1. “Nemo Dat Quod Non Habet”
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2. 


As a general rule, when a person takes goods
(e.g buyer), he or she gets only the same
rights to the goods as the person from whom
he or she took them (e.g seller).
This rule is expressed in the latin maxim
nemo dat quad non habet.
This rule is set out in section 27 of SOGA
1957
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3. 

Sale by person not the owner
“subject to this Act and any other law for the
time being in force, where the goods are sold
by a person who is not the owner thereof,
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 sller had, unless the owner of
the goods is by his conduct precluded from
denying the seller‟s authority to sell:
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4. 
Provided that where a merchantile agent is,
with the consent of the owner, in possession
of the goods or of the document of title the
goods, any sale made by him when in the
ordinarycourse of business of amercantile
agent shall be as valid as if he were expressly
authorized by the owner of the goods to
make the same; provided that the buyer acts
in good faith and has not at the time of the
contract of sale notice that the seller has no
authority to sell.
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5. 

if goods are brought from a person who is
not the owner, and who does not sell them
under the owners‟ authority, the buyer does
not acquire any title.
The rationale of this section is to protect the
right of ownership. If this rule is not present,
then the interest of the true owner would be
jeopardized.
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6. 

The chairman of Resp. co.‟s BOD entered into an
agreement in Jan 1961 with a contractornamed
Ahmad, who had secured contracts from PJ authority
for construction of culverts, under which the Resp
were to provide Ahmad with all materials for his
culverts and also to finance the carrying out of the
contracts. Resp then bought materials for the project
and delivered them to the construction site.
In June 1961, resp came to know that PJ Authority
after having some problems withAhmad, had
cancelled his contract. Resp informed th PJ authority
that materials on the site belonged to them and also
made attempts to sell them.
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7. 

In sept 1061, the resps discovered that the
materials had been sold by Ahmad to the App
for RM14,000 of which had received
RM7,000as part payment.
The resp then commenced this action
forconversion. The trial judge gave
judgement for resp for the sumof
RM25,080.52 andc costs
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8. 
On appeal by the App, it was contended that:
1. as the resp caused the chattels to be
delivered to Ahmad, he became the owner of
the chattels and as such could pass a title in
the chattels to the App; and
2. the chattels were the property of a
partnership between the Resp and ahmad as
such had the power to dispose of the goods
under sec. 28 of SOGA 1957
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9. 
It was held that Ahmad was merely the bailee
and not the owner of the chattels at the time
he sold them to the App. As he has no title to
the chattels or authority to sell them, he
could not give the App. any title.
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10. 
The Plf bought a car fr the 2nd Def. to effect the
transfer of ownership of the car into the Plf‟s
name, 2nd Def had to pay MUI Finance from
whom he had earlier obtained a hire-purchase
facility. For this purpose, 2nd Def retained
registration card. After obtaining the cancellation
of indorsement of MU‟s ownership. 2nd def sold
the car to B whose purchase was finance by 1st
Def. 1st def indorsed its ownership claim on the
registration card. The Plf applied to the court for
a determination as to whether he or the 1st Def
had a better title to the car.
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11. 

held: allowing the application.
After a full payment was made by the 2nd Def to
MUI Finance and MUI Finance had relinguised all
rights to ownership over the car, the Plf had
acquired ownership to the car and the 2nd def‟s
further dealings on the car with the 1st def are
therefor illegal. To that end, the 1st def acquired
no title or interest over the car when they
purchased it and their only remedy, if any, is
against the 2nd def personally for the return of
the purchase price but against the Plf they cannot
claim any right of ownership over the car.
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12. 

Commercial & Savings Bank of Somalia v. Joo
Seng Company (1989) 2 MLJ 200
Syarikat Batu Sinar Sdn Bhd. & Ors v. UMBC
Finance Bhd & Ors (1990) 3 MLJ 468
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13. Estoppel
„where owner is precluded by his conduct
makes it appear to the buyer that the person
who sells the goods has his authority to do so
and then 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;
Case: Eastern Distributers v. Goldring (1957) 2

QB 600
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14. 
A mercantile agent is a person whose
ordinarily business is to sell goods, or
consign them for sale, or to by goods, or to
raise money on the security of goods. A
simple example is a motor dealer to whom
the owner of a vehicle delivers the vehicles
with the authority to sell it.
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15. 

Where a mercantile agent is a person is, with the
consent of the owner, in possession of the goods
of a document of title to the goods, any sale by
him when acting in the ordinary course of
business of a mercantile agent shall be as a valid
as if he were expressly authorized by the owner
of the goods to make the same. However, the
buyer must have acted in good faith and, at time
of the contract of sale, had not received notice
that the seller has no authority to sell.
Case: Folkes v. King (1923) 1 KB 282
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16. 

Goods may be owned by one or more than
one person.
Sec. 28 provides that if one of several joint
owner 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 time of the
contract of sale, notice that the seller has no
authority to sell.
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17. 
Sec. 29, SOGA 1957 provides that where the
seller of goods has obtained possession
thereof under a contract voidable under sec.
19/20 of the Contract Act 1950, but the
contract has not been recinded 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.
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18. 
Sec. 30(1), SOGA 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, or by a mercantile
agent acting for him, of the goods or document
of title under any sale, pledge or other
disposition thereof to any person receiving the
same in good faith and without notice of the
previous sale shall have the same effects as if the
person making the delivery or transfer were
expressly authorized by the owner of the goods
to make the same.
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19. 

The effect of sec 30(1) is that if a seller
resells to a second buyer the goods sold by
him prevoiusly to the first buyer, the 2nd
buyer will obtain good title to the goods if he
has received the goods in good faith and
without notice of the previous sale. The 1st
buyer will lose the title but he can take legal
action against the seller.
Case: Pacific Motor Auctions Pty ltd v. Motor
Credit (Hire Finance) Ltd (1965) 112 CLR 192.
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20. 

A car dealerentered into a display agreementwith
Motor credits. Under the agreement, cars bought
by the dealer were sold to the finance com. For
90% of the purchase price. The car dealer
retained possession for display purposes.
When the dealer got into financial difficulty, the
finance co. cancelled its agreement with him. The
same day as its authority was withdrawn, the
dealer sold all his stock to Pacific Motor Auctions.
Pacific Motor Auctions was unaware of the
withdrawal of the car dealer‟s authority and the
car dealer signed a ceclaration stating that all of
its stock was unencumbered ans was its sole
property.
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21. 

The issue was whether the finance co. can
successfully sue Pacific Motor Auctions for
the return of the cars.
It was held that Pacific Motor Auction had title
to the cars as they had bought them in good
faith and without notice of the sale from a
seller who had continued in possession of the
goods after the sale.
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22. 
Sec.30(2) of SOGA 1957 provides that if a buyer,
having bought or agreed to buy goods, obtains
with the consent of the seller possesion of the
goods or the documents of title to the goods, the
delivery or transfer by that person or by a
mercantile agent acting for him of the goods or
the documents of title under any sale, pledge or
disposition thereof to any person receiving the
same in good faith and without notice of any lien
or other right of the original seller in respect of
the goods shall have effect as if such lien or right
did not exist.
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23. 

In other words, if a buyer, having bought or
agreed to buy goods, obtains possession of
the goods or the document 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 1st transaction he has
not obtained a good title.
Case: Newtons of Wembley Ltd v. Williams
(1965)
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