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Title : Phillips v Brooks Ltd
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Status: Positive or Neutral Judicial Treatment

*243 Phillips v Brooks, Limited.

King's Bench Division
1 May 1919

[1918 P. 674]

[1919] 2 K.B. 243

Horridge J.
1919 April 11; May 1.
Sale of Goods—Passing of Property—Purchaser fraudulently personating another Person.
If A., fraudulently assuming the name of a person of credit and stability, buys, in person, and
obtains delivery of, goods from B., the property in the goods passes to A., and he can
therefore give a good title thereto to a third party who, acting bona fide and without notice,
has given value therefor, unless in the meantime B. has taken steps to disaffirm the contract
with A.
Edmunds v. Merchants' Despatch Transportation Co. (1883) 135 Mass. 283followed .
ACTION tried by Horridge J.
The plaintiff, who was a jeweller, sued the defendants, who were pawnbrokers, for the return of a
ring or, alternatively, its value, and damages for its detention.
On April 15, 1918, a man entered the plaintiff's shop and asked to see some pearls and some
rings. He selected pearls at the price of 2550l. and a ring at the price of 450l. He produced a
cheque book and wrote out a cheque for 3000l. In signing it, he said: “You see who I am, I am Sir
George Bullough,” and he gave an address in St. James's Square. The plaintiff knew that there
was such a person as Sir George Bullough, and finding on reference to a directory that Sir George
lived at the address mentioned, he said, “Would you like to take the articles with you?” to which
the man replied: “You had better have the cheque cleared first, but I should like to take the ring
as it is my wife's birthday to-morrow,” whereupon the plaintiff let him have the ring. The cheque
was dishonoured, the person who gave it being in fact a fraudulent person named North who was
subsequently convicted of obtaining the ring by false pretences. In the meantime, namely on April
16, 1918, North, in the name of Firth, had pledged the ring with the defendants who, bona fide
and without notice, advanced 350l. upon it.
In his evidence the plaintiff said that when he handed over *244 the ring he thought he was
contracting with Sir George Bullough, and that if he had known who the man really was he would
not have let him have it. In re-examination he said that he had no intention of making a contract
with any other person than Sir George Bullough.
Hogg K.C. and Roome for the plaintiff. The property in the ring never passed out of the plaintiff.
There was no contract between the plaintiff and North. Where the owner of goods voluntarily parts
with the possession of them but does not intend to pass the property in them to the particular
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person with whom he is dealing, being deceived by him as regards his identity, larceny by a trick is
committed by the fraudulent person and there is no contract. See per Buckley L.J. in Whitehorn v.
Davison . 1 That was the case in Cundy v. Lindsay 2 , where a person obtained goods by writing a
letter fraudulently inducing the belief in the minds of the owners of the goods that he was a
reputable firm bearing a very similar name to his own. So, too, in Hardman v. Booth 3 , where a
person obtained goods by a false representation that he was a member of a particular firm. See
also In re International Society of Auctioneers and Valuers; Baillie's Case . 4 In this case the
plaintiff intended to contract with Sir George Bullough and with no one else, and he purported to
make a contract with Sir George Bullough. The whole transaction was a nullity, and North, who
could have been convicted of larceny by a trick, could pass no title to the defendants, who are
therefore liable to the plaintiff. [They referred to ss. 1, 32, and 45 of the Larceny Act, 1916 .]
J. B. Matthews K.C. and Valetta for the defendants. The property in the ring passed from the
plaintiff to North: Edmunds v. Merchants' Despatch Transportation Co. 5 , which decided that if A.,
in person, obtains goods by pretending to be B., then, as A. is identified by sight and hearing, the
property passes. The present case is quite different from Hardman v. Booth 6 , where the owner of
the goods was induced by *245 the fraudulent person to believe that he was contracting with a
certain firm, and not with the swindler personally. There the swindler purported to act as the agent
of the firm. So, too, in Cundy v. Lindsay 7 , where there was a written order, fraudulently
concocted, which induced in the minds of the goods owner the belief that it came from a reputable
firm, whereas in truth it emanated from an impostor bearing a somewhat similar name. In this
case the contract was made between the plaintiff and the man North, who was present before the
plaintiff in flesh and blood. North could not have been convicted of larceny by a trick. The
distinction is clear between that offence and the offence of obtaining goods by false pretences. In
the former the owner of goods has no intention to part with the property, whereas in the latter he
8 9 10
has the intention to part with it. See Rex v. Jackson ; Reg. v. Adams ; Reg. v. Hazelton ;
11
Reg. v. Martin .
Hogg K.C. in reply.
12
[HORRIDGE J. Edmunds v. Merchants' Despatch Transportation Co. appears to be against you.]
That case is cited by Sir Frederick Pollock in his book on Contracts, 8th ed., p. 497n., but after it
he adds “Sed qu. and cf. Pothier, Obl. § 19.” I adopt the query, and rely on Pothier's opinion,
which is set out in the judgment of Fry J. in Smith v. Wheatcroft . 13 Pothier says: “Whenever the
consideration of the person with whom I am willing to contract enters as an element into the
contract which I am willing to make, error with regard to the person destroys my consent and
consequently annuls the contract.” In this case it was a material element of the contract into which
the plaintiff was willing to enter that the purchaser of the ring was to be Sir George Bullough.

