Attorney General v. Rising Trading Co and Another

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

M.P. ACTION NO. 82 OF 1972

_________________

Between

_________________

Coram: Judge Bewley in Chambers

Date: 18 August, 1972

_________________

JUDGMENT

_________________

1.This is an application by the Attorney General by way of interpleader in respect of a jade and diamond finger ring which is claimed by two jewellery companies, Rising Trading Co. (first claimant) and Hong Kong Royal Jewellery & Watches Co. (second claimant). With the consent of both claimants the matter was dealt with summarily in chambers.

2.The ring in question was stolen from Rising Trading Co. in the course of a robbery in June, 1970. It was purchased the same month by Mr. KWOK Ming-yee of King’s Jewellery Co. in good faith from a former employee of his, Mr. WONG Shiu-yuen, for $1,800.00. A few days later Mr. KWOK sold the ring to Mr. LAM Bun of Hong Kong Royal Jewellery & Watches Co. for $1,950.00 and here again the purchase was made in good faith. In October, 1971, Mr. WONG Chung-tak, the sole proprietor of Rising Trading Co. saw the ring in the second claimant’s showcase and reported the matter to the Police who seized the ring.

3.There has been no prosecution in respect of the robbery and Crown Counsel informs me that there is little prospect of one. Mr. WONG Shiu-yuen is in Taiwan and there is no evidence as to how he obtained the ring. The position in law is that the title to the ring remains vested in the first claimant unless the second claimant is able to invoke the provisions of either section 24 or section 25 of the Sale of Goods Ordinance, Cap. 26. The burden of proof rests on the second claimant.

4.Section 25 deals with the situation where the seller of goods has a voidable title thereto. There is no evidence that Mr. WONG Shiu-yuen had a voidable title to the ring and accordingly section 25 has no application. Section 24(1) states “Where goods are openly sold in a shop or market in the Colony, in the ordinary course of the business of such shop or 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.”

5.Section 24 incorporates the wording of section 22 of the Sale of Goods Act, 1893, and goes further by providing that the buyer of goods openly sold in a shop is also protected. By custom every shop within the city of London is market overt for the purposes of the English Statute and the principles of law to be applied to sales in such shops may be found in the English cases. In order to bind property against the true owner the article must be openly exposed under such circumstances that the purchaser might say to himself that no person but the owner would dare to expose it there and that therefore he might assume that the shopkeeper had a right to sell it. (Crane & London Dock Co. 1864 5 B & S 313).

I am unable to find any case in which the custom has been extended to sales to a shopkeeper. Although it was unnecessary to decide the point in that case, Wills J in Hargreave v. Spink 1891 1 QB 25 said at p. 31 “Sales effected in a shop to a shopkeeper seem to me to stand upon a footing different in many substantial respects from sales by the shopkeeper …………… A sale by a shopkeeper is a sale by a person who can be found if wanted, and about whom enquiries can be made. Having a certain more or less permanent status of some degree, often a very high degree, of substantiality and respectability, he stands upon a very different footing from a casual and unknown person who comes into the shop. He, also, is an accessible source of information as to the channel through which the goods reached him. The casual stranger from whom he buys goes away, and perhaps can never be found again.”

Mr. WONG Shiu-yuen took the ring to King’s Jewellery Co. where Mr. KWOK purchased it. It appears that King’s Jewellery Co. maintains business premises at two different addresses and there is no evidence as to which premises housed the transaction. I shall return to this point later but, so far as this sale is concerned, it is not necessary to decide which premises were involved or whether they were a shop within the meaning of the section. Applying the principles in the cases referred to above, it is clear that Mr. KWOK Ming-yee obtained no better title to the ring than that of Mr. WONG Shiu-yuen and failed to acquire  a good title by virtue of section 24.

6.Turning now to the second transaction, there is some evidence that Mr. KWOK did ‘expose’ the ring, for he said in evidence, “If there had been any defect in title I would not have been placed the ring in the showcase.” However, there is no evidence as to the location of this showcase. In his affirmation he describes himself as the General Manager of King’s Jewellery Co. situate at 49, Mirador Mansion, Ground Floor, Nathan Road. The invoice which relates to the sale of the ring, together with 12 other items, is in the name of “King’s Goldsmiths and Jewellers, Importers and Wholesalers, Specialists in precious stones and jewellery.” The address on the invoice is 16, Kimberley New Street, Ground Floor. Neither Mr. LAM Bun nor Mr. KWOK has stated in which premises the transaction took place. I must have regard to the invoice in default of other evidence and it seems to me that the premises of an “importer, exporter and wholesaler” can in no sense be described as a shop.

Goods worth a total of $7,680 are described in the invoice. These goods were not delivered at the time of the bargain and payment was made at a date subsequent to delivery. If the purchaser is to get a good title not only must the goods be exposed for sale but the whole transaction of sale and delivery must be begun, continued and completed in the shop (Crane & London Dock Co. 1864 5 B & S 313) The Bailiffs etc. of Tewkesbury v. Diston (6 East. 438). Hill v. Smith (4 Taunt. 520).

The second sale of this ring strikes me as a wholesale transaction negotiated in premises which were not a shop and concluded elsewhere. I am satisfied therefore that section 24 of the Sale of Goods Ordinance applies to neither of these transactions. Accordingly the second claimant has not acquired a good title to the ring that would enable him to defeat the title of the original owner, the first claimant. The latter is entitled to judgment and the return of the ring. The second claimant will pay the first claimant’s costs on Scale III and there will be no order as to the applicant’s costs.

John Harte c.c. for Applicant.

Leonard IP (Peter Mo & Co.) for 1^st Claimant.

A.R. Hoosen (P.K.H. Wong & Co.) for 2^nd Claimant.