Precious Metals; Dealers’ Holding

Subject:

Precious Metals; Dealers’ Holding

Requested By:

Robert F. Thomas, Jr. Police Attorney Charlotte Police Department

Question:

What method is used to calculate the time period in which a precious metal dealer must hold purchased items before sale pursuant to North Carolina General Statutes § 66-170?

Conclusion:

The five-day time period during which a precious metal dealer must hold purchased items before sale is calculated under Rule 6(a) of the Rules of Civil Procedure, and the dealer may sell such items on the sixth day.

A dealer who has purchased an item covered by the provisions of Article 25 of Chapter 66 of the North Carolina General Statutes, "Regulation of Precious Metal Businesses," is required by G.S. § 66-170 to hold those items for five days before any sale, disposition, or change of form or before allowing the item to be removed from the dealer’s premises. That statute reads as follows:

"§ 66-170. Items not to be modified. No item included in a dealer purchase shall be sold, traded or otherwise disposed of, melted, cut or otherwise changed in form nor shall any such item be removed from the licensed premises for a period of five days from the date the purchase was made."

This Article was enacted by the General Assembly "in order to prevent thefts, disposal of stolen property, and other abuses upon its citizens" of the precious metals regulated by the statutory provisions. G.S. § 66-163. The statute defines dealers covered by the act and the precious metals which may be disposed of only subject to the statutory procedures. G.S. § 66-164. Dealers are required to obtain permits from local law-enforcement agencies. G.S. § 66-165. Merchants may be exempt if their transactions in gold, silver, or platinum are a sufficiently small percentage of their business. G.S. § 66-166. Records must be kept both by dealers who have received permits and by merchants who have received exemptions. G.S. § 66-169. These statutory provisions are apparently designed to enable law-enforcement officers and agencies to recover stolen gold, silver, and platinum items which may be purchased, whether innocently or knowingly, by dealers in such items.

"The time within which an act is to be done, as provided by law, shall be computed in the manner prescribed by Rule 6(a) of the Rules of Civil Procedure." G.S. § 1-593. This statute has been applied in determining the expiration of a thirty-day negotiation period, provided by statute before a fifty-day period during which a shareholder dissenting from a corporate reorganization is allowed to file a petition for the appointment of appraisers. Jackson v. Stanwood Corp. 38 N.C.

App. 479, 248 S.E.2d 576 (1978). Thus, it appears that G.S. § 1-593 should also be applied to determine the expiration of the five-day period required by G.S. § 66-170 to run before a precious metals dealer may dispose of items governed by Article 25 of Chapter 66 of the General Statutes.

The language of G.S. § 66-170 forbids a dealer to dispose of or permit removal of covered items "for a period of five days from the date the purchase was made." Clearly, the intent of the General Assembly was to require the dealer to retain those items in their same form for five full days. Consequently, no disposition, change of form, or removal may be made until after the five days or, in other words, on the sixth day. In similar types of situations, the courts have reached similar conclusions. Thus, a seller improperly resold goods which he had repossessed under a retail installment contract when statutory language required him to retain the goods for fifteen days after retaking them and when he resold them on the fifteenth day. Auto Acceptance Corp., v. Veneziano, 2 Conn. Cir. 708, 205 A.2d 788 (1964). The court there felt that the buyer had a full fifteen days after, not including, the date of repossession in order to redeem. Thus, a resale on October 29 after repossession on October 14 did not meet the statutory requirement. Similarly, where a seller was required to retain goods for ten days after retaking in order to permit a buyer to redeem the goods, the tenth day must expire before the resale, the ten days being computed by excluding the first day and including the last day, with sale only permissible after midnight of the tenth day. Fisk Discount Corp. v. Brooklyn Taxicab Trans. Co., 270 App.Div. 491, 60 NYS 2d 453 (1946).

Both the language of G.S. § 66-170 and the interpretations of other courts in analogous types of circumstances require a conclusion that the dealer must hold the goods in the same form on his premises for five days and wait until the sixth day before any disposition or change of form. The question then becomes how to calculate the expiration of the five days. Since G.S. § 1-593 requires computation according to Rule 6(a) of the Rules of Civil Procedure, it is necessary to refer to that Rule to make the computation. Rule 6(a) provides that the first day, in this case the day of purchase or acquisition by the dealer, should be excluded. The last day, the date which will be reached as the fifth day after acquisition by the dealer, is included unless it is a Saturday, Sunday or legal holiday. The last day will be the first succeeding day which is not a Saturday, Sunday or legal holiday. Additionally, Rule 6(a) requires exclusion of all intermediate Saturdays, Sundays, and holidays if the period of time prescribed or allowed is less than seven days, as it is here. This would mean that if a precious metals dealer acquired items of jewelry at 9:00 a.m. on Wednesday, he would be required to hold these items through Thursday, Friday, the following Monday, Tuesday, and Wednesday, and could not dispose of them until the following Thursday. If a dealer acquired items on a Friday, and the following Monday were a holiday, the first day under the statute would not be until the following Tuesday, and the fifth day would fall on the Monday after that, so that the dealer could not dispose of the items until the next Tuesday. Since only intermediate Saturdays, Sundays and holidays must be excluded, a dealer may dispose of an item on Saturday if the fifth day of the holding period is a Friday, as would be the case if the dealer acquired the item on a Friday or Saturday and held the item the following Monday through Friday, none of which were legal holidays. Regardless of what time of day the dealer acquires the items, he must begin counting the five-day period on the succeeding day and hold those items through five full business days, excluding all Saturdays, Sundays and legal holidays, and neither dispose of the item, remove it from his premises, or change the form until the sixth day after acquisition, not counting the day on which he acquired them and excluding all intermediate Saturdays, Sundays, and legal holidays.

RUFUS L. EDMISTEN Attorney General

Norma S. Harrell Assistant Attorney General