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“NEMO DET QUOD NON HABET” – This Latin maxim means that “No one can give who possesses not”.
The general rule is: “No man can sell goods and give a good title unless he is the owner of the goods”.
In a contract of sale, the seller can sell the goods only if he is the owner of those goods. Before the contract of sale, it is must that the seller is the true owner of the goods and when the seller transfers the property to the buyer, then the buyer becomes the true owner of the goods.
If the seller was not the owner of the goods, then he cannot transfer the ownership rights the buyer. i.e. “No man can pass a better title than he himself has.”
For example: ‘X’ stole a car and sold it to ‘Y’ bought it in good faith and without knowledge of defective title of car. Held, ‘Y’ could not obtain title of goods.
Exception to this rule:
There are few cases where a non – owner can transfer the property in goods i.e. although the seller was not the owner of the goods but he did pass a better title to the buyer of the goods.
Seller ≠ owner still a valid sale + valid transfer of title
In the following exceptional cases, a person who is neither the owner, nor having the authority om the owner for selling the goods, but having possession with the owner’s consent can make a sale and confer rights on the buyer.
The exceptions are as follows:
1. Sale by implied authority of owner of title by estoppel: Where the true owner of the goods by his words or conduct made the buyer believe that the seller was the owner of the good or that the seller had authority to sell them, then he (owner) cannot later on deny the fact that the seller had no authority to sell the goods. In such a case, the buyer gets a better title than the seller.
For example: ‘A’ tells ‘H’ in the presences of ‘J’ that he (A) is the owner of certain goods which is actually belongs to ‘J’, where ‘J’ does not contradict ‘A’s statement. After some time ‘H’ bought those goods from ‘A’. held ‘H’ will get better title as buyer of goods, although ‘A’ was not the owner of the goods.
2. Sale by mercantile agent (Sec 27): where a mercantile agent, with the consent of the owner is in possession of the goods and sale is made by him in the ordinary course of his business, such sale shall be valid, provided the buyer acts in good faith and without notice that the seller had no authority to sell. Here, the buyer acquires a good title to the goods, though the seller had no authority to sell.
For example: A jewellery house owner had appointed Rahim as his agent to take care of hi jewellery. Rahim sold the jewellery to Mr. X. X was unaware that Rahim was not the owner of that jewellery. It was held, that ‘X’ got a better title of goods as.
3. Sale by one of the joint owner (Sec 28): Where one of several joint owners, one has possession of the goods by permission of the co – owners the property in the goods is transferred to any person who buys them from such joint owner in good faith and without notice that the seller had no authority to sell.
For example: ‘A’, ‘B’ and ‘C’ are joint hindu brothers, who own certain cattle in common ‘B’ and ‘C’ leave the cattle in possession of ‘A’ which ‘A’ sells to ‘D’. ‘D’ makes the purchase in good faith. The property in the cattle is transferred to ‘D’.
4. Sale by person in person in possession under a voidable contract (Sec 29): It provides that a person in possession of goods under a voidable contract which has not been rescinded can transfer a good title to the buyer who buys the goods in good faith and without notice of the seller’s defective of tile.
For example: ‘A’ purchase a piano from ‘B’ y fraud. Before ‘B’ rescinds the contract, ‘A’ sells the piano to ‘C’, who buys it in good faith and without knowledge of defective title. Held, ‘C’ gets a good title.
5. Sale by seller in possession of goods after sale (Sec30 (1)): It provides that where a person has sold goods but continues in possession of them or of the documents of title to them he may sell them to a third person and if such person obtains delivery thereof in good faith and without notice of the previous sale, he gets a good title to them.
For example: ‘A’ sold certain goods to ‘B’, but continued to remain in possession thereof with the consent of the buyer, ‘A’ subsequently resold the goods to ‘C’. It was held that ‘C’ had acquire a good title.
6. Sale by buyer in possession before buying (Sec 30(2)): Where a person having bought or agreed to buy goods, obtain with the consent of the seller, had possession of goods or documents of title of goods and sells them to a third party, who buys it in good faith and without notice of defective title, then the third party gets a better title.
For example: ‘A’ sold goods to ‘B’, ‘B’ had the possession of goods, thereof with the consent of seller, ‘B’ sold goods to ‘C’. it was held that ‘C’ had acquire a good title.
7. Sale by an unpaid seller (Sec 54(3)): A seller who has not received his payment is called as an unpaid seller. An unpaid seller who has exercised his right to lien and right to stoppage in transit may resell the goods to another buyer. Then, such new buyer shall acquire a better title of the goods.
8. Sale by a finder of goods: The finder may sell goods in the following situations:
i) When the thing is in danger of perishing or of losing the greater part of its value or
ii) When the lawful charges of the finder, in respect of the thing found, amount to two-thirds of its value.
When the finder of goods sells them under these circumstances, the buyer of such goods gets a good title to them.
9. Sale in market overt: English law recognizes an exception to the rule in case of sale in the open market by a person who generally deals in such goods. Then buyer’s title is protected in case of such a sale though the seller may be liable for the tort of conversion.
