Okla. Stat. tit. 12A § 2-403
Okla. Stat. tit. 12A, § 2-403
Oklahoma Code Comment
(1) "A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased." Previous Oklahoma law is in accord. Adkisson v. Waitman, 202 Okl. 309, 213 P.2d 465 (1950); Al's Auto Sales v. Moskowitz, 203 Okl. 611, 224 P.2d 588 (1950); Haulsee v. Reichert, 155 Okl. 9, 8 P.2d 27 (1932) [lessee cannot convey title]; Carpenter v. Mead, 60 Okl. 127, 153 P. 658 (1915) [bailee cannot convey title3;WoodwardCo-op Elevator Ass'n. v. Johnson, 207 Okl. 217, 248 P.2d 1002 (1952) (truck driver cannot convey title to goods carried).
"A person with voidable title has power to transfer a good title to a good faith purchaser for value." Previous Oklahoma law is in accord. The most common way in which a voidable title is obtained is by fraud. Oklahoma has previously held in several cases that one who procures property by fraud has the power to convey good title to a bona fide purchaser for value. Browning v. De Ford, 8 Okl. 239, 60 P. 534 (1900), affirmed 178 U.S. 196 , 20 S.Ct. 876, 44 L.Ed. 1033; Nelson in Jones, 93 Okl. 85, 219 P. 667 (1923).
(a) There are no previous Oklahoma decisions. In many states, title passes to an impostor who deals with the seller in person, but does not pass to one who perpetrates his fraud by mail. Thus the first could pass title, but the second could not. This section abolishes the distinction, and grants power to the impostor to convey good title to a bona fide purchaser in either event.
(b) and (c) This changes Oklahoma law. Almost all cash sales cases involve checks, so these two will be discussed together. Oklahoma, and the majority of other states, have previously held that when the transaction was inttended as a cash sale, and a check was given in payment thereof, no title passed until the check was honored. Motors Ins. Corp. v.Craig, Okl., 313 P.2d 515 (1957) (purchaser of automobile who gave a "hot" check in payment thereof did not acquire an insurable interest); Valley Loan Service v. Neal, 205 Okl. 94, 235 P.2d 932 (1951); McIver v. Williamson-Halsell-Frazier Co., 19 Okl. 454, 92 P. 170, 13 L.R.A.,N.S., 696 (1907); Arnold v. Gambrel, 64 Okl. 283, 167 P. 630 (1917); First Nat. Bank of Byars v. Griffin & Griffin, 31 Okl. 382, 120 P. 595, 49 L.R.A.,N.S., 1020 (1912); C. M. Keys Commission Co. v. Beatty, 42 Okl. 721, 142 P. 1102 (1914); Mott v. Nelson, 96 Okl. 117, 220 P. 617 (1924). Also, Oklahoma and most states have previously held- that the vendor may even recover the property from a bona fide purchaser, or, in other words, that the purchaser has no power to convey good title to an innocent purchaser. Valley Loan Service v. Neal, 205 Okl. 94, 235 P.2d 932 (1951) (A car was sold to Sheffler on January 14 and a check given in payment. On January 15 Sheffler mortgaged the car to plaintiff for value. On the same date Sheffler's check was dishonored, and on January 16 the car was returned to the original vendor, the defendant. Held: that title did not pass to Sheffler, because this was a cash sale and no title passed until the check was honored. Therefore, Sheffler did not obtain title, and could transfer no greater interest to the plaintiff than he himself had.) See also McIver v. Williamson-Halsell-Frazier Co., 19 Okl. 454. 92 P. 170. 13 L R.A., N.S.,696 (1907), in which the court held that a vendor was entitled to possession of the goods for which a "hot" check was given as against an attaching creditor of the buyer. The Commercial Code therefore changes Oklahoma law in that the vendee has the power to convey good title to a bona fide purchaser for value even though the transaction was intended as a cash sale, or a "hot" check is given in payment of the goods. Since giving a bad check is but one kind of fraud, and since Oklahoma holds that one who procures goods by fraud obtains the power to convey title, the results are desirable. It has been difficult, if not impossible, to distinguish the fraud cases and the hot check cases in principle.
