A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agr...
A delivers a gold necklace to B on a 'sale or return' basis, meaning that the necklace is given to B with the option to purchase it or return it. It is agreed between A and B that the property of the necklace will not pass to B until he has paid the price for it.
B then sells the necklace to C. The key question here is whether C obtains good title to the necklace, meaning whether C becomes the legal owner of the necklace.
No Valid Title for C:
In this case, C does not obtain a good title to the necklace. This is because the property of the necklace has not passed from A to B, as agreed between them. As a result, B does not have valid title to transfer to C. In general, a person cannot transfer a greater title than they themselves possess. Since B does not have ownership of the necklace, he cannot pass on ownership to C.
Exception: Bona Fide Purchase for Value:
There is an exception to this rule, known as the doctrine of 'bona fide purchase for value without notice'. This doctrine applies when a person purchases an item in good faith, for value, and without notice of any defect in the seller's title.
If C can prove that he purchased the necklace in good faith, for value, and without notice that B did not have valid title, then C may obtain good title to the necklace. However, in this case, it is clear that C was aware of the arrangement between A and B, as B sold the necklace without paying the price. Therefore, C cannot claim to have purchased the necklace without notice of any defect in B's title.
Conclusion:
In conclusion, C does not obtain good title to the gold necklace. The property of the necklace did not pass from A to B as agreed, and B sold the necklace without paying the price. Therefore, C cannot claim ownership of the necklace and A can seek legal remedies to recover the necklace from C.
A delivers a gold necklace to B on ‘sale (or) return’ basis. It is agr...
YES
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