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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sale of Goods Act, 1930

Three brothers jointly own a stock of machine parts. With the permission of the other two, Anil alone holds sole possession of the stock. He sells it to Gopal, who buys in good faith and has no notice that Anil lacks authority to sell. What is the effect?

Property in the goods passes to Gopal. A joint owner who has sole possession with the co-owners' permission can transfer title to a buyer who purchases in good faith and has no notice that the seller lacks authority, so ratification by the others is unnecessary.

  1. AProperty in the goods is transferred to GopalCorrect
  2. BThe sale is void because the other two brothers did not sign the contract
  3. CGopal gets only Anil's one-third share
  4. DGopal gets title only after the other brothers ratify the sale

Explanation

Where one of several joint owners has sole possession with the co-owners' permission, the property passes to a person who buys from him in good faith and without notice of lack of authority. Both conditions are met here. Hence Gopal gets the full property, not merely a one-third share.

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