Nemo Dat

Nemo Dat means one cannot give what himself does not have
The true owner is the one who always triggers Nemo Dat as per section 21 SOGA 1979
which states that where goods are sold by a person who is not their owner and without the
authority or consent of the true owner, the buyer enjoy no better title to the goods than the
seller had.
However, Nemo Dat is subjected to six exceptions.
*Title goes beyond ownership rights.
*Understand carefully, If there is a clash between obtaining the title, such as HPA and seller
in the possession, the seller in possession will defeat HPA if the second buyer can fulfil the
requirement
* If the person does not have the right to sell, he can be used under Section 12
*For essay only. Relationship – Lord Denning vs Lord Goff – Lord Goff: the general rule is a
very long standing rule that the true owner has absolute ownership rights and that no one
should be interfering with this absolute ownership. The true owner should be regarded as
having absolute, unfettered ownership rights towards the goods and that title should not be
one that can be easily defeated.

Use when title cannot passed but the *Nevertheless given that the question is
discussion need to continue whether M can acquire title to goods,
regardless of that title cannot pass under E
provided that M can successfully pro the
moving of title from the true owner to her
under any of the chain of transactions that
subsequently follow.

Estoppel exception
This is where the buyer can show that the true owner, by virtue of his own conduct or
behaviour such as he has said something or done something or forgotten to do something
and these conduct and words have somehow given the message that he has authorized the
seller to sell the goods.

Estoppel by words/conduct Henderson & Co. v Williams – see note

Case with authorisation
Farquharson Bros v King & Co
-In this case, without the knowledge of the
true owner, the clerk went on to create a
company of their own called Bailey and
used another name for themselves “Brown”.
They engaged in the contract with the
customer of the true owner, King company.
The clerk then misrepresented and said he
is Brown and is acting for company Bayley.
The clerk then obtained money and run
away.
-The court held that the estoppel could not
 be satisfied as there was no authorisation
by the true owner.

Estoppel by Negligence Mercantile Credit Co Ltd v Hamblin

Mrs H wants to sell the car. She
approaches the car dealer and authorizes
the car dealer to act on her behalf to help
her in the sale of her vehicle. The car
dealer then asked Mrs H to sign a blank
form and told Mrs H that it is easy for him to
proceed with the sale but in fact, it was a
lie.
-The question here arises is whether there
is estoppel by negligence that was raised
by the buyer.
-The court held there was a duty of care
owed but when there is a question
regarding whether there was a breach, the
answer is no because Mrs H cannot
foresee that the employee of this car
dealership would misuse the document for
a purpose that was otherwise stated to her.

Mercantile Agent

The person selling the goods must be a Section 1 of the Factors Act 1889 states
mercantile agent (middleman) that a mercantile agent means a mercantile
agent having in the customary course of his
business 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.
Lowther v Harris – the court, in this case,
held that the individual can be considered a
mercantile agent as long as he had
authority on the particular occasion to act
on behalf of another. Moreover, the
mercantile agent need not be acting for
multiple principals but only one is sufficient.
Is the Mercantile Agent in possession of the Pearson v Rose & Young – need both
goods or document of title possession of the goods and document of
title for the vehicle
Are the goods or documents of title in Pearson v Rose & Young/ Du Jardin v
possession of the Mercantile Agent with the Beadman – goods obtained by a trick are
consent of the true owner considered as the consent of the owner

Are the goods or documents of title Here, capacity means the purpose of
entrusted to the Mercantile Agent in his possession of goods and documents of the
capacity as a Mercantile Agent title that were given. (because sometimes it
is left in the hands of the mercantile agent
for services rather than for sale)
As per Pearson v Rose & Young, the
owner’s consent must reflect the purpose
and be connected with his business as a
 mercantile agent because there must be
consent to something of that kind before the
owner can be deprived of his goods.
The sale must be made in the ordinary Oppenheimer v Attenborough – the
course of business of a mercantile agent business of a mercantile agent must be
within ordinary hours and, at the proper
place of business, and in other respect in
the ordinary way in which a mercantile
agent would act
Buyer must take in good faith and without Heap v Motorist Advisory Agency
notice Where good faith and notice did not
emerge. A rogue obtained H’s car and sold
it to the defendant for a very low price. The
price was extremely low and no registration
document was provided and an uncrossed
check was strange and ought to have
raised some suspicion. The process of
sales also did not tally to how the proper
procedure of car sales would go. Therefore,
there was deemed to be a notice..

Voidable title exception

-Mistake or misrepresentation
Mistake as to attributes
This is where the rogue pretends to be another person and then convinces the seller that he
is able to make payment for the items that he has purchased. Although the seller has not
heard of the person the rogue is calming to be but he believes his creditworthiness and
entered into a contract with him.
As per Lewis Averay, there is a presumption that where the parties are dealing face to face,
it is the intention that the decided party intended to contract will the person standing before
him. Thus, the contract cannot be void but only voidable.
Misrepresentation
Misrepresentation renders a contract voidable rather than void
As per general rule, a person from whom goods have been obtained by false pretences, he
or she cannot avoid the transaction unless he or she does an act which shows his or her has
an election to avoid it and communicates his election to the other party to the contract.
If not, a bona fide third party will be able to get a good title where there is a voidable contract
and that contract has not yet been avoided at the time of the sale as per section 23 SOGA
1979,
-Car & Universal Finance v Caldwell held that the rescission is only effective before a bona
fide third party gets his hand on the goods. Hence, it means that the true owner must very
quickly notify the police or the Automobile Association.
*please note that the person who argues there is an exception also can be the person given
a fraudulent check. – however, says that XX has paid with a fraudulent check and thus the
discussion will proceed on the basis of whether title can pass under J to ultimate bona fide
purchaser for value and not whether the title can pass to J.

