Can United recover the scales from Jasper? Explain.

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Can United recover the scales from Jasper? Explain.

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United Road Machinery Company, a dealer in heavy road equipment (including truck scales supplied by Thurman Scale Company), received a telephone call on July 21 from James Durham, an officer of Consolidated Coal Company, seeking to acquire truck scales for his coal mining operation. United and Consolidated entered into a twenty-four month lease-purchase arrangement. United then notified Thurman that Consolidated would take possession of the scales directly. United paid for the scales, and Consolidated took possession of them, but the latter never signed or returned the contract papers forwarded to it by United. Consolidated also never made any of the rental payments ($608/month) due under the lease. On September 20, Consolidated, through its officer Durham, sold the scales to Kentucky Mobile Homes for $8,500. Kentucky’s president, Ethard Jasper, checked the county records prior to the purchase and found no lien or encumbrance on the title; likewise, he denied knowledge of the dispute between Consolidated and United. On September 22, Kentucky sold the scales to Clyde Jasper, individually, for $8,500. His search also failed to disclose any lien on the title to the scales, and he denied knowledge of the dispute between Consolidated and United. Can United recover the scales from Jasper? Explain.

Explanation & AnswerSolution by a verified expert

Explanation

Individual CJ has reacted truthfully, gave value, and while taking the goods was unaware of any defect in title. It makes Individual CJ, a good-faith buyer. Organization C had voidable title when the goods were acquired by Individual CJ, along with that Individual CJ also procured good title, which is non-defeasible under the UCC.

Sample Response

No, Individual CJ is going to take the good title of goods if he bought the goods in good faith. The verdict is based on Section 2-403 of the Uniform Commercial Code (UCC), which gives the rights of transferring good title, who has a voidable title, to the person who purchased goods in good faith in return for value.

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