TRANSFER OF TITLE BY SELLER WHO IS NOT THE OWNER AND ITS EXCEPTIONS

Section 27
provides the rule that no one can transfer a better title than he has himself.

The maxim is nemo dat quod non habet.

This means the buyer can only acquire a good title in the goods if he purchases from the owner of the goods.

Consequently, if the buyer purchases the goods from a person who is not the owner of the goods or a person who does not sell the goods under the owner's authority, the buyer will not acquire a title in the goods he purchases.

However, there are few exceptions to the rule of nemo dat quod non habet
(Refer to Figure 13.1. The exceptions are provided in the following provisions under the Sale of Goods Act 1957.

In the case of Lim Chui Lai v. Zeno Ltd [1964] 30 MLJ 314, Zeno Ltd entered into an agreement with a contractor named Ahmad who had secured contracts from the Petaling Jaya Authority for construction of culverts.

Under the contract, Zeno Ltd was to provide Ahmad with all the materials for the culverts construction. They brought the materials for the projects and delivered them to the construction site. Later, Ahmad's contracts with Petaling Jaya Authority were cancelled whereupon Zeno Ltd informed the authority that the materials on the site belonged to them. When they attempted to sell the materials, they discovered that the materials had been sold by Ahmad to Lim Chui Lai, the appellant in this action.

In an action for conversion, the Federal Court held that: Ahmad was merely the bailee and not the owner of the goods at the time he sold them to the appellant. Since Ahmad had no title to the goods or authority to sell them, he therefore could not transfer any title to the appellant.