The principle or rule that Lord Denning was discussing in the case of Bishopsgate Motor Finance Corporation Limited

v Transport Brakes Limited1 is the common law maxim called in Latin nemo dat quod non habet, which provides that a seller, or an agent acting for the seller, can give no better title to goods than the seller himself. Where, therefore goods are sold by a person, who is not the owner, the buyer acquires no better title than the seller. The facts of the case of Bishopsgate Motor Finance Corporation Limited v Transport Brakes Limited2 are that a hirer, under a hire purchase arrangement, obtained possession of a car. He then took the car to Maidstone market and handed it over to an auctioneer tried without success to sell the car by auction. He then sold it to A by private treaty. A question arose as to whether A had obtained good title to the car. It was held that Maidstone market was a market overt and that the practice in the market of allowing sales to be conducted privately within the market after an auction had failed was sufficient to constitute usage of the market within the meaning of the provision, and consequently A had obtained good title. The opposite of the case above is the case of Rajan Patel v The Attorney-General3 where the appellant bought a Mercedes Benz car from one Humphrey Musonda and one Patrick Kangwa who approached him in his shop; this was after the appellant was shown a Vehicle Registration Book, a National Registration Card and a Customs Clearance Certificate. The Registration Book showed that the registered owner of the car was Patrick Kangwa. The Registration Book was issued by the Government of Zambia. The appellant checked the engine and chassis numbers. These corresponded with what was in the Registration Book. The agreed purchase price was $ 28,000. The appellant even went to the Police Station at the motor vehicle section for purposes of verifying the ownership status of the subject car. There after, Musonda and the appellant went to see the officer in charge where Musonda swore an affidavit on behalf of Patrick Kangwa for change of ownership. Then after this, the two went to the Road Traffic Department where they affected change of ownership of the car into the joint names of the appellant and his wife. After, they proceeded to the appellants lawyer where a contract of sale for the motor vehicle was made and signed. After signing of the contract the appellant paid to Musonda the sum of US $28,000.

1
2

[1949] 1KB 322. Ibid 3 (2002) ZR 59 (Supreme Court of Zambia)

It later transpired that the said car had been hijacked from the owner in the Republic of South Africa and the matter was reported to South African Police who opened a docket and circulated this information to Interpol. It was held that both in the High Court and on appeal, citing with approval the case of Rowland v Divall, and section 12 (1) of the sale of Goods Act, 1873, that the appellants claim must fail. The thief who stores the car could not pass good title because he had none. It was further held that that sale of the car in this case was not a sale in market overt. Sakala.J.C, defined a market overt as an open public and legally constituted market. And stated that the sale of a vehicle by people going to the plaintiffs shop cannot be accepted that it was a sale at the market overt and the appeal was dismissed It is one of the core tenets of commercial property law that one cannot give that which one does not have: or, to render that sentiment in its more familiar Latin form, nemo dat quod non habet. The point is the simple one in theory: it is not possible for a person who does not have rights in property to transfer good title in that for a person who does not have rights in property to transfer good title in that property to another person.

Exceptions to the nemo dat rule To the general nemo dat rule there are eight exceptions. Under these exceptions, a non-owner will be able to pass good title to goods even if he may have none himself, or if he only has a defective one. 1. Estopple Section 21 (1) provides that where goods are sold by a non-owner who does not sell them under the authority of the owner the buyer acquires no better title than seller unless the owner of the goods is by his conduct precluded from denying the sellers authority to sell. This amounts to a sale by estoppels. In order to raise estoppel under that subsection, it must be shown that either the owner represented that the seller was entitled to sell the goods. The owner must have acted in such a way as to mislead the buyer into believing that the seller was entitled to sell the goods. The owner must have gone beyond merely allowing the non owner to have possession of the goods in question. Regard must be made to the

conduct of the owner rather than his intention and it is the effect of his conduct that decides the question whether he is stopped or not. The exception above is demonstrated by the case of Eastern Distributors Ltd v Goldring4 where, Murphy the owner of a Bedford van, desirous of raising money on it, agreed with Coker, a car dealer, that the latter should represent to the plaintiffs, a finance company that he, Murphy, wished to take the car on hire-purchase. He then signed and delivered to Coker blank hire purchase proposal forms and a memo of agreement and they pretended that Coker was selling the van to Murphy. The hire purchase company bought the van and let it out to Murphy, who then sold it to the defendant, who bought it in good faith. Murphy defaulted in making the instalment payments under the agreement. The hire purchase company traced the van and sued the defendant for conversion. By the nemo dat rule the plaintiff and no title to assert because they bought the van from Coker, a non-owner. It was held that; since Coker was armed by Murphy with documents which enabled Coker to represent that he was the owner of the van with the right to sell it, Murphy was stopped by his conduct from denying the plaintiffs title: when Murphy sold the van again to the defendant, he did not have title, it being vested in the plaintiff. Judgment was accordingly entered for the plaintiff hire purchase. Estoppel by negligent conduct may be successfully pleaded when the true owner of goods acted so negligently as to induce the buyer into believing that the seller is in fact the owner of the goods. In order to establish estoppels by negligence it must be shown that: (i) There was a duty of care, (ii) The duty was breached; (iii) Detriment resulted to the buyer, the breach of duty being the effective cause. This was asserted by the case of Merchantile Credit Co v Hamblin5 where the defendant mrs. Hamblin, wishing to raise money on the security of her cars approached a respected car dealer who suggested signing a number of documents which would enable her obtain the loan. She signed some blank forms under the impression that the dealer would use them to discover how money might be raised. The documents turned out to be such as allowed the dealer to appear as the true owner of the cars. The dealer completed them so as to
4
5