Buyer in possession exception

Section 25 SOGA states that Where a person having bought or agreed to buy goods
obtains, with the consent of the seller, possession of the goods or the documents of title to
the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of
the goods or documents of title, under any sale, pledge, or other disposition thereof, to any
person receiving the same in good faith and without notice of any lien or other right of the
original seller in respect of the goods, has the same effect as if the person making the
delivery or transfer were a mercantile agent in possession of the goods or documents
Buyer and Buyer in Possession are two different things, a buyer is someone who has title
and possession of the goods whereas a buyer in possession is someone who does not have
the title but only has possession.
Buyer possession happens when the buyer entered into the contract to buy the goods and
he does not pay for it and go away.
This can happen when there is a fraudulent check given to the seller and this is the reason
why section 23 SOGA has a link with section 25 SOGA.
This scenario is not equivalent to theft because the buyer is taken with the consent of the
seller
The requirements

The buyer must have bought/ agreed to buy -it is to be noted that the conditional sale
the goods (first buyer/ fraudster) agreement (Hire & Purchase contract) and
hire/ purchase contract now fall outside the
scope of section 25

The goods must be in the possession of the A buyer in possession is someone who
“buyer in possession” does not have the title but only has
possession
Goods must be in possession of the “buyer Pearson v Rose & Young/ Du Jardin v
in possession” with the consent of the True Beadman -it does not care whether the
Owner consent is obtained by fraud.

The sale must be a sale “as if done by a -For example, the sale must be in the
mercantile agent” ordinary course of business of a mercantile
agent
-Did the seller sell off the goods like a
mercantile agent
Newtons of Wembley Ltd v William
-It appears that section 25(1) could not be
successfully invoked unless the first buyer
had access to a place of business and
conducted a second sale in the ordinary
course of business of a mercantile agent.
 Bona fide for value without notice Notice means the purchases property
*If xx given a fraudulent cheque, that without notice of any other party’s claim to
means not bona fide. the title of that property/ XX does not know
that the seller actually does not have the
title.

Seller in possession exception

Section 24 SOGA

The requirements

The seller must have sold the goods to a

first purchaser to whom ownership of goods
has passed or there must be a first sale of
the particular goods

The seller continues to be in actual -The goods must remain with the seller
continuous, physical possession of the -there used to be the crucial that the
goods – the chain of possession cannot be capacity under which the seller holds
broken continuous possession of the goods
mattered – Staff Motor Guarantee case
(this case section 24 did not apply because
the continuous possession of goods was
“qua hirer”
-however, it has been overruled by Pacific
Motor Auction, so which means that the
capacity under which the seller holds
continuous physical possession of the
goods does not matter (it means no longer
important whether it is hirer only or seller in
possession)
-all that is now only required is that the
chain of continuous physical possession of
goods is not broken

The seller must have delivered the goods to -It does not care whether it is actual
2nd buyer delivery or constructive delivery
Michael Gerson v Wilkinson
In this case, for the buyer to grant a lease
back to the seller, there must have been
some moment in time where the goods
would have been delivered to the buyer at
first because only the seller can lease back
if the goods have been delivered to the
buyer. The court held that there is
constructive delivery.
 Bona fide third-party purchaser for value Heap v Motorist Advisory Agency
*If xx given a fraudulent cheque, that -There is no exception to section 21 if the
means not bona fide. second buyer is not bona fide.
-Notice means the purchases property
without notice of any other party’s claim to
the title of that property/ XX does not know
that the seller actually does not have the
title.
*Requirements 1, 2 and 4 are easily satisfied. Consider 3.

Hire Purchase Exception

Only one requirement must be satisfied.

XX, the bona fide purchaser for value without notice will rely on the exceptions to the general
rules.
Section 27(2) is designed to protect a private purchaser and if the purchaser is a private
purchaser then the title of the vehicle will be vested to him.

The purchaser must be a private purchaser -A private purchaser is the purchaser who
within the meaning of Section 29(2) Hire at the time of the disposition made to him
Purchase Act 1964 does not carry on any business as per
section 29. As long as the buyer is a trade
purchaser or financial purchaser, he is not
considered as a private purchaser.
-Trade or finance purchaser is where they
purchase for the purpose of sale or letting
them out on hire.

Section 27(3) states that where buyer one is a trade or finance purchaser but buyer two is a
private purchaser, buyer 2 can rely on the protection by HPA 1964. Here, it afforded
deferred protection which means that despite the immediate purchaser being a trader or
finance purchaser, the first purchaser from the trader or financial purchaser then will be able
to avail themselves of the protection afforded under the HPA 1964.
XX is not a person who carries on the business of purchasing motor vehicle for purpose of
reselling them or letting them on hire purchase.
Right to sell under section 12 SOGA 1979

*XX only option is to sue Y for breach of section 12(1) SOGA 1979 as per Rowland v Divall,
where there has been a “total failure in consideration”, I will be entitled to receive the
repayment of the full purchase price of the goods.