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 has recourse against only Jones for the amount owing.

Question

Quizplus · Accepted Answer

The bank has a security interest in the automobile and can enforce it against whoever possesses the automobile, including Doe. Therefore, the bank can seek to repossess the automobile from Doe and may also seek to recover any deficiency owed by Jones after the sale of the automobile.

Doe Purchased an Automobile from Jones for $1,000