A COMMERCIAL LAW ASSIGNMENT

ON

ARGUABLY, THE DOCTRINE OF MARKET OVERT DOES NOT

EXIST IN TODAY’S COMMERCIAL TRANSACTIONS, DISCUSS.

WRITTEN BY

UMANA, VICTOR ISANG

CONSTITUENCY 3

20/LA/2975

DEPARTMENT OF LAW

FACULTY OF LAW

SUBMITTED TO

PROF. UWEM UDOK

LECTURER IN CHARGE OF

COMMERCIAL LAW PIL :314

FACULTY OF LAW UNIVERSITY OF UYO, UYO.

20 JANUARY, 2023

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TABLE OF CONTENTS

• ABSTRACT
• INTRODUCTION
• MARKET OVERT
• FEATURES OF MARKET OVERT
• COMPARATIVE ANALYSIS OF THE MARKET OVERT
EXCEPTION IN TODAY’S COMMERCIAL TRANSACTIONS
• CONCLUSION

2
 Abstract

In disagreement with the assertion that market overt system does not exist in
today’s commercial transactions, it is imperative to observe the distinctive
features of the system in today’s commercial transaction, and to also give an
analysis to show how the market overt exception has affected the course of daily
transactions, and to prove that the practice of the exception of market overt
system still exists and affects our daily transactions, especially in Nigeria. The
clear picture of what the market overt rule is all about, can be seen in the main
reason for its existence, which is an exception to the rule that property in the
goods does not reside in the said seller, and that the purported buyer has bought
nothing as the ownership of such goods cannot validly pass to the purchaser.
Basically, the major falsifying reason for this rule is that it seeks to annual the
validation of other contractual transactions involving the sale of goods in the
transfer of ownership held outside what has been defined as a market overt. In a
bid to enhance consumer’s and buyer’s interests in commercial transactions,
this work will explore the market overt rule vis-à-vis modern realities. However,
it is suggested that the restrictive toga of market overt be shed and the exception
be expanded to cover other business premises and entities.

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 INTRODUCTION

The market overt exception was meant to operate as a lifeline to innocent

buyers. It therefore follows that any sale wherein there is no valid or actual
transfer of property in the goods from the seller to the buyer is incomplete and
cannot be termed as a sale of goods in the real sense of it. A market overt is an
open and public market recognized by law. The market overt rule is in fact, a
long-established exception to the principal nemo dat quad non habet. The rule,
having been labeled a “legal absurdity” by commentators, was abolished in
England in 1995. The rule has been heavily criticized by various writers,
Bradgate regards the market overt rule as an anachronism; White has
highlighted the rule’s nonsensical application to the modern marketplace, and
Davenport and Ross have categorized it as an “ugly medieval relic, the only
benefit of which [is] assist[ing] in the sale of stolen goods''.

However, in reality, because it is not in all cases that a seller of goods

sells goods or sells with the express or implied authority of the original owner.
The principle of nemo dat quad non habet is one that has held sway /forte in
jurisprudence all over the world. It is a general principle, and like other legal
principles, it admits of exceptions such as; sale under agency; sale by a person
having a voidable title; estoppels, sale by a seller in possession; sale by a buyer
in possession; sale by a mercantile agent; sale under common law power; sale
under statutory powers; sale by virtue of Bankruptcy Act; sale under order of
Court including market overt. It is to this effect that a person cannot give a
better title than he has. That is to say one cannot give that which he does not
have.

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The principal law regulating sale of goods in the common law world including
Nigeria is the English Sale of Goods Act, 1893. The statute was received in
Nigeria, a former British colony as a Statute of General Application1. Over time,
coupled with the independence of Nigeria and the creation of states in the
federation, some of the states2 adopted the Act as their Sale of Goods Law with
slight amendments to reflect the peculiar situation. It is important to note that
even in England from where it was not made a reforming statute. Rather, it
sought to make law on sale more accessible through the statutory codification of
the existing common law3. Consequently, in England some provisions of the
sale of the Act have been abolished or amended while in Nigeria, no
comprehensive review of the Act has been undertaken and the law still remains
largely handed down. This undertaking interrogates one of the exceptions in the
sale of goods relating to the transfer of title in goods to another by a non-owner
following the successful conclusion of a negotiation.

