SUDAN GOVERNEMNT vs. BAKHEIT ADAM MOHAMMED

(AC-CR-REV.  186- 1956)

Principles

·  Criminal Law : Recovery of property . Recovery of Lost and Stolen Property Ordinance, 1924- Section 3 Rule II and III - conviction under Section 348 S.P. C. in respect of the property

Criminal Law : Recovery of property . Recovery of Lost and Stolen Property Ordinance, 1924- Section 3 Rule II and III - conviction under Section 348 S.P. C. in respect of the property
 

Judgment

The accused had been convicted under Section 348 S.P.C. for having pledged, without authority of the owner, valuables entrusted to him The pledgee surrendered the valuables to the Court. The pledgee had acquired the valuables in good faith. The Magistrate applying Section 3 Rule III  Recovery of Lost and Stolen Property Ordinance, 1924, ordered that the goods be kept in Court and the fine be applied in repayment of the advance made by the pledgee, and in the absence of such payment of fine the owner was to recover the goods on payment of one-half the sum advanced by the pledgee.

The Pledgee appealed to the Judge of the High Court, Hassib, J., who held Rule III to be inapplicable and reversed the order of the Magistrate. Applying Rule II, Hassib J. ordered the valuables to be handed to their owner without payment. The Pledgeemoved the Chief Justice to call for the record under Section 257 (1) of the Sudan Code of Criminal Procedure.

Held: (1) Rule II applies for there was here a conviction viz  that of the accused custodian of the property.

(2) The general common law rule of nemo dat quod non habet is given effect in Rule II

Decision of Hassib J. affirmed.

Application for Revision under Section 257 S.C.C.P.

Advocate: Y. Nigm ……….for Ister Showa, the Pledgee.

The facts are fully set out by Abu Ranna.. C.J.: - The accused has been convicted under Section 348 of the Sudan Penal Code, of Criminal Breach of Trust in that he pledged some valuables entrusted to him for safe-keeping without authority of their owner. The pledgee, a money-lender gave evidence and surrendered the valuables to the Court. The learned Magistrate made an order under Section 3 Rule III of the Recovery of Lost and Stolen Property  Ordinance, 1924. Ordering that The  valuables be kept in Court he ordered that the fine

recovered from the accused was to be applied to repay the money-lender, but that in the absence of such payment the owner was to recover the valuables on paying half the sum advanced by the money-lender to the accused. It appears to be clear that the money-lender acquired the valuables in good faith.

From this part of the judgment the money-lender appealed claiming that she be handed the valuables and that she should only have to surrender them if the owner paid the full sum of the loan i.e. LE.55 On revision the learned Judge of the High Court ordered that the case fell under Rule II of the said Ordinance and thus that the money lender was not entitled to any compensation whatsoever.

The two Rules read as follows Rule II: When any person has been convicted of any of the offences mentioned in Rule I (i.e. theft, “extortion, robbery, criminal misappropriation or criminal breach of trust, See Section 2 definition of ‘stolen goods’ these offences are defined in the Penal Code) the original owner of the stolen property may, subject to the limitation of time mentioned in Rule I (i.e. three years) recover the property from any person in whose possession it is “without paying any compensation.” Rule III: When any property has been lost or stolen and no person has been convicted  of any of the offences mentioned in Rule I, the original owner may, subject to the limitation of the time mentioned in Rule I, recover the lost or stolen property from the person in whose possession it is without paying any compensation, unless such person has acquired in good faith for valuable consideration or has directly or indirectly acquired the property in good faith from a person who acquired it in good faith and for valuable consideration.

In such case the original owner can only recover the lost or stolen property on payment of fair compensation having regard to the price paid by the last purchaser of the property and the other circumstances “of the case”.

The learned Judge of the High Court stated : The Magistrate applied Rule III of Section 3 of the Ordinance. That was inapplicable. The property was stolen property in accordance with Section 2 and the accused  was convicted for misappropriating it and thus there was stolen property and a conviction of a person in respect thereof. As such the case comes under Rule II of Section 3 That being the law Rule III was not applicable. It applies only when there is no “conviction what ever in respect of the stolen property.”

