Nemo dat one cannot transfer a better legal title than they own at the time of transfer unless an equitable estoppel leads to the result Implicit limitations

One cannot transfer a better legal title than they own at the time of transfer unless an equitable estoppel leads to the result

(1) A legal interest trumps an equitable interest;

(2) Possibility of equitable estoppel

FIRST LEGAL VS SECOND LEGAL

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  Nemo dat resolves dispute
  
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  Exception for goods sold in a “market overt”
  
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  Estoppel may be raised if first interest holder acts in bad faith (e.g. gross negligence)
  
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  BMO v Innovation Credit Union at para 51: “BMO could only take its interest subject to [Credit Union’s] prior interest.”
  

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  Nemo dat generally resolves disputes
  
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  Court has a discretion which may result in second equitable interest being granted priority
  
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  Priority of first interest does not extend to a “mere equity”
  
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    Mere equity = A right affecting property that is less significant than an equitable right or a legal right; it does not affect anyone except the parties to the transaction in which it is contained.
    

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  Nemo dat will normally resolve dispute; regardless, a legal interest normally trumps an equitable interest
  
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  Court has discretion which can grant second equitable interest holder priority
  

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  Exception to nemo dat
  
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  To claim priority, subsequent legal interest holder MUST be a BFPFVWN
  
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    Bona fide
    
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    Purchaser  either an owner or a security interest holder
    
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    Value  cannot be a gift; low consideration relative to value can relate to a lack of good faith
    
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    Without notice  actual knowledge; imputed knowledge (through agent); constructive notice at common law (prudent person making normal inquiries would have discovered the existence of prior equitable interest, which can be altered by statute)
    

Negotiability  relates to status of goods, money a great example