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Higher category:Law andCommon law |
Nemo dat quod non habet, literally meaning "no one can give what they do not have", is a legal rule incommon law, sometimes called thenemo dat rule, that states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser anyownership title. It is equivalent to thecivil (continental)Nemo plus iuris ad alium transferre potest quam ipse habet rule, which means "one cannot transfer to another more rights than they have". The rule usually stays valid even if the purchaser does not know that the seller has no right to claim ownership of the object of the transaction (abona fide purchaser); however, in many cases, more than one innocent party is involved, making judgment difficult for courts and leading to numerous exceptions to the general rule that aim to give a degree of protection tobona fide purchasers and original owners. The possession of the good of title will be with the original owner.
InAmerican law, abona fide purchaser who unknowingly purchases and subsequently sells stolen goods will, atcommon law, be held liable introver for the full market value of those goods as of the date ofconversion. Since the true owner retains legal title, the seller is liable even in a chain of successivebona fide purchasers (i.e., the true owner can successfully sue the fifthbona fide purchaser in trover). However, the problem of successivebona fide purchasers can be remedied: If the jurisdiction recognises animplied warranty that the seller has title to the property (such as under Article 2 of theUniform Commercial Code (UCC)), then thebona fide purchaser can sue the seller for breach of that implied warranty.Courts of equity traditionally also recognise various other exceptions, likely giving rise to the idea embodied in the modern UCC.
This rule is exemplified in circumstances like theHolocaust reconciliation movement, where property, such as works of art, stolen or confiscated by theNazis was returned to the families of the original owners. Anyone who purchased the art or thought they had ownership was denied any rights over the litigiousproperty due to thenemo dat rule.
As mentioned earlier, thenemo dat rule has numerous exceptions.Legal tender, for example, does not adhere to the rule in certain circumstances. For example, if a rogue buys goods from abona fide merchant, then that merchant will not have to return the bills to the true owner because holding the rule to be otherwise would disrupt the economy and prevent the free flow of goods. The same may be true of other"negotiable" instruments likecheques. If Alice, a thief, steals a cheque from Bob and sells it to innocent Charlie, then Charlie is entitled to deal with the cheque, and Bob cannot claim it back from Charlie (though the name appearing on the cheque may affect the validity of such a transfer).
Another matter is the transfer of other legal rights normally granted by ownership. In 2011, a US District judge ruled that a woman who had purchased a stolen laptop could sue a device tracking company for invasion of privacy stemming from recording software installed on the laptop to facilitate its recovery after being stolen.[1] This ruling demonstrated thatbona fide purchasers are entitled to some rights by virtue of possession alone, or thatnemo dat is superseded by thebona fide purchaser'sright to privacy.
When dealing with real property, most American jurisdictions have codified recording statutes that will enable subsequent purchasers to divest title from the party with common law title if they qualify for protection under the recording statute. Three varieties ofrecording statutes exist: 1) race statutes, 2) notice statutes, and 3) race-notice statutes.
A race statute will divest common law title from a person with superior title if the subsequent purchaser recorded their deed prior to the person with superior title. A notice statute will divest common law title from a person with superior title if the subsequent purchaser had no notice (either actual or constructive – otherwise known asbona fide) of the true owner's title. A race-notice statute requires a subsequent purchaser to bebona fide and record first.
The original owner can obtain protection against the former owner through the doctrine ofestoppel (see also, s 21(1) of theSale of Goods Act 1979 "unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell"). Methods of the estoppel can be by words, by conduct, or by negligence.
Estoppel by words, or representation by the original owner through words that he is the true owner or has the owner's authority to sell:
Estoppel by conduct:
Mistake about identity:
In the eighteenth century at the time ofWilliam Blackstone, sales in anopen market were an exception to thenemo dat principle in English law.[2]
However, after the growth in the UK ofcar boot sales led to opportunities for rogues to "fence" stolen property, theSale of Goods (Amendment) Act 1994[3] abolished the "market overt" exception to thenemo dat rule in 1995.
As in the United States, banknotes in Scotland are an exception to the rule. This issue arose in the 1749 case ofCrawfurd v The Royal Bank, where title to a banknote issued by theBank of Scotland that had gone missing in the post and found in the possession of theRoyal Bank of Scotland was disputed.[4]
