BangladeshUniversityofProfessionals

(BUP)

CourseName:Business and CompetitionLaw

Course Code: LAW3504
Term Paper

Reassessing Nemo Dat Quod Non Habet:Are Statutory

Exceptions Sufficient to Promote Commercial
Fluidity?
Submitted to–

Moniruz Zaman
Assistant Professor
Department of Law
FSSS,BUP

Submitted by–

Sinthia Islam
ID-24429509047

Session:2023-24
 Reassessing Nemo Dat Quod Non Habet:Are Statutory Exceptions
Sufficient to Promote Commercial Fluidity?

The doctrine nemo dat quod non habet literally means no one can give what he has not
got.1This maxim illustrates one of the general rules of transfer of title on sale, which is: the
seller cannot transfer to the buyer ofgoods a better title than he himself [Link] the title of the
seller is defective the buyer’s title will also be subject to the same defect. In the context of
Bangladesh, legal provision of this maxim lies in section-27 of the Sale of Good Act,1930.
Section-272says, where goods are sold by a person who is not the owner thereof and who
does not sell them under the authority or with the consent of the owner, the buyer acquires
no better title of the goods than the seller had.

In the case, Greenwood v. Bennet3, Bennet, the original owner of a Jaguar car entrusted it
to one Searle for some repairs to be carried out. Searle was a rogue and used it for his own
purposes. He had a crash and damaged it [Link] without authority he sold it
for 75 pounds to Harper, a garage proprietor who was not aware that Searle was not the
owner. Harper spent 226 pounds on repairing it and sold it to the finance company. The
court held that the car still belonged to Bennet.

The foundational rationale behind this doctrine is the protection of the true owner. The law
in general does not permit a fraudster or a mere bailee to strip an innocent owner of title
simply by effecting a purported sale to a third party. This was the very philosophy affirmed
in the Bangladeshi Commercial Jurisprudence drawing from the common law tradition.

However, a rigid application of this doctrine would paralyse commerce. The act4has
enumerated a few exceptions with a view to ensuring swift movement of the goods and
sale at the same time protecting the true owners. First exception, embodied in section-27, is
Estoppel. It says that the purchaser may get a good title if the owner of the goods is by his
conduct precluded from denying the seller’s authority to sell.5For instance, where a person
sold his mother’s good in her presence, she making no objection, she was not permitted
subsequently to deny her son’s authority to sell. Thus, when the owner is not permitted to

1MC Kucchal and Vivek Kucchal, Mercantile Law(first published in 1978)280

2Sale of Goods Act,1930
3
Greenwood v Bennet (1972)1WLR 691
4
Sale of Goods Act,1930
5
Avtar Singh, Business Law(first published in1973,Eastern Book Company)
6 ibid
deny the seller’s authority that is known as an estoppels against him. 6Nonetheless, mere
carelessness may not create an estoppels. In Heap v Motorists’AdvisoryAgency Ltd6it
was held that, Negligence in order to give rise to a defence under section-27, it must be
more than mere carelessness on the part of a person in the conduct of his own affairs, and
must amount to a disregard of his obligations towards the person who is setting up the
defence. Thus, when a car and its registration book were taken away from the owner by a
swindler under a fake hire-purchase agreement, the buyer from him could not get a good
title.7On the other hand, where the owner of the car delivered signed forms to a person
which enabled him to pretend to the buyer that he had the owner’s authority to sell his car,it
was held that the owner was stopped from disputing the buyer’s title8

Second exception is sale by joint owner9, where one of several joint owners has possession of
the goods by permission of the co-owners, the property in the goods is transferred to any
person who buys them in good faith and has not at the time of the contract of sale notice
that the seller has no authority to sell.

Third exception is sale by person in possession under voidable contract enumerated in

section-2910The first requirement to attract this exception is that goods have to be obtained
under voidable contract as opposed to void contract. For instance, in Phillips v Brooks
Ltd11a fraudulent person presented himself as a respectable person and obtained from a
[Link]
discovered the rouge pledged the ring with a bona fide pledgee, who obtained a good title.
The contract was voidable because of the fraud and before it was rescinded the goods had
gone to the hands of a third party. Thus, it protects the innocent third party who had no
knowledge of the underlying disputes between the original owner and the person he
purchased goods from.

Fourth exception is seller in possession after sale enumerated under section-30(1)12. If the
seller remains in possession of the goods after selling them and sells them to another
person, the buyer gets a good title. This exception can be attracted if the second buyers acts

6(1923)1KB282(CA)

7Central Newburg Car Auctions v Unity Finance,(1956)3WLR 1068(CA)

8Eastern Distributors Ltd v Goldring, (1957)2 QB 600
9
Section-28 of the Sale of Goods Act,1930
10
Sale of Goods Act,1930
11(1919)2KB243

12
Sale of Goods Act,1930
in good faith, had no notice of the previous sale and the goods has been delivered to the
buyer. However, it is not necessary that the seller should be in the personal possession of
goods as mentioned in City Fur Mfg Co v Fureenbond (Brokers) London Ltd13

FifthexceptionisBuyerinpossessionbeforesalementionedinSection-30(2)[Link]
buyer has the possession of goods even before the sale has been completed and sells it to
another party, the second buyer will get the title. In the case, Marten v Whale15the plaintiff
agreed to buy a plot of land from one T in return for a car subject to the condition that his
solicitor approved the title to the land. Before anything was done, the plaintiff gave the
possession of his car to T ,who sold it to the defendant. It was held that the defendant
acquired a good title.

Thus, these statutory exceptions allow to build a bridge between the conflict of nemo dat
quod non habet and commercial fluidity. Sometimes, commercial transaction may get
stagnant due to the rigid provision of this doctrine, however, by upholding the exceptions
the transaction may be made flexible.

References:
1. Sale of Goods Act,1930
2. Mercantile Law, MC Kucchal and Vivek Kucchal
3. Greenwood v Bennet(1972)
4. Heap v Motorists’ Advisory Agency Ltd(1923)
5. Business Law, Avtar Singh
6. Central Newburg Car Auctions v Unity Finance,(1956)
7. Eastern Distributors Ltd v Goldring,(1957)
8. Phillips v Brooks Ltd(1919)
9. City Fur Mfg Co v Fureenbond(Brokers)LondonLtd(1917)

13(1937)1AllER199

14SaleofGoodsAct,1930

15(1917)2KB480CS