Howes J:

This is an appeal from an order made by the District Judge, Penang, ordering the return to Ipekdjian Brothers Ltd. of certain jewellery which had been pledged with the appellants.

The learned District Judge found that M/s. Ipekdjian Brothers Ltd. were still the owners of the jewellery, and he consequently, after holding an inquiry under s. 435 of the Criminal Procedure Code (which deals with the disposal of property produced before the Court, regarding which an offence appears to have been committed), made an unconditional order for it to be returned to them, under s. 27 of the Pawnbrokers Ordinance.

The facts are very simple. Ipekdjian Brothers Ltd. employed one Khoo Sian Tat as a salesman (but who also acts as a broker for them) at 140A Malacca Street, Penang.

On 10 May 1938, as evidenced by Consignment Note No. 5 (exh. "G") Ipekdjian Brothers Ltd. handed to Khoo Sian Tat certain jewellery "to be sold by him at a price not less than the amount set out opposite each item of goods; and either such price of same or the goods are to be returned on demand by the Company, and the property in the said goods shall remain in the Company until the said price is paid to the Company." The District Judge found that Khoo Sian Tat was a mercantile agent.

Khoo Sian Tat gave certain of the articles to Yeoh Oon Chye (whom he had known for nearly 3 years, and who had acted for him as a broker on previous occasions in May 1938) for the purposes of sale, Yeoh Oon Chye having told him he had a buyer.

Khoo Sian Tat had no suspicion that there was anything wrong, and Yeoh Oon Chye gave him receipts (Exhs. F1-4) for the various articles, made out as having been "received from Ipekdjian Brothers Ltd." each receipt being marked "For approval" which I presume to be the equivalent of a sale "On approval." In fact Yeoh Oon Chye had no prospective buyer, but at once pawned the articles with the different appellants.

On the complaint of Khoo Sian Tat, Yeoh Oon Chye was charged under s. 420 of the Penal Code with having cheated Khoo Sian Tat by dishonestly inducing him to deliver the various articles, and upon his pleading guilty, was convicted of that offence.

Section 420 of the Penal Code is analogous to the English law of obtaining goods by false pretences, but is wider, in that, although under English law (62 & 63 Vic c 22 s. 3) a promise as to future conduct not intended to be kept is not by itself a false pretence, this, under the Code, will amount to cheating.

The intention of Khoo Sian Tat was clear. He delivered the articles to Yeoh Oon Chye as a broker or agent, intending not only that he should have possession, but should dispose of the property by sale. It is immaterial that Yeoh Oon Chye while ostensibly agreeing to the contract of agency, yet secretly intended to disregard it.

Any agent who has been entrusted with the power of sale, is given the lesser power of pledging.

Clearly, Yeoh Oon Chye had the right at any time to pay Khoo Sian Tat the amount he had received from the pawnbrokers plus the difference between that and the price at which he was authorized to sell the jewellery, and had he done so, then both the property as well as the possession of the goods would have passed to Yeoh Oon Chye, unless in the meantime, the contract of sale between him and Ipekdjian Brothers Ltd. made by their salesman Khoo Sian Tat had been avoided.

During the continuance of this contract, it follows that Yeoh Oon Chye was entitled to pledge the jewellery to an innocent third party for valuable consideration.

The articles were, with the consent of Khoo Sian Tat, in the possession of Yeoh Oon Chye and with the, right to dispose of them; and although Yeoh Oon Chye obtained them by making false representations as to what he was going to do with them, Yeoh Oon Chye had a good title to the articles until the contract or the possession obtained by those representations is avoided, (see London Jewellers Ltd. v. Attenborough [1934] 2 KB