Miracles always be with you

Transfer of Title

Posted by snowie , Tuesday, April 20, 2010 9:46 PM

The English rule "Nemo dat Quod non habet" is set out in the Section 27 of the Sales of Goods Act 1957 which means that if goods are bought from a person who is not the owner, and who does not sell them under the owner’s equity, the buyer does not acquire any title. This rule is to protect the right of ownership. This general rule is illustrated in the cases of Lim Chut Lai v. Zeno Ltd. and Ng Ngat Siang v. Arab-Malaysian Finance Bhd. & Anor.

However, there is six exceptions to the rule which are:
1)The operation of estoppel (section 27)
2)Sale by mercantile agent (section 27)
3)Sale by one of joint owners (section 28)
4)Sale under a voidable title (section 29)
5)Sale by a seller in possession after sale (section 30(1))
6)Sale by a buyer in possession (section 30(2))


1) The operation of estoppel
Where the owner by his conduct make it appear to the buyer that the person who sells the goods has his authority to do so and the buyer relies on that conduct, the buyer obtains a good title because the owner is precluded by his conduct from denying the seller’s authority to sell: Section 27, Sale of Goods Act 1957 and Eastern Distributers v. Goldring.

2)Sale by mercantile agent
The proviso to Section 27, Sale of Goods Act 1957 provides that where a mercantile agent is, with the consent of the owner, in possession of the goods or of document of title to the goods, any sale made by him when acting in the ordinary course of business of a mercantile agent shall be as valid as if he were expressly authorized by the owner of the goods to make the same. Examples of a mercantile agent would be a broker, or an auctioneer.

3)Sale by one of joint owners
Goods may be owned by more than one person. Section 28, Sales of Goods Act 1957 provides that if one of several joint owners of goods has the sole possession of them by permission of the co-owners, the property in the goods is transferred to any person who buys them from such joint owner in good faith and has not at the same time of the contract of sale notice that the seller has no authority to sell.

4)Sale under a voidable title
Section 29 of the Sales of Goods Act 1957 provides that where the seller of goods has obtained possession thereof under a contract voidable under Section 19 or 20 of the Contracts Act 1950, but the contract has not been rescinded at the time of the sale, the buyer acquires a good title to the goods provided he buys them in good faith and without notice of the seller’s defect of title.

5)Sale by a seller in possession after sale
Section 30(1) of the Sale of Goods Act 1957 provides that if a seller continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person to any person receiving the same in good faith and without notice of the previous sale shall have the valid.

6)Sale by a buyer in possession
Section 30(2) of the Sales of Goods Act 1957 provides that if a buyer having bought or agreed to buy goods, obtains possession of the goods or the documents of title with the consent of the seller, he can pass a good title to a subsequent buyer acting in good faith, even if under the first transaction he has not obtained a good title. This is illustrated in Newtons of Wembley Ltd. v. Williams.