Chapter 5: Seller is not the owner
| Library | Commercial Law 2012–2013 |
| Pages | 37-47 |
| Author | Jonathan Fitchen |
Someone who does not have title to the goods, or is not authorised by the owner to sell them, cannot pass on good title to these goods to a later buyer.
When one of the following exceptions applies, despite the
The true/original owner may be estopped (that is, stopped) from asserting that good title has not been passed on if the following requirements are all satisfied:
-
The true owner represented that the seller was the owner or had the owner’s authority to sell. (Note that merely letting someone have possession of your goods does not amount to such a representation. That is still the case, even if it is a motor vehicle and you leave him in possession of its registration book as well –
Central Newbury Car Auctions v Unity Finance [1957]. ) -
The true owner’s representation was made negligently or intentionally.
-
The innocent purchaser relied on the representation and bought (not merely agreed to buy) the goods.
A rogue tricked a dealer into parting with a car and registration document on HP. The rogue then pretended to be the person named as the owner of the car on the registration document and sold it to another dealer, who sold it to Unity Finance. When the original dealer sought its return the question arose, ‘Was the original dealer estopped from denying the rogue’s right to sell because it let him have both car and registration document’? The court said ‘No’.
Simple possession of property and title documents is not a representation leading to an estoppel.
A mercantile agent is an ‘agent having in the customary course of his business as such agent authority either to sell goods or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods’ (s 1(1) of the
In addition, in order to be a mercantile agent, the person must be:
-
independent from the person for whom he or she is agent;
-
acting as agent by way of business; and
-
authorised to deal with goods in his or her own name without disclosing the agency.
Before a mercantile agent can pass on good title to someone else’s goods (under s 2 of the
-
the mercantile agent must be in possession of the goods (or documents of title);
-
he must have that possession in his capacity as mercantile agent;
-
he must have that possession with the consent of the owner;
-
in selling the goods, he must have been acting in the normal course of business of a mercantile agent; and
-
the purchaser must buy them in good faith, without knowledge of the agent’s lack of authority.
A car dealer who has possession of a car for the purpose of repair or servicing would not be in possession in his capacity as mercantile agent. He would be, however, if he had possession for the purpose of seeing what offers he could secure from potential buyers of the car.
Note that, in the case of a motor vehicle, the agent must be in possession not only of the vehicle but also of the registration document; the possession of these items must be with the consent of the owner (
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
