Receivers of stolen property do not pay full value for the property. A receiver is a person who buys the property from the thief or someone deriving, consciously, possession from the thief. Anyone in possession after the theft derives possession from the thief, whether they know it or not. The knowledge of the person decides the point as to whether they are a receiver or an innocent person in possession. (That knowledge can be inferred; if the property is bought for a considerable discount on its true value there is an implication that the purchaser knows the goods are stolen. To be suspicious is to know, for these purposes).
In the world of commerce, possession alone is insufficient to transact business; title or ownership is indispensable. (There are very rare exceptions).
Consequently, purchasers of stolen property are at risk of losing the money they pay for the property. We see this in Mallett & Son [Antiques] Ltd -v- Rogers [2005] IEHC 131.
The Plaintiff purchased a piece of furniture from the Defendant. It was an antique piece and of very high value. It had been stolen ten years previously. When the property was located by its true owner as the Plaintiff put it up for sale in London it was returned to the owner and the Plaintiff claimed for its loss against the Defendant.
Amusingly, as recorded by the judge,
“The defendant claims that the plaintiff was guilty of negligence and breach of the duty of care which it owed inter alia to the defendant, by failing to take any or any reasonable steps to carry out appropriate checks on the authenticity of the bookcase (notwithstanding considerable experience and expertise in the buying, selling and restoration of antique furniture).
The defendant claims that if the plaintiff had exercised reasonable care it would have discovered that the bookcase had in fact been stolen and was the property of Lord Roden and would have to be returned to him.”
This was an absurd proposition. On the facts, the Defendant was in the antiques business himself. As a practical matter he was in at least as good a position, as the Plaintiff, to make inquiries.
More importantly, the issue is dealt with in the Sale of Goods Act 1893 (as amended). Section 12 reads:
“(1) In every contract of sale, other than one to which subs. (2) applies, there is
(a) an implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods and, in the case of an agreement to sell, he will have a right to sell the goods at a time when the property is to pass,
(b) an implied warranty that the goods are free, and will remain free until the time when the property is to pass, of any charge or encumbrance not disclosed by the buyer before the contract is made and that the buyer will enjoy quite possession of the goods except insofar as it may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed.”
The contract between the parties was governed by the terms of the 1893 Act and the Defendant was in breach of the contract. That breach resulted in a claim for £111,533 and judgment in that amount.