Explanation of Article 359

Explanation of Article 359

The article addresses the ruling on a person selling a specific item not owned by them; this occurs in practice. A person may sell something owned by their son, father, wife, or relative, not as a representative but as an original party on their own behalf. An heir might sell something not part of the inheritance, or part of it but not in their share. A co-owner in common might sell the entire common property while only owning a share of it. In all these cases, the seller might be unaware that the item is not owned by them or might know it.

The article, in its two paragraphs, explains the effect of selling someone else's property from two perspectives: First: Its effect on the owner's rights. Second: Its effect on the contracting parties and others.

The first paragraph clarifies that such a sale is not effective against the owner; the sale does not transfer ownership of the sold item to the buyer unless the owner approves it. Accordingly: If the owner does not approve the sale, they can file a claim for restitution to recover the sold item from the buyer or whoever possesses it. The provisions of possession outlined in articles (672-677) apply regarding what the buyer, as the possessor of the sold item, must compensate the owner for the fruits of the sold item and what the owner must compensate the buyer for necessary, beneficial, or luxurious expenses incurred by the buyer on the sold item, as well as liability for the destruction of the sold item in the buyer's possession. According to the established rules, possession does not grant the possessor ownership of the item, no matter how long the period; thus, the restitution claim does not prescribe. The owner may also seek compensation from the seller for any damage incurred due to the sale of their property, according to the rules of liability for harmful acts.

If the owner approves the sale, it becomes effective against them, and their approval, as a unilateral legal act, is subject to the general rules established in the first section of this system; the approval does not require the buyer's acceptance, and its effect dates back to the time of sale, not the time of approval. It can be explicit or implicit, and the approver must have the capacity to sell at the time of approval, among other conditions.

The end of the article clarifies that the approval must not infringe on the rights of others established in the sold item before the approval; because the sale was not effective against the owner before the approval. If the owner had established a real right in the sold item, such as a usufruct right or a mortgage right meeting its legal conditions, or a personal right such as a lease contract on the sold item, the ownership of the sold item transfers to the buyer burdened with that right; because it precedes the sale's effectiveness against the owner. The buyer may seek partial compensation for the claim in this case.

The second paragraph explains the effect of selling someone else's property between the contracting parties; it is a contract subject to annulment for the buyer's benefit alone, not the seller's. The buyer exercises their right to annulment either by filing a lawsuit to request the annulment of the sale or as a defense in a lawsuit filed by the seller to claim the price. The annulment of the sale is subject to the provisions outlined in the general rules for annulment.

If the buyer explicitly or implicitly approves the sale, their right to annulment is forfeited. The buyer's approval of the sale does not affect the contract's effectiveness against the owner; whether the buyer approves the sale or not, the sale is not effective against the owner unless they approve it.

The generality of the paragraph indicates that the buyer has the right to annulment whether they were unaware at the time of sale that the seller did not own the sold item or were aware of it. The buyer might have agreed to the sale knowing that the seller did not own the sold item, believing that the seller could persuade the owner to transfer ownership of the sold item. However, once the buyer knows that the sold item is not owned by the seller, the annulment claim prescribes one year from their knowledge, according to the general rules. The annulment claim does not require the owner to challenge the buyer; the buyer can request annulment even if the owner has not actually challenged them.

The generality of the article also indicates that the buyer has the right to annulment whether the seller was in bad faith, knowing at the time of contracting that the sold item was not owned by them, or in good faith, not knowing they did not own the sold item.

The paragraph explains that the buyer's right to request annulment is forfeited, in addition to the causes for forfeiture of the right to request annulment established in the general rules, in two cases: The first case: If the ownership of the sold item transfers to the seller after the sale contract is concluded; whether it transfers to them by purchase, gift, inheritance, will, or otherwise; because the purpose of the right to annulment, which is to protect the buyer who was sold something the seller did not own, is nullified. The second case: If the owner explicitly or implicitly approves the sale.

The buyer's right to request annulment is not forfeited unless either of the two previous cases occurs before they request annulment; if they file an annulment lawsuit and then the seller acquires the sold item or the owner approves the sale before the judgment is issued, the right to annulment is not forfeited; the relevant time is the time of filing the lawsuit, not the time of judgment; the request for annulment, unlike the request for rescission, cannot be preempted after the lawsuit is filed except in the cases specified in the system, and there is no delay in it.

It is important to note the following when applying the provisions of the article: First: The article's ruling does not apply in the following cases: A- If the sold item is specified by type; even if the seller does not own such a type at the time of sale; since a type-specified item cannot have a specific owner at the time of sale; it is not considered a sale of someone else's property. B- The sale of a specific item if it is owned by the seller under a suspensive or resolutory condition; the sold item transfers to the buyer with this condition. C- The sale of a specific item not owned by the seller if the seller conditions the sale on acquiring ownership of the sold item. D- A person's commitment to another that the owner will sell the item to the promisee; this commitment is subject to the provisions of commitment on behalf of another outlined in article (100). E- The sale of an item owned by the buyer, who is unaware of their ownership of that item; such as someone buying something unaware that they inherited it or it was gifted to them; the sale in this case is absolutely void due to the impossibility of the subject matter; it is impossible to transfer ownership of something to someone who already owns it.

Second: The right to annulment in the article is a specific annulment for this issue, in addition to the causes for annulment established in the general rules; this annulment does not require the presence of a defect in consent but is established for the buyer in all cases merely because the sold item is specifically not owned by the seller, and this does not prevent the buyer from requesting annulment for another reason, and they also have the right not to invoke annulment, retaining the right to request rescission for the seller's breach of their obligation to transfer ownership of the sold item, or to uphold the contract and retain the right to seek compensation from the seller for the claim if a claim is filed against them by the owner.

Third: The owner's approval and the buyer's approval of the contract agree in that each is a unilateral legal act subject to the general rules for such acts; the effect of each dates back to the time of contract formation, not the time of approval. However, they differ in that the owner's approval pertains to a contract not effective against them, as they are not a party to it, in accordance with the principle of contract relativity established in article (99); if the owner approves the contract, it becomes effective against them retroactively, while the buyer's approval pertains to a valid contract effective against them, and its effect is the forfeiture of their right to annulment, in accordance with the general rule for the right to annulment established in article (78), and the buyer's approval does not have a retroactive effect, as the contract was effective before its issuance. Therefore, there is no need to restrict the buyer's approval by not harming the rights of others, as the effect of the contract on others is the same before and after approval, unlike the owner's approval, which must not affect the rights of others. On the other hand, the owner's approval of the sale forfeits the buyer's right to annulment, as the purpose of it is nullified; the reverse is not true; the buyer's approval does not affect the owner's right to insist on the sale's ineffectiveness against them. This difference between the two approvals is not due to a difference in the nature of one approval from the other; each is a unilateral legal act, but due to the different legal status of the one from whom the approval is issued. Therefore, the system did not resort to using another term, such as acknowledgment, to express the approval issued by the owner or others who are not parties to the contract in this and other places in the system to distinguish it from the approval issued by one of the contracting parties, as some comparative laws do; instead, the system used the term "approval" in both places, due to their legal nature agreement, and to avoid the confusion of the term acknowledgment with evidence.

Related To

Article 359

1. If a person sells without authorization a specific thing that he does not own, the sale shall not take effect against the owner. If the owner ratifies said sale, it shall take effect against him, without prejudice to the rights of third parties.

2. The buyer may demand nullification of the sale, unless ownership of the sold item devolves to the seller after the contract is concluded, or the owner approves the sale.