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.
-Doe has a good and clear title to the automobile,because he purchased it without knowledge of the bank's claim.

Question

Quizplus · Accepted Answer

Even though Doe purchased the automobile without knowledge of the bank's claim, the bank still has a valid security interest in the automobile that would take priority over Doe's ownership. Therefore, Doe does not have a good and clear title to the automobile.

Doe Purchased an Automobile from Jones for $1,000