Clarkson-11E: Case Problem with Sample Answer s2

Clarkson-11e: Case Problem with Sample Answer Chapter 21: Title, Risk, and Insurable Interest

21–6. Case Problem with Sample Answer

William Bisby gave an all-terrain vehicle (ATV) to Del City Cycle in Enid, Oklahoma, to sell on his behalf. Joseph Maddox bought the ATV but paid for it with a check written on a closed checking account. The bank refused to honor the check. Before Del City or

Bisby could reclaim the ATV, however, Maddox sold it to Aaron Jordan, who sold it to

Shannon Skaggs. In November 2003, the Enid Police Department seized the ATV from

Skaggs. Bisby filed a suit in an Oklahoma state court against the state and Skaggs, claiming that he was the owner of the ATV and asking the court to return it to him.

Skaggs objected. Is there a distinction between the ownership interests of a party who steals an item and those of a party who acquires the item with a check that is not paid?

What was the status of Skaggs’s title, if any, to the ATV? Among the many parties involved in this case, which one should the court rule is the owner of “good” title to the

ATV? Why? [State v. Skaggs, 140 P.3d 576 (Okla.Civ.App. Div. 3 2006)]

Sample Answer:

The court should allow Skaggs to keep the ATV, as the owner with “good” title to it. The principal parties involved in the circumstances of this case were Bisby, Del City,

Maddox, Jordan, and Skaggs. Through Del City, Bisby intended to sell the ATV—to transfer “good” title to it to a purchaser. Maddox bought the ATV at Del City with a check and thereby obtained at least voidable title to it with the power, under UCC 2–403, to transfer the title to a good faith purchaser for value. Maddox sold the ATV to Jordan, who transferred it to Skaggs, a good faith purchaser for value. By then, of course, Maddox’s check had been dishonored, and Maddox could ultimately be charged with the crimes of fraud, larceny, and obtaining goods by false pretenses. But even a conviction on these charges would not change the basic facts of the transaction with

Bisby, who had intended to transfer the title to the ATV by selling the vehicle to Maddox.