What If You Innocently Buy Stolen Goods (3)

By Femi Bamisile

…continued from last week

The Market Overt Exception and Nigerian Case Law

The concept of “market overt” is one that is recognized byNigerian courts. In AlhajiYauDankula v.AlhajiGarba Dan Shagamu(2007) Appeal No: CA/K/320/2001, the Appellant claimed to have Power of Attorney over a plot of land (Plot 5 Road “Q”). He mistakenly developed another plot which belonged to the 1stRespondent (Plot 7 Road “N”), as the two plots were adjacent to each other. After constructing two bungalows (within two years), he met with the 1stRespondent on how to resolve the matter. Both agreed to a swap of Certificate of Occupancy and the Appellant handed over the Certificate of Occupancy on Plot 5 Road “Q” to the 1stRespondent while he expected to be given the Certificate of Occupancy in respect of Plot 7 Road “N”.

Meanwhile, the 1stRespondent had mortgaged his own interest in Plot 7 Road “N” to a Bank for a loan. When the 1stRespondent was unable to redeem the mortgaged property, the Bank auctioned the said property to the 2ndRespondent who now held a new Certificate of Occupancy on same. The Appellant only became aware of the deal when the 2ndRespondent attempted to eject the tenants in the building in order to take physical possession. The Appellant lost the action at the trial court and on appeal, while the 2ndRespondent’s counter claim was granted.

Upholding the trial court’s decision,the Court of Appeal, per Ariwoola L.J.stated inter alia:

“…Therefore, there was no equitable interest whatsoever in the Appellant to compete with that ofFirst Bank Plc who properly transferred its own equitable right and interest to the 2ndRespondent for value. In law, only a purchaser for valuable consideration who obtains a legal estate at the time of his purchase without a notice of a prior equitable right is entitled to priority in equity as well as at law. In which case, equity follows the law. In law and equity, a purchaser of an equitable interest without notice takes priority from a prior equity, if his purchase gave him the better right to a legal estate”

The Court also stated thus:

“There is no doubt and the trial court rightly found that the 2ndRespondent merely responded to an advertisement for sale of the property in dispute by the First Bank of Nig. Plc and he duly purchased it without notice and at market overt. There was therefore proper evaluation of the evidence adduced before the trial court … This issue is accordingly resolved against the Appellant”.

To buttress its decision, the Court referred to the Supreme Court’s judgment in W.T. Ejuetami v. Mrs. B.O. Olaiya(2002) 1 SCM 87 at 104 &119 – 120, (2001) 8 NSCQR 385.

The rationale for the market overt exception

The market overt exception protects innocent purchasers against the claims of an original owner. Historically, it has its rootsin England, going back to Anglo-Saxon times. It has been largely argued however that this rationale for the market overt exception is poorly suited tomodern times. It has come to be regarded asarchaic and quaint. In older times where the modes of transportation were more limited, it would have been practicable for aperson whose goods had been stolen to expect to find them being sold at a market nearby. However, astransportation became more developed, thieves can easily dispose of goods at the far end of the country.

Indeed, a key criticism of the market overt exception is that it promotes trade instolengoods. An English writer, Goode, R. in his publication “Commercial Law” (3rd Edition, Penguin Books,2004) stated thata major factor inthe abolition of the market overt exception in England was the fact that althoughdesigned to promote honesty among buyers and the integrity of the market,it was being employed as “a charterfor thieves”.

This problem is aggravated by the increasing level of internet sales. The literal words of Section 23 of the Lagos State Sale of GoodsLaw do not preclude internet sales. Persons who have stolengoods may seek to disposeof these goods via the internet, hoping to benefit from the relative anonymity and privacy that the internet allows.It is thus arguable that the practical applicability of Section 23 of the Lagos State Sale ofGoodsLaw has widened as a result of the growth of internet sales.

Market Overt vis-a-viz the Criminal Code

The concept of market overt is, by implication, recognized in the Criminal Code. Section 429 thereof provides that if a stolen property passes to another person who acquires a lawful title, subsequent receiving of the goods will not amount to receiving stolen goods. A lawful title,as explained above, may be acquired through a sale in market overt.

Conclusion

An English judge, Lord Justice Lloyd, in Shaw v. Commissioner of Metropolitan Police[1987] 1 WLR 1332, said the following:

“It is, of course, a frequent occurrence that the courts have to decide which of two innocent parties is to suffer by the fraud of a third”.

Whilst acknowledging that it may be tough to determine contradicting rights betweentwo innocent parties, the market overt rule is laudable as it seeks to protect the innocent purchaser who acquires a defective title without notice of the defect. A delicate balance must however be maintained between the rights of original owners and the rights ofinnocent purchasers. Also, contrary to some opinions, Section 23 of the Lagos State Sale of Goods Law must not be seen as promotingtrade in stolen goods.

Lastly, it is instructive to note that as with any other subject of Law, the theory of market overt is open-ended. An accused person who seeks protection under this theory is required to put in strict proof of his innocence, based on the fact that he acquired title in “an open, legally regulated shop or market, where goods are openly sold in the ordinary course of business of such shop or market”. Court matters are unpredictable and one may never know the attitude of the courts in adjudging each matter that it brought before them. Each matter is treated on its individual merits. This is particularly important when one considers the Anti-Graft War, with the enactment of such strict statutes as the Money Laundering Act and the Economic and Financial Crimes Commission Act. If, however, you are an innocent purchaser of stolen goods who is accused of being guilty of a crime, please speak to a lawyer. As always, one cannot over-emphasize the importance of engaging a lawyer in various circumstances, such as when one is falsely accused of an offence.

…Concluded