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warranty of title, even if the socialite never sues to recover the ring. The warranty of title is that the title transferred is good and that the transfer is rightful. A thief, of course, has no title to transfer to anyone. Thus, the title the thief transferred to the investor was not even existent, let alone good. [ See 2 Hawkland UCC Series § 2-312:1, Westlaw (database updated June 2021).] (2) An airplane dealer leased a plane from a manufacturer. Thus, under UCC § 2-403, the manufacturer entrusted the plane to the dealer, giving the dealer power to transfer good title to a buyer in the ordinary course. Afterward, the dealer sold the plane to an airline, a buyer in the ordinary course. The airline had no reason to know that the dealer lacked title to the plane. Accordingly, the dealer transferred good title to the airline. Even so, the dealer breached the warranty of title. This warranty assures the buyer not only that the title transferred is good, but also that the transfer itself is rightful. Here, the dealer’s transfer of the plane was not rightful, because the plane was not his to sell. Accordingly, a significant shadow is cast over the airline’s title to the plane, even if the airline would ultimately prevail against the manufacturer in any litigation. [ See Sumner v. Fel-Air, Inc. , 680 P.2d 1109 (Ala. 1984) (noting some possibly contrary authority); Entrusting, supra .] Note : Under the minority approach, the dealer did not breach the warranty of title in the immediately preceding example, for the airline in fact obtained good title to the airplane. Under the majority approach, though, the dealer most assuredly breached the warranty of title. [ See 2 Hawkland UCC Series § 2-312:1, Westlaw (database updated June 2021), citing Hodges Wholesale Cars v. Auto Dealer’s Exchange of Birmingham , 628 So.2d 608 (Ala. 1993); Warranty of Title: Majority Approach, Warranty of Title: Minority Approach, supra .] a. Time of Breach of Warranty of Title The warranty of title is breached, if at all, when the seller tenders delivery of the goods. [U.C.C. § 2-312, cmt. 2 (1951).] b. The Warranty of Title and Encumbrances Again, the warranty of title assures the buyer that, at contracting, there are no security interests, liens, or other encumbrances against the goods of which the buyer lacks actual knowledge. The requirement of actual knowledge means that the buyer need not search the public records or conduct other investigation to discover any encumbrances. In that vein, the mere fact that there is some public record of the encumbrance ( e.g. , a filed financing statement) does not give the buyer actual knowledge. But because the warranty of title is breached, if at all, when the seller tenders delivery, the seller has until that time to clear any encumbrances, even if they exist at the time of contracting. Of course, if the seller informs the buyer of an encumbrance at or before the time of contracting, there can
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