Herbert White owned a house in Atlanta. He refinanced his home through Citizens Trust Bank, but fell behind on his loan payments. He owed about $43,000. The Bank notified White that it intended to foreclose. After some delays, the Bank sent White a formal notice that it would sell his house at a foreclosure sale on the courthouse steps, on May 7. The finance agreement provided that if the Bank foreclosed, White owed the full amount.
On that date, White arrived and offered the Bank $35,000 to stop the foreclosure. The Bank’s collection manager, D.J. Hughlett, accepted the money and drafted a letter, which he and White signed:
Citizens Trust Bank agrees to postpone the foreclosure [based on] a payment of $33,000.00 in certified funds and a possible $2,000.00 from the account of Cora White Cummings on the above-referenced property. Our Attorney, William A. Broughman, will forward to you a written agreement, for your signature, to consummate this transaction. The payoff balance as of 11:05 AM is $7,986.43. If his sister pays the $2,000.00, the balance will be $5,986.43.
White did pay the extra $2,000. Hughlett decided that the signed letter was a forbearance agreement with White, so he did not bother to send an additional document. Hughlett believed that White would pay the balance within 30 days, but White never did so. The Bank sent a new foreclosure notice and did in fact sell the house.
White sued the Bank, claiming that it had breached its agreement not to foreclose. The jury agreed, awarding White $250,000 in compensatory damages. The Bank appealed, arguing that White gave no consideration for the agreement because he was already obligated to pay the full balance.