Indrek, a University Student, Owned a Small Automobile, Which He

Essay

Indrek, a university student, owned a small automobile, which he desired to sell for $800. He placed an advertisement in the university newspaper offering the vehicle for sale and included his telephone number for further information.
A few days later, he received a telephone call from a man who identified himself as Mr. Green. Green asked Indrek a number of questions concerning the car, and then expressed a desire to examine the vehicle. A meeting was arranged for later that evening, and Indrek gave Green the opportunity to test drive the automobile.
Green agreed to purchase the vehicle for $800 and offered Indrek a personalized cheque bearing the name "R. Green" as payment. Indrek was reluctant to accept the cheque without further identification and suggested the two men meet the next day at the bank to close the deal. Green explained that he would not be available for the next week or two as he was leaving town on some business. Instead, he offered the driver's licence and a number of credit cards bearing the name "R. Green" as evidence of his identity. He offered to leave his credit cards with Indrek as security. With some hesitation and concern, Indrek signed the blank motor vehicle registration, and handed Green the papers necessary to transfer the ownership. In return he received the cheque and the credit cards which he agreed to hold until Green's return.
The next day, Indrek presented the cheque at Green's bank only to discover the cheque had been forged. A customer at the bank whose name was "R. Green" had apparently lost his wallet sometime before, and the wallet contained the cheque book as well as the credit cards and licence.
In the meantime, the purchaser of the automobile, posing as Indrek, sold the vehicle to Smith for $500, and disappeared.
A few weeks later, Smith wrote a letter to Indrek asking if he might have the owner's manual to the automobile, and at that point, Indrek demanded the return of his vehicle. Smith refused to return the vehicle. He maintained that it was now registered in his name as a result of the transaction that, from his point of view, was a bona fide purchase from the person who possessed the registration documents for the automobile.
Indrek brought an action against Smith for the return of the automobile. Discuss the points of law which are raised in this case and indicate how the courts might decide the matter.