(1957) 2 QB 600; 3WLR 237 (1965) 2 QB 242

constitute an offer to sell the cars to the plaintiff hire purchase company, who accepted the offer. Mrs. Hamblin then repudiated the agreement. The plaintiff argued that she was precluded by her negligent conduct (in signing the blank forms) from asserting her title to the car. It was held that the respondent, Mrs Hamblin, did not owe a duty of care to the appellant finance company in signing the forms. Furthermore, the respondent had not been careless because it was reasonable to have trusted a respectable car dealer. 2. Sale Under the Factors Act Section 2 (1) of the Factors Act of 1889 provides that: Where a mercantile agent is, with the written consent of the owner, in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition of the goods, made by him when acting in the ordinary course of business of a mercantile agent, shall be as valid as if it were expressly authorised by the owner of the goods to make the same. Section 21 (2) of the sale of Goods Act, provides that nothing in this Act shall affect the provisions of the Factors Act, or any enactment enabling the apparent owner of goods to dispose of them as if he were the true owner thereof The case which demonstrates this is the case of Heap v Motor Advisory Agency Ltd6 where the plaintiff was desirous of selling his Citroen car for 210 pounds. A rogue called North informed the plaintiff that he had a friend who was interested to buy the car for that price. The plaintiff then allowed North to take possession of the car for the purpose of showing it and possibly selling it to H. in fact H never existed and North made the representation with the intention of obtaining the car for his own benefit. Later on, North sold the car through an intermediary to the defendant for 110 pounds. The question was whether the defendant could set up the defence under section 21 (1) of the Sale of Goods Act. It was held that the defendant could not set up the defence under section 21 (1) in as much as under that sub-section, the plaintiff was not by his conduct precluded from denying the sellers authority to sell the car. The buyers had notice of a defect in the title of the car and so were not afforded the protection of section 2 of the Factors Act, 1889. It was stated that in order to constitute conduct precluding him from denying the sellers authority
6

(1923) 1 KB577

to sell the car within the meaning of section 21 (1), the negligence on the part of the owner of goods which have been sold without his authority or consent, must be more than mere carelessness in the management of his own affairs and must amount to a disregard of his obligation towards the buyer. 3. Sale under Special Common Law or Court Order Section 21 (1) (b) of the sale of Goods Act provides that nothing in the Act would affect the validity of any contract under special common law or statutory power of sale under a court order. The question is who may exercise these special powers? These powers may be exercisable by pledges since a pledge carries with it an implied right to sale. They may also be exercised by agents of necessity and by executors and administrators. (a) Statutory Powers Sellers of goods under statutory powers do pass a good title even if the owners of the goods did not authorise or consent to the sale. Section 3 of the Disposal of Uncollected Goods Act7, for example, confers a right on bailees, in certain circumstances, to sell goods held under bailment for repair or other treatment and not re-delivered. The section 8 states that, Where, in the course of a business, goods have been accepted and are held, by any person under a bailment for repair or other treatment on terms, express or implied, that the said goods will be re-delivered to the bailor or in accordance with his directions when the repair or other treatment has been carried out and on payment to the bailee of such charges as may be agreed between the parties or as may be reasonable, and where such goods are ready for re-delivery but the bailor fails both(a) to pay or tender to the bailee his charges in relation to the goods.

The Sheriff of Zambia and his bailiffs also have the right to sell seized property and pass good title to purchasers thereof. Section 15 (1) of the Sheriffs Act9 provides that: Where any goods in the possession of a judgement debtor at the time of seizure by an officer are sold by such officer without any claim having been made to the same7 8 9

Chapter 410 of the Laws of Zambia 3 (1) of the Disposal of Uncollected Goods Act of Chapter 410 of the Laws of Zambia Chapter 49 of the Laws of Zambia

(a) the purchaser of the goods so sold acquires a good title to those goods Statutory powers of sale include those conferred on an unpaid seller of goods under the Act. In terms of section 25 (1) of the Act, where a person who has sold goods remains in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person of the goods or documents of title to a third party who receives the same in good faith and without notice of the previous sale has the same effect as if the person making the delivery or transfer had the express authority of the owner in doing what he did. This section reproduces with slight modification the provision of section 8 of the Factors Act of 1889. Other persons who may have statutory power to sell are liquidators and trustees in bankruptcy, mortgagees in possession, and many others. (b) Court Order Under the Supreme Court Rules (the White Book of England which apply to Zambia) Oder 29, Rule 4, the court has power to make an order as to the sale of goods of a perishable kind or likely to deteriorate if kept or which for any other reason it is desirable to do so. The order provides that:
(1) The Court may, on the application of any party to a cause or matter, make an order for

the sale by such person, in such manner and on such terms (if any) as may be specified in the order of any property (other than land ) which is the subject matter of the cause or matter or as to which any question arises therein and which is of a perishable nature or likely to deteriorate if kept or which for any other good reason it is desirable to sell forthwith. 4. Sale by Agent An agent who sells goods on behalf of his principla will pass good title if the agent has authority to do so. Section 61 contains saving provision for rules of the common law. Agency law is made up of rules of common law. By virtue of section 61, these rules will apply in contracts of sale. 5. Sale under Voidable Title

By section 23 of the Act, where the seller of goods has voidable title but the title has not been avoided at the time of the sale, the buyer obtains good title to the goods provided he buys the goods in good faith and without notice of the defect in title. Section 23 protects third parties only where the sale was voidable.