Sale by Non-Owners

Introduction:             The object of the Sale of Goods Act, is to define and amend the law relating to the sale of goods. In the definition of contract of sale it is provided that the seller has transferred or agreed to transfer the property in the goods to the buyer for price paid or to be paid. Therefore the seller must have the property in the goods i.e. title or ownership in respect of the goods.

Meaning of the Maxim 'Nemo Dat Quinon Habet':

The meaning of the maxim is that no one can transfer better title than his own.  It is a general rule of law that "No one can give that which he has not to give".  No one can give what one does not have. 

It is a universal rule and a fundamental principle of law of personal property that no one can be deprived of his property without his consent and no one give what he has not.  No man can pass better title than he himself has.  In general, no man can sell goods and convey a valid title to other unless he is the owner or representative of the owner.  A person, therefore however innocent, he may be who buys goods from another and not from the true owner of it, acquires no property in them, whatsoever, except in certain cases.

It is based on the ownership of the things, consequences of ownership as to alienate property therefore a person having no ownership, if alienates the title, then transferee will not get anything.  The principle is based on the practical consequences.  But if we follow this rule and go by this rule, there will be unjust consequences of the theoretical and practical aspects of this rule.  Theoretically, a person having rights can transfer the title but practically there are exceptions to this rule incorporated in Section 27 to 30 to safeguard the interest of bonafide purchaser.

Case Law:

• Cundy Vs. Lindsay, 1878 - In this case A purchased a piano from B by fraud.  A had a voidable title to the goods.  Before B rescinded the contract, A sold the piano to C, who bought the piano in good faith and in ignorance of the fraud.  Court held C got a good title, But if the agreement is void, even though the buyer is innocent, he acquired no title in the goods.
• Pramathanath Talukdar Vs. Maharaja Probirendra M. Tagore AIR 1966 Cal. 405 – Court held that Section 30 (1) does not require that the seller must be in actual physical possession of the goods. It is enough that he should have such control over the goods as to transfer possession by making over a document of title.  The section refers to possession not merely of goods but also of documents of title to goods.  Possession of documents of title to goods is equated to possession of goods.  Possession of document of title enables the holder of documents to transfer title and possession by endorsement and delivery of the documents of title to goods.