Nemo Dat & The Transfer Of Title

Question 1

Cundy v Lindsay (1878)?

Answer 1

B ordered linen by post by impersonating a well known local company. The contract was void; therefore B had no title and accordingly no title could be passed by him to P.

Question 2

Jerome v Bentley &a Co 1952?

Answer 2

P entrusted a stranger with a diamond ring to sell for £550. 12 days later he sold the ring for £175 to D who bought it in good faith Ed thinking he was the owner. The court held that the stranger effectively became a thief of the ring and that no property passed to D.

Question 3

Eastern Distributors Ltd v Goldring 1957

Answer 3

The O signed 4 hire purchase forms in blank (the proposal and agreement for a car and van) and left them with S. Although the proposal for the car didn’t go through S carried on with the proposal for the van (contrary to O’ instructions) and the P finance co bought the car from S. S was armed by O with documents which enabled him to represent to P that he was the owner of the van and had the right to sell.

Question 4

Coventry Shepard & Co v Great Eastern Railway Co 1883

Answer 4

Rare case; Ds negligently issued two delivery orders in respect of the same goods. Person to whom they were issued was thereby able to pledge and sell goods. It was held estopped. Documents had a mercantile meaning attached to theming therefore owed a duty to merchants and people likely to deal with those documents

Question 5

What does nemo dat mean?

Answer 5

Non owner

Question 6

What is the general rule of nemo dat contrary to a.22 if the Sales Goods Act?

Answer 6

Where goods are sold by a person who is not their owner and does not have the consent to sell from the owner, the buyer does not acquire any better title than the seller had.

Question 7

What are the exceptions to the nemo dat rule?

Answer 7

Sale by an agency
Sale by one of the joint owners
Sale by a person under a voidable contract
Sale by a seller in possession after sale
Sale by buyer in posses before transfer of ownership
Effect of estoppel

Question 8

What constitutes an mercantile agent?

Answer 8

Having the possession with consent.
Acting in ordinary course of business.
The buyer acted in good faith
Has no motive of no authority to sell

Question 9

Lowther v Harris [1927] 1 KB 393

Answer 9

This described a mercantile agent. L engaged P to seek buyers for antiques. P brought customers to the house for antiques, he removed the tapestry and sold them. It was held that acting as an agent wasn’t enough to be classed as a mercantile agent, they must be independent.

Question 10

What constitutes a voidable contract?

Answer 10

A possession under voidable central
Coercion, under influence, misrepresentation or fraud
Goods sold before contract is cancelled
Buyer acted in good faith.

Question 11

Shogun Finance v Hudson [2003]

Answer 11

Motor dealer agreed to sell car to fraudster who produced a stolen driving license as proof of ID. On basis of false ID and forged signature on HP agreement obtained car. Depended on whether that rendered agreement void or voidable. Majority held that this was a contract by correspondence. Applied Cundy v Lindsay –therefore void. But Nicholls and Millett endorsed proposition first mooted by Lord Denning in Lewis v Avery that face to face contract induced by misrep always voidable

Question 12

What constitutes a sale by seller in possession after sale?

Answer 12

Continues to be in possession of goods before making the delivery.
Buyer has no knowledge of previous sale
Buyer acted in good faith

Question 13

What constitutes a a sale by buyer before the transfer of ownership?

Answer 13

The buyer procession with the consent of seller. The new buyer has no knowledge of other right or lien. The buyer acted

Question 14

What is estoppel?

Answer 14

A statement or conduct led that led the buyer to believe that seller has authority.

Question 15

Eastern Distributors Ltd v Goldring [1957] 2 QB 600.

Answer 15

The O signed 4 hire purchase forms in blank (the proposal and agreement for a car and van) and left them with S. Although the proposal for the car did not go through S carried on with the proposal for the van (contrary to O’s instructions) and the P finance co bought the car from S. It was held that the claimant’s signing of the hire purhcase form in blank had the effect of estopping him from denying the dealer’s right to sell the van and therefore he was estopped from forcing the return of his van.

Question 16

Mercantile Bank of India Ltd v Central Bank of India Ltd [1938]

Answer 16

S pledged railway receipts (documents of title) with the Central Bank in return for an advance. In accordance with usual practice, the bank returned them to S to enable him to obtain clearance of the goods, but S fraudulently used them to pledge the goods with the Mercantile Bank. It was held estoppel was found as the they allowed the third party to have possession of goods and registration documents.

Question 17

What is estoppel by negligence?

Answer 17

Where the owner negligntly fails to disclose information to the buyer (in such case as he owes a duty of care), ergo, impliedly representing that the seller posesses the right to sell the goods. Case law therefore establishes that a person who has been careless with one of their possessions to the point of recklessness and leaves it unattended my recover it even from someone having purchased it in good faith.

Question 18

Moorgate Mercantile

Answer 18

A car dealer was offered a car for sale by M. The dealer undertook a search of the central register and , having found it was not registered as being the subject of a HP agreement, brought the car. In fact the car was the subject of a HP agreement but the finance company involved had failed to register the agreement. Subsequently, when M defaulted on HP installments, the finance company brought an action against the dealer for damages for conversion. The dealer, in his defence, claimed that the finance company, by failing to have registered the HP agreement with the central register, were estopped from claiming damages for conversion and that they were guilty of negligence in their failure to register the agreement. The House of Lords held, even though both the dealer and the finance company were members of the central register the dealer owed the finance company no duty of care meaning the finance company was estopped. A duty of care to avoid economic loss by negligence will only be imposed where there has been an assumption of responsibility by the defendant sauch as to create a special relationship between himself and the claimant.