Re: [gnso-irtpd] Off the cuff draft:

[Holly Raiche <h.raiche@xxxxxxxxxxxxxxxx>]

Normally, I would never quote from Google on matters of law, but it's a lot 
easier than copying text from text books.  So the concept of bona fide 
purchasers for value without notice is defined below - and it gives the BFP 
(for value without notice) the goods as against the former owner. But you are 
correct in saying that there is still a claim against the person who 
fraudulently sold the property.

So the question is then what is meant by 'without notice' and what reasonable 
steps should such purchaser have taken so that they can be said to be 'without 
notice'.

All good fun, reallly

Holly

A bona fide purchaser (BFP) – referred to more completely as a bona fide 
purchaser for value without notice – is a term used in the law of real property 
and personal property to refer to an innocent party who purchases property 
without notice of any other party's claim to the title of that property. A BFP 
must purchase for value, meaning that he or she must pay for the property 
rather than simply be the beneficiary of a gift. Even when a party fraudulently 
conveys property to a BFP (for example, by selling to the BFP property that has 
already been conveyed to someone else), that BFP will, depending on the laws of 
the relevant jurisdiction, take good (valid) title to the property despite the 
competing claims of the other party. As such, recording one's interest protects 
an owner from losing that interest to a subsequent buyer who qualifies as a 
BFP. Moreover, some jurisdictions (so-called "race-notice" jurisdictions) 
require the BFP himself or herself to record in order to enforce his or her 
rights. In any case, parties with a claim to ownership in the property will 
retain a cause of action (a right to sue) against the party who made the 
fraudulent conveyance.

A BFP will not be bound by equitable interests of which he/she does not have 
actual or imputed notice, as long as he/she has made "such inspections as ought 
reasonably to have been made".[1]

BFPs are also sometimes referred to as "Equity's Darling". However, as Jeffrey 
Hackney has pointed out,[2] the title is somewhat misleading; in cases where 
legal title is passed to a bona fide purchaser for value without notice, it is 
not so much that equity has any great affection for the purchaser - it is 
simply that equity refuses to intervene to preserve any rights held by the 
former beneficial owner of the property. The relationship between the courts of 
equity and the BFP are better characterised as benign neglect. However, equity 
still undoubtedly recognises the right of the beneficial owner to claim against 
the former legal owner where the sale was improper.

In the United States, the patent law codifies the bona fide purchaser rule, 35 
U.S.C. § 261. Unlike the common law, the statute cuts off both equitable and 
legal claims to the title.

On 14/01/2014, at 9:09 AM, rob.golding@xxxxxxxxxxxx wrote:

> 
>> is talk about the 'innocent third party' who put
>> money down in good faith for something - with compensation for the
>> loser.
> 
> The 3rd-party would have recourse to claim from whomever they paid
> - you can't legitimise the purchase of 'stolen' goods through an 'innocent 
> 3rd party'
> 
> Rob
>