FOAKES v BEER (1884) DOWNWARD VARIATION: Common Law Position

"...In consideration of the said John Weston Foakes paying to the said Julia Beer on the signing of this agreement the sum of £500, the receipt whereof she doth hereby acknowledge in part satisfaction of the said judgment debt of £2090 19s.,......... [and paying the remainder of the sums due in instalments] ........then she the said Julia Beer hereby undertakes and agrees that she, her executors, administrators or assigns, will not take any proceedings whatever on the said
judgment...

In August 1875, Julia Beer had obtained a High Court judgment against Dr Foakes for £2,090 19s. It was agreed in writing, in December 1876, that if Dr Foakes were to pay £500 immediately and pay £150 on two occasions each year until the whole sum of £2,090 19s. had been paid, then Julia Beer 'would not take any proceedings whatever on the said judgment'. (As a judgment debtor, Dr Foakes was liable for the interest that had accrued on the judgment debt, but the agreement had not mentioned this.) Dr Foakes paid the judgment debt in accordance with the agreement, but Julia Beer then brought an action claiming the interest on the debt. The House of Lords was divided on the question of whether the agreement amounted to a promise to excuse Dr Foakes from payment of the interest.

Held: In any event, Dr Foakes had not provided any consideration for Julia Beer's promise not to take any proceedings on the judgment and therefore the promise was unenforceable. He had done only what he was legally bound to do anyway.

EARL OF SELBORNE LC: [T]he question remains, whether the agreement is capable of being legally enforced. Not being under seal, it cannot be legally enforced against the respondent, unless she received consideration for it from the appellant, or unless, though without consideration, it operates by way of accord and satisfaction, so as to extinguish the claim for interest. What is the consideration? On the face of the agreement none is expressed, except a present payment of £500, on account and in part of the larger debt then due and payable by law under the judgment. The appellant did not contract to pay the future instalments of £150 each, at the times therein mentioned; much less did he give any new security; in the shape of negotiable paper, or in any other form. The promise de futuro was only that of the respondent, that if the half-yearly payments of £150 each were regularly paid, she would 'take no proceedings whatever on the judgment.' No doubt if the appellant had been under no antecedent obligation to pay the whole debt, his fulfilment of the condition might have imported some consideration on his part for that promise.

But he was under that antecedent obligation; and payment at those deferred dates, by the forbearance and indulgence of the creditor, of the residue of the principal debt and costs, could not (in my opinion) be a consideration for the relinquishment of interest and discharge of…