[ Reg. v. Middleton 14 , Reg. v. Buckmaster 15 , Factors Act, 1889, s. 9 , and Sale of Goods Act,
1893, s. 24, sub-s. 2 , were also referred to.]
Cur. adv. vult.
*246

May 1. HORRRIDGE J.
read the following judgment: This is an action brought by the plaintiff, who is a jeweller in Oxford
Street, London, for the return of a ring or its value, and for damages for detaining the same. The
value of the ring was agreed as being 450l., and no evidence was given before me of any damage,
apart from the value of the ring which was taken. I have carefully considered the evidence of the
plaintiff, and have come to the conclusion that, although he believed the person to whom he was
handing the ring was Sir George Bullough, he in fact contracted to sell and deliver it to the person
who came into his shop, and who was not Sir George Bullough, but a man of the name of North,
who obtained the sale and delivery by means of the false pretence that he was Sir George
Bullough. It is quite true the plaintiff in re-examination said he had no intention of making any
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contract with any other person than Sir George Bullough; but I think I have myself to decide what
is the proper inference to draw where a verbal contract is made and an article delivered to an
individual describing himself as somebody else.
After obtaining the ring the man North pledged it in the name of Firth with the defendants, who
bona fide and without notice advanced 350l. upon it. The question, therefore, in this case is
whether or not the property had so passed to the swindler as to entitle him to give a good title to
any person who gave value and acted bona fide without notice. This question seems to have been
decided in an American case of Edmunds v. Merchants' Despatch Transportation Co. 16 The
headnote in that case contains two propositions, which I think adequately express my view of the
law. They are as follows: (1.) “If A., fraudulently assuming the name of a reputable merchant in a
certain town, buys, in person, goods of another, the property in the goods passes to A.” (2.) “If A.,
representing himself to be a brother of a reputable merchant in a certain town, buying for him,
buys, in person, goods of another, the property in the goods does not pass to A.”
The following expressions used in the judgment of Morton C.J. seem to me to fit the facts in this
case: “The *247 minds of the parties met and agreed upon all the terms of the sale, the thing
sold, the price and time of payment, the person selling and the person buying. The fact that the
seller was induced to sell by fraud of the buyer made the sale voidable, but not void. He could not
have supposed that he was selling to any other person; his intention was to sell to the person
present, and identified by sight and hearing; it does not defeat the sale because the buyer
assumed a false name or practised any other deceit to induce the vendor to sell.” Further on,
Morton C.J. says:
“In the cases before us, there was a de facto contract, purporting, and by which the
plaintiffs intended, to pass the property and possession of the goods to the person
buying them; and we are of opinion that the property did pass to the swindler who
bought the goods.”

