''Nemo dat quod non habet'', literally meaning "no one can give what they do not have", is a legal rule, sometimes called the ''nemo dat'' rule, that states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any
ownership
Ownership is the state or fact of legal possession and control over property, which may be any asset, tangible or intangible. Ownership can involve multiple rights, collectively referred to as '' title'', which may be separated and held by dif ...
title. It is equivalent to the civil (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 (a
''bona 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 to ''bona fide'' purchasers and original owners. The possession of the good of title will be with the original owner.
United States
In
American law
The law of the United States comprises many levels of codified and uncodified forms of law, of which the supreme law is the nation's Constitution, which prescribes the foundation of the federal government of the United States, as well as v ...
, a
''bona fide'' purchaser who unknowingly purchases and subsequently sells stolen goods will, at
common law
Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
, be held liable in
trover
Trover () is a form of lawsuit in common law jurisdictions for recovery of damages for wrongful taking of personal property. Trover belongs to a series of remedies for such wrongful taking, its distinctive feature being recovery only for the valu ...
for the full market value of those goods as of the date of
conversion. Since the true owner retains legal title, the seller is liable even in a chain of successive ''bona fide'' purchasers (i.e., the true owner can successfully sue the fifth ''bona fide'' purchaser in trover). However, the problem of successive ''bona fide'' purchasers can be remedied: If the jurisdiction recognises an
implied warranty that the seller has title to the property (such as under Article 2 of the
Uniform Commercial Code
The Uniform Commercial Code (UCC), first published in 1952, is one of a number of uniform acts that have been established as law with the goal of harmonizing the laws of sales and other commercial transactions across the United States through U ...
(UCC)), then the ''bona 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 the
Holocaust reconciliation movement, where property, such as works of art, stolen or confiscated by the
Nazis
Nazism (), formally named National Socialism (NS; , ), is the far-right politics, far-right Totalitarianism, totalitarian socio-political ideology and practices associated with Adolf Hitler and the Nazi Party (NSDAP) in Germany. During H ...
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 litigious
property
Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, re ...
due to the ''nemo dat'' rule.
As mentioned earlier, the ''nemo dat'' rule has numerous exceptions.
Legal tender
Legal tender is a form of money that Standard of deferred payment, courts of law are required to recognize as satisfactory payment in court for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything ...
, for example, does not adhere to the rule in certain circumstances. For example, if a rogue buys goods from a ''bona 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 like
cheque
A cheque (or check in American English) is a document that orders a bank, building society, or credit union, to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The person writing ...
s. 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. This ruling demonstrated that ''bona fide'' purchasers are entitled to some rights by virtue of possession alone, or that ''nemo dat'' is superseded by the ''bona fide'' purchaser's
right to privacy
The right to privacy is an element of various legal traditions that intends to restrain governmental and private actions that threaten the privacy of individuals. Over 185 national constitutions mention the right to privacy.
Since the globa ...
.
Recording statutes
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 of
recording 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 as ''bona fide'') of the true owner's title. A race-notice statute requires a subsequent purchaser to be ''bona fide'' and record first.
English law
The original owner can obtain protection against the former owner through the doctrine of
estoppel
Estoppel is a judicial device whereby a court may prevent or "estop" a person from making assertions or from going back on their word. The person barred from doing so is said to be "estopped". Estoppel may prevent someone from bringing a particul ...
(see also, s 21(1) of the
Sale of Goods Act 1979
The Sale of Goods Act 1979 (c. 54) is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act ...
"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:
*''Henderson & Co v Williams''
8951 QB 521
*''
Shaw v Commissioner of Metropolitan Police''
9871 WLR 1332, following ''Henderson''
Estoppel by conduct:
*''
Farquharson Bros v C King & Co Ltd''
902AC 325
*''
Mercantile Bank of India Ltd v Central Bank of India''
938AC 287, upholding ''Farquharson''
*''
Central Newbury Car Auctions Ltd v Unity Finance Ltd''
9571 QB 371
Mistake about identity:
*''
Shogun Finance Ltd v Hudson''
003UKHL 62
Exceptions
Sales in open markets
In the eighteenth century at the time of
William Blackstone
Sir William Blackstone (10 July 1723 – 14 February 1780) was an English jurist, Justice (title), justice, and Tory (British political party), Tory politician most noted for his ''Commentaries on the Laws of England'', which became the best-k ...
, sales in an
open market were an exception to the ''nemo dat'' principle in English law.
However, after the growth in the UK of
car boot sales led to opportunities for rogues to "fence" stolen property, the
Sale of Goods (Amendment) Act 1994 abolished the "
market overt" exception to the ''nemo dat'' rule in 1995.
Scots law
As in the United States, banknotes in Scotland are an exception to the rule. This issue arose in the 1749 case of ''
Crawfurd v The Royal Bank'', where title to a banknote issued by the
Bank of Scotland that had gone missing in the post and found in the possession of the
Royal Bank of Scotland
The Royal Bank of Scotland Public Limited Company () is a major retail banking, retail and commercial bank in Scotland. It is one of the retail banking subsidiaries of NatWest Group, together with NatWest and Ulster Bank. The Royal Bank of Sco ...
was disputed.
[Kenneth Reid (1 May 2013)]
"Banknotes and their Vindication in Eighteenth-Century Scotland"
/ref>
See also
*''Corpus Juris Civilis
The ''Corpus Juris'' (or ''Iuris'') ''Civilis'' ("Body of Civil Law") is the modern name for a collection of fundamental works in jurisprudence, enacted from 529 to 534 by order of Byzantine Emperor Justinian I. It is also sometimes referred ...
''
* English property law
References
{{DEFAULTSORT:Nemo Dat Quod Non Habet
Brocards (law)
Legal rules with Latin names
Property law