Ingram v Little [1960] EWCA Civ 1 (27 July 1960)

Plaintiffs sold a car to a rogue impersonating another person, accepting his cheque only after verifying the identity in a directory. The rogue sold the car to an innocent defendant. The court held the contract was void due to mistake of identity.

Facts

The plaintiffs, three elderly ladies, advertised their car for sale. A rogue, introducing himself as ‘Hutchinson’, offered to buy it for £717. When he produced a chequebook, one of the plaintiffs stated they would not accept a cheque and the deal was off. To persuade them, the rogue gave his full name as P.G.M. Hutchinson and an address in Caterham. While the rogue waited, one of the plaintiffs verified the name and address in a telephone directory. Reassured by this, they accepted the cheque and allowed the rogue to take the car. The cheque was dishonoured. The rogue, whose real name was not Hutchinson, sold the car to the defendant, Mr. Little, a bona fide car dealer. The plaintiffs sued the defendant for the return of the car or its value.

Issues

The central legal issue was whether the contract of sale between the plaintiffs and the rogue was void for unilateral mistake of identity, or merely voidable for fraudulent misrepresentation. If the contract was void from the outset (ab initio), then no title would have passed to the rogue, and he could not subsequently pass good title to the defendant. If the contract was merely voidable, the rogue acquired a voidable title, which he could pass to a bona fide purchaser for value without notice (the defendant) before the plaintiffs took steps to rescind the contract.

Judgment

The Majority (Sellers and Pearce L.JJ.)

The majority of the Court of Appeal held that the contract was void for mistake of identity and found in favour of the plaintiffs. They distinguished this case from previous authorities like Phillips v Brooks Ltd, where a contract made face-to-face was held to be with the person physically present.

Sellers L.J. emphasised the plaintiffs’ initial refusal to accept a cheque and their subsequent specific actions to verify the identity of the person they were dealing with. He concluded that the offer to sell the car was made only to the real P.G.M. Hutchinson of Caterham, not to the rogue physically present. The identity of the buyer was of fundamental importance.

Pearce L.J. agreed, reasoning that the circumstances showed the plaintiffs intended to deal only with P.G.M. Hutchinson. The presumption that one intends to contract with the person present was rebutted by the evidence. The plaintiffs had made it clear that they were unwilling to contract with the rogue until they were satisfied of his identity. He stated:

How can it be said that they intended to contract with a man whose offer of a cheque they had just refused, and whose presence, name and address were all a fraudulent fiction?… The fact that they were in his physical presence at the time did not prevent them from showing that he was not the man with whom they intended to contract.

He concluded the contract was void ab initio, and thus no title passed to the rogue which he could convey to the defendant.

The Dissent (Devlin L.J.)

Devlin L.J. delivered a powerful dissenting judgment. He argued for a strong presumption that in face-to-face transactions, a party intends to contract with the person physically present, regardless of who that person claims to be. He distinguished between a mistake as to identity and a mistake as to attributes (such as creditworthiness). In his view, the plaintiffs were mistaken about the rogue’s attributes (that he was creditworthy and would honour a cheque), not his fundamental identity. Devlin L.J. argued:

There is no-one to whom the offer can be addressed but the physical person who is present. The offer is made to him. If it is accepted, a contract is made with him. It may be a voidable contract because of his fraud, but it is not a nullity.

He expressed concern that the majority’s decision created uncertainty and placed the loss on an innocent third-party purchaser, disrupting commercial transactions. He favoured the principle that protected the bona fide purchaser where one of two innocent parties must suffer from the fraud of a third.

Implications

The majority decision in Ingram v Little created a very fine and controversial distinction in the law of unilateral mistake as to identity, particularly in face-to-face dealings. It suggested that if identity is proven to be of fundamental importance to one party, and they take steps to verify it, a contract with an imposter may be void, even if made in person. The decision has been heavily criticised for its reasoning and the difficulty in reconciling it with Phillips v Brooks Ltd. The dissenting judgment of Devlin L.J., which argued for a clearer rule favouring the contract being voidable in all face-to-face transactions, has been widely preferred in subsequent case law, notably in Lewis v Averay [1972] and was endorsed by the majority of the House of Lords in Shogun Finance Ltd v Hudson [2003], which effectively confined Ingram v Little to its own specific facts.

Verdict: Appeal dismissed. The court found in favour of the plaintiffs.

Source: Ingram v Little [1960] EWCA Civ 1 (27 July 1960)