Doe purchased an automobile from Jones for $1,000.Unknown to Doe,Jones had used the automobile as security for a loan from his bank,and the bank had registered its security interest in the automobile under the provincial personal property security registration legislation.A few months after the sale,Jones defaulted on the loan,and the bank discovered that Doe was in possession of the automobile.
-The bank is not entitled to seize the automobile,because it had not given Doe notice of its claim against the vehicle before Doe purchased it.

Question

Quizplus · Accepted Answer

The bank is actually entitled to seize the automobile due to its registered security interest, regardless of whether or not it provided notice to Doe before the sale. This is based on the principle of "buyer beware" in which the buyer is responsible for conducting their own research and inquiry into any potential encumbrances on the property they are purchasing.

Doe Purchased an Automobile from Jones for $1,000