Market Overt

The rule on market overt is an ancient common law principle. The term market
overt is derived from the French word Marche Ouvert which translates to “open
market” and it has its origin from the 16th century. According to the Black’s Law
Dictionary4, a market (also called mart) is a place of commercial activity where
goods or services are bought and sold. Jervis, J in Lee v Bayes5, defined market
overt as an open, public and legally constituted market. In the case of Law
Union and Rock Insurance of Nigeria Ltd. v Livinus Onuoha6The Court of
Appeal held that: ‘spots set aside in any of the Nigerian towns for the sale of
specific or particular goods and which are publicly patronized at regular hours
and acknowledged as market qualify to be described as market overt’. Section
22(1) of the Act7, further states that “where goods are sold in market overt,
according to the usage of the market, the buyer acquires a good title to the
1
A. O. Obilade, The Nigerian Legal system (London, Sweet & Maxwell, 1986), 70; A. E. W. Park. The Sources
of Nigerian Law (Lagos, African Universities Press; London Sweet and Maxwell, 1985) 24-33.
2
Some of the states which have re-enacted the Sale of Goods Act as their legislation include Cross River State,
Kaduna, Kwara, Lagos State and Rivers State.
3
F White, ‘Sale of Goods Law Reform: An Irish perspective’. Common Law World Review, 42 (2013),
172-199, Doi:10. 1350/clwr.2013.42.0253. Accessed 02-04-2020; see also R. Goode, Commercial Law, (4th
edn., London, Lexis Nexis, 2009) ch.6.
4
B A Garner, op. cit, 988
5
(1856) 18 C.B 599 at p. 200-201
6
(1998) 6 N.W.L.R (pt. 555) 576, per Oquntade J.C.A
7
Sale of Goods Act 1893

5
goods, provided he buys them in good faith and without notice of any defect or
want of title on the part of the seller”.

From the following definitions, it is obvious that market overt is any

public market designed by the relevant authorities. A place does not become a
market overt because the public can resort to it. It describes a legally recognized
market that is open to the public. By this, places such as shops, malls,
supermarkets, mini – marts, super stores, trade fairs, kiosk stalls and the like are
not market overt. Constitutionally, markets are under the sphere of the authority
of the local government councils by virtue of s.7 and Part 3, of the Fourth
Schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as
amended)8. It therefore, presupposes that as an open market is indeed market
overt for the purposes of the application of this legal rule. Furthermore, a market
can be legally constituted in this regard under statutory powers such as Onitsha
market, Keyatta and Obete markets in Enugu, Aba market, Ibadan market and
Kano market, as well as several markets under local government councils. Apart
from statutes, markets may also be regularly constituted by prescription or
custom. This appears to be the fate of many markets in the village. However, an
unauthorized market does not qualify as market overt.

Features of Market Overt

The idea principally of market overt has been to protect the interest of the
original owner of such goods from the scheming of unscrupulous sellers; it also
favors the owner and protects his rights of ownership of such goods. The
following, are the basic features of the market overt exception:

1. To constitute a sale in a market overt, it must be shown that the sale took
place within the premises of the market, during business day provided it is a sale
of goods of the kind normally sold in the market. The usual business hours of
markets are occasionally between sunrise and sunset (i.e., from 6am - 6pm), as
this is a key component of the application of this doctrine, that the venue of sale
is the market parameters during hours within which the market operates and the
goods sold are such goods as are usually sold in the market. These conditions
are conjunctive and not disjunctive as they must exist side by side with each
other. In the case of Law Union and Rock Insurance of Nig. Ltd. v Livinus
Onuoha9The Claimant bought a scrap 504 Peugeot saloon car at a mechanic
8
CFRN 1999, Cap.
9
Supra.

6
village in Makurdi from a person who claimed to be the owner. The car had
been stolen from the true owner and the thief had convinced the Claimant of his
title to the car by presenting the original registration papers of the car which he
had found in the glove compartment of the car. The Claimant purchased the car,
carried out extensive repairs on it and insured it with the Defendant. The car
was later destroyed by fire and the defendant refused to settle the insurance
claim when they discovered that the car was a stolen car. The Claimant sued the
Defendant claiming the sum of N40, 000 as the estimated value of the car and
indemnity, and the trial court awarded him the said sum. The defendant
appealed and argued that the Claimant was not entitled to an indemnity because
the car was a stolen car thereby rendering the contract of sale between the seller
and Claimant illegal and the contract of insurance null and void as the Claimant
had no title to the car and therefore no insurable interest in the car. The
Claimant on his part argued that he bought the car in the market overt for value
and without notice of any defect in the title of the vendor and that he had title
and insurable interest in the car as he was protected by section 22(1) of the Sale
of Goods Acts, 1893. The Court of Appeal, while upholding the arguments of
the Claimant, held that the facts of the case show that the Claimant bought the
car from the mechanic village which qualified as a market overt and having in
the circumstances of the sale bought it in good faith without notice of any defect
or any want of title on the part of the seller, he acquired good title. The Court of
Appeal further held in that case that ‘spots set aside in any of the Nigerian
towns for the sale of specific or particular goods and which are publicly
patronized at regular hours and acknowledged as market qualify to be described
as market overt.’

