Hirachand Punumchand v Temple

Hirachand Punamchand v Temple 2 KB 330 is often cited as one of the exceptions to the accord and satisfaction rule laid out in Foakes v Beer. In that case, it is held that an agreement to accept part payment of a debt cannot validly discharge the entire debt. In Hirachand Punamchand v Temple, part payment of a debt is held to be valid because it is supplied by a third party and not the debtor.

Background

The defendant, Lieutenant Temple had gotten indebted to money lenders issuing them a promissory note; after no money was forthcoming from Lieutenant Temple, the plaintiffs approached his father, Sir Richard Carnac Temple, 2nd Baronet, and asked him to pay the debt for him. Sir Richard in reply, got his solicitors to send the moneylender a cheque for 1,500 rupees, which was less than the full amount owed, with a letter attached that this was tendered as a "full settlement of his son’s account".
The money lenders cashed the cheque but then proceeded to sue the debtor for the outstanding balance.

Held

The Court of Appeal ruled that the defendant was not liable for the remaining balance owed to the moneylender.
Fletcher Moulton LJ said in the ruling:
The net effect of the father's intervention was to essentially extinguish the original credit note; in the words of Vaughan Williams LJ:
He had previously said :
Thus arriving at an essentially similar position to that of Willes J in Cook v Lister 13 CBNS 543 but by virtue of rather different reasoning.