Let me say a once that I consider this conclusion to be correct.

I would like to give my reasons in support of the decision by the learned Judge of the High Court.

Before looking at the Ordinance and seeing whether it effected a change in the Common Law, it is advisable to examine what the Common Law is on this subject

The basic rule of the Common Law is nemo dat quod non habet. This rule is clearly stated by Blackburn J. in Coles vs. N. W. Bank [1875] L R. 10 C.P. 354 at pp. 362-363 : At common law a person in possession of goods could not confer on another, either by sale or by pledge, any better title to the goods than he himself had The general rule was that, to make either a sale or pledge valid against the owner of the goods sold or pledged, it must be shown that the seller or pledger had authority from the owner to sell or pledge, as the case might be.

This rule is further illustrated in Hoare vs. Parker (1788) 2 Term Rep. 376 where Counsel refused to argue against it, pleading that the rule is too well established. In that case a tenant for life pledged some silver plate and the Court held that the pledgeecould not hold the plate as against the remainder man. A demand having been made for its return the pledgee was liable in trover.

The law is thus as Best C.J. stated in Williams vs. Belton (1825) 3 Bing. 139 at 146 : “As the law now stands if the pawner of goods has no authority to make the pledge, the Pawnee cannot hold them against the owner.” This rule. must however be read subject to the statement of Denning L.J. in Bishopsgate  Motor Finance Corporation Ltd vs. Transport Brakes Ltd [1949] 1 K.B. 322 at 336: “In the development  of our law, two principles have striven for mastery, the first is the protection of property : no one can give a better title than he himself possesses. The second is the protection of commercial transactions : the person who takes in good faith and for value without notice should get a good title. The first principle has held sway for a long time but it has been modified by the common law itself and by statute so as to meet the needs of our ‘‘times.’’

In Common Law there is the restriction of this rule in the case. of a sale in market overt. But above all there is the case of the person having an apparent authority. This is well brought out in Root vs. French, New York 13 Wendell 570 (cited Kingsfond vs. Merry (1856) 1 H. & N. 503) where Savage C.J. stated : “Where one of two innocent persons must suffer from the fraud of a third shall suffer who by his indiscretion has enabled such third person to commic the fraud. A contrary principle “would endanger  the security of commercial transactions, and destroy

that confidence upon which, what is called, the usual course of trade “materially rests.”

Illustrations of this are seen in Lloyd vs. Grace, Smith and Co. [1912] A.C. 716 on one side and Kingsford vs. Merry on the other side of the fence.

One such case of an apparent authority which carries with it the power to pledge is the case of the factor. The Factors Act 1889 expressly enables a mercantile agent not only to sell the goods of another, provided he obtained these goods as a mercantile agent, with the consent of the owner, but also he can pledge them. See Section 5.

An authority by estoppel would also prevent the owner from denying the right of another to pledge his property.

Various statutes have been passed to deal with the position of a pledge. It is clear that a bailee who pledges a chattel belonging to his bailor thereby automatically terminates the bailment (unless he has authority to pledge such chattel) (Lamb vs. Attenborough (1862) 1 B. & S. 831). Thus if a bailee pledges the chattel of his bailor, the pledgee would have to return the chattel to the bailorand would not be liable to the bailee. Cheesman vs. Exall (1851) 6 Ex. 341. The Pawnbroker Act 1872, which has only limited application i.e. is limited as to amount of the loan advanced, provides for the relationship between the pawner and the pawnbroker. It does not affect the position of an owner  where the pawner is not the owner. Thus in Singer Manufacturing Co. vs. Clark [1879] 5 Ex. D. 37 the Defendant pleaded that as he had returned a chattel to the person presenting the pawn-ticket, he could not be sued by the owner of the chattel. Held that Section 25 of the Pawnbroker Act merely protected the pawnbroker as against the Pawnee, but not as against the true owner unless the true owner is bound by the acts of the Pawnee i.e. has authorized or is deemed to have authorized the pledge.

