Cundy v Lindsay

Facts
Lindsay & Co were manufacturers of linen handkerchiefs, amongst other things. They received correspondence from a rogue named Blenkarn. He had rented a room at 37 Wood Street, Cheapside, but purported to be [4] 'Blenkiron & Co', with premises on 123 Wood Street. Lindsay & Co knew of a business named as 'Blenkiron & Co', and knew them to be reputable and residing on the same road. Under this guise, and the rogue's signing of [4] his letters as 'Blenkiron & Co', Lindsay & Co sold the rogue a large order of handkerchiefs. Blenkarn then sold the goods - 250 dozen linen handkerchiefs - to an innocent third party, Cundy, whom Lindsay & Co sued for conversion of the goods. [edit]Judgment [edit]Divisional

Court

The Divisional Court held that Lindsay could not recover the handkerchiefs from Cundy. Blackburn J, giving [5] judgment, held the following.

The rule of law has been thoroughly establishedthe cases are numerous, and I need not cite themthat where a contract is voidable on the ground of fraud, you may avoid it, so long as the goods remain in the man's hands who is guilty of the fraud, or in the hands of anybody who takes them from him with notice; but where a person has bon fide acquired an interest in the goods, you cannot, as against that person, avoid the contract. Where the goods have come into the hands of a bon fide purchaser you cannot take them back. The case is very closely analogous to the old common-law rule, in the case of felony or trespass. If goods are stolen or taken away by trespass, no title whatever is conferred, in general, upon a purchaser from the person who took them, however bon fide the purchase may have been; but if the sale be in market overt to a person who has no knowledge of the felony or trespass, then the purchaser acquires the property, notwithstanding the goods had been taken from the owner by felony or trespass.

Mellor J and Lush J agreed. [edit]Court

of Appeal

The Court of Appeal, with Mellish LJ, Brett J and Amphlett JA overturned the Divisional Court, holding that Lindsay could recover the handkerchiefs, since the mistake about the identity of the rogue voided the contract from the start. Cundy appealed. [edit]House

of Lords

The House of Lords held that Lindsay & Co had meant to deal only with Blenkiron & Co. There could therefore have been no agreement or contract between them and the rogue. Accordingly, title did not pass to the rogue, and could not have passed to Cundy. They were forced to therefore return the goods. Lord Cairns explained the mistake to identity, and the consequences:

Now, my Lords, stating the matter shortly in that way, I ask the question, how is it possible to imagine that in that state of things any contract could have arisen between the Respondents and Blenkarn, the dishonest man? Of him they knew nothing, and of him they never thought. With him they never intended to deal. Their minds never, even for an instant of time rested upon him, and as between him and them there was no consensus of mind which could lead to any agreement or any contract whatever. As between him and them there was merely the one side to a contract, where, in order to produce a contract, two sides would be required. With the firm of Blenkiron & Co. of course there was no contract, for as to them the matter was entirely unknown, and therefore the pretence of

a contract was a failure.

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