N.E.M. vs. Jones

21/04/1988 – A buyer cannot acquire a better title than the thief

HL (Lord Bridge of Harwich, Lord Lowry, Lord Brandon of Oakbrook, Lord Griffiths, Lord Goff of Chieveley, Sir Denys Buckley)


NATIONAL EMPLOYERS’ MUTUAL GENERAL INSURANCE ASSOCIATION LIMITED – VS – JONES

House of Lords: Lord Bridge of Harwich, Lord Lowry, Lord Brandon of Oakbrook, Lord Griffiths, Lord Goff of Chieveley: April 21 1988

Despite the fact that a stolen car had passed through several hands before it was purchased by the appellant, who bought it in good faith and for full value, he was not entitled to retain it, the House of Lords held.

BACKGROUND.

The case raises the issue of whether the owner’s rights to stolen goods prevail over all others. It was decided against the legislative context of the Factors Acts and the Sale of Goods Acts.

FACTS.

In 1983, a car belonging to Miss H was stolen. The thieves were convicted but they had already sold the car to L for an unknown price. L sold the car to T, who then sold the car to a dealer. The dealer sold the car for £2,350 to M. Motors, from whom, the defendant, Mr Jones, bought it in good faith, paying £2,650.

The claimants, Miss H’s insurers, having bought out her interest after the theft for £2,750, claimed the car against Mr Jones who lost the action in the County Court. He appealed, lost the case, and appealed to the House of Lords.

DECISION.

Lord Goff stated that s.9 of the Factors Act 1889 was effectively incorporated into S.25(2) of the Sales of Goods Act 1893. That Act expressly maintained the fundamental principle that no one can give better title than he himself has, embodied in the Latin maxim, “nemo dat quod non habet”, (no one can give a better title than he has).

Except in the limited circumstances of persons who dealt with an agent entrusted by the owners with goods or documents of title, there was not the slightest indication that the Act intended to take so radical a step as to enable an agent, entrusted with goods by a thief or a purchaser from a thief to give title to another purchaser – albeit a bona fide one – and so to override the true owner’s title.
Such a suggestion had never before been advanced in an English Court. In other words, the present case was preceded by almost a century of silence.

Commonwealth authority directly on the point, as well as distinguished academic authority, was also unanimously against the appellant.