[1971] 3 All ER 907
Court of Appeal
The facts are stated in the judgement of Lord Denning MR. The facts are very similar to Phillips v Brooks and Ingram v Little and the issue is the same: was the contract void for mistake?
Lord Denning MR
This is another case where one of two innocent persons has to suffer for the fraud of a third. It will no doubt interest students and find its place in the textbooks.
Mr Lewis is a young man who is a postgraduate student of chemistry. He lives at Clifton near Bristol. He had an Austin Cooper motor car. He decided to sell it. He put an advertisement in the newspaper offering it for £450. On May 8, 1969, in reply to the advertisement a man--I will simply call him the "rogue," for so he was--telephoned and asked if he could come and see the car. He did not give his name. He said he was speaking from Wales, in Glamorganshire . Mr Lewis said that he could come and see it. He came in the evening to Mr Lewis's flat. Mr Lewis showed him the car, which was parked outside. The rogue drove it and tested it. He said he liked it. They then went along to the flat of Mr Lewis's fiancee, Miss Kershaw (they have since married). He told them he was Richard Green and talked much about the film world. He led both of them to believe that he was the well-known film actor, Richard Greene, who played Robin Hood in the "Robin Hood" series. They talked about the car. He asked to see the logbook. He was shown it and seemed satisfied. He said he would like to buy the car. They agreed a price of £450. The rogue wrote out a cheque for £450 on the Beckenham branch of the Midland Bank. He signed it "RA Green". He wanted to take the car at once. But Mr Lewis was not willing for him to have it until the cheque was cleared. To hold him off, Mr Lewis said that there were one or two small jobs he would like to do on the car before letting him have it, and that would give time for the cheque to be cleared. The rogue said: "Don't worry about those small jobs. I would like to take the car now." Mr Lewis said: "Have you anything to prove that you are Mr Richard Green?" The rogue thereupon brought out a special pass of admission to Pinewood Studios, which had an official stamp on it. It bore the name of Richard A Green and the address, and also a photograph which was plainly the photograph of this man, who was the rogue. On seeing this pass, Mr Lewis was satisfied. He thought that this man was really Mr Richard Greene, the film actor. By that time it was 11 o'clock at night. Mr Lewis took the cheque and let the rogue have the car and the logbook and the Ministry of Transport test certificate. Each wrote and signed a receipt evidencing the transaction. Mr Lewis wrote:
"Received from, Richard A Green, 59 Marsh Rd, Beckenham, Kent, the sum of £450 in return for Austin Cooper S Reg No AHT 484B chassis No CA257--549597. Keith Lewis"
The rogue wrote:
"Received logbook No 771835 and MOT for Mini-Cooper S No AHT 484B. RA Green."
Next day, May 9, 1969, Mr Lewis put the cheque into the bank. A few days later the bank told him it was worthless. The rogue had stolen a cheque book and written this £450 on a stolen cheque.
Meanwhile, whilst the cheque was going through, the rogue sold the car to an innocent purchaser. He sold it to a young man called Mr Averay. He was at the time under 21. He was a music student in London at the Royal College of Music. His parents live at Bromley. He was keen to buy a car. He put an advertisement in the "Exchange and Mart," seeking a car for £200. In answer he had a telephone call from the rogue. He said that he was speaking from South Wales. He said that he was coming to London to sell a car. Mr Averay arranged to meet him on May 11, 1969. The rogue came with the car. Young Mr Averay liked it, but wanted to get the approval of his parents. They drove it to Bromley. The parents did approve. Young Mr Averay agreed to buy it for £200. The rogue gave his name as Mr Lewis. He handed over the car and logbook to young Mr Averay. The logbook showed the owner as Mr Lewis. In return Mr Averay, in entire good faith, gave the rogue a cheque for £200. The rogue signed this receipt:
"Sale of Cooper S to AJ Averay. Received £200 for the Cooper S Registration No AHT 484B, the said car being my property absolutely, there being no hire purchase charges outstanding or other impediment to selling the car. Keith Lewis May 13, 1969."
