ABSTRACT
Introduction The basic rule governing transfer of title in English law is nemo dat quod non habet.1 While this is the fundamental principle, which applies to every sort of asset, it is subject to a large number of exceptions, which vary according to the asset in question. For example, the need for unrestricted and simple transfer of negotiable instruments has led to the development of the status of holder in due course, who obtains good title even from a thief. This chapter is confined to the application of the rule to goods. The exceptions to the rule in relation to goods can be criticised as being piecemeal, inconsistent and lacking in principle. However, even though imperfectly exemplified in the rules of the current law, one can detect two interconnected themes. First, an owner who holds out someone else as authorised to transfer title to his goods, is estopped from denying that authority. Second, possession is an indication of ownership, and so possession without ownership indicates ‘false wealth’.2 This is one of the main justifications for requiring the registration of security interests. However, it also arises in contexts other than where security interests are granted, for example, where goods are bailed to another person, where goods are stolen and where goods are found. English law does not allow one who acquires goods in good faith from someone in possession to take free of all previous interests. Although the rules are somewhat inconsistent, generally a person in possession of goods without the consent of the owner (for example, a thief ) is not able to pass a better title than he has. A person in possession of goods3 with the consent of the owner is sometimes, though not always, able to pass a better title than he has.