2. It is not necessary that the seller is the trader in the market, but as already
stated that the goods must be such as those that are usually sold in the market.
Which means that the entire sale must be made in the market and a sale which
begins in the market, but is concluded outside the market is not protected? In
other words, it is important to ensure that the whole transaction is made in the
market overt, it is not enough that samples alone were exposed for sale at the
market. Again, not only must the sale be done in a market overt, and the whole
transaction affected there, it is vital to show that the sale was open and public.
In Reid v Metropolitan Police Commissioner10, the sale of stolen goods took
place in a market overt in the morning when the sun had not risen and it was

10
(1973) 2 All ER 97

7
still only half light. The Court of Appeal quashed the decision of the lower court
in favor of the defendant buyer, because the goods should have been sold in day
time when all who passed could see the goods. It has been decided in Mbanugo
and Ors v U.A.C. (Nig.) Ltd.11, that a sheriff’s sale, i.e., a sale at an auction sale
by the order of the Court is not a sale in a market overt.

3. A sale in a market overt is effective to pass the title only if it takes place as
provided by s.22 (1) of the Act, i.e., ‘according to the usage of the market’.
Thus, in Bishopsgate Motor Finance Corporation v Transport Brakes Ltd.12, X
had a motor car under a hire-purchase agreement from Y. in breach of this
agreement; X took the car to Maid Store Market and handed it to the auctioneers
to sell at the market. The car was not sold by the auctioneers but later that day,
X sold it to Z. it was held that, as the usage of the market allowed sales to be
made privately in the market after the auctioneer had failed to sell, the sale was
in a market overt and z had a good title. In other words, the sale by private
treaty gave a good title to the defendant’s purchasers and Maid Store Market
where the car was sold, was a market overt for the sale of motor cars, the market
having been established since 1747. It should however be noted that, in selling a
car at Ogete market, Enugu or Onitsha market, the claim that it appears to be a
sale in a market overt may be defeated if the usage of the market does not
include the sale of cars.

4. If stolen goods are sold in a market overt, the buyer acquires a good title to
the goods under s.22 (1) of the Act, provided he buys them in good faith and
without notice of the seller’s lack of title. There is also the element of ‘good
faith’ in a market overt transaction. The good faith is that of the buyer and not
the seller. This implies that the buyer has no knowledge (actual or constructive)
of any defect or want of title on the seller’s part. He is not aware that the goods
were stolen or obtained by fraud. If he has any such knowledge, he cannot
invoke the market overt exception. Besides, the buyer must have obtained the
goods at the market for value. This implies that some consideration was
furnished to perfect the transaction. A gift is not covered by the market overt
exception and will not be protected. Even if done in good faith, a gift is not a
sale. Another condition necessary for this exception to subsist is that the sale
must be by persons of full contractual capacity. The capacity to buy and sell is
regulated by the general law relating to capacity to contract, and to transfer and

11
(1961) All N.L.R. 775.
12
(1949) 1 KB 332; (1949) 1 ALL E.R 39

8
acquire property. However, s.24 (1) of the Act provides that if the thief is
prosecuted to conviction, the property in the goods reverts in the owner of his
personal representative13. Moreover, this question of reverting stolen goods to
the true owner on the conviction of the thief has no retrospective effect. Thus,
dealing in the goods between the date of conviction of the thief will not render
any one liable in damages to the true owner for the tort of conversion. If the
goods were obtained by false pretenses and not by stealing, the property in them
will not revert on conviction. Also, property will not revert if the buyer pleads
the Factors Act (s.2 (1), 8, 9.) because s21 (2) (a) of the Act provides that
nothing in the Act shall affect the provisions of the Factors Act. However, it is
suggested that, in order to adequately protect titles acquired in market overt,
Section 24 of the Act should be repealed, as it has been done in England by the
Theft Act, 1968.

Comparative Analysis of the Market Overt Exception in Today’s

Commercial Transactions

The aim of this analysis is to prove that the doctrine of Market Overt rule has
been in existence and is still in existence even in today’s modern commercial
transactions. The market overt exception to the nemo dat rule dates back to the
sixteenth century. It was adopted from the law merchants and was originally not
a part of the common law. The reasoning for the exception was the supposed
duty of one whose goods have been stolen to search for and claim them in the
marketplace. If he fails or neglects to search for them, and they are sold in the
market, he loses them by his own carelessness and the innocent buyer ought not
to suffer. The objective of this rule was to give the purchaser more protection
than he would derive from a private sale. According to the jurist Bracton, ‘If a
person has bought a stolen article publicly in a market or fair in the presence of
the bailiffs or other honest men, thinking it to be purchasable, and has paid toll
and customs, even though he cannot produce a warrantor, he shall be set
free…’. Buying in a market overt relieved the purchaser from the consequences
of being in possession of stolen property. The market overt exception was
thereby adopted as a means of meeting the dynamics of commercial activities
and to provide certainties in commercial transactions. According to Goode, the
exception promotes the integrity of the marketplace.

