This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Whether a given representation involves the identity of the adversary party or whether it involves merely characteristics or qualities of such party, as for instance, his reliability, financial standing, and the like is a question which presents difficulties, especially in cases in which the defrauded party has actually met the imposter. If the one party has actually met the other and knows him but is deceived as to his identity, financial standing, and the like, we have a contract which some courts hold to be absolutely void,1 but which other courts hold to be voidable only,2 so that property which has been delivered to such imposter can not be recovered from a bona fide purchaser from the wrong-doer.3 This result is reached upon the theory that the primary intention of the defrauded party is to deal with the person with whom he has been in personal negotiation, and that the name and financial standing of such individual are qualities or characteristics, which do not go to his identity, however material they may be.4 Under this principle a negotiable instrument delivered to an imposter who has personal dealings with the person who thus delivers it is not a nullity, and the person who executes and delivers it to such imposter is liable to a bona fide indorsee.5
7 England. Cundy v. Lindsay, L. R. 3 App. Cas. 459.
Massachusetts. Rodliff v. Dallinger, 141 Mass. 1, 55 Am. Rep. 439, 4 N. E. 805.
Ohio. Hamet v. Letcher, 37 0. S. 356.
Vermont. McCrillis v. Allen, 57 Vt. 505.
Wisconsin. Mayhew v. Mather, 82 Wis. 355, 52 N. W. 436.
8 Cundy v. Lindsay, L. R. 3 App. Cas. 459; Newberry v. Norfolk & S. R. Co., 139 N. Car. 45, 45 S. E. 356.
9 Miller v. Hoboken, 90 N. J. L. 167, 100 Atl. 216.
10 Fox y. Tabel, 66 Conn. 397, 34 Atl. 101; School) Sisters v. Kusnitt, 125 Md. 323, L. R. A. 1916D, 792, 93 Atl. 928; Norris v. Home City Lodge, - Mich. - , 168 N. W. 935.
11 Norris v. Home City Lodge, - Mich. - , 168 N. W. 935.
12 Schuhmacher v. Lebeck, 103 Kan. 458, L. R. A. 1918F, 788, 173 Ac. 1072.
1 Loeffel v. Pohlman, 47 Mo. App. 574; Newberry v. Norfolk & Southern Ry., 133 N. Car. 45, 45 S. E. 356.
2 Alabama. Hickey v. McDonald Pros., 151 Ala. 497, 13 L. R. A. (N.S.) 413, 44 So. 201.
Iowa. Perkins v. Anderson, 65 la. 308, 21 N. W. 696.
Maine. Martin v. Green, - Me. - , 102 Atl. 077.
Massachusetts. Edmunds v. Merchants' Despatch Transportation Co., 135 Mass. 283.
New York. Phelps v. McQuade. 220 N. Y. 232, L. R. A. 1918B, 973, 115 N. E. 441.
Utah. Heavy v. Commercial National Bank, 27 Utah 222, 101 Am. St. Rep. 966, 75 Ac. 727.
3 Hickey v. McDonald Bros., 151 Ala. 497, 13 L. R. A. (N.S.) 413, 44 So. 201; Martin v. Green, - Me. - , 102 Atl. 977; Edmunds v. Merchants' Despatch Transportation Co., 135 Mass. 289; Phelps v. McQuade, 220 N. Y. 232, L. R. A. 1918B, 973, 115 N. E. 441.
4 "The learned appellate division rested their decision upon the definition of common-law larceny, holding that where such larceny had been committed the thief acquired no title by his crime; where it had not, at least a voidable title passed. We agree with that statement of the Haw. But we should prefer to define the rule in another form. Where the vendor of personal property intends to sell his goods to the person with whom he deals, then title passes, even though he be deceived as to that person's identity or responsibility. Otherwise it does not. It is purely a question of the vendor's intention.
Where the transaction is a personal one, the seller intends to transfer title to a person of credit, and he supposes the one standing before him to be that person. He is deceived. But in spite of that fact his primary intention is to sell his goods to the person with whom he negotiates.
Where the transaction' is by letter the vendor intends to deal with the person whose name is signed to the letter. He knows no one else. He supposes he is dealing with no one else. And while in both cases other facts may be shown that would alter the rule, yet in their absence, in the first, title passes; in the second, it does not": Phelps v. McQuade, 220 N. Y. 232, L. R. A. 1918B, 973, 115 N. E. 441.
If the wrong-doer and the defrauded party to the transaction do not meet personally, the sole intent of the defrauded party is to deal with the person whose name purports to be signed to the correspondence which constitutes the offer or the offer and acceptance. In such cases the contract is void. If it is a sale, no title passes, and the property may be recovered, even from a bona fide purchaser.6 A common carrier is liable to the owner for delivering goods to the imposter.7
If A, the wrong-doer, falsely claims to be the agent of B, and thus purchases goods from X, who believes that he is selling to B, the contract is void, and the goods can be recovered, even from a bona fide purchaser from A.8