Reference - Used Car Problems. Marcy purchased a used car from ABC Motors. Six months later the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors had also sold a used car to Frank who wrote a bad check for the car and left town but not before he sold the car to Betty who paid $1,100, a fair price for the car, believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that ABC Motors was an innocent purchaser from the thief, which of the following is true regarding Betty's obligations, if any?
A) She is not required to return the car because Frank held voidable title, not void title.
B) She is not required to return the car under the UCC because she paid over $1,000 for it.
C) She is required to return the title because Frank held voidable title, not void title.
D) She is required to return the title under the UCC because she paid under $5,000 for it.
E) Under the UCC, the car should be sold with ABC and Betty splitting the proceeds.
Correct Answer:
Verified
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