(..5..)

EFFECT OF CONTRACT.

Table of Contents

B) Transfer of title
(S. 27 to 30).

QUESTION BANK.

Q.1. ‘Nemo dat quod non-habet’ – Explain. State exceptions if any.

Q.2. “No seller can transfer a better title than what he him-self has”. Discuss with exceptions.

Q.3. Enumerate the circumstances under which a sale by a non-owner of goods can convey a good title to the buyer.

Q.4. Explain the general rule that no-one can give better title than he himself has. Discuss and illustrate exceptions under this rule. Nov. 05.

SHORT NOTES.

Sale by non-owner. Apr. 04.

SYNOPSIS

Transfer of title (S. 27 to 30):-
NEMO DAT QUOD NON HABET: –
EXCEPTIONS: –
Estoppel (S. 27):-
Sale by mercantile Agent (S. 27): –
Sale by one of the joint owners (S. 28): –
Sale by a person in possession under Voidable contract (S. 29): –
Seller in possession after the sale. (S. 30 (1)): –
Buyer in possession before Sale (S. 30 (2)): –

B. TRANSFER OF TITLE (Ss. 27 TO 30):-

The effect of sale is the transfer of property from the seller to the buyer with the title thereof. Ss. 27 to 30 deal with the transfer of title of the property on sale.

I. NEMO DAT QUOD NON HABET[1]: –

This maxim lays down the general rule regarding the transfer of title. It means ‘no man can transfer a better title than he himself has’. This principle is a Common Law principle brought forth to protect property and its ownership.

E.g. Where the stolen horse was sold at a public auction or where a person obtained goods under a hire-purchase agreement and sold them, the buyer could not get a good title.

II. EXCEPTIONS: –

As the protection of interest of the property and its ownership is important, equally important, it is to protect commercial transactions, i.e. the person purchasing goods in good faith and for value without notice (of seller lack of authority to sell) should get a good title.

Therefore, some exceptions are provided by the Act (Ss. 27 to 30) to protect innocent buyers of the goods for price. In other words, these exceptions provide that the buyer gets a better title in the following circumstances than the seller himself. They are as follows.

1. Estoppel[2] (S. 27): –

Estoppel arises from the owner’s representation that the seller has the authority to sell. When the buyer innocently acts upon that representation, the owner is precluded from denying the seller’s authority to sell. Such representation may arise from words or declarations, or it may arise from an act or omission.

Illustration

Where A sold a wristwatch of B to C in the presence of B, but B did not object to such a sale. Afterwards, B cannot recover the watch from C because B is precluded from denying that A had no right or title to sell the watch.

2. Sale by mercantile Agent[3] (S.27): –

Where the mercantile agent[4], with the consent of the owner, is in possession of the goods or- of documents of title to the goods,- sales of those goods (When acting in the ordinary course of business of a mercantile agent) is binding (on owner) provided that, a) The buyer acts in good faith; and

b) Buyer has no notice that the seller has no authority to sell.

3. Sale by one of the joint owners[5] (S. 28): –

Where one of the joint owners of the goods is in temporary possession of those goods and sells those goods. The buyer gets a good title if he purchases-

a) In good faith.
b) Without the notice, that seller has no authority to sell.

4. Sale by a person in possession under a Voidable contract[6] (S. 29): –

When the person has obtained possession of goods under a Voidable contract, and he makes a sale of them, the buyer gets a good title provided that: –

i) The contract has not been avoided at the time of sale, and
ii) The buyer acts in good faith, and

iii) Without notice of the seller’s defect in the title.

In Philips vs Brook[7]

Facts: A fraudulent person posed as a rich man and obtained a valuable golden ring from the shopkeeper by giving him a cheque. The cheque was dishonoured. But before this fraud could be discovered, the fraudulent person pledged the ring to the bonafide pledgee.

Held: – The pledgee has obtained a good title. The contract was Voidable by reason of fraud, and before it was rescinded, the goods had gone to the hands of the pledgee.

5. Seller in possession after the sale[8]. (S. 30(1)): –

Where the seller, having sold goods, continues in possession of them and sells them over again to another person, the buyer gets the good title provided-

i) He purchases in good faith, and
ii) Without notice of the previous sale.

6. Buyer in possession before Sale[9] (S. 30(2)): –

Where a person has bought or agreed to buy certain goods of which possession has been given over to him, but the seller still has some lien or right over the goods, if the buyer resells the goods, the second buyer will get a title free from the seller’s right of lien.

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[1] देणा-याजवळ जेवढा अधिकार आहे तेवढाच अधिकार तो हस्तांतरण करु शकतो, त्यापेक्षा जादा नाही.

[वह केवल उतना ही अधिकार हस्तांतरित कर सकता है जितना अनुदानकर्ता के पास है और उसेसे जादा नहीं।

[2] प्रतिबंधक कबूली. [निवारक स्वीकारोक्ति।]

[3] व्यापारी दलाल किंवा वाणिज्यक अभिकर्ता.- [व्यापारी दलाल या वाणिज्यिक एजेंट]

[4] Mercantile Agent (S. 2 (9) means an agent having in the customary course of business (as such agent), authority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods.

[5] सहमालकाने विक्री. [सह-मालिक द्वारा बिक्री।]

[6] निरर्थक कराराप्रमाणे वस्तू ताब्यात असणा-या व्यक्तीने विक्री.

[7] (1919) 2 K. B. 243.

[8] विक्रीनंतरसुध्दा ताब्यात असणारा माल विक्रेत्याने विकणे. [शून्य अनुबंध के रूप में माल के कब्जे में व्यक्ति द्वारा बिक्री।]

[9] विक्रीपूर्वीच खरेदीदाराच्या ताब्यात माल असल्यास. [बिक्री के बाद भी कब्जे में माल की विक्रेता द्वारा बिक्री।]