13
Okachi, op. cit, 3.

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 Clearly, section 22(1) of the Act excludes shops and such other business
outfits. By the rule of construction expressio unis est exclusio alterius meaning
that the expression of one thing is the exclusion of another, all shops in the city
of London were regarded as market overt while outside London, market overt
meant only legally recognized markets. As another scholar put it, ‘this ancient
rule applied to sale from shops in the city of London and, outside the city of
London, to sales from any open, public and legally constituted market,
including fairs.’ It is common knowledge that with the advance in civilization,
science, technology and modern economic activities, there has been a
proliferation of businesses around us. Shops, kiosks, roadside and street corner
ware display tables, supermarkets, superstores, shopping malls, trade fairs,
electronic commerce and numerous forms of businesses are commonplace in
our modern society. The restrictive nature of the rule as it applies to Nigeria has
effectively placed the consumer in a somewhat disadvantaged position. This
narrow application of the market overt exception is anti-consumer and
anti-buyer as it works against the protection of consumers. The market overt
rule is obviously restrictive. The rule may have served its purpose at times
earlier than this, but there is no doubt that it is not in sync with modern realities.
Business outfits other than legally recognized open markets are as prevalent
today as open markets. And even as the world has grown digital with the
internet as a veritable signpost of contemporary civilization it would be out of
place to confine the market overt exception to markets. With the advent of the
virtual marketplace birthing wide scale electronic commercial transactions
(through websites, emails, blogs, text messages, etc.) restricting the market
overt rule would amount to playing the ostrich.

This rule is not in tandem with modern realities. Indeed, today anything that
can be gotten in a market can be gotten elsewhere. With electronic commerce
and a wide range of swift electronic payment platforms, almost any commodity
can be bought from anywhere in the world without the need for either party
(buyer and seller) to move. The world is now a global village, and at the click of
a button what appeared impossible in long distance trade can now be made
possible. Interestingly a large chunk of consumers rely on businesses other than
those situated in markets for their purchases. The volume of trade in business
places other than markets in recent times is unprecedented and huge. As stated
by Sealy and Hooley, the market overt exception has ‘come to be regarded as
archaic and quaint.’ The market overt rule has been abolished in the United
Kingdom. While these writers do not stand for the abolishing of the market

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overt exception, it is strongly contended here that rather than throw away the
baby with the bath water, the rule be tinkered with to enhance consumer
protection and purchasers. It is difficult to argue that the rule that allows a
person who buys goods bona fide and without knowledge of the seller’s
defective title to receive a good title, is bad law. The operation of the rule is, no
doubt, good for commerce as it is inconceivable and manifestly unjust to
deprive an innocent purchaser of his purchase when he has been made to go the
whole hog of the transaction on the faultless understanding that the property in
the goods lies in the seller or that the seller has the imprimatur of the seller to
dispose of the goods.That is simply impracticable. However, in keeping to the
dictates of modernity and affording buyers more legal coverage, it is advised
that the concept of market overt be enlarged in application to factor in and
indeed accommodate other business environments and outfits such as kiosks,
roadside and street corner stalls, supermarkets, super stores, shopping malls,
cinemas, electronic commerce platforms including new (social) media online
shops.

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 Conclusion

In conclusion, this work has done a deep research study on the subject matter of
what Market Overt is all about, its history, features and a comparative analysis
explaining the rationale for its creation and the modern implications of its
existence in commercial transactions of today. By these necessary observations
and hypothesis, it is evident that even in today’s transaction in some fourth
world and developing countries such as Nigeria, the rule of s.22(1) of the Act
concerning the application of market overt still applies to guide the commercial
transactions of states who under the Statute of General Application have kept
this provision unamended in conducting commercial transactions under the
modern trends of business transactions with regards to what is described as a
Market Overt. Unlike in England, where the meaning of what a Market Overt is
has been diversified to suit modern business transactions, its principle features
still apply under the exception of the maxim nemo dat quad non habet, to prove
that the doctrine of Market Overt is still in existence but its prima principles had
been ameliorated.

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 References

1. A. O. Obilade, The Nigerian Legal system (London, Sweet & Maxwell, 1986), 70.

2. A. E. W. Park. The Sources of Nigerian Law (Lagos, African Universities Press;

London Sweet and Maxwell, 1985) 24-33.
3. Okany, M. C. (1992). Nigerian Commercial Law. Onitsha Africana FEP
Publishers Ltd.
4. Dorothy Umoatan, Commercial Law 2020; ISBN, 9785077985, 323 pg.

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