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© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
to transfer all rights of the entruster to a buyer in ordinary course of business.
(3) “Entrusting” includes any delivery and any acquiescence in retention of possession regardless of
whether the procurement of the entrusting or the possessor's disposition of the goods have been such as
to be larcenous under the criminal law.
.
In reaching the conclusion that applies in this case and that Roberts was the rightful owner of the Corvette, the
trial court relied on . In Keybank, the court of appeals held that a theft in which the owner willingly entrusts his
property to another is different than “ordinary theft,” in which the owner is unaware of the taking and does not
intend to part with the property. Id. at 214. The trial court found that, under the Keybank holding, theft by
deception or fraud is not covered under the stolen property statute if the theft involves a transfer of goods in which
had intended to part with the property. Thus, the court found the stolen property statute does not apply in this
case. Second, the court found that the trial court correctly applied . Even though the cashier's *1040 check from
Wilson was later dishonored, the court held that Roberts was a bona fide purchaser and acquired a full property
interest in the Corvette.
We accepted certiorari to reconcile the apparent conflict between the two statutes-section 2-403 of the UCC and
III. Analysis
The Stolen Property Statute
We begin by examining whether the stolen property statute applies in this case. Matters of statutory
interpretation are questions of law, which we review de novo. E.g., . When interpreting a statute, we look first to
its plain language. E.g., .
value of another without authorization, or by threat or deception, and ... [i]ntend[ing] to deprive the other person
permanently of the use or benefit of the thing of value.” (emphasis added). Theft by deception as set forth in
subsection 18-4-401(1)(a) requires proof that the victim relied on a swindler's misrepresentations, which caused
the victim to part with something of value. .
The language of the stolen property statute states that the statute applies to property obtained by theft and that
for the purposes of the stolen property statute. Hence, based upon the plain language of the stolen property
statute and , we determine that the stolen property statute appears to apply in this case.
Having analyzed the stolen property statute, we now examine .
The Uniform Commercial Code
West asserts that the trial and district courts should not have applied in this case. He offers two primary
official comments to indicate that only subsections (2), (3), and (4) apply solely to merchant transactions, we
conclude that subsection 2-403(1) applies to non-merchant transactions. Thus, we continue our analysis to
ed.2004).
Subsection 2-403(1) protects good faith purchasers for value. The provision requires that goods be “delivered
under a transaction of purchase.” . As we have noted, under the UCC, a purchase is broadly defined as “taking
by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other
voluntary transaction creating an interest in property.” . (emphasis added). Voluntary means “proceeding from
pertinent part, that “[w]hen goods have been delivered under a transaction of purchase, the purchaser has such
power [to transfer good title to a good faith purchaser for value] even though ... [t]he delivery was in exchange for
a check which is later dishonored, or ... [t]he delivery was procured through fraud punishable as larcenous under
the criminal law.” . This language indicates that a transaction of purchase is not thwarted simply because a
purchaser failed to provide payment that met the seller's expectation. To employ West's rationale that
payment is made.” . We deem it significant that subsection 1.5 demarcates livestock transactions; its only effect
is to require payment before a buyer has power to transfer title. This amendment to the Colorado UCC statute
suggests that, by requiring payment before the power to transfer can attach, livestock transactions are to be
treated differently than other transactions controlled by the statute. Therefore it is logical to conclude that a
purchaser of non-livestock goods possesses the power to transfer those goods upon receipt of the goods from the
voidable title passes.” . The argument that the term “transaction of purchase” indicates that the true owner did
not intend to enter such a fraudulent transaction fails “in light of the clear policy of to enable the good-faith
purchaser to prevail.” Hillman, supra, ¶ 5.04[2] n. 95 (citing 3A R. Dusenberg & L. King, Sales & Bulk Transfers
Under the Uniform Commercial Code § 10.06[1] (1982)).