The general rule is: “No man can sell goods and give a good title unless he is the owner of the goods”.
In a contract of sale, the seller can sell the goods only if he is the owner of those goods. Before the contract of sale, it is must that the seller is the true owner of the goods and when the seller transfers the property to the buyer, then the buyer becomes the true owner of the goods.
If the seller was not the owner of the goods, then he cannot transfer the ownership rights the buyer. i.e. “No man can pass a better title than he himself has.”
For example: ‘X’ stole a car and sold it to ‘Y’ bought it in good faith and without knowledge of defective title of car. Held, ‘Y’ could not obtain title of goods.
Exception to this rule:
There are few cases where a non – owner can transfer the property in goods i.e. although the seller was not the owner of the goods but he did pass a better title to the buyer of the goods.
In the following exceptional cases, a person who is neither the owner, nor having the authority om the owner for selling the goods, but having possession with the owner’s consent can make a sale and confer rights on the buyer.
The exceptions are as follows:
1. Sale by implied authority of owner of title by estoppel: Where the true owner of the goods by his words or conduct made the buyer believe that the seller was the owner of the good or that the seller had authority to sell them, then he (owner) cannot later on deny the fact that the seller had no authority to sell the goods. In such a case, the buyer gets a better title than the seller.
For example: ‘A’ tells ‘H’ in the presences of ‘J’ that he (A) is the owner of certain goods which is actually belongs to ‘J’, where ‘J’ does not contradict ‘A’s statement. After some time ‘H’ bought those goods from ‘A’. held ‘H’ will get better title as buyer of goods, although ‘A’ was not the owner of the goods.
2. Sale by mercantile agent (Sec 27): where a mercantile agent, with the consent of the owner is in possession of the goods and sale is made by him in the ordinary course of his business, such sale shall be valid, provided the buyer acts in good faith and without notice that the seller had no authority to sell. Here, the buyer acquires a good title to the goods, though the seller had no authority to sell.
For example: A jewellery house owner had appointed Rahim as his agent to take care of hi jewellery. Rahim sold the jewellery to Mr. X. X was unaware that Rahim was not the owner of that jewellery. It was held, that ‘X’ got a better title of goods as.
3. Sale by one of the joint owner (Sec 28): Where one of several joint owners, one has possession of the goods by permission of the co – owners the property in the goods is transferred to any person who buys them from such joint owner in good faith and without notice that the seller had no authority to sell.
For example: ‘A’, ‘B’ and ‘C’ are joint hindu brothers, who own certain cattle in common ‘B’ and ‘C’ leave the cattle in possession of ‘A’ which ‘A’ sells to ‘D’. ‘D’ makes the purchase in good faith. The property in the cattle is transferred to ‘D’.
4. Sale by person in person in possession under a voidable contract (Sec 29): It provides that a person in possession of goods under a voidable contract which has not been rescinded can transfer a good title to the buyer who buys the goods in good faith and without notice of the seller’s defective of tile.
For example: ‘A’ purchase a piano from ‘B’ y fraud. Before ‘B’ rescinds the contract, ‘A’ sells the piano to ‘C’, who buys it in good faith and without knowledge of defective title. Held, ‘C’ gets a good title.
5. Sale by seller in possession of goods after sale (Sec30 (1)): It provides that where a person has sold goods but continues in possession of them or of the documents of title to them he may sell them to a third person and if such person obtains delivery thereof in good faith and without notice of the previous sale, he gets a good title to them.
For example: ‘A’ sold certain goods to ‘B’, but continued to remain in possession thereof with the consent of the buyer, ‘A’ subsequently resold the goods to ‘C’. It was held that ‘C’ had acquire a good title.
6. Sale by buyer in possession before buying (Sec 30(2)): Where a person having bought or agreed to buy goods, obtain with the consent of the seller, had possession of goods or documents of title of goods and sells them to a third party, who buys it in good faith and without notice of defective title, then the third party gets a better title.
For example: ‘A’ sold goods to ‘B’, ‘B’ had the possession of goods, thereof with the consent of seller, ‘B’ sold goods to ‘C’. it was held that ‘C’ had acquire a good title.
7. Sale by an unpaid seller (Sec 54(3)): A seller who has not received his payment is called as an unpaid seller. An unpaid seller who has exercised his right to lien and right to stoppage in transit may resell the goods to another buyer. Then, such new buyer shall acquire a better title of the goods.
8. Sale by a finder of goods: The finder may sell goods in the following situations:
i) When the thing is in danger of perishing or of losing the greater part of its value or
ii) When the lawful charges of the finder, in respect of the thing found, amount to two-thirds of its value.
When the finder of goods sells them under these circumstances, the buyer of such goods gets a good title to them.
9. Sale in market overt: English law recognizes an exception to the rule in case of sale in the open market by a person who generally deals in such goods. Then buyer’s title is protected in case of such a sale though the seller may be liable for the tort of conversion.
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