In a contract of sale of goods, where property in goods is transferred or agreed to be transferred by the seller to the buyer for monetary consideration called the price, title is passed to the buyer once payment is made.
A special case may arise in a situation where title in the goods is purportedly passed or transferred to the buyer by a non-owner. This brings about the principle of ‘Nemo dat quod non habet’ which means ‘No one can give a better title than he himself has’.
In an emerging economy such as Nigeria, an integral component of commerce is that goods should be freely alienable and should move with little hindrance. However with the advancement in commerce fuelled by technology, commercial relations is increasingly becoming complex, hence the need for law to develop a number of exceptions to the common law rule of ‘Nemo dat’.
These exceptions have become necessary to meet the dynamics of commercial activities and offer certainties in commercial transactions, which is necessary for the greater protection of purchasers of goods. These exceptions have been statutorily provided by the Sales of Goods Act 1893 in Sections 21-25. One of such exceptions is Sale in Market Overt.
Sale in market overt is one the exceptions of ‘Nemo dat rule’ which gives a valid title to the buyer by a non-owner seller. Sale in market overt dates back to the early medieval periods in England. Section 22(1) of the Sales of Goods Act 1893 gives a spine to sale in market overt.
The section provides that “where goods are sold in market overt according to the usage of the market, the buyer: acquires a good title to the goods, provided he buys them in good faith and without notice of any defect or want of title on the part of the seller”.
Thus, market overt has been defined as a legally constituted market, open between the hours of sunrise and sunset and where goods for sale are openly or publicly displayed so that stand- by and passer-by could see them. In Law Union & Rock Ins. V. Onuoha (1998) 6NWLR 576, the Supreme Court held that “…Nigerian towns for the sale of specific or particular goods and which are publicly patronised at regular hours and acknowledged as market qualify to be described as market overt….”
However, for a sale to constitute one in a market place, the following requirements must be met as set out in Halsbury’s Laws of England, and accepted in Nigeria:
i. the sale must be made in the usual market place…upon the lawful market day and during the hours….and not at the night;
ii. the goods must be exposed for sale and the whole transaction…must begin and conclude in the market…
iii. the sale must be a real sale by a person of contractual capacity; and
iv. the goods must be goods of a kind which is vulnerable in the market.
For a buyer to prove his title against that of the true owner of the goods, he must prove that the sale was in accordance with the usage of the market. It must also be proved that the buyer bought the goods in good faith and had no actual or constructive notice that the seller had no perfect title. When these conditions precedent are fulfilled, a buyer obtains a valid title from a non-owner seller through sale in market overt.
Having established the principle of sale in market overt as a panacea or exception to Nemo dat rule, the next question to be answered is, what happens where stolen goods are sold in market? To answer this question, though receiving of stolen goods or property has been criminalized by virtue of the Section 427 of the Criminal Code and also through the presumption as to existence of certain facts under Section 167(a) of the Evidence Act, recourse to Section 22(1) of the SGA covers the situation where stolen goods are sold or received in market overt.
Thus, if stolen goods were sold in a market, the seller who complies with the conditions laid down in Section 22(1) of the SGA acquires a valid title to them against that of the true owner. 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. A practical example lies; where Dayo steals a canvas shoe from Ngozi and takes it to Dugbe market to sell; or steals a laptop from Ngozi and takes it to computer village to sell. If Dayo sells any of those items at the usual market place of Dugbe within the working hours after displaying them, the buyer acquires a valid title against that of the true owner (Ngozi). Hence, a buyer who buys any item purportedly stolen in open market obtains a valid title to the property because he had no notice of the defect of the items.
However, a reverse would be when Dayo takes those items to Dugbe express road at midnight and secretly sells it to a buyer who had earlier arranged with him to buy the items at a discount. This would not qualify as sale in market overt as the conditions required for a sale in market overt have not been met.
In conclusion, a buyer would not be culpable for the offence of receiving stolen goods only if the non-owner seller complies with the conditions of sale in market overt. However, sale of stolen goods in market overt will be void and the buyer will obtain an invalid title where there are irregularities in the transaction pointing to a knowledge in the defect in title of the seller, such as gross undervalue.
In Nigeria, shops in open places have been held to come under the definition of market overt. Flowing from the foregoing, sale in market overt has tamed the offence of receiving stolen goods if the requirements for a valid sale in market overt are met.
Joseph Jagunmolu Ogunmodede is the Founder/CEO of THE LEGAL DIARY.
He is a Double First Class lawyer from the prestigious University of Ibadan and the Nigerian Law School. Joseph is an Asaociate at Udo-Udoma and Belo-Osagie with interest in Corporate Law, Energy Law, Real Estate Law and Commercial Litigation.