17
The rule laid down by Lord Cairns L.C. in Cundy v. Lindsay is as follows:
“If it turns out that the chattel has been stolen by the person who has professed to
sell it, the purchaser will not obtain a title. If it turns out that the chattel has come
into the hands of the person who professed to sell it, by a de facto contract, that is to
say, a contract which has purported to pass the property to him from the owner of
the property, there the purchaser will obtain a good title, even although afterwards it
should appear that there were circumstances connected with that contract which
would enable the original owner of the goods to reduce it, and to set it aside, because
these circumstances so enabling the original owner of the goods, or of the chattel, to
reduce the contract and to set it aside, will not be allowed to interfere with a title for
valuable consideration obtained by some third party during the interval while the
contract remained unreduced.”

The question whether or not the property would pass if a fraudulent person had gone himself to
the firm from whom he wished to obtain the goods and had represented that he was someone else
18 19
was raised in the argument in Cundy v. Lindsay . In the speech of Lord Penzance, he says :
*248
“Hypothetical cases were put to your Lordships in argument in which a vendor was
supposed to deal personally with a swindler, believing him to be someone else of
credit and stability, and under this belief to have actually delivered goods into his
hands. My Lords, I do not think it necessary to express an opinion upon the possible
effect of some cases which I can imagine to happen of this character, because none
of such cases can I think be parallel with that which your Lordships have now to
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decide.”

Lord Hatherley, in his speech, seems to me to have rather put the case of a man's obtaining
goods by representing that he was a member of one of the largest firms in London, which would
20
be a case of representation as to authority to contract, as he says :
“Now I am very far, at all events on the present occasion, from seeing my way to
this, that the goods being sold to him as representing that firm, he could be treated
in any other way than as an agent of that firm.”

The illustration given by Lord Hatherley and the facts in the case of Hardman v. Booth 21 seem to
me to be cases which fall within the second proposition in the headnote in Edmunds v. Merchants'
Despatch Transportation Co. 22 , namely, representation by a person present that he was an agent
for somebody else so as to induce the seller to make a contract with a third person whom the
person present had no authority to bind.
It was argued before me that the principle quoted from Pothier (Traité des Obligations, § 19), in
Smith v. Wheatcroft 23 , namely, “Whenever the consideration of the person with whom I am
willing to contract enters as an element into the contract which I am willing to make, error with
regard to the person destroys my consent and consequently annuls the contract” applies. I do not
think, however, that that passage governs this case, because I think the seller intended to
contract with the person present, and there was no error as to the person with whom he
contracted, although the plaintiff would not have made the contract if there had not *249 been a
fraudulent misrepresentation. Moreover, the case of Smith v. Wheatcroft 24 was an action for
specific performance, and was between the parties to the contract, and had no relation to rights
acquired by third parties innocently under the contract, and misrepresentation would have been an
answer to the enforcement of the contract. In this case, I think, there was a passing of the
property and the purchaser had a good title, and there must be judgment for the defendants with
costs.

Representation

Solicitors for plaintiffs: Isadore Goldman & Son . Solicitors for defendants: Attenboroughs .
Judgment for defendants. (J. S. H.)

1 1. [1911] 1 K. B. 463 , 479.

1 2. (1878) 3 App. Cas. 459 .

1 3. (1863) 1 H. & C. 803 .

1 4. [1898] 1 Ch. 110 .

1 5. (1883) 135 Mass. 283 .

1 6. (1863) 1 H. & C. 803 .

1 7. 3 App. Cas. 459 .

1 8. (1813) 3 Camp. 370 .

1 9. (1844) 1 Den. C. C. 38 .

1 10. (1874) L. R. 2 C. C. 134.

1 11. (1879) 5 Q. B. D. 34 .
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1 12. 135 Mass. 283 .

1 13. (1878) 9 Ch. D. 223 , 230.

1 14. (1873) L. R. 2 C. C. 38.

1 15. (1887) 20 Q. B. D. 182 .

1 16. 135 Mass. 283 , 284.

1 17. 3 App. Cas. 459 , 464.

1 18. 3 App. Cas. 459 , 462.

1 19. ibid. 471.

1 20. 3 App. Cas. 469 .

1 21. 1 H. & C. 803 .

1 22. 135 Mass. 283 .

1 23. 9 Ch. D. 223 , 230.

1 24. 9 Ch. D. 223 , 230.

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