Sale by a person who is not the owner 215(v) The sale or disposition of the goods must have been made in the ordinary course of
business as a mercantile agent.
(vi) The person taking the goods must have done so in good faith, without notice of the
agent’s lack of authority.
Example
If a customer left a watch with a jeweller, telling him to repair the watch so that it could later
be sold, ownership would pass to an innocent party who bought the watch from the jeweller.
The customer who left the watch with the jeweller could of course sue the jeweller for
damages. This example assumes that the jeweller sometimes sells goods for others.As long as possession was gained with the consent of the owner, it does not matter that the
owner was tricked into giving this consent.
(s. 23 SGA) Sale by a person with a voidable title
In Chapter 4 we saw that a seller who is induced to make a contract by a misrepresentation
has the right to rescind the contract. A contract which is capable of being rescinded is said
to be voidable (capable of being made void). So a person who makes a misrepresentation
when buying goods does not acquire a complete title to the goods, but only a voidable title,
that is one which can be called off by the seller within a reasonable time (see Chapter 4). We
also saw that duress might make a contract voidable.
Section 23 provides that if a person with a voidable title sells the goods before the con-
tract was avoided then a new buyer who acts in good faith will get complete ownership of
the goods. This is an exception to the nemo datprinciple because a seller with a voidable title
is giving more than he has got; he is giving a complete title.
Folkes vKing (1923)A mercantile agent gained possession of a car by deception. The owner had given the car
to the mercantile agent but had expressly instructed him not to sell it for less than £575.
The mercantile agent immediately sold the car to A, who bought it in good faith, for £340.
The car passed to several other buyers before passing to K. The original owner sued K to
recover the car.
HeldThe original owner could not recover the car. A good title had passed to A under
s. 2(1) Factors Act, and this title had passed through the other buyers to K.Lewis vAveray (1972) (Court of Appeal)A rogue bought a car with a bad cheque, pretending to be Richard Greene the television
actor. As this was a fraudulent misrepresentation, the rogue gained only a voidable title to
the car. In the long run this voidable title would have been worth very little to him as the
owner would surely have rescinded the contract as soon as he discovered that the cheque
t