COMMERCIAL LAW LECTURES 2012 -2013
SALE OF GOODS (4)
TRANSFER OF TITLE BY A NON-OWNER
1. The general rule as to priority in the case of personal property is clear and underpins all forms of transfer, whether by gift, sale, bailment or security, and it is that a person cannot give what is not his or hers to give. This basic rule is often expressed in the Latin maxim nemo dat quod non habet and if reflected in s 21 SGA.
2. In practice, a simple three party situation is relatively uncommon. Very often, more than one person claims to have a better title to the goods than the buyer. This is because in English law title is relative (see National Employer’s Mutual General Insurance Association Ltd v Jones  1 AC 24).
Introduction: the basic rule
3. Section 21 SGA provides:
(1) Subject to this Act, where goods are sold by a person who is not their owner, and who does not sell them under the authority or with 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 his conduct precluded from denying the seller’s authority to sell.
(2) Nothing in this Act affects -
(a) the provisions of the Factors Act or any enactment enabling the apparent owner of goods to dispose of them as if he were their true owner;
(b) the validity of any contract of sale under any special common law or statutory power of sale or under order of a court of competent jurisdiction.
4. Examples of the general rule:
Cundy v Lindsay (1878) 3 App Cas 459 B ordered linen by post by impersonating a well known local company. Contract void: therefore B had no title and accordingly no title could be passed by him to P. The court held:
by the law of our county the purchaser of a chattel takes the chattel as a general rule subject to what may turn out to be certain infirmities in the title. If it turns out that the chattel has been found by the