below.1 Judgment on the pleadings should be granted only when a case is clear and free from doubt. Nevling v. Natoli, 290 Pa.Super. 174, 434 A.2d 187 (1981). It must be shown that there is no genuine issue of material fact. Coal Operator’s Casualty Co. v. Charles T. Easterby & Co. Inc., 440 Pa. 218, 269 A.2d 671 (1970). The majority sustains the entry of judgment on the pleadings against United Penn Bank of Wilkes-Barre on the basis of the doctrine of promissory estoppel as set forth in the Restatement of Contracts, 2nd, § 90 and also that the appellant agreed to act as a guarantor. At the outset we note that if the appellant bank made any promise in this case there is nothing to indicate that such a promise was supported by consideration. Consideration is an essential ingredient of a contract and a promise unsupported by consideration is unenforceable in the absence of justifiable detrimental reliance by the promisee. Cardamone v. University of Pittsburgh, 253 Pa.Super. 65, 384 A.2d 1228 (1978). However, under the doctrine of promissory estoppel consideration is not required to make a promise legally enforceable. Section 90 of the Restatement of Contracts, 2nd, provides:

§ 90. Promise Reasonably Inducing Action or Forbearance
(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

We note that “[although the doctrine of promissory estop-pel has become fully recognized in Pennsylvania, it is not to *514be loosely applied; if it were, any promise, regardless of the complete absence of consideration, would be enforceable.” Fedun v. Mikes Cafe, Inc., 204 Pa.Super. 356, 368, 204 A.2d 776, 782 (1964). The doctrine of promissory estoppel is only used to enforce a promise unsupported by consideration in order to avoid injustice. Utility Appliance Corp. v. Kuhns, 393 Pa. 414, 143 A.2d 35 (1958). Our first inquiry in determining whether the doctrine of promissory estoppel applies is whether the letter of June 8, 1977 constituted a promise by the appellant bank to pay Robert Mallery Lumber Corporation a sum up to $25,000 for purchases by B. & F. Associates, if B. & F. Associates did not pay Mallery. The appel-lee, Robert Mallery Lumber Corporation, was aware of the necessity of proving an agreement by the appellant bank to pay for purchases by B. & F. Associates for it alleged in its complaint against B. & F. Associates and United Bank in paragraph XIX that the bank sent the letter of June 8,1977 to Robert Mallery Lumber Company “promising and guaranteeing payment of up to $25,000 for lumber purchased from Robert Mallery Lumber Corporation by B. & F. Associates, Inc.” Our reading of the letter of June 8, 1977 discloses no such promises and guarantees, so as to warrant the grant of judgment on the pleadings. The letter merely stated that a line of credit had been established and “$25,000 is reserved for purchases from Mallery Lumber Company.” In my opinion the record before us is not so clear that we should hold as a matter of law that the bank made a promise that is legally enforceable without consideration.

Another requirement for the application of the doctrine of promissory estoppel is that there must be reliance by the promisee upon the promise resulting in prejudice to the promisee. Department of Labor and Industry v. Unemployment Compensation Board of Review, 203 Pa. Super. 262, 199 A.2d 735 (1964); Harkins v. Zamichieli, 266 Pa.Super. 401, 405 A.2d 495 (1979). In this case, the record does not show to what extent, if any, the appellee relied on the June 8, 1977, letter in continuing to extend credit as appellee was *515paid the sum of $27,478.23 by B. & F. Associates on July 6, 1977, less than a month after the bank’s letter was sent. Would this not cause the appellee to question whether the $25,000 “line of credit” was consumed? Even assuming that the bank’s letter could be construed as a sufficient promise to pay the debt of B. & F. Associates the element of reliance by Robert Mallery Lumber is not clearly established.

The second thrust of the majority opinion is that the bank agreed to act as a guarantor for B. & F. Associates, Inc. Again, we are unable to find a clear promise by the bank to pay the obligations of B. & F. Associates if that company, which was the primary obligor, failed to do so. In Atlanta Corporation v. Ohio Valley Provision Co., 263 Pa.Super. 374, 376, 398 A.2d 183, 184 (1979) a bank sent the following letter to a seller of goods:

One of our valued customers, Ohio Valley Provision Company, has placed an order with your company in the amount of approximately $19,000.00 and we understand that you want a guarantee before releasing the meat products to them.
“You may be assured that this amount will be paid by the above mentioned company within 10 days. This company has been a customer of ours since their organization and maintains substantial balances with us.
s/K. W. Gundlach
President”

This court held that the letter from the bank did not constitute a guarantee of payment since it did not promise that the bank would pay the debt of the buyer. Similarly, in my opinion the appellant in this case did not unambiguously promise to act as guarantor of debts owed by B. & F. Associates to Robert Mallery Lumber Corporation. I would therefore direct that the judgment on the pleadings be reversed.

. I agree with the majority that the letter from the United Penn Bank of Wilkes-Barre, Pennsylvania, appellant, to Robert Mallery Lumber Corporation of June 8, 1977, does not constitute a letter of credit within the meaning of the Uniform Commercial Code.