Pinnel's Case - 1602

Legal Case Summary

Pinnel’s Case (1602) 5 Co Rep 117

Summary: Whether part payment of a debt can be good consideration.

Facts:

The defendant, Cole, owed the plaintiff, Pinnel, the sum of £8 10s. Pinnel sued Cole for recovery of the debt. Cole had, at Pinnel’s request, paid £5 2s 6d one month before the debt was due to be paid and stated that they had an agreement that this part payment would discharge the entire debt.

Issues:

The defendant argued that the plaintiff had accepted partial payment of the debt as satisfaction of the whole.  However, it was a general rule that payment of a lesser sum than that which was owed in satisfaction of a debt could not discharge the obligation to repay the whole amount.

Decision/Outcome:

The court confirmed the general rule that part payment of a debt cannot be satisfaction for the whole. However, since the payment had been made early this was sufficient to discharge he debt. Lord Coke said (at 1117a):

‘Payment of a lesser sum on the day in satisfaction of a greater sum cannot be any satisfaction of the whole… but the gift of a horse, hawk, or robe etc. in satisfaction is good. For it shall be intended that a hawk, horse, or robe, etc. might be more beneficial to the plaintiff than the money’

Therefore, by paying some money early the defendant had provided the plaintiff with a further benefit and had not just repaid the money which he already owed. Consequently, this was good consideration, and the court found for the defendant.