X fraudulently obtained goods from P by writing to him and pretending to represent a respectable company and, not paying, he resold the goods to D who bought in good faith. (NB unlike Phillips below, X never met P face-to-face). HL held that since no contract had ever been made between P and X, the goods were to return to P, regardless of D’s innocence.
Lord Cairns: If A buys goods from B who has no title himself to the goods, A will have a right to them against all EXCEPT the actual owner. However, if the seller obtained the chattel by a de facto contract (i.e. a contract that purports to pass ownership from owner to seller) the new BF purchaser has a good title. In this case there was no contract because X misled P as to the identity of the party to whom he was selling.
He places great emphasis on the fact that X is a “dishonest fraudster” and the party he was impersonating was a reputable company. IS this relevant? Would the decision be changed if X had been impersonating a company as disreputable as himself or if, in fact, he had been as reputable as the company he was impersonating e.g. by innocently inducing them to mistake his identity i.e. is “fault” or “blameworthiness” relevant or is it merely factual mistake?