The Person who Takes in Good Faith Should Get a Good Title – Nemo Dat Quod Non Habet Rule
The Person who Takes in Good Faith Should Get a Good Title
The Operation of the Nemo Dat Quod Non Habet Rule – The preservation of property rights
According to the Oxford Dictionary, “nemo dat” is the basic principle that the person who does not own property, especially a thief, cannot confer it on another except with the true owner’s authority or consensus.
The sale of goods usually takes place between the buyer and the owner of the goods or by his authority.
There are some circumstances in which a seller purpose to sell goods which he does not have any right to sell. In a case involving the nemoimpk dat rule, the seller (who is not the owner) will have sold goods to an innocent third party and then he will disappear so that the two parties may not be able to seek a remedy from him. Either the owner or the third party must then suffer loss.
One of the most important principles in the Law is the protection of commercial transactions: “The person who takes in good faith should get a good title.
The nemo date rule is that the transferor of goods cannot pass a better title than he possesses.
Greenwood v Bennett (1973)
In this case the original owner of a Jaguar car (Bennett) entrusted it to a man named Searle for repairs to be carried out. Searle then used the car for his own purposes, crashed it and caused extensive damage. Searle then sold the car to Harper, who owned a garage, for £75. Harper did not realize that Searle was not the owner of the car. Harper then spent £226 repairing the car and sold it on to a finance company. It was held by the court that the car belonged to Bennett as Searle did not have title and could therefore not transfer that title to Harper. For the same reason, Harper could not transfer title to the finance company. Bennett was therefore able to recover the car but had to compensate Harper for the work done to it.
Every rule has exceptions.
- The situation where the owner holds out the agent as being himself the owner
- Estoppel by negligence
- Market overt’
(The list is not exhausted)