Transfer of title by a non-owner
- Part 3 of the Act deals with cases which a seller with no rights to the goods may pass a good
title to a third party.
A balancing action between two innocent parties.
The protection of property v protection of commercial transactions.
- The principle of the law – nemo dat quod non habet
S. 21(1) – where goods are sold by a non-owner without the authority or consent of the
owner, the buyer acquires no better title to the goods than the seller had unless the
owner by his conduct allowed the seller to sell.
S. 47(1) – the unpaid seller’s right of lien or stoppage in transit is not affected by any
sale/other disposition of the goods which the buyer may have made unless the seller
has assented to it.
o If a seller assents to a resale by the buyer to a third party, the third party
obtains a good title free from the seller’s lien or right of stoppage in transit.
o The effect is similar to that of estoppel, except that the consent is not
required to be communicated to the sub-buyer/third party. Consent is
sufficient if it is only communicated to the buyer.
Consent must be an active action, mere notice of such resale and has not objected to
it does not amount to an assent.
o Mordaunt Bros v British Oil & Cake Mills Ltd [1910] 2 KB 502
D sold petroleum to X who resold part of it to P. P gave D the delivery
orders and D accepted without comment.
D delivered the instalments of the oil to P as and when they were
paid by X. X fell into arrear with the payments and D refused to
deliver any more.
Held D had not assented to the resale.
a. The assent which affects the right of lien must be one showing
that the seller intends to renounce his rights against the goods.
b. The fact that the seller was known of the sub-contract is not
enough.
o D F Mount Ltd v Jay & Jay Co Ltd [1960] 1 QB 159
M told D that he would pay D out of the price he obtained from the
sub-purchaser and D agreed.
M sold the cartons to P who had paid M. D did not receive price from
M and claimed to be still entitled to the goods.
Held D had assented to the resale.
D knew that M could only pay for the goods out of the money he
obtained from his customers.
D also knew that M could only obtain money from his customers only
when they received the goods (delivery order in favour of the
customers).
D intended to renounce their rights against the goods and to take the
risk of M’s honesty.
Not applicable when there is a mere agreement to sale
o ‘Where goods are sold’ – the section only applied when there is a contract of
sale of goods.
- Part 3 of the Act deals with cases which a seller with no rights to the goods may pass a good
title to a third party.
A balancing action between two innocent parties.
The protection of property v protection of commercial transactions.
- The principle of the law – nemo dat quod non habet
S. 21(1) – where goods are sold by a non-owner without the authority or consent of the
owner, the buyer acquires no better title to the goods than the seller had unless the
owner by his conduct allowed the seller to sell.
S. 47(1) – the unpaid seller’s right of lien or stoppage in transit is not affected by any
sale/other disposition of the goods which the buyer may have made unless the seller
has assented to it.
o If a seller assents to a resale by the buyer to a third party, the third party
obtains a good title free from the seller’s lien or right of stoppage in transit.
o The effect is similar to that of estoppel, except that the consent is not
required to be communicated to the sub-buyer/third party. Consent is
sufficient if it is only communicated to the buyer.
Consent must be an active action, mere notice of such resale and has not objected to
it does not amount to an assent.
o Mordaunt Bros v British Oil & Cake Mills Ltd [1910] 2 KB 502
D sold petroleum to X who resold part of it to P. P gave D the delivery
orders and D accepted without comment.
D delivered the instalments of the oil to P as and when they were
paid by X. X fell into arrear with the payments and D refused to
deliver any more.
Held D had not assented to the resale.
a. The assent which affects the right of lien must be one showing
that the seller intends to renounce his rights against the goods.
b. The fact that the seller was known of the sub-contract is not
enough.
o D F Mount Ltd v Jay & Jay Co Ltd [1960] 1 QB 159
M told D that he would pay D out of the price he obtained from the
sub-purchaser and D agreed.
M sold the cartons to P who had paid M. D did not receive price from
M and claimed to be still entitled to the goods.
Held D had assented to the resale.
D knew that M could only pay for the goods out of the money he
obtained from his customers.
D also knew that M could only obtain money from his customers only
when they received the goods (delivery order in favour of the
customers).
D intended to renounce their rights against the goods and to take the
risk of M’s honesty.
Not applicable when there is a mere agreement to sale
o ‘Where goods are sold’ – the section only applied when there is a contract of
sale of goods.
