Casey, a resident of the United States, visited Canada on his sailboat. While in Canada, he sold the

Casey, a resident of the United States, visited Canada on
his sailboat. While in Canada, he sold the boat to his friend Donald, who
resided in Toronto, Ontario. The friend purchased the sailboat for $10,000.
Some time later, Donald purchased a power boat from a dealer and used the
sailboat as a trade-in to cover part of the purchase price. The dealer made a
search for security interests under the provincial Personal Property Security
Act and found no claims against the sailboat. The boat dealer sold the sailboat
some time later to Morgan, under a conditional-sale agreement, and registered
»

Casey, a resident of the United States, visited Canada on
his sailboat. While in Canada, he sold the boat to his friend Donald, who
resided in Toronto, Ontario. The friend purchased the sailboat for $10,000.
Some time later, Donald purchased a power boat from a dealer and used the
sailboat as a trade-in to cover part of the purchase price. The dealer made a
search for security interests under the provincial Personal Property Security
Act and found no claims against the sailboat. The boat dealer sold the sailboat
some time later to Morgan, under a conditional-sale agreement, and registered
the security interest. Morgan later sold the sailboat to Kidd for $8,000 and
moved to the province of Alberta. Kidd did not make a search for creditor
claims at the time of the purchase. He had paid over the money unaware of the
boat dealer’s registered security interest in the property. The conditional-sale
agreement went into default when Morgan neglected to make a payment to the boat
dealer. However, before the dealer could find the boat, Customs and Excise
claimed that the sailboat had been illegally brought into Canada, and the
property in the goods, as a result, had vested in the Crown. Discuss the rights
of the parties, including the Crown, in this case.

»

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