Lake v Simmons: HL 1927

A jeweller claimed on a policy of insurance. One Ellison had induced him, in face-to-face dealings, to part with possession of two necklaces by pretending she was the wife of a local gentleman called Van der Borgh, with whom she was living, and that he wanted a necklace on approval as he was contemplating giving it to her. She further pretended that a Commander Digby, who was engaged to her sister, wanted the other necklace on approval. There was no such man. Miss Ellison disposed of the necklaces. Were the underwriters were exempted from liability under an exclusion in respect of ‘loss by theft or dishonesty committed by . . any customer in respect of goods entrusted to’ the customer.
Held: They were not. When considering whether the goods were ‘entrusted’ to Miss Ellison, the test was whether the face-to-face dealings between her and the jeweller were capable of giving rise to a contract. They were not because of the mistake as to her identity.
Haldane said: ‘The latter was entirely deceived as to the identity of the person with whom he was transacting. It was only on the footing and in the belief that she was Mrs.Van der Borgh that he was willing to deal with her at all. In circumstances such as these, I think that there was no such consensus ad idem as, for example, Lord Cairns, in his judgment in Cundy v. Lindsay, declared to be requisite for the constitution of a contract. No doubt physically the woman entered the shop and pretended to bargain in a particular capacity, but only on the footing of being a different person from what she really was. There was never any contract which could afterwards become voidable by reason of a false representation made in obtaining it, because there was no contract at all, nothing excepting the result of a trick practised on the jeweller.’

Lord Cairns, Viscount Haldane,
[1927] AC 487
England and Wales
Citing:
CitedCundy v Lindsay HL 1878
Cundy was asked to pay the linen manufacturers Lindsay and Co for 250 dozen cambric handkerchiefs which he had acquired from a crook who had acquired them from Lindsay by pretending to be the respectable business firm of Blenkiron.
Held: A . .

Cited by:
CitedShogun Finance Limited v Hudson HL 19-Nov-2003
Thief acquired no title and could not sell
A purchaser used a stolen driving licence to obtain credit for and purchase a car. He then purported to sell it to the respondent, and then disappeared. The finance company sought return of the car.
Held: (Lords Nicholls and Millett . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 01 November 2021; Ref: scu.188459