Sunday, April 18, 2010

Foakes v beer (1884) 9 App Cas 605

1- Whether there was a valid agreement between the parties John and Julia
2- Whther the respondent entitled to the amount given by the appellant

The appellant, John Weston Foakes, owed the respondent, Julia beer, a sum of $2,090 19s after a court judgment. Beer agreed that she would not take any action against Foakes for the amount owed if he would sign an agreement promising to pay an initial sum of $500 and pay $150 twice yearly until the whole amount was piad back. Foakes was in financial difficulty, and so Beer waived any interest on the amount owed. Foakes made the payments as agreed without any interest. But then Beer sued Foakes for the interest. The questiom was whether she was entiled to it, despite their agreement that he would not need to pay it.

Queen's Bench

At trial, the court found in favour of Foakes. Watkin William J uphelp this decision, given the agreement between the two. Mathew J said,

" It is material to notice that by the agreement the debtor shall not bind himself to pay the creditor's nominee. That stipulation renders the document available as a security. Upon the authority of the decision, I think there was a bundant consideration for the agreement."

Court of appeal
Brett MR held, in a short judgment, that there was no consideration for the agreement. Lindley LJ and Fry LJ concurred without giving considered opinions.

House of Lords

The House of Lords (Earl of selborne LC, Lord Waston and Lord Fitzgerald) upheld the ruling of the court of Appeal in favour of Beer. They reasoned that though the agreement did not contemplate the interest owed, it could still be implied given an enforceable agreement.
However, the promise to pay a debt was deemed nit ti sufficient considerattion as there was no additional benefit moving from Foakes to Beer that was not already owed to her.

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