A fortnight later, on May 29, 1969, Mr Averay wanted the workshop manual for the car. So his father on his behalf wrote to the name and address of the seller as given in the logbook--that is, to Mr Lewis. Then, of course, the whole story came to light. The rogue had cashed the cheque and disappeared. The police have tried to trace him, but without success.
Now Mr Lewis, the original owner of the car, sues young Mr Averay. Mr Lewis claims that the car is still his. He claims damages for conversion. The judge found in favour of Mr Lewis and awarded damages of £330 for conversion.
The real question in the case is whether on May 8, 1969, there was a contract of sale under which the property in the car passed from Mr Lewis to the rogue. If there was such a contract, then, even though it was voidable for fraud, nevertheless Mr Averay would get a good title to the car. But if there was no contract of sale by Mr Lewis to the rogue--either because there was, on the face of it, no agreement between the parties, or because any apparent agreement was a nullity and void ab initio for mistake, then no property would pass from Mr Lewis to the rogue. Mr Averay would not get a good title because the rogue had no property to pass to him.
There is no doubt that Mr Lewis was mistaken as to the identity of the person who handed him the cheque. He thought that he was Richard Greene, a film actor of standing and worth: whereas in fact he was a rogue whose identity is quite unknown. It was under the influence of that mistake that Mr Lewis let the rogue have the car. He would not have dreamed of letting him have it otherwise.
What is the effect of this mistake? There are two cases in our books which cannot, to my mind, be reconciled the one with the other. One of them is Phillips v Brooks, where a jeweller had a ring for sale. The other is Ingram v Little, where two ladies had a car for sale. In each case the story is very similar to the present. A plausible rogue comes along. The rogue says that he likes the ring, or the car, as the case may be. He asks the price. The seller names it. The rogue says that he is prepared to buy it at that price. He pulls out a cheque book. He writes or prepares to write, a cheque for the price. The seller hesitates. He has never met this man before. He does not want to hand over the ring or the car not knowing whether the cheque will be met. The rogue notices the seller's hesitation. He is quick with his next move. He says to the jeweller, in Phillips v Brooks: "I am Sir George Bullough of 11 St James's Square"; or to the ladies in Ingram v Little "I am PGM Hutchinson of Stanstead House, Stanstead Road, Caterham"; or to the post-graduate student in the present case: "I am Richard Greene, the film actor of the Robin Hood series." Each seller checks up the information. The jeweller looks up the directory and finds there is a Sir George Bullough at 11 St James's Square. The ladies check up too. They look at the telephone directory and find there is a "PGM Hutchinson of Stanstead House, Stanstead Road, Caterham." The post-graduate student checks up too. He examines the official pass of the Pinewood Studios and finds that it is a pass for "Richard A Green" to the Pinewood Studios with this man's photograph on it. In each case the seller feels that this is sufficient confirmation of the man's identity. So he accepts the cheque signed by the rogue and lets him have the ring, in the one case, and the car and logbook in the other two cases. The rogue goes off and sells the goods to a third person who buys them in entire good faith and pays the price to the rogue. The rogue disappears. The original seller presents the cheque. It is dishonoured. Who is entitled to the goods? The original seller? Or the ultimate buyer? The courts have given different answers. In Phillips v Brooks Ltd, the ultimate buyer was held to be entitled to the ring. In Ingram v Little the original seller was held to be entitled to the car. In the present case the deputy county court judge has held the original seller entitled.
It seems to me that the material facts in each case are quite indistinguishable the one from the other. In each case there was, to all outward appearance, a contract: but there was a mistake by the seller as to the identity of the buyer. This mistake was fundamental. In each case it led to the handing over of the goods. Without it the seller would not have parted with them.
