Derivative acquisition Flashcards
What are the requirements for transfer?
- Title (nemo dat quod non habet) (Chalmers v Chalmers)
- Capacity
- Consent (Morrisson v Robertson)
- Identification (PMP Plus Ltd v Keeper of the Registers of Scotland) (Sale of Goods Act 1979, s16)
What are the specific requirements of different kinds of property?
- Corporeal heritable property is transferred by registration in the Land Register.
- Corporeal moveable property is transferred by delivery (if not a sale), except where the Sale of Goods Act 1979 (if a sale) applies. Delivery is a transfer of possession.
- Incorporeal property is transferred in one of two ways:
- Real rights are transferred by registration or possession
- Personal rights are transferred by intimation to the debtor
If a transfer is void, what happens?
The transferee does not become owner, and the property may be recovered from anyone in possession.
The transferee has only a potential contractual remedy against the transferor.
If a transfer is voidable, what happens?
Voidable transfers occur when:
- All of the requirements for transfer have been met, the transfer will be initially effective.
but
- The law holds that the transferee ought to be deprived of the benefit of the transfer.
However, the property may not normally be recovered from a third party acquirer in good faith (Stair).
What is the legal stance of transfers induced by fraud?
MacLeod v Kerr - Owner of car puts it up for sale and it approached by individual offering to buy and an agreement is made by both party’s consenting. Buyer gives a cheque for the car and takes the car. Cheque book was stolen and cheque bounces. The car has been sold to a third party.
Held: Third party was held as owner because first sale was effective to transfer ownership, it was voidable, but until challenged in court he is owner and can therefore sell the car on.
What is the offside goals rule?
The offside goals rule requirements:
- Pre-existing obligation between two people whereby one will grant a real right to another (Wallace v Simmers - sister had no real rights to reside in home sold where personal rights had allowed her to live in the property).
- Grant in breach of contract/agreement (Rodger (Builders) Ltd v Fawdry).
- Bad faith or absence of value. Being aware of previous agreement puts you in bad faith even if the owner assures you the agreement no longer stands (Rodger (Builders) Ltd v Fawdry).
Discuss the facts and ratio of Rodger (Builders) Ltd v Fawdry.
F owner of heritable property. F agrees to sell to R. R is late in paying but not in circumstances where F is entitled to get out the contract. F sells to third party (Bell). B registers property as their own and became owner but because B knew of contract between F and R, B was in bad faith and contract was voidable. B wasn’t entitled to take F word for it.
What are the two systems of transferring corporeal moveables and when do they apply?
- If the transfer is by sale in exchange of money (s1(1)), the Sale of Goods Act 1979 applies.
- If the transfer is not by sale, the common law rules of delivery apply.
How is a sale defined under the Sale of Goods Act 1979?
Sale defined in s.2(1): A contract of sale of goods
Goods may be “specific” or “unascertained”. Specific goods are those “identified and agreed on at the time a contract of sale is made” (s. 61(1)).
The act doesnt not apply to transactions acting as security (s. 62(4)).
When do goods transfer ownership under the Sale of Goods Act 1979?
Property passes when intended to pass, having regard to any contracts (s17).
Armour v Thyssen - Party’s contract had agreed buyer wasn’t to become owner until all debts owed to seller were paid.
What are the rules of presumed intention to transfer?
Found in s18 of the Sale of Goods Act 1979:
- Goods in a deliverable state are transferred on making of contract, regardless of time of payment or delivery.
- Goods which the seller is contractually bound to put in a deliverable state are transferred when alteration carried out and notice given to buyer.
- Goods which the seller must weigh, test or measure to ascertain price are transferred when price determined and buyer informed.
- Goods supplied on a “sale or return” or “approval” basis are transferred when approval period expires (Poole v Smith’s Car Sales) or buyer adopts transaction (Brown v Marr).
When are unascertained goods transferred?
SGA 1979, s16 - Where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained.
According to rule 5, intention to transfer is presumed when:
- Goods are unconditionally appropriated to the contract
- by one party with the assent of the other.
Not enough just to set goods aside as intended for purchaser (Carlos v Charles 1957)
What are the exceptions to the nemo dat non quod habet rule created by the Sale of Goods Act 1979?
Section 24: If the seller has already transferred ownership, but continues in possession after sale; and the seller sells and delivers goods to a third party; and the third party in good faith; the third party becomes owner.
Section 25: If the buyer of goods has possession but is not yet owner; the buyer sells and delivers goods to a third party; and the third party in good faith; the third party becomes owner.
What are the types of delivery?
Delivery is made by giving the other party control and doesn’t require being handed over.
- Actual delivery (Liquidator of West Lothian Oil Co v Mair - Locking barrels in an enclosure and giving transferee the key. By handing over control delivery occurred as the key gave control to barrels.)
- Constructive delivery (Anderson v McCall - Delivery can be made by notifying the person who has custody of the goods on your behalf. It must be an independent third party. Not true in this case.)
- Short hand delivery (transferee already has control of the goods) (Erskine)
