King's Bench Division. (BCeforC M. JusrTicE HoBBIWE.) In this action the plaintiff, a jeweller, of Wardour- street, sued the defendants, who were pawnbrokes, for the return of an emerald and diamond ring, or its value (?450), and for damages for detaining it. The defendants denied that the ring was the pro- perty of the plaintiff, and they said that if the ring was held to- be the property of the plaintiff it was obtained on or about Apri 15, 1918, by false pre- tences by one John North, and was afterwards pledged by North with them (the defendants), who took it in. the ordinary course of their business as pawn-. brokers and in good faith. They advanced ?350 upon it. The defendant-i relied upon 56 and 57 Vic., G. 71, section 24 (2-) of the Sale of Goods Act. Mlr. Hogg, K.C., and Mr. Roome appeared forlthe plaintiff; Mr. J. B. Matthews, K.C., and Mr. Valetta appeared for the defendants. 'The plaintiff, in giving evidence, said that a man, who afteiwards turned out to be John North, came to hin on April 15, 1918, and, representing himself to be Sir George B3ullough, bought an emerald and diamond ring for ?450 and a pearl rope for ?2,550, for which he made payment by a cheque for ?3,000, signed George Bullough lie (the plaintiff) had] 1 heard of tSir- George Bullough as a sporting ge'ntle-' man of meas, atnd on the strength of.N?6rths repre- sentation he accepted the cheque, and asked NFort if he wished to takc the jewelry ' away with aim. North said that he would take the rinig as it was for his wife, and her birthday was the next. day.. North took the ring and left the pearl rope.' The cheque was presented and was returned marked " no account" lie -(the plaintiff) would not have parted with the ring if he had not thought that it was, Sir George Bullough who was buying it. - ' 'This was the only evidence for the plaintiff. Tir DEFENCE. : - - Mr. Albert Fine said that he was sales manager to the defendants. lie was consulted by- the de- fendantN as to pledges over ?1(1, and he bad been-in the trade about 35 years. On April 15, 1918, abbiit 5.30 p.m. a man (afterwards proved to 'be 'Johx North) ealled and brought with him an emefald and diamond ring on wlich he wanted an - advancce of ?450. As it was getting dusk -and the value of the ring could not be scen in the uncertain light he Was told to call next ornong. lIe went awayand re- turned in half an hour and asked for a temporary loan of ?100. He gave his name as J. Firth and gave an address in Dover-street. One Jhundred pounds was advanced to him that night. Next -day he - re- turned. He was told that his address could not be found in the directory, and he said that' he was in a flat over a shop, and the names of tenants did not appear in the directory. lie alleged that he bought the rmg some years ago for his wife and'gave ?1,200 for it. He wanted the money to gamble with. He said that he had not kept the receipt for the ring, and had given a cheque for it. When he was pressed for some corroboration of his statements he went away and returned with his discharge paper as a private in the Army.- The discharge paper umistakably described him as a man of 6ft. 3in. There was an alteration'of the name from North to Firth. Further mnoney was advanced to him. On the same day in the police report there was & description of a ring corresponding to'the one' in Court. 'The police we e informed by him (the 'wit- ness), and North was arrested and brought up at Mlarlborough-sstreet Poliee Court. In Csross-examination the witness said that he had no suspicion about the man Firths or North at the time, as he hnd been in the shop several times before. This closed the eviden :e for the defendants. Mr. beoo submitted that the prOperty in the rng never pased from the plaintiff to' the man North There was no valid contract. The plaintiff pur- ported to sell the ring to Sir George Bullough, not to the man North. As Sir George aBulough ws not there there could be no contract. Them were certain essential elements in a contract. - There could not be a contract it there was a mistake as to the identity of the parties Mr. Hogg cited Cundy v Lindsay (3rtC.)h White- horn v. Davison ([19111 1 R.B. 463); Hardman v.Booth (1 H. and C.);In re International Society of Auc- tioneets and Valuers (18981 1 Oh. 110). MIr. MAargsxvs contended that if A in person obtained goods by -representing himself -to be -B the property in the goods passed, but it did not if he re- presented hirself to be the agent of B. Mlr. Matthews cited Edmuonds v. the 3fisachusetts Despatch tCo. (135 Iass, Stlate Reports); Atten- borough v. St. hathenne's Dock Co. (3 C.P.D.); the Queen v. Bazelton (2 Cr.Ca.R.)O the -Queen v. Martin (5 Q.B.D.) ; the Queen vMlEddleton(2 Cr.Ca;RK) ! Smith v. Wheatcroft (9 Ch Div.). This Lonsemt reserved judgoment. ' Gn ' SolicitofsIn.