Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 2

Vernon Crum was a merchant in the business of selling used cars to use dealers. By means of a sight draft, J T Auto Sales bought some cars for resale from Crum. While keeping the certificates of title for the cars, Crum transferred possession of the cars to J T. J T transferred the cars to By-Pass Auto Sales, another used car dealer, which resold the cars in the course of its business to buyers who gave notes for them. By-Pass sold the notes to SouthTrust Bank of Alabama. By-Pass did not pay-pass cars, and J T's draft was not paid. The people who had bought the cars from By-Pass applied for certificates of title, but the state would not issue them without the current title certificates, which Crum had. SouthTrust sued Crum and J T for the title certificates. Did ownership of the cars pass to By-Pass's customers?