King’s Norton Metal Co v Edridge Merrett & Co (1897) 14 TLR 98
Contract – Fraud – Misrepresentation
Facts:
A fraudster ordered goods from a metal manufacturer. He told the manufacturer that he was a well known business man and provided him with false details which matched the description of a wealthy business man, leading the manufacturer to believe he had multiple factories and agents. The fraudster set up an account with the manufacturer and paid nothing for the goods upfront. The fraudster then sold the goods to Edridge Merritt.
Issues:
Whether there was a contract between the fraudster and Edridge Merritt.
Held:
Judgment was awarded to Edridge Merritt. The court held that the fraudster had made a contract with Edridge Merritt in his own capacity and identity. He had not fraudulently taken on another identity when selling the goods to Edridge. Although the contract was voidable, possessory title was held to pass from a fraudster to an innocent person, because they were led to believe the purchase they were making was bona fide. The case of Cundy v Lindsay (1877) App Cas 459 was distinguished as the court held that Cundy had contracted with the fraudster under the guild of a separate identity. A good title was said to pass from the fraudster to the innocent party, deeming them the new rightful owner. Cundy v Lindsay is now held to be the correct approach to fraud and sale of goods to an innocent third party, in that there is no possessory title to be passed on to the innocent third party. However, the court held that King’s Norton was unable to recover the goods or their value from Edridge Merritt.
Updated 19 March 2026
This case note broadly describes the facts and outcome of King’s Norton Metal Co v Edridge Merrett & Co (1897) 14 TLR 98 accurately. The core legal principle — that where a party contracts with a fraudster face to face or as a single (albeit fictional) entity, the contract is voidable rather than void, so that title can pass to a bona fide third party purchaser before the contract is avoided — remains good law.
However, the final paragraph of the article contains a significant inaccuracy. It states that Cundy v Lindsay (1878) 3 App Cas 459 is now the correct approach to fraud and sale of goods to an innocent third party. This is misleading. The House of Lords in Cundy v Lindsay held the contract void for mistake as to identity, meaning no title passed at all. King’s Norton was not overruled by Cundy v Lindsay; rather, the two cases represent different factual situations that continue to coexist. Importantly, the House of Lords in Shogun Finance Ltd v Hudson [2003] UKHL 62 confirmed both cases as still representing the law in their respective factual contexts. Shogun Finance is the leading modern authority on mistake as to identity and should be read alongside this case. The article’s suggestion that Cundy v Lindsay supersedes the approach in King’s Norton is therefore incorrect. The two cases continue to apply to different factual scenarios.
Students should also note that the rules on transfer of title where goods are sold by a person without title are governed by the Sale of Goods Act 1979 (as amended), particularly sections 21–25, which remain in force.
