question

Greetings!

Thank you for your question.

‘Nemo dat quod non habet’ means no one can give what they do not have. The essence of the maxim is that only the real owner can pass a real title to the buyer in sale. In the context of sale of goods, no one can transfer a better title than he himself.  

Section 27 of Sale of Goods Act, explains this maxim elaborately. It provides for Sale by person not the owner. It says that where goods are sold by a person who is not the owner and sells them without any authority or the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by conduct precluded from denying the seller’s authority to sell.

The exception to this provision are-

1. Mercantile agent- Where with the consent of the owner, any person in possession of the goods or of a document of title to the goods, makes any sale, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorized by the owner of the goods to make the same, provided that the buyer act is good faith and has not at the time of the contract of sale notice that the seller has not authority to sell.

In the case of Pearson v. Rose & Young ltd. it was held that if the title is obtained without the consent of the owner, the buyer did not acquire a good title.

1. Estoppel- A person, who does an act in good faith at the words of another, should not be deceived. When the owner of the goods by his act or omission or conduct allows the buyer to believe that the seller has a right to sell the goods, the true owner cannot deny such sale subsequently. Estoppel arises from a representation that the seller had the authority to sell.

• Estoppel arises from-

1. act or omission - but it should be a legal obligation
2. Negligence – not mere negligence but it should be in regard to the person.

Section 29 of SOGA talks about Sale by person in possession under voidable contract. It says that when the seller has obtained possession under a voidable contract but the contract has not rescinded at the time of the sale, the buyer acquires a good title, provided done in good faith.

So, to answer your question, the maxim is used to explain the effect of a sale conducted by a person who is not the real owner. But there are exceptions to this which are estoppel by the real owner and sale by mercantile agent. 

Hope this answers your question.

Regards,

Karishma Yadav