Ga. Code Ann. § 11-2-403 (1) empowers a purchaser with a voidable title to confer good title upon a good faith purchaser for value where the goods were procured through fraud punishable as larcenous under the criminal law. The distinction between theft and fraud in this context is found in the statutory definitions of delivery and purchase. Delivery concerns a voluntary transfer of possession, and purchase refers to a voluntary transaction creating an interest in property. Ga. Code Ann. § 11-1-201 (32).
Appellee sold his vehicle to the first purchaser and transferred the vehicle title without putting the first purchaser's name on the title. The first purchaser represented himself to be the seller and sold the vehicle to appellant, the second purchaser. This vehicle was later resold to a third party. The first purchaser's check to the seller had been deemed a forgery, and the local authorities required the vehicle to be returned to the seller. The second purchaser brought a trover action against the seller, claiming he had obtained valid title to the vehicle. The trial court granted summary judgment for the seller and the second purchaser appealed. The court reversed the judgment.
Was appellant a good faith purchaser for value?
The court reversed and held that the second purchaser was a good faith purchaser pursuant to Ga. Code Ann. § 11-2-403 and was therefore entitled to return of the vehicle. The court held that because the seller transferred his car to the first purchaser by the perpetration of criminal fraud, the title was voidable. However, when the first purchaser transferred title to the second purchaser, it was transferred for value to a good faith purchaser, and thus the title became valid.