Ans.
Sale by a mercantile
agent [Proviso to Sec. 27]
Sale of goods by a mercantile agent gives a good title to
the purchaser even in case where the agent acts beyond his authority, provided
the following conditions are satisfied-
(i) The agent is in possession of the goods or of a
document of title to the goods.
(ii) Such possession is with the consent of the owner.
(iii) The agent sells the goods in the ordinary course
business.
(iv) The purchaser acts in good faith and has no notice
that the agent had no authority to sell.
“Mercantile Agent” – ‘Mercantile agent’ means an agent
having in the customary course of his business as such agent authority either
(1) to sell goods, or (2) to consign goods for the purpose of sale, or (3) to
buy goods, or (4) to raise money on the security of goods. [Sec. 2(9)]
Goods faith means honestly, whether done negligently or
not.
Document of Title to
Goods. [Sec. 2(4)]
A document of title to goods is a document representing
goods and is used –
- in the ordinary course of business
- as proof of the ownership, possession or control of
goods.
It authorizes the possessor of such document to receive
or transfer the goods represented thereby.
According Sec. 2(4), documents of title to goods includes
(a) bill of lading (b) dock warrant (c) warehouse keeper’s certificate (d)
wharfinger’s certificate (e) railway receipt (R/R), lorry receipt (L/R) (f)
multimodal transport document and (g) delivery order.
Thus, document of title is a document, which is the
evidence of full ownership of goods represented by the document. Delivery of
document of title is as good as giving delivery of goods. Transfer of document
of title is a symbolic delivery of goods to the purchaser. The document of
title to goods is transferred by endorsement or by mere delivery and it confers
a good title to the transferee if he receives it in good faith. E.g. Delivery
of railway receipt is enough to constitute delivery of goods represented by
railway receipt.
Document of title shall be distinguished from document
showing title to the goods. In case of document showing title to the goods,
ownership cannot be transferred by endorsement or mere delivery unlike as in
document of title to the goods.
What is bill of lading? When the goods are carried by
sea, the carrier of goods issues to the shipper a bill of lading. It is a
document of title. Transfer of goods can be effected by transfer of bill of
lading. The buyer may demand delivery of goods at the destination on the basis
of the bill of lading.
Wharfingers certificate: A Wharf is a platform alongside
the water for loading and unloading a ship. A wharfingers certificate is a
document issued by a wharfingers. If certifies that the goods specified in it
are in the wharf.
