Greiner v. Greiner: Be Careful with Promises

Real Estate Houses

Real Estate

Promises which are made among family members very rarely end up involving the legal system. But those which do tend to offer valuable lessons which, if heeded, can help people avoid considerable hassle and headache. The case of Greiner v. Greiner (1930) is an interesting example of a promise made between family members gone awry. Though the peculiar facts of Greiner are highly unlikely to be replicated today, the case still gives useful information for those who are considering giving something of great value away to a family member or close friend. Real estate owners in particular should pay close attention so that they can avoid the ordeal which the Greiner family had to experience.

Facts

Mrs. Greiner inherited a large piece of land following the death of her husband. She made a promise to her son, Frank Greiner, which allowed him to have a small portion of this land provided that he move his family onto the land and live there indefinitely. In direct response to this promise Frank Greiner moved onto the property with his family. Over time, Frank Greiner made improvements to the property and eventually asked Mrs. Greiner for a deed. Mrs. Greiner refused to give the deed and soon thereafter brought suit against her son in the hope of forcibly removing him from the premises. Mrs. Greiner argued before the court that a valid contract had not been made and therefore forcible removal was warranted; on the other hand, Frank Greiner argued that he had relied on the promise extended by his mother to such an extent that forcible removal would be unjust.

Law

Though a valid contract had not been made because no consideration was exchanged, the rule of promissory estoppel was still triggered by the offer given to Frank Greiner. The doctrine of promissory estoppel states that when a person reasonably relies on a promise to their detriment that promise may be enforceable by law in order to avoid injustice.

Ruling

The court (Supreme Court of Kansas) ruled that the doctrine of promissory estoppel applied given the facts of the case. It was reasonable to expect that Frank Greiner would uproot himself, move his family onto the property and then make valuable improvements to the property because of the promise made by Mrs. Greiner. And since he reasonably relied on the promise in this manner the promise should be enforceable by law. The court granted the land to Frank Greiner.

As Greiner v. Greiner illustrates, one has to be very careful when making promises which involve things of exceptional value. This is true even when the promise is made among family members. If you’re a real estate owner, be very careful before you promise any part of your land to someone else!

Image credit: woodleywonderworks

Though property owners do have to be careful with their promises, real estate ownership still carries plenty of benefits. Current and future owners should view this presentation on tax savings in order to fully capitalize on their ownership

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johnAbout john
Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. He is a graduate of Washington State University and the University of Washington School of Law.

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