The Transfer of a Title by a Non-Owner

The Transfer of a Title by a Non-Owner

This question is mainly concerned with the 'Transfer of Title by a

Non-Owner'. Sections 21-26 of the Sale of Goods Act 1979 deal with the

transfer of title. The general rule is that a person cannot give a

better title than he himself possesses when he purports to sell goods.

This is nest expressed by the legal maxim 'Nemo dat quod non habet' -

no one gives who possesses not, that is to say, no person can give a

greater title than that which they possess.

Section 21(1) provides:

'subject to this Act, when goods are sold by a person who is not their

owner and who does not sell them under the authority and consent of

the owner, the buyer acquires no better title to the goods than the

seller had…'

The Act does not affect the provisions of the Factors Act or any

enactment enabling the apparent owner of goods to dispose of them as

if he were their true owner.

At one time the only exception to this was sale in market overt, but

in response to commercial pressures a steady flow of further

exceptions have been introduced both by statute and common law, while

the concept of market overt itself has been abolished.

There are many exceptions to the nemo dat rule. The first one is

Estoppel, this exception isincorporated into s21(1) which ends:

'…unless the owner of the goods is by his conduct precluded from

denying the seller's authority to sell.'

Section 21 can only operate to pass title when there has been a sale,

if there is merely an agreement to sell then the doctrine of estoppel

will not operate. Estoppel is often considered to operate in a number

of possible ways, by words...

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... So all in all in my opinion I believe the law has achieved an even

balance between the respective parties as in the case the hire

purchase company couldn't recover the car as the third party bought

the car in good faith and obtained a good title, and since cars were

sold in the market by private sale as well as by public auction, the

car was sold to the third party "in market overt, according to the

usage of the market," within the Sale of Goods Act 1893 s. 22 (1) and,

therefore, the third party was able to give a good title to the

defendant, with the result that the hire purchase company could not

recover.

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[1] [1921] 3 K.B. 387

[2] [1923] 2 K.B. 500

[3] [1954] 1 W.L.R. 1286

[4] [1987] 1 W.L.R. 1332

[5] [1965] 1 Q.B. 560