I. SALE IN MARKET OVERT
A. The nature and scope of the market overt rule
In England, the ‘market overt’ rule is currently found in section 22(1) of
the United Kingdom Sale of Goods Act 197911 (‘UK SGA’). It reads:
‘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.’
The rule, although statutorily codified, is common law in origin. As a
common law rule, it has existed since (at least) the time of Sir Edward
Coke.12 Section 22(1), according to the Chief Justice in Caterpillar, represents
the ‘statutory encapsulation’ of the common law rule;13 the common law
informs the scope of section 22(1).
The market overt doctrine may be briefly described as follows: If goods
are purchased in a market overt, and provided certain other conditions are
satisfied, the bona fide buyer obtains a good title, although the seller had
none to give. This rule was originally evolved to promote commerce.14 The
word ‘market’ is used in the sense of denoting a place where trading is
conducted. Only certain markets are, in law, ‘markets overt’. Every shop
within the City of London is by custom a market overt.15 Outside the City a market overt is an “open, public, and legally constituted market”.16 To
quote from the learned editor of Benjamin’s Sale of Goods: ‘To be “legally
constituted” the market must be one that has been created by statute or
charter, or established by long continual user....’17 Not every sale made in
a market overt gives the buyer a good title. There are requirements relating
to how and in what circumstances the sale should be conducted. The
sale must be conducted according to the usage of the market. To quote
from the learned editor again: ‘The sale...must be made at the place of the
market upon an ordinary market day and during the usual hours.18 The
goods must be of a description which it is customary to find on sale in the
market and must be openly exposed for sale there. The whole transaction,
that is, the sale and delivery of the goods, must be begun and completed
openly in the market....’19 It is thought that publicity ‘minimises the likelihood
of the goods offered for sale being stolen property.’20 The rationale,
developed in ancient times when commerce was slower in pace and smaller
in scale, was this: The owner could and should pursue his goods to the
market where it is well known that such goods are openly sold. If he does
not bother, his title deserves to be defeated; the buyer of the stolen goods
can legitimately say to himself: ‘[N]o person but the owner would dare to
expose them for sale here, and therefore I have a right to assume that the
shop-keeper has a right to sell them.’