Phillips v Brooks [1919] 2 KB 243

Key point

Unilateral mistake as to identity does not void a contract that is made in person.

Facts

  • A rogue pretended to be Sir George Bullough, a rich and famous playboy.
  • The rogue bought a ring from C’s store, C allowed him to take the ring before the cheque cleared.
  • The rogue later sold the ring to D, a bona fide purchaser who had no notice of the fraud.
  • Upon discovering the fraud when the cheque was declined, C sued D in tort for conversion.

Held (Court of Appeal)

  • C’s claim failed as D had good title to the ring.
  • The contract was voidable for fraud but not void for unilateral mistake and could not be rescinded as the ring was purchased by a bona fide purchaser without notice of the fraud.

Horridge J

  • The fact that the seller (C) was induced to sell by fraud renders the contract voidable but not void.
  • The fact that there was fraud does not change the fact that C intended to contract with the person present and there was no error in that sense: p. 248D.

Commentary

  • The reasoning suggests that there is a presumption of intention that a seller intends to sell to the person present.
  • This case distinguishes Cundy v Lindsay, which held that unilateral mistake as to identity renders a contract made face-to-face void.
  • The distinction between face-to-face cases and in-writing cases was affirmed in Shogun Finance v Hudson.