Saunders v. Anglia Building Society

Saunders v. Anglia Building Society

[1970] 3 All ER 961

(non-est factum principle)


In order for the defense of non-est factum to succeed, the person must show that the transaction which he signed was essentially different in substance or in kind from the one which he purported to sign. Earlier it was thought that this defense could not be applied when there is only mistake as to the contents of the document and not the mistake as to the character.


In Saunders v. Anglia, it was established that the difference between contents and the character is not an intelligible one for a document takes its character from its contents; further, the mistake as to the contents might be just as fundamental as mistake as to the character. House of Lords formulated the test that when the person signs, without any negligence of his own, the document which is radically, fundamentally, essentially or substantially different from one which the person purported to sign, there the defense of non-est-factum will apply. This difference is to be analysed by taking into account the object which the signor intended to achieve and which the signed document helped achieve.


The appellant Gallie, an elderly lady, who had a leasehold interest in the house, gave the deeds to her nephew, intending to make a gift to him. She knew that her nephew wished to raise money on it and his friend Lee is helping him to do so. Later, Lee asked her to sign on a deed which she could not read because of her broken spectacles. When she asked what it was, Lee told her that it was a deed of gift of her house to the nephew. She executed it in that belief and the nephew witnessed the execution, it being part of his arrangements with Lee that Lee would raise money on the house and repay it to the nephew by installments  The document was in fact gift deed to Lee. The arrangement never worked out: Lee mortgaged the house to a building society to raise loan, never paid anything to nephew but used that money to pay off his debts; and, later defaulted on his installments. Gallie now filed a suit for possession of property claiming ‘non-est-factum’.

Note: She did not take the plea of fraud and misrepresentation because then, title of the house had been passed onto the building society from Lee till the contract, which was merely voidable, was claimed to be rescinded by Gallie


Lord Denning in Court of Appeal:

a)      Rejected the supposed distinction between mistake as to the contents and mistake as to the character of the document:

  1. Document takes its class and character from its contents: a mistake as to one is often mistake as to another.
  2. A mistake as to contents might be just as fundamental as mistake as to the character. For instance: a man without reading the document signs on it, thinking it to be a bill of exchange of 10/- but in reality it turns out to be that of 10,000/- Though the signor there made a fundamental mistake: but mistake as to the contents only and not as to the class and character, for in any case it was a bill of exchange.
  3. Further, a mistake as to the class and character might not be as fundamental as mistake as to the contents: for instance, a man signs on the deed thinking it to be a paper of guarantee of 100/- but in reality it turns out to be a bill of exchange of 100/- though the person made a mistake but not so fundamental in first instance but he will be allowed to take the plea of non-est factum as it was nevertheless the mistake as to the character of the document.

b)      “Estoppel by negligence” is not the quite expression: it should be “estoppel by conduct”. The estoppel arises because the conduct of the defendant has led the plaintiff to believe that the document was defendant’s document. However, the conduct should be qualifiable as “carelessness”: when a person who could read and does not read; if a person who could not read but does not require the deed to be read or its effect explained to him; if a person who did not understand the deed does not require it to be explained.

Lord Russell:

It must be proved that the document was signed on account of false representation and only because of that representation. But here, Gallie had failed to prove this. As per evidence, she would have executed the deed even if the true character and nature of the deed would have been explained to her. Further, the document would have helped achieve the same purpose of her nephew’s raising money on the house (if the arrangement would have worked well) as the purported document.


Moreover, the lady was careless in the sense that she was capable of reading the document had her spectacles be in perfect condition. She should have waited for her spectacles to get repaired. In her believing the misrepresentation made by Lee without taking toil and having patience to get the contract read by her, she was careless in her conduct.


Author: Vishrut Kansal (National University of Juridical Sciences, Kolkata)

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