PROPERTY IN SALE OF GOODS CONTRACT

Too often the term property is used to refer to things that belong to someone. It is common for people to refer to property as a tangible thing. But in law, property denotes the relationship existing between a person and a thing. It is the bundle of rights that one has over something. As was stated by the court in Yanner versus Eaton (1999) 201 CLR 351;

The word "property" is often used to refer to something that belongs to another. But in the law, "property" does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of "property" may be elusive. Usually it is treated as a "bundle of rights". But even this may have its limits as an analytical tool or accurate description, and it may be that "the ultimate fact about property is that it does not really exist: it is mere illusion". Considering whether, or to what extent, there can be property in knowledge or information or property in human tissue may illustrate some of the difficulties in deciding what is meant by "property" in a subject matter. So too, identifying the apparent circularity of reasoning from the availability of specific performance in protection of property rights in a chattel to the conclusion that the rights protected are proprietary may illustrate some of the limits to the use of "property" as an analytical tool. No doubt the examples could be multiplied.

Property consists primarily in control over access. Much of our false thinking about property stems from the residual perception that 'property' is itself a thing or resource rather than a legally endorsed concentration of power over things and resources. There is a huge difference between property and possession. one of the property interests that one m2ay have is ownership, it consist of legal rights that one has over a thing, possession on the other hand denotes physical control over a thing. Possession is often times controlled and limited by ownership.

"Property" is a term that can be, and is, applied to many different kinds of relationship with a subject matter. It is not "a monolithic notion of standard content and invariable intensity". That is why, in the context of a testator's will, "property" has been said to be "the most comprehensive of all the terms which can be used, inasmuch as it is indicative and descriptive of every possible interest which the party can have". Because "property" is a comprehensive term it can be used to describe all or any of very many different kinds of relationship between a person and a subject matter. To say that person A has property in item B invites the question what is the interest that A has in B? The statement that A has property in B will usually provoke further questions of classification. Is the interest real or personal? Is the item tangible or intangible? Is the interest legal or equitable?

Ownership" connotes a legal right to have and to dispose of possession and enjoyment of the subject matter. As Holmes J said in Missouri v Holland “possession is the beginning of ownership." Property comprised legal relations not things, and those sets of legal relations need not be absolute or fixed.

In Yanner versus Eaton (1999) 201 CLR 351 Hohfeld said this of "property”:

"Sometimes it is employed to indicate the physical object to which various legal rights, privileges, etc., relate; then again - with far greater discrimination and accuracy - the word is used to denote the legal interest (or aggregate of legal relations) appertaining to such physical object. Frequently there is a rapid and fallacious shift from the one meaning to the other. At times, also, the term is used in such a 'blended' sense as to convey no definite meaning whatever."

The absolute property that one can have in a good is ownership. Ownership gives one the right to deal with the good as he so wishes in exclusion of all others. The principles of ownership include;

• ·         Control over the use of the good
• ·         Right to take any benefit from the good
• ·         Right to transfer or sell the good
• ·         Right to exclude others

Possession is also a form of property that one has over a good, though it is limited. It is a de facto relationship; it denotes physical control over a good and not legal right over it. Possession can easily be defeated by a claim of a de jure relationship.

In a contract, the rights that one gets over a good depend on the agreement between the parties and the terms of the contract. While for example, a sale of goods contract is intended to eventually transfer property absolutely to the buyer, Retention of Title Clause may reduce the right that the buyer gets to merely possessory until a certain condition be fulfilled.

PURCHASER’S REMEDY IF SELLER DIES BEFORE REGISTRATION OF TRANSFER OF LAND TO PURCHASER

Where there is an agreement for the sale of land and the seller dies before registration of the transfer, the purchaser may be at a loss on the way forward. Under section 43 (3) of the Land Act, 2012, a transfer is completed by the registration of the transferee as proprietor of land. In other words, before registration, the transfer is not complete and the property still belongs to the registered owner.

Upon death, the property of the deceased vests in his personal representatives. Under section 51 of the Law of Succession Act, the administrator of the estate of a deceased holds the land subject to any liabilities, rights and interests that are unregistered but nevertheless enforceable and subject to which the deceased held the land.

Once one gets into an agreement for the sale of land and the purchaser pays the purchase price, he becomes a creditor of the seller. The seller has an obligation to transfer his interest over the land to the buyer. Therefore, if the seller unfortunately dies before the transfer is registered, he dies indebted to the purchaser.

The purchaser’s remedy in that case is to claim against the estate of the deceased seller as a creditor to his estate. the purchaser’s claim should be directed to the personal representatives of the deceased as at that point the property vests in them and they have the legal power to deal with the property as the grant.

If the personal representatives had obtained a grant and had it confirmed in such a manner that the land subject of the agreement of sale would devolve to a beneficiary of the deceased and thus cut out the purchaser, the purchaser may make an application seeking to revoke that grant. In this case, the purchaser will approach the court under section 76 of the Law of Succession Act as an interested party.

Section 76 states that A grant of representation, whether or not confirmed, may at any time be revoked or annulled if the court decides, either on application by any interested party or of its own motion that the grant was obtained fraudulently by the making of a false statement or by the concealment from the court of something material to the case. The court in the case of Musa Nyaribari Gekone & 2 others v Peter Miyienda & Another (2015) eKLR defined the term ‘interested party’ as used under section 76 to include a purchaser.

This therefore means that the purchaser may apply to court to have the grant revoked if he can prove that the administrators obtained the grant fraudulently. In this case, he would have to show the court that the administrators were fully aware of his interest over the property but they nevertheless went ahead to apply for confirmation of grant which would take away the purchaser’s interest over the property. The purchaser is a creditor to the property and has the right to seek refund of the purchase price from the estate of the deceased seller.