## Facts

- Best Signs, Inc. (Best) wanted to buy a truck for its sign business, including equipment suitable for sign work.
- Best contacted Bobby King (King), who dealt in trucks and related equipment.
- King sold a truck to Best, but the truck needed repairs and/or parts.
- King agreed to complete the repairs later after obtaining the necessary parts.
- Best paid for the truck, took possession, and used it for several months.
- The parties’ paperwork and title documentation were irregular, and King did not have clean record title in his own name at the time of later events.
- Best later returned the truck to King so King could perform the promised repairs.
- While the truck was in King’s possession for the repair work, King wrongfully sold the truck to Design Team Sign Company, LLC (Design Team).
- Design Team paid value and took possession, claiming it purchased in good faith without notice of Best’s claim.
- King was later arrested and jailed.
- Best sued King and Design Team seeking return of the truck, arguing King could not convey ownership because he did not hold title.
- The trial court entered judgment for Design Team, and Best appealed.

## Issues

1. Whether Best’s return of the truck to King for repairs constituted an entrustment or delivery under Tenn. Code Ann. § 47-2-403 sufficient to give King power to transfer Best’s rights.
2. Whether King had voidable title or statutory power under Tenn. Code Ann. § 47-2-403 to transfer good title to Design Team despite defects in the chain of title.
3. Whether Design Team qualified as a good-faith purchaser for value (and thus took good title) when it bought the truck from King.

## Decision

- The Tennessee Court of Appeals affirmed the judgment for Design Team.
- Best’s voluntary return of the truck to King for repairs placed the truck in King’s possession in a way that allowed Tenn. Code Ann. § 47-2-403 to operate.
- Even if King lacked clean record title, the circumstances of the transaction gave King voidable title and/or statutory power to transfer Best’s rights to a protected purchaser.
- Design Team was a good-faith purchaser for value without notice that the sale violated Best’s ownership rights.
- Accordingly, Design Team acquired good title to the truck, and Best could not recover it from Design Team; Best’s remedy lay against King.
- Permission to appeal to the Tennessee Supreme Court was denied.

## Legal Principles

- Under Tenn. Code Ann. § 47-2-403, a person with voidable title has power to transfer good title to a good-faith purchaser for value.
- When goods have been delivered in a transaction of purchase, defects in title or irregular documentation do not necessarily prevent a later transfer of good title to a good-faith purchaser for value.
- Entrusting possession of goods to a merchant who deals in goods of that kind can give the merchant power to transfer the entruster’s rights to a protected purchaser.
- “Entrustment” can include turning goods over to the dealer for a limited purpose such as repairs.
- As between an original buyer who voluntarily left the goods with the dealer and an innocent downstream purchaser who bought in good faith for value, § 47-2-403 places the loss on the party whose conduct enabled the wrongful sale, leaving the purchaser with good title.

## Conclusion

In *Best Signs, Inc. v. King*, Best paid for and used a truck, then returned it to dealer Bobby King for promised repairs; King wrongfully resold the truck to Design Team. Applying Tenn. Code Ann. § 47-2-403, the court held that King had voidable title and statutory power to transfer good title to a good-faith purchaser for value, so Design Team kept the truck and Best’s claim was against King rather than the downstream buyer.


Best Signs, Inc. v. King, 358 S.W.3d 226 (2009)