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‘Nemo Dat Quad Non Habet’ or ‘no one gives what he doesn’t have’ is a legal rule to invalidate transfer

of title to goods to another party from a person who does not actually own the property in the goods. Under this rule, owner’s title is protected inasmuch as the situation of the unauthorized transfer falls outside the exceptions[1] stipulated in SOGA, whereas violated right of the buyer who has trusted the legitimacy of the sale will remain unattended. Although the bona fide purchaser can sue the non-owner for breach of warranty[2], his loss with regard to the goods may be irremediable. Following this rule, British courts have held that the property remains at the original titleholder even though bona fide party insists on their interest in the property obtained through regular procedure. The consistent attitude of courts towards the Nemo Dat rule is clearly indicated in cases represented by Cundy v Lindsay[3], where House of Lords concluded that the title, which had been attempted to be given the bona fide buyer, was a title which could not be given to them, and by Jerome v Bentley[4] where the title to the ring stayed at the original owner because he did not misled the stranger whom he entrusted to sell the ring. However, this rule contains the risk to encumber normal business transactions with its one-sided patronage aspect. As Lord Denning noted, “the person who takes in good faith and for value without notice[5]” should be also protected in some way. Hence, SOGA provides nine exceptions[6] to the rule although Ismail[7] criticized them as arbitrary. The followings are two of such exceptions. 1. First Exception: Estoppel
Estoppel, which is defined as “a bar that precludes a person from denying something that has been legally established as true[8],” is one of the exceptions provided by SOGA[9]. Here is an act established as true by the fake owner. If the real owner did not take part in the establishment of the wrong act, nor did he give any false impression to lead the third party to believe that the seller was his agent, the bona fide purchaser cannot get better title to the goods. However, when the real owner is estopped by his conduct from denying such a fake establishment or tacitly permits the seller’s unauthorized act, the purchaser may obtai n legitimate title to the goods. Estoppel, therefore, places the responsibility on the owner of goods for

the Nemo Dat rule. In Farquharson Bros v C King[10], Lord Lindley negated the existence of estoppel which precludes the plaintiffs from denying Capon’s right to sell to the defendants and then stressed that the plaintiffs have done absolutely nothing to mislead the defendants and to induce them to trust Capon, the unauthorized fraudster.

2. Fifth Exception: Sale under a voidable title

When the seller of goods has a voidable title to them, but his title has not been avoided at the time of the sale[11], the bona fide purchaser without notice of seller’s defect of title can get a good title to the goods. This was shown in Lewis v Averay[12] where a student who bought a car in good faith from the person, who had obtained the car fraudulently before the sale for the student, successfully got

The owner should be watchful over the possible abuse of his title or ownership by an unauthorized person. could not get a good title because the original owner of the Jaguar has validly exercised his right by immediately reporting the fraud he discovered to the police and the Automobile Association to avoid the first transaction before the last bona fide buyer purchases the car. House of Lords [4] [1952] 2 All ER 114. Exceptions to the Nemo dat Principle: Arbitrary and Unfair (2005) [8] Garner’s Dictionary of Legal Usage.a good title. New exceptions always appear even if more comprehensive level of reform is realized. Conclusion The exceptions to the Nemo Dat rule do not seem so arbitrary as Ismail maintained. In contrast. who may involve bona fide third party. (CA) [13] [1965] 1 QB 525. each case must be analyzed and decided on its own fact. House of Lords [11] Sale of Goods Act 1979 s23 [12] [1972]1 QB 198. which might adversely affect his future title to the goods. Queen’s Bench Division [5] Bishopsgate Motor Finance Corporation Ltd v Transport Brakes Ltd [1949] 1KB 322 (CA) [6] Sale of Goods Act 1979 s21-26 [7] Faliq Ismail. as Phillimore LJ describes[14]. He can insure the property against various prospective problems. Both the owner and the buyer need to pay attention to the risk in regard to goods. Third Edition. After all. the buyer should be careful about the legitimacy of the sale. Likewise. the buyer in Car & Universal Finance v Caldwell[13]. 3. (CA) [14] Ingram v Little [1961] 1 QB 31 . [1] Sale of Goods Act 1979 s21-26 [2] Sale of Goods Act 1979 s53 Remedy for breach of warranty [3] (1878) 3 App Cas 459. p330 [9] Sale of Goods Act 1979 s21(1) [10] [1902] AC 325.