P L D 1958 (W (PLP)

(e) Sale of Goods Act (III of 1930), S. 27‑Person obtaining goods by fraud from bailee cannot claim protection under section

27. Date of hearing : 6‑2‑1956. WAHIDUDDIN AHMED, J.‑

This is an appeal against the judg ment of Inamullah, J. in Suit No. 435 of 1951 dated 25‑3‑1953 whereby the appellant was directed to return the engines in dis pute or in the alternative to pay Rs. 8,000 as damages. Briefly stated the facts out of which the present appeal has arisen are that the respondent under instructions from Messrs. Greaves Cotton (Pakistan) Ltd., cleared six cases containing "6XHR" Oil Engine from the steamer "City of Rochester". These cases were removed to the respondent's godown. On 12‑4‑1950, a gentelman named Eric Andrews came to the respon dent's godown and falsely represented himself to be an employee of Messrs. Greaves Cotton, and fraudulently induced the respondent to deliver five cases out of the said consignment to him.. It appears these cases were sold to the appellant and this fact was admitted by 'them on the 16th April 1950 when the respondent contacted them and it was pleaded that they had purchased the engine from one Mr., F. J. Baxter for Rs. 10,

000. The respondent demanded the said goods' from the appellant on the ground that they belonged to Messrs. Greaves Cotton & Co., and they were their bailees and these goods were delivered on false representation, but the appellant refused to do so unless and until they were paid Rs. 10,000 as compensation. The respondent thereupon filed a suit for the delivery of the said goods and in the alternative for Rs. 10,000 as damages. The only question involved in this case was whether Mr. Eric Andrews was a mercantile agent of Messrs. Greaves Cotton & Co. and therefore, the appellants were, justified in' refusing to deliver the said goods under section 27 of the Sale of Goods Act. Inamullah, J., after recording the evidence of the parties and on consideration of the issues involved in the matter, came to the conclusion that. Mr. Andrews was not the mercantile agent of Messrs. Greaves Cotton & Co., that the appellants had acquired the goods in dispute from a person who was not authorised by the owner to do so and granted a decree for the return of the goods in dispute and in the alternative for payment of Rs. 8,000 as damages. Mr. Dingomal, the learned counsel for the appellant, has not attacked the finding of the learned Judge that Mr. Eric Andrews was not the mercantile agent of Messrs. Greaves Cotton. In our opinion he rightly did so because on the admission of the appellants themselves the goods in dispute were not purchased from Mr. Eric Andrews but from one Mr. F. L. Baxter, and, therefore the very foundation of the plea on behalf of the appel lants in this respect before the trial Judge was weakened. The learned counsel for the appellant has, however, urged before us that under section 27 of the Sale of Goods Act the learned Judge below should have also taken into consideration the conduct of the owner of the property in dispute and the very fact that they delivered the goods to Mr. Eric Andrews and their cartman left the goods at the premises of the appellant was sufficient to satisfy the purchaser that the person in possession of the goods was the ostensible owner and had a right to sell the goods. The learned counsel for the appellant in this connection placed reliance on section 27 of the Sale of Goods Act, particularly on the underlined portion. Section 27 reads as follows :‑ "Subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell Provided that, where a mercantile agent is, with the consent of 'the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same ; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has not authority to sell." The principle recognised in this section is based on the Latin maxim "nemo dat quod non habet", that no man can pass a better title than he has and if anyone deals with the property of another person, the transaction confers no title even on an innocent or bans fide purchaser. There are certain exceptions to this rule and one of them is based on the principle of general estoppel namely that if a party represents by conduct, words or otherwise that another person is the owner of or has a right to sell the goods belonging to him, then he cannot set up his own title to the goods and claim them from the purchaser. Meth carelessness on the part of the owner in respect of the goods will not create estoppel. This exception again can only be applied against the owner of the goods and cannot be extended to the actions of servants or agents without power or authority to dispose them of. In the instant case the goods in dispute were kept by the respondents on behalf of Messrs. Greaves Cotton & Co., as bailees and it was on that basis they filed the suit under appeal. Chapter IX of the Indian Contract Act deals with the rights and duties of bailors and bailees. A perusal of these provisions makes it abundantly clear that the bailee has no right to dispos of or sell the property unless specifically authorised to do so. They have only a right to retain the goods bailed with them until they receive due remuneration for the services rendered in respect c of the goods. They are responsible for the safe delivery of thQ goods bailed with them and in default are responsible to the bailor for any loss of the goods. Under section 180 they are therefore entitled to file a suit against third persons for wrongfully depriving them of the use or possession of the goods bailed. The learned counsel for the appellant contended that the bailee being in possession of the property should be treated as the owner of the property. This argument is fallacious. Under ‑section 27, it is the conduct of the owner that is to be taken into consideration and not of his agents. It does refer to the case of agent but that is only the mercantile and no other type of agent. On a careful consideration of the language of section 27 of the Indian Sale of Goods Act, it appears to us that the rule of estoppel referred to therein only applies to the real owner of the goods and may be applicable to an agent having full authority to dispose of the property but cannot be applied to a mere bailee. Assuming for the sake of argument that it applies to the bailee, even then mere carelessness on the part of the respondent will not bring the case within the four corners of the rule of estoppel recognised under section 27 of the Sale of Goods Act: On the facts of the case we are satisfied that the goods in dispute were obtained fraudulently from the respondent and anybody obtaining such property cannot claim protection under the said provisions of law. The learned counsel for the appellant did not urge any other point in appeal. We therefore dismiss the appeal with costs. K. M. A. Appeal dismissed.