Sales and Leases | 120
Example : The owner of an antique convertible had the convertible towed to a mechanic for restoration work. While in possession of the convertible, the mechanic changed business locations and, thus, moved the convertible to his new location. Several months passed, yet the mechanic never returned the convertible, even though the owner repeatedly asked him about returning it. Eventually, the mechanic sold the convertible to himself for $1,500, invoking the state’s abandoned vehicles act, and then resold it to a third party, a good- faith purchaser for value, for $4,000. Here, the mechanic could transfer no title to the third party, because he did not acquire the convertible through a transaction of purchase. The owner never intended to transfer ownership to the mechanic; rather, she intended that the mechanic perform the restoration work and then return the convertible to her. [ Adapted from Ryan v. Patterson & Son Motors , 726 So.2d 667 (Ala. Ct. Civ. App. 1998).] c. Purchaser for Value The UCC spells out several specific instances in which a purchaser is deemed to take for value. Namely, one takes for value if she takes: in exchange for a binding commitment to extend credit, or in exchange for credit that is immediately available, regardless of whether the credit is ever drawn on and regardless of whether any chargeback is provided for should any difficulties in collection arise; as security for a preexisting claim; in total or partial satisfaction of a preexisting claim; by accepting delivery under a prior purchase contract; or for any consideration that suffices to support a simple contract.
[U.C.C. § 1-204 (1951).]
Note : From the preceding definition of value, it becomes clear that a donee or thief does not take for value. Thus, a donee or thief cannot receive good title from one with mere voidable title. d. Good-Faith Purchaser In determining whether one is a good-faith purchaser, the general definition of good faith applies. In the context of § 2-403, one generally takes in bad faith if she knows of whatever problem or defect caused the seller’s title to be voidable. [ See 2 Hawkland UCC Series § 2-403:2, n. 9, Westlaw (database updated June 2021) (citing and summarizing cases).]
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