Explain who is entitled to possession of the car.


Home Indemnity, an insurance company, paid one of its insureds after the theft of his car. The car reappeared in another State and was sold to Michael Schrier for $4,300 by a used car dealer. The dealer promised to give Mr. Schrier a certificate of title. One month later the car was seized by the police on behalf of Home Indemnity. Explain who is entitled to possession of the car.

Answer and ExplanationSolution by a verified expert

Verified Answer

Here, the settlement and ownership of the vehicle is going to be for Company H. The person who steals the goods does not have the authority to transfer goods title to another person, irrespective of the knowledge that the person, who stole the goods, has about the goods. The sale of the goods, be it to a bonafide customer for value, is not going to rob the true owner from the title.

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