In the later case of Leicester & Co. vs. Cherryman [1907] 2 K.B. 101 the position was made quite clear, that the Pawnbroker’s Act does rot affect an owner who is not the pawner, unless he assents to any order under that Act. In that case, the bailee of somejewellery  had been convicted of larceny. He had pawned the goods. Section 30 of the Act states : - If any person is convicted in any court of felonious taking or fraudulently obtaining any goods and chattels, and it appears to the court that the same have been pawned with a pawnbroker the court on proof of ownership of the goods and chattel, may, if it  thinks fit, order the delivery  thereof to the owner, either on payment of the loan or of any partnereof or without payment thereof or any part thereof,

as the Court according to the conduct of the owner and other circumstances of the case seems just and fitting.” The Court ordered the return of the goods on payment of the loan. The owner was present but took no part in the proceedings. Held, that the owner was not precluded from bringing a common law action for the recovery of the goods. Ridley J. gave the reason for this provision as follows : - The intention was to benefit the prosecutor by saving them from the necessity of bringing actions for the return of their property : but, it was also necessary to safeguard other people’s interests, and therefore in the Pawnbroker’s ‘Act is to be found a provision that, if the goods have been pawned with a Pawnbroker the Court has a discretion to order the return of the goods only on the terms that the owner do pay to the pawnbroker “the whole or part of the loan.” But the Court held that if the order was to be made subject to a condition e.g. for payment of the loan or part thereof, then the owner must consent to such order or he will not be bound by this, his Common Law remedy being unaffected.

there are other statutory provisions regarding sales e.g. the Sale of Goods Act, 1893, with which we are here not concerned since the case before us is one of pledge. Suffice it to say here that inroads have been made into the Common Law rule since it was found to work injustice in some cases.

Now let us look at the. Rules in the Recovery of Lost and Stolen Property Ordinance. From these Rules it is clear that Rule II merely restates the common law rule, though Rule III is a departure therefrom. It is however clear that we have a conviction and thus Rule II and not Rule III applies. (Compare with Section 24 of the Sale of Goods Act). The accused clearly had no right to pledge these valuables. There is no evidence that the Complainant had ever held out the accused as being her agent or had in any way acted in such a way that the money-lender could have thought that the accused had authority to act on her behalf. If a money-lender is prepared to take securities from a person, she makes certain that these cover the loan she makes. She will also have to make certain that she is taking securities from the person who owns them. The Ordinance in my view is just like the Pawnbroker Act of England. It is a convenience to prevent further litigation. Where there has been no conviction, compensation can be ordered so as to secure the rights of the third party who may have acted on an apparent authority or because by standing by, the owner has precluded himself from raising an objection to the rights of the possessor i.e. third party, without being prepared to compensate such third party.

Also in the case where both are innocent it may be reasonable to apportion the loss (see supra) provided

(i) no conviction; and

(ii) the loss was not caused by the indiscretion of the owner.

(It can well be imagined that a prosecution is brought but no conviction secured e.g. the accused is not the actual thief, the provision of Rule III give the possessor the benefit of the doubt that a conviction may not be possible e.g. there may have been consent to the taking).

Although the money-lender has been acting in good faith, this should, not mean that a person from whom property has been stolen or misappropriated should have to pay to get his property back unless that person had in some way contributed to his loss. No such evidence exists here. Any-remedy the money-lender may have at common law against the accused naturally still exists. (She can have no right to demand the possession in any case. Thus even if Rule III were applicable the learned Magistrate was right in ordering the property to be kept in Court so that if necessary a sale would be ordered. This does not apply here however). The mere fact that the Complainant owner of the goods is an undesirable character makes no difference in law once her evidence is accepted

Although I too sympathize with the Applicant, I can see no way around the wording of the Ordinance which would do justice to both sides in these circumstances. The Ordinance is not unjust in these cases.

(Application for revision dismissed)