Sale by buyer in possession ( Section 30 (2))

If a buyer , having bought or agreed to buy goods , obtains possession of the goods or the documents of title with the consent of the seller , he can pass a good title to a subsequent buyer acting in good faith , even if under the first transaction he has not obtained a good title .

Example :

Newtons of Wembley Ltd v. Williams ( 1965 ) 1 Q.B.  560

W sells a car to X who pays by cheque . X is given possession of the car but it is agreed that the property will not pass until the cheque is honoured . Subsequently , the cheque is dishonoured but X has sold the car to Y who buys it without the knowledge of the position . Later Y resells the car to Z . Now W tries to recover the car from Z .

It is held that X , the original buyer , was in possession with the consent of the owner , W . Therefore , X could pass a good title to Y , who in turn transferred it to Z . Hence , Z was entitled to keep the car .