As the result of a previous judgment of the Court of Exchequer, Foakes owed Beer £2,090 19s. The two parties entered into an agreement on December 21, 1876 (not under seal) that Foakes would pay £500 immediately and £150 every 6 months until he had paid off the debt and in return Beer wouldn't take any action. By June of 1882, Foakes has paid off the entire principal. Beer sought leave to proceed on the judgment, claiming she was entitled to interest because the debt was not paid off immediately. Foakes claimed there was a contract with no mention of interest which Beer claimed was invalid because she did not receive any consideration.
- Is partial payment of a debt sufficient consideration for the original contract between Foakes and Beer?
Appeal dismissed with costs, interest payment due.
Selborne, writing for the court, held that as the agreement was not under seal the defendant was not bound unless there was consideration. He refers to Pinnel's Case and the doctrine
that payment for a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges, that by no possibility a lesser sum can be a satisfaction to the plaintiff for a greater sum
While he acknowledges that this doctrine has been criticized it has not been overruled and therefore somewhat hesitantly adopts it and dismisses the appeal.
Payment of a lesser amount cannot serve as satisfaction of a larger amount.
or The payment of a smaller sum of money for a lager sum is not consideration because in paying less is not whole satisfaction