This case therefore raises the question: What is the effect of a mistake by one party as to the identity of the other? It has sometimes been said that if a party makes a mistake as to the identity of the person with whom he is contracting there is no contract, or, if there is a contract, it is a nullity and void, so that no property can pass under it. This has been supported by a reference to the French jurist Pothier; but I have said before, and I repeat now, his statement is no part of English law. I know that it was quoted by Lord Haldane in Lake v Simmons, and, as such, misled Tucker J in Sowler v Potter, into holding that a lease was void whereas it was really voidable. But Pothier's statement has given rise to such refinements that it is time it was dead and buried altogether.
For instance, in Ingram v Little the majority of the court suggested that the difference between Phillips v Brooks and Ingram v Little was that in Phillips v Brooks the contract of sale was concluded (so as to pass the property to the rogue) before the rogue made the fraudulent misrepresentation: whereas in Ingram v Little the rogue made the fraudulent misrepresentation before the contract was concluded. My own view is that in each case the property in the goods did not pass until the seller let the rogue have the goods.
Again it has been suggested that a mistake as to the identity of a person is one thing: and a mistake as to his attributes is another. A mistake as to identity, it is said, avoids a contract: whereas a mistake as to attributes does not. But this is a distinction without a difference. A man's very name is one of his attributes. It is also a key to his identity. If then, he gives a false name, is it a mistake as to his identity? or a mistake as to his attributes? These fine distinctions do no good to the law.
As I listened to the argument in this case, I felt it wrong that an innocent purchaser (who knew nothing of what passed between the seller and the rogue) should have his title depend on such refinements. After all, he has acted with complete circumspection and in entire good faith: whereas it was the seller who let the rogue have the goods and thus enabled him to commit the fraud. I do not, therefore, accept the theory that a mistake as to identity renders a contract void.
I think the true principle is that which underlies the decision of this court in King's Norton Metal Co Ltd v Edridge, Merrett & Co Ltd and of Horridge J in Phillips v Brooks, which has stood for these last 50 years. It is this: When two parties have come to a contract--or rather what appears, on the face of it, to be a contract--the fact that one party is mistaken as to the identity of the other does not mean that there is no contract, or that the contract is a nullity and void from the beginning. It only means that the contract is voidable, that is, liable to be set aside at the instance of the mistaken person, so long as he does so before third parties have in good faith acquired rights under it.
Applied to the cases such as the present, this principle is in full accord with the presumption stated by Pearce LJ and also by Devlin LJ in Ingram v Little. When a dealing is had between a seller like Mr Lewis and a person who is actually there present before him, then the presumption in law is that there is a contract, even though there is a fraudulent impersonation by the buyer representing himself as a different man than he is. There is a contract made with the very person there, who is present in person. It is liable no doubt to be avoided for fraud, but it is still a good contract under which title will pass unless and until it is avoided. In support of that presumption, Devlin LJ quoted, not only the English case of Phillips v Brooks, but other cases in the United States where
"the Courts hold that if A appeared in person before B, impersonating C, an innocent purchaser from A gets the property in the goods against B."
That seems to me to be right in principle in this country also.
In this case Mr Lewis made a contract of sale with the very man, the rogue, who came to the flat. I say that he "made a contract" because in this regard we do not look into his intentions, or into his mind to know what he was thinking or into the mind of the rogue. We look to the outward appearances. On the face of the dealing, Mr Lewis made a contract under which he sold the car to the rogue, delivered the car and the logbook to him, and took a cheque in return. The contract is evidenced by the receipts which were signed. It was, of course, induced by fraud. The rogue made false representations as to his identity. But it was still a contract, though voidable for fraud. It was a contract under which this property passed to the rogue, and in due course passed from the rogue to Mr Averay, before the contract was avoided.
Although I very much regret that either of these good and reliable gentlemen should suffer, in my judgement it is Mr Lewis who should do so. I think the appeal should be allowed and judgement entered for the defendant.