Hirachand Punumchand v Temple
|Hirachand Punamchand -v- Temple|
|Court||Court of Appeal of England and Wales|
|Full case name||Hirachand Punumchand -v- Richard Durand Temple|
|Citation(s)|| 2 KB 330|
|Judge(s) sitting||Fletcher Moulton LJ, Vaughan Williams LJ|
|accord and satisfaction|
Hirachand Punamchand -v- Temple  2 KB 330 is often cited as one of the exceptions to the accord and satisfaction rules established under Foakes v Beer, which in this case involves a part payment of a debt made not by the debtor, but a 3rd party.
The defendant, Richard Durand Temple, [1880 - 1962] (whom later inherited the title of 3rd Baronet from his father) a British army officer in India - a lieutenant in the 60th Rifles had gotten indebted to a moneylender to the position where he found he was unable to repay the debt. In a seemingly cunning move at the time by the moneylender (although surely later regretted doing so), suggested that the debtor contact his father, Sir Richard Carnac Temple, 2nd Baronet, and ask 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.
In a case of wanting to have one’s cake and eat it too, the moneylender both cashed the cheque, then proceeded to sue the debtor for the remaining balance.
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:
|“||But in the present case we are dealing with the question of the effect of money paid by a third person [and not by the debtor]. In such a case there is no difference between payment of the total amount and payment of a portion of it only, so long as it is paid in settlement of the debt. If a third person steps in and gives a consideration for the discharge of the debtor, it does not matter whether he does it in meal or in malt, or what proportion the amount given bears to the amount of the debt. Here the money was paid by a third person, and I have no doubt that, upon the acceptance of that money by the plaintiffs with full knowledge of the terms on which it was offered, the debt was absolutely extinguished.||”|
To sum up, had the debtor here had tendered the part payment as full settlement, as occurred in Foakes v Beer, it us unlikely that the creditor would not be able to pursue the debtor for the balance. But because here the settlement offer came from a 3rd party (the debtors father) and not the debtor himself, meant the creditor, after effectively accepting the settlement offer, could not also claim the remaining balance from the debtor.