Transfer of
Title by Person not the Owner (Section 27-30)
The general rule is that only the owner of goods can sell the goods.
Conversely, the sale of an article by a person who is not or who has not the
authority of the owner, gives no title to the buyer. The rule is expressed by
the maxim; "Nemo dot quod non habet" i.e., no one can pass a
better title than what he himself has. As applied to the sale of goods, the
rule means that a seller of goods cannot give a better title ~o the buyer than
he himself possess. Thus, even bona fide buyer who buys stolen goods
from a thief or from a transferee from such a thief can get no valid title to
them, since the thief has no title, nor could he give one to any transferee.
Example:
1. A, the hirer of goods under a hire purchase agreement, sells them to
B, then B though, a bonafide purchaser, does not acquire the property in the
goods. At most he can acquire such an interest as the hirer had.
2. A finds a ring of B and sells it to a third person who purchases it
for value and in good faith. The true owner, i.e. B can recover from that person,
for A having no title to the ring.
Exception to
the General Rule
The Act while recognizing the general rule that no one can give a better
title than what he himself has, laid down important exceptions to it. Under the
exceptions the, buyer gets a better title of the goods than the seller himself.
These exceptions are given below:
a)
Sale by a mercantile agent: A
buyer will get a good title if he buys in good faith from a mercantile agent
who is in possession either of the goods or' documents of title of goods with
the consent of the owner, and who sells the goods in the ordinary course of his
business.
b)
Sale by a co-owner: A buyer
who buys in good faith from one of the several joint owners who is in sale
possession of the goods with the permission of his co-owners will get good
title to the goods.
c)
Sale by a person in possession
under a voidable contract: A buyer buys in good faith from a person
in possession of goods under a contract which is voidable, but has not been rescinded
at the time of the sale.
d)
Sale by seller in possession after sale: Where
a seller, after having sold the goods, continues in possession of goods, or
documents of title to the goods and again sells them by himself or through his
mercantile agent to a person who buys in good faith and without notice of the
previous sale, such a buyer gets a good title to the goods.
e)
Sale by buyer in possession: If a
person has brought or agreed to buy goods obtains, with the seller's consent,
possession of the goods or of the documents of title to them, any sale by him
or by his mercantile agent to a buyer who takes in good faith without notice of
any lien or other claim of the original seller against the goods, will give a
good title to the buyer. In any of the above cases, if the transfer is by way
of pledge or pawn only, it will be valid as a pledge or pawn.
f)
Estoppel: If the true owner stands by
and allows an innocent buyer to pay over money to a third-party, who professes
to have the right to sell an article, the true owner will be estopped from
denying the third-party's right to sell.
g)
Sale by an unpaid seller: Where an
unpaid seller has exercised his right of lien or stoppage in transit and is in
possession of the goods, he may resell them and the second buyer will get
absolute right to the goods.
h)
Sale by person under other laws: A Pawnee,
on default of the Pawnee to repay, has a right to sell the goods, pawned and
the buyer gets a good title to the goods. The finder of lost goods can also
sell under certain circumstances. The Official Assignee or Official Receiver,
Liquidator, Officers of Court selling under a decree, Executors, and
Administrators, all these persons are not owners, but they can convey better
title than they have.
