Under Section 23(1) only the owner of the goods can sell and pass a good title and no non-owner can pass a good title unless the owner of the goods is estopped or excluded from denying that the seller had his authority or circumstances to sell.
The Rule of Estoppel or Exclusion is a rule of evidence and not a rule of law. A person can be precluded from giving evidence if by his conduct he has led other persons to believe that the goods weren’t his.
A non-owner cannot pass any good title to another person except where the owner is estopped from denying the authority of the seller. Where a seller sees his goods being sold and he keeps quiet, he is estopped from giving evidence that the goods were his. His conduct of omission precludes him from claiming the goods.
What is the effect where the owner has been estopped the person who has the goods keeps the goods. The effect of estoppel is to invest title to the 3rd party who is an innocent buyer.
Eastern Distributors Ltd V. Goldring (1967) 2 QB
In pursuance of a plan to deceive a finance company, one M signed and delivered forms to C which enabled C to represent that he had M’s authority to sell a car belonging to him, it was held by the court of Appeal that M was estopped from setting up his title against the plaintiffs who had bought the car from C. It was also held that the estoppel in fact operated to pass a good title to the plaintiffs not only against M himself, but also against a buyer in good faith from M.
The effect of estoppel in sale of goods is to pass title.
Only an owner of goods can sell and pass a good title. When can a non-owner sell and pass good title? Under what circumstances?
- Where the owner is estopped by his conduct from denying the auctioneers’ authority to sell.
- Sale by an agent S. 23(1) agent is authorised or sells the goods with consent of the owner. The agent never becomes the owner he is only selling the goods and passing the property because he is authorised by the owner. A sale by an Agent passes a good title.
- Section 23 (2) (b) the validity of any contract of sale under any special common law or statutory power of sale or under the order of a court of competent jurisdiction. Section 23 (2) a and b deal with special powers of sale where a non-owner may pass a good title if the or the sale is under the order of a court of competent jurisdiction…
The courts may authorise a Sale of Goods where a decree holder has sought to sell the goods because the party is unable to clear the money owed. The decree holder applies to the court to attach the goods; neither the court nor the auctioneer is the owner of the goods but they can sell the goods.
- Order of Court – A court can order a sale. The court may order a Sale of Goods even though there is no decree holder. Where goods that are perishable have been deposited with the courts or where the prices of the goods are falling, the court can order that the goods be sold while waiting for determination of the case.
Sale in Market Overt: - A market overt is an open public and legally constituted market. Sale of Goods Cap 31 Laws of Kenya does not have any provisions for a market overt. This is found in the English Sale of Goods Act. What we have are public markets. The key distinction between market overt and other markets is that a person who purchases goods in a market overt passes good title irrespective of whether the seller had authority.
The goods in the market overt are determined by the market overt. Goods sold in market overt are specific goods i.e. if you go to Wakulima Market you can buy vegetables but you do not expect to buy, lets say a car! In the market overt situation, all our markets qualify to be market overt but we call them public markets and anything that you buy in those markets that is generally sold there you get good title so long as it is specific to that market.