Phillips v Brooks Ltd
In face to face dealings, a seller is presumed to intend to contract with the person in front of him, so a fraudster's identity fraud makes the contract voidable, not void.
Facts
A man named North entered Mr Phillips's jewellery shop and selected some pearls and a ring worth £450. He wrote a cheque and said, I see who you are, he was Sir George Bullough, a wealthy man, giving an address in St James's Square. Mr Phillips checked a directory, found that a Sir George Bullough lived at that address, and allowed North to take the ring away. The cheque was dishonoured. North pledged the ring with Brooks, a pawnbroker, which acted in good faith. Mr Phillips sued Brooks to recover the ring.
Legal principle
Horridge J held that Brooks was entitled to keep the ring. Mr Phillips had intended to contract with the person present in his shop, even though he was mistaken about that person's identity and creditworthiness. The contract was therefore not void for mistake, but voidable for fraud. Since Mr Phillips had not rescinded the contract before North pledged the ring, North had a voidable title, and Brooks, acting in good faith, obtained good title. The case is usually compared with Ingram v Little and Lewis v Averay.
Related cases on mistake
- Associated Japanese Bank (International) Ltd v Crédit du Nord SA [1989] 1 WLR 255
- Bell v Lever Brothers Ltd [1932] AC 161
- Couturier v Hastie (1856) 5 HLC 673
- Cundy v Lindsay (1878) 3 App Cas 459
- Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2003] QB 679
- Hartog v Colin & Shields [1939] 3 All ER 566
- Ingram v Little [1961] 1 QB 31
- Lewis v Averay [1972] 1 QB 198
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