Question

Max purchased an antique watch from a local store for $500. As soon as Max stepped outside the shop with the watch, a man approached him claiming that the watch was actually his and had been stolen over a week ago. He claimed that the watch was personalized with his initials and showed Max his driver's license. Max checked the watch and realized that he was in fact the owner of the watch. In the context of rights of ownership, which of the following is true in this scenario?a. Max has title to the watch since he purchased it in good faith, without knowing that it was stolen.b. Max has title to the watch as it was a legitimate purchase, whether or not he knew it was stolen.c. Max should return the watch to the store owner, who has title to the watch because he sold it.d. Max should return the watch to the man who approached him, as this man is the actual owner.

Answer 1

D) Max should return the watch to the man who approached him, as this man is the actual owner.

Step-by-step explanation:

A thief that steals goods cannot pass good title of them, so any sale to a third party can be voided and the goods must return to their proper owner.

In this case even if Max purchased the watch in good faith, he must return it to its original owner. So now Max's only hope to recover some money is to sue the antique watch store.

It would be different if the store had committed fraud in order to get the watch and then sold it to Max. When a third party in good faith purchases goods obtained through fraud, good title passes to the buyer.