Miles Homes Division v. First State Bank of Joplin
Court of Appeals of Missouri
782 S.W.2d 798 (1990)
The Ames financed land through a mortgage with First State Bank of Joplin (bank) (defendant) and separately contracted with Miles Homes Division (Miles) (plaintiff) for building materials secured by a second mortgage; Miles told the bank about its second mortgage and asked the bank to notify it if the Ames became delinquent or faced foreclosure on the first mortgage, so Miles could protect its interest, and the bank agreed. The Ames became delinquent, the bank sold the note to a third party who foreclosed and resold the property for $27,500, and the bank never notified Miles as promised; Miles sued for breach of contract, and the trial court found the bank's promise was supported by consideration and awarded Miles $27,500 minus the unpaid loan balance, and the bank appealed.
Whether, if a promisor should reasonably know that the promise will result in an action, and the promise does so result, the promise is binding if injustice can be avoided only by enforcing the promise.