(d) In some states, the distinction between the crimes of larceny and obtaining money or property by false pretense has been abolished, and a single crime, usually called "larceny" has been substituted. Therefore, this might lead a court to hold that title cannot be obtained by "larceny," even though the larceny was perpetrated by fraud, rather than by stealth. This section precluded such an interpretation. If the taking is by fraud, the taker obtains the power to convey title, even though the crime be labeled "larceny." Of course, this section can apply only when the offense at common law was "obtaining property by false pretense" in which the victim intended to pass title. It cannot apply to cases in which the victim intended to pass possession only. In Oklahoma, we have retained the distinction between larceny and obtaining property by false pretense, and therefore this section is not particularly significant. There, per haps, is still some need for t is section under the present interpretation of our "false pretense" statutes. In Riley v. State, 64 Okl.Cr. 183, 78 P.2d 712 ,(1938-) the defendant, who had given a "hot" check in payment of an automobile, was convicted of larceny. The court held that the crime was appropriately larceny, and not false pretense, because the defendant's fraud nullified the victim's intent to pass title, and also because of the application of the cash sale law. Under this section of the Code, Riley could still pass good title to the car, even though its taking was by larceny.
(2) Previous Oklahoma law is in accord, although there has been considerable conflict among the opinions as to what constitutes "entrusting." In Al's Auto Sales v. Moskowitz, 203 Okl. 611, 224 P.2d 588 (1950) the plaintiff, a used car dealer, delivered a car to another used car dealer in return for a check. The purchaser sold the car in ordinary course of business to the defendant. The check was dishonored, and the plaintiff attempted to recover the car from the defendant. The court held that the plaintiff had created circumstances that indicated authority to sell, and therefore was estopped to assert title against a bona fide purchaser for value. In Kent v. Wright, 198 Okl. 103, 175 P.2d 802 (1947) the plaintiff delivered cattle, in return for a check, to Kuykendall, who was known by the plaintiff to be a cattle broker. Kuykendall placed them in the hands of Wright, a commission salesman, who sold them in ordinary course of business and remitted to Kuykendall. Kuykendall's check was then dishonored. The court held that Wright was not guilty of conversion, because the plaintiff knew that Kuykendall was a dealer in cattle and that he would sell them, and that he was therefore estopped to assert title. See also Holbird v. Harris, 197 Okl. 646, 174 P.2d 262 (1946), in which the court found that the owner had clothed another with apparent title, and therefore estopped to assert title, Mahar v. White, 190 Okl. 434, 124 P.2d 260 (1942), in which the owner, who had delivered a truck to a commission salesman with authority to solicit offers but without the authority to sell, was estopped to assert title against a bona fide purchaser, and Kuykendall v. Lambert, 68 Okl. 258, 173 P. 657, in which the court held that the owner who negligently permits another to sell his property is estopped to assert title.
See, however, Owen v. Allen, 169 Okl.351, 86 P.2d 277, in which the owner delivered possession of a new car and the title thereto to his son, who was a salesman of that kind of car, with authority to use it as a demonstrator. The court held that the son had no authority to sell, and that the owner was not estopped to assert title. There is some doubt from the facts, however, that the defendant was a bona fide purchaser for value.
It is important to note that the "entrusting" must be to a merchant who deals in goods of that kind. Thus, delivery of goods to a carrier for transportation is not such an entrusting, Woodward Co-op Elevator Ass'n. v. Johnson, 207 Okl. 217, 248 P.2d 1002 (1952), nor is delivery to an ordinary lessee or bailee Haulsee v. Reichert, 155 Okl. 9 8 P.2d 27 (1932); Carpenter v. Mead, 60 Okl. 127, 153 P. 658 (1916). See also Valley Loan Service v. Neal, 205 Okl. 94, 235 P.2d 932 (1951), in which the plaintiff delivered a car to a purchaser, in return for a hot check. There was no indication that the purchaser was a dealer. This is not an "entrusting," although, of course, paragraphs (b) and (c) would govern the transaction and grant to the purchaser the power to convey good title.
(3) This section, by the words "and any acquiescence in retention of possession" included the seller in possession situation. The rights of creditors in goods left in the seller's possession are governed by Section 2-402 , and the rights of purchaser's by this section. Therefore, a purchaser who leaves a "merchant" in possession constitutes an "entrusting," which gives the merchant power to convey title to a bonafide purchaser. However, since paragraph (3) appears to be an elaboration of paragraph (2), a non-merchant vendor who is left in possession does not have power to convey title. In this respect, therefore, the results modify 24 O.S. § 6 which requires a change of possession and makes no distinction as between types of vendors.
(4) This is self explanatory,