-mr. Isadore Goldman; aessrs. Attent- boroughs. EXCESS PROFITS: PENALTIES FORI ALLEGED TRDlNG WITH THIE ENE&MY. COIMM8ISSO NE RS OF INLAND BE VENUE v. E. C. WrRNES AN) CO.a (Befoere Ma:. JlJSrlCE ROWIIT.)I This case, stated by the ComGnrsioCers ior Generals Purposes of Income-Tax, raised the question wzhether a penalty s and costs incurred for an alleged oence under the Customs (War Powers) Act, 1915, could be re8arded as a loss arising out of and incidentsl to the trade or business, and therefore whether they night be deducted in assessing the profits for excess profil duty. The respondents (Messrs. E. C. Warnes and Co.) had appealed to the General Cms0?8sioners against two assessments to excess prorits duty am ounting to ?973 for the period ended June 30, 1916, and to ?592 4s. for the period ended June 30, 1916, made on them in respect of their profits from the business of oil merchants. w the groud-of the appeal was tat if g iving at the profits of the business for the assessmnents a penalty of ?2,000 imposed on the respondents in the case of th2e Attorney-General v. E. C. Warnes and Co. (Limited) in April, 1918, should be deducted under llule 3, Case 1, Schedule D, of the Income-Tax Act, 1842, section 100, on the ground that the penalty, with costs, was a loss arising out of and incidental to the trade of the respondents, and maight therefore be deducted. The respondents were sued for a penalty under the Customs (Consolidation) Act, 1876, section 139, as extended by the -Customs (War Powers) Act, 1915, section 5, subsection2 (-, for the-bra of orlers and proclamations relating to the'requireme4nts of the Board of Customs and EtrciSe relating to a consign- ment of oil shipped by them to Nonvay. The action was settled in Court by consent. The respondents agreed to pay a mitigated penalty of ?2,00o. That sum was to cover the costs of the Crown, and it was a term that all imputationson the moral culpability of the respondents should be withdrawn. It was to be made clear to the public that the respondents had not been taking part by connivance or consent in trading with the enemy, but hlad ou1l been carelss. Judgment in favour of the . Crown was given accordingly. The penalty of ?2,000 was paid to the Crown; and the respondents had incurred costs amounting to ?660 lSs. lOd. in defending the proceedings. The assessments appealed against were based on the profits made by the respondents without deduction of the sums of ?2,000 and ?560 18s. 1Od. The Surveyor of Taxes contended that (a) this was not a loss connected with or arising out of the trade or business of the respondents ; and (b) that theamounts paid as penalty and costs could not be regarded as the necessary expenses of carrying on the trade or business, and were not proper deductions to be made in arriving at the profits for excess profits duty. On behalf of the respondents it was contended that both the peualty ind costs should be allowed and deducted on the ground that the penalty and costs were a loss arising out of and incidental to the trade. It was submitted that the penalty and costs might be deducted i .the sam way. as bad-debts. It was also argued that the profits must be taken in their commercial sense and that this was a loss which an ordinary prudent commercial man would write off against the profits of the business. The General Cormmissioners decided that the penalty and costs mighlt legally be deducted in arriving at the profts for the purpose of assessment to the The Crown appealed. The Solicitor-General (Sir E. M. Pollock, K.C.) and Mr. T. H. Parr appeared for the Crown; and the Hon. W. Finlay, K.C., and Mr. Bremner for the respondents. MiR. JruncE RowL&Tr, in delivering judgment, said that it had been argued that the sum paid for the penalty and the costs was a loss connected with and arising out of the trade or business within Rule 3 of Case 1, Schedule D. Undoubtedly that detriment was a loss in the sense that the respondents had lost the ?2,000 penalty and the costs. The loss also arose out of their tradSe or business, because it was incurred in carrying en -their business. But the question was whether it vwas a loss connected with or arising out of the trade or business within the meaning of the clause referred to. It was impossible th franie any formula to describe what mwas & IOBS within the meaning of the phrase, and there was not much to be gained by going through a number' of analogies. A 'penal liability I could not be regarded as a loss connected wMtI, and arising out of, the trade or business writhin the meaning of the clause. To be w:ithin the clause the loss must be something in the nature of a commercial loss. It was not possible' to say that a fine inflicted on a com- mercial or trading concern was such a loss. The appeal of the Crown must be allowed. l Solicitors.-The Solicitor to the Inland Revenue; Messrs. Waltons and Co., for Messrs. Andrew IL Jack- son and Co., HuLl KING'S BENCH DIVISION. CLAINI TO A VALUABLE RING. WOOLF PHILLIPS v. J. T. BROOKS *(IMITED).