McGraw purchased an antique rocking chair from Tillis by check. The check was dishonored by the bank due to insufficient funds. In the meantime, McGraw sold the rocking chair to Rio who had no knowledge that McGraw's check had been dishonored. Which of the following is correct?

A. Tillis may repossess the rocking chair from Rio.

B. Tillis may recover money damages from Rio.

C. Tillis may recover money damages from McGraw.

D. Tillis may recover damages from McGraw based on fraud.

Question

Business

Holden Marshall

27 June, 04:29

McGraw purchased an antique rocking chair from Tillis by check. The check was dishonored by the bank due to insufficient funds. In the meantime, McGraw sold the rocking chair to Rio who had no knowledge that McGraw's check had been dishonored. Which of the following is correct?

A. Tillis may repossess the rocking chair from Rio.

B. Tillis may recover money damages from Rio.

C. Tillis may recover money damages from McGraw.

D. Tillis may recover damages from McGraw based on fraud.

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Answers (1)

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Spike · Answer 1

Depends on the price of the chair, it may be one or the other.

C) Tillis may recover money damages from McGraw.

D) Tillis may recover damages from McGraw based on fraud.

Explanation:

If the price of the rocking chair was higher than $500, then McGraw committed a felony by writing a bad check, but if the price of the rocking chair was lower than $500, then McGraw wouldn't go to jail, but he is still responsible for any damages suffered by Tillis. Most states consider writing a bad check for more than $500 a felony (check fraud), but if the amount is lower it may be considered a misdemeanor. The misdemeanor doesn't always apply since it can be considered unintentional, it all depends on the circumstances.

Since Rio bought the rocking chair in good faith and McGraw owned it at that moment, then he will keep it and no one can accuse him of any type of crime or wrongdoing.