Foakes v. Beer

Facts

Dr. Foakes (D) owed Julia Beer (P) monies on a judgment. The parties entered into an agreement that if D would pay some monies at once (500 pounds), and the remainder of the principal in certain installments, P would forgive the interest on the debt. D paid and then P sued for the interest. The court ruled for P and D appealed.

Argument: (Holl) It may be much more advantageous to the creditor to obtain immediate payment of part of his debt than to wait to enforce the whole or by pressing the debtor into bankruptcy which would only result in a small dividend. It is everyday practice for tradesmen to take less in satisfaction of a larger sum and give discount. It is often held that a sheet of paper or a stick of sealing wax is sufficient consideration. Here the argument was to give time for payment of the whole without interest.

Argument: (Bompas) What the law implies as a duty is no consideration. Where a debt is due part payment is no reason for giving up the residue.

Argument: (Earl of Selborne) Not being under seal it cannot be enforced unless P gets consideration for it from D or unless without consideration it operates by way of accord and satisfaction. There is no consideration on the face as D did not contract to pay the future installments much less give any new security. The only promise is by P that if the payments were made regularly, she would take no proceedings on the judgment. Are we ready to dismiss the doctrine laid down by Sir Edward Coke? I think not. It might be an improvement of our present law if a release or acquittance of the whole debt, on the payment of any sum which the creditor may be content with, were held to be binding. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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