"NEMO DET QUOD NON HABET" Meaning

 "NEMO DET QUOD NON HABET - This Latin maxim means that "No one can give who possesses not."

Meaning-  

The General Rule is: "No man can sell goods and give a good title unless he is the owner of the goods."

Section 27 has protected the interest of the TRUE OWNER of the goods by making the law that where the goods are sold by a person who is not the owner of the goods and who does not sell them under the authority or with the consent of the true owner, the buyer acquires no better title to the goods than the seller had. If the title of the seller is defective, the buyer's title will also be subject to the same defect. Therefore a buyer cannot acquire a superior title to that of the seller.

If the seller was not the owner of the goods, then he cannot transfer the ownership rights to the buyer i.e. "No Man can pass a Better Title than he himself has."

Examples:

X stole a car and sold it to Y. Y bought it in good faith and without knowledge of defective title of car. Held, Y could not obtain title of goods.

Exceptions to the Rule

There are few cases where a non-owner can transfer the property in goods i.e. although the seller was not the owner of the goods but he did pass a better title to the buyer of the goods.
(1). Sale by implied Authority of owner of Title by Estoppel: Where the true owner of the goods by his conduct or behaviour made the buyer to believe

that the seller was the owner of the goods or that the seller had authority to sell the goods, then he (owner) cannot later on deny the fact that the seller had no authority to sell the goods In such a case, the buyer gets a better title than the seller.

Example :

• Ankit tells Harleen within the hearing of Joy that he (Ankit) is the owner of certain goods (which actually belong to Joy). Joy does not contradict Ankit's statement. After some time Harleen bought those goods from Ankit. Held, Harleen will get better title as buyer of goods, although Ankit was not the owner of the goods.

(2). Sale by a Merchantile Agent (Section 27)

This exception states that when a merchantile agent: 

(i) With the consent of the OWNER,

(ii) Has possession of Goods or Documents of Title to goods.

(iii) He is acting in the ordinary course of his business as a merchantile agent.

(iv) The buyer acts in goods faith (i.e., an at done honestly).

(v) The buyer has no knowledge that the agent has no authority to sell the goods. 

THEN, the sale made by such merchantile agent who is not the owner of goods is a valid sale and the buyer gets a better title of goods.

(3). Sale by one of the joint owner (Section 28) Where:

(i) One of the joint owner had possession of goods...

(i) With the consent of all owners. (iii) The buyer purchased goods in good faith.

(iv) The buyer had no knowledge of the defective title.

THEN, the buyer gets a better title of goods.

(4). Sale by person in person in possession under a voidable contract: (Section 29)

(i) If a person has possession of goods under a voidable contract;

(ii) The contract has not been rescinded/avoided so far: (ii) The person having possession sells it to a buyer.

(iv) The buyer acts in good faith.

(V) The buyer has no knowledge that the seller has no right to sell.

THEN, such a sale by a person who has possession of goods under a voidable contract shall amount to a valid sale and the buyer gets a better title.

Example-

A purchases a piano from B by fraud. Before B rescinds the contract, A sells the piano to C, who buys it in good faith and without knowledge of defective title. Held, C gets a good title.

5. Sale by Seller in possession of goods after sale [U/S 30 (1) of Sale of Goods Act, 1930]

(i) A seller has possession of goods after sale.

(ii) With the consent of the other party (i.e. buyer).

(iii) The seller sells goods (already sold) to a new buyer:

(iv) The new buyer acts in good faith.

(v) The new buyer has no knowledge that the seller has no authority to sell.

THEN: It amounts to a valid sale although the seller is no more the owner of goods after sale.

(6) Sale by buyer in possession before buying Section 30(2):  

Where a person having bought or agreed to buy goods, obtains with the consent of the seller, possession of goods or documents of title of goods and sells them to a third party (who buys in good faith & without notice of defective title), then this buyer. (the third party) gets a better title.

(7) Sale by an unpaid seller [Section 54 (3)]: 

A seller who has not received his payment is called as an unpaid seller.

An unpaid seller who:

(i) has exercised his right to lien or right to stoppage in transit;

(ii) but has still not received the payment from his buyer. 

(iii) such an unpaid seller may re-sell the same goods:

Then, such a new buyer shall acquire a better title of the goods.

(8) Sale by a Finder of goods (Section 169 of Indian Contract Act, 1872):

U/S 71 of the Indian Contract Act 1872, the finder of lost goods must take reasonable care of the goods found, must find the true owner and return back the goods to him. But if the true owner is not found out after reasonable effort of the finder, or where the true owner refuses to pay the lawful charges incurred by the finder, then the finder is entitled to sell the goods U/S 169 of ICA. 1872, provided:

-when the thing is in danger of perishing or of losing the greater part of its value, or.

-when the lawful charges of the finder, in respect of the thing found, amount to two thirds of its value. When the finder of goods sells them under the circumstances stated above, the buyer of

such goods gets a good title to them..

9. Sale by Pawnee (Section 176 of Indian Contract Act, 1872):

Where the pawnor does not pay back the payment of debt obtained from the Pawnee, the Pawnee may either sue him for the debt or may sell the goods pledged after giving a reasonable notice to the pawnor. Such a sale made by the Pawnee shall transfer a better title to the buyer of goods (to whom the goods are sold by Pawnee).

10. Sale in Market Overt

English Law recognizes an exception to the rule according to which on the sale of goods in market overt, according to the usage of the market, the buyer acquires a good title to the goods, provided he buys them in the good faith and without notice of any defect or want of title on the part of the seller. Such sale means sale in the open market by a person who generally deals in such goods. The buyer's title is protected in case of such a sale though the seller may be liable for the tort of conversion