This is encapsulated in the Latin
maxim: Nemo dat quod non habet. This translates to mean “you
can’t give what you don’t have”. Thus, S.12 SOGA provides that
before ownership can be transferred, the following have to be met:
- If it
is a sale, a condition that the seller has the right to sell and if it is
an agreement to sell, the seller would have the right to sell at the time
the property in the goods will pass 12 (1).
- There
must be a warranty of quiet enjoyment and non-interference; 12 (2).
- A
warranty that the goods are free from third party charges and
encumbrances; 12 (3).
In the case of Akoshile
vs. Ogidan 1950 19 NLR 87, the defendant bought a stolen car from
a third party. He subsequently sold the car to the plaintiff. When the third
party was arrested, the car was collected from the plaintiff by the police. The
plaintiff subsequently sued for the price he paid to the defendant. The court
held that the sale of the car to the plaintiff by the defendant was in breach
of the condition S.12 (1). This was due to the fact that the defendant didn’t
have a title to the goods since they were stolen. Thus, he could not transfer
same.
General exceptions to the rule
This rule lends itself to some
exceptions. They are:
1. Where there is a sale of property by
an agent: By the provisions of 21(1) title
can be passed by a person who is not the owner if he sells the goods on the
permission of the true owner; Imam vs. ABU 1970 NNLR @p39.
2. Where the principle of estoppel
applies: This could come to play in situations
in which the true owner by conduct or words implies that the seller has
ownership of the property. It could also arise due to the negligence of the
owner which gives the seller the authority to sell.
This could be seen by the closing part
of S.21(1) where it said that sale by persons not the owner
would be valid if the owner has by his conduct been precluded from denying the
seller’s authority to sell.
3. Sale By a Mercantile Agent Under The
Factors Act: It is stated by the provisions of S.21
(2) (a) SOGA that this rule doesn’t apply to goods sold under the provisions of
the Factors Act. The factors act deals with the regulation of sale of goods by
a mercantile agent.
A mercantile agent has been defined by S.1
(1) of the Factors Act as a person whose normal business it is to
receive goods as an agent for the purpose of the sale of such goods. Thus a
person who decides to help his friend sell some goods to a third party cannot
be regarded as a mercantile agent. This is due to the fact that being an agent
is not his normal business.
For this exception to apply, S.2(1) of
the Factors Act provides that the mercantile agent has to be
in possession of the goods with the consent of the owner, provided that the
person who buys them does so in good faith. This means that even though the
owner did not tell the mercantile agent to sell, if the documents of the goods
and possession are given with consent to the agent, any sale by the agent to a
buyer in good faith would be valid.
In the case of Pearson vs.
Rose and Young Ltd (1950) 2 All ER 1027, the plaintiff
delivered his car to a mercantile agent in order to just get offers, not to
sell the car. The agent intended to sell the car as soon as possible and to
embezzle the funds. Thus, he tricked the plaintiff into leaving the
registration book with him. While the owner/plaintiff was away, the agent sold
the car to a third party.
In court, it was held that although the
agent was in possession of the car and the registration book, the possession of
the registration book was without the owner’s consent. Thus, he couldn’t
validly sell the car since a car can’t be sold without its registration book.
4. Sale Under Special Powers: According to the provisions of S.21 (2) (b)
SOGA, the validity of a contract of sale under common law power, statutory
power and judgement of a court would be exempt from the provision of this rule.
5. Sale in Market Overt: A market overt has been defined by Jervis J in Lee
vs. Bayes 1856 18 CB 599 at p. 601 as an open, public and
legally constituted market. By the provisions of S.22 (1)
SOGA, goods that are bought in a market overt according to the use of the
market and in good faith are also exempted from the application of the rule of
ownership. Thus, if a person buys a car in a market overt for foodstuff, it is
not according to the use of the market and thus, the rule would not apply. A
market overt is one that is usually open during the hours of sunrise and
sunset.
For this rule to apply, the goods have
to be sold in the market within the hours of operation of the market.
6. Sale under Voidable Title: By the provisions of S.23 of the Sale of
Goods Act, where a seller has a voidable title to the goods in his
possession and he sells them before his title becomes void, the buyer has
gotten a valid title to the goods purchased if the goods are bought in good
faith.
Thus, in the case of Lewis
vs Averay a rogue misrepresented himself as a popular actor
to the plaintiff in order to purchase a car from him. The car was purchased
with a cheque which later bounced. The rogue sold the car, before the fraud was
discovered, to the defendant who bought it in good faith. After the fraud was
discovered, the plaintiff sued the defendant for the car.
it was held that the title which the
rogue possessed after duping the plaintiff was voidable pending the failure of
the cheque. Since the car was bought in good faith by the defendant from a
person who had a voidable title, he had acquired a valid title.
7. Seller In Possession: According to the provisions of S.25(1) of SOGA,
if a seller having sold the goods in question but he still has them in his
possession and the goods are bought in good faith, from him or a
mercantile agent acting for him, by another party who is ignorant of the
initial sale, such party has acquired a valid title.
8. Buyer In Possession: By the provisions of S.25(2) of SOGA, if
a person who has bought or agreed to buy some goods is in possession of the
goods or documents of title, he or a mercantile agent acting on his behalf can
transfer the same to another buyer who buys in good faith and the title would
be considered valid.
SOURCES
- MC
Okany: Nigerian Commercial Law
- Sale of
Goods Act
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