We note that courts in other jurisdictions have applied subsection 2-403(1) to similar types of fraudulent, though
holding that no voluntary transfer had occurred); (holding that an exchange in which a man purchased *1044 an
airplane using an invalid check was a transaction of purchase sufficient to confer voidable title to the purchaser
regardless of the purchaser's larcenous intent).
Having concluded that West delivered the Corvette under a transaction of purchase, we continue our examination
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
of subsection 2-403(1) in order to determine if Roberts obtained good title to the Corvette. The provision allows a
person with voidable title to transfer good title to a good faith purchaser for value even under certain conditions,
including when the transferor paid in cash or with a check that was later dishonored, or when the transferor
otherwise procured the delivery through fraud punishable under criminal law. . Specifically, subsection (1)(d)
states that a good faith purchaser may obtain good title to property even if the transferor acquired the property
“through fraud punishable as larcenous under the criminal law.” We begin by noting that West does not dispute
that Roberts is a good faith purchaser for value.
Section 18-4-403 of the Colorado Criminal Code provides that any Colorado law referring to larceny “shall be
interpreted as if the word ‘theft’ were substituted therefore.” As the trial court found, Wilson could be charged
Roberts.
Subsections (1)(b) and (1)(c) might also be relevant, depending on whether a cashier's check is
considered cash, as West implies, or a check. However, we need not analyze this issue because we
conclude that subsection (1)(d) applies in this case.
IV. Application
effectively identical to the current provision, was enacted in 1861 as a territorial law. The UCC provision, which
addresses in detail several types of scenarios, is more specific than the stolen property statute. We therefore
hold that prevails over the stolen property statute.
The original version of the statute provided that “[a]ll property obtained by larceny, robbery or burglary,
shall be restored to the owner; and no sale, whether in good faith on the part of purchaser, or not, shall
(1978) (“Where the goods are stolen from the original owner, both the common law and the Code preserve the
original owner's ownership rights ... notwithstanding subsequent sales.”). However, provides an exception to
that general rule. *1045 Comment 1 to hints at such an exception in the context of subsection (1), explaining
that “subsection (1) provides specifically for the protection of the good faith purchaser for value in a number of
specific situations which have been troublesome under prior law.” official cmt. 1, C.R.S. Each of the specific
distinguished from robbery-type theft because the original seller has a better opportunity to prevent that type of
theft:
In general voidable title passes to those who lie in the middle of the spectrum that runs from best faith buyer at
one end to robber at the other. These are buyers who commit fraud, or are otherwise guilty of naughty acts
(bounced checks), but who conform to the appearance of a voluntary transaction; they would never pull a gun or
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
to transfer all rights of the entruster to a buyer in ordinary course of business.
(3) “Entrusting” includes any delivery and any acquiescence in retention of possession regardless of
whether the procurement of the entrusting or the possessor's disposition of the goods have been such as
to be larcenous under the criminal law.
.
In reaching the conclusion that applies in this case and that Roberts was the rightful owner of the Corvette, the
trial court relied on . In Keybank, the court of appeals held that a theft in which the owner willingly entrusts his
property to another is different than “ordinary theft,” in which the owner is unaware of the taking and does not
intend to part with the property. Id. at 214. The trial court found that, under the Keybank holding, theft by
deception or fraud is not covered under the stolen property statute if the theft involves a transfer of goods in which
had intended to part with the property. Thus, the court found the stolen property statute does not apply in this
case. Second, the court found that the trial court correctly applied . Even though the cashier's *1040 check from
Wilson was later dishonored, the court held that Roberts was a bona fide purchaser and acquired a full property
interest in the Corvette.
We accepted certiorari to reconcile the apparent conflict between the two statutes-section 2-403 of the UCC and
III. Analysis
The Stolen Property Statute
We begin by examining whether the stolen property statute applies in this case. Matters of statutory
interpretation are questions of law, which we review de novo. E.g., . When interpreting a statute, we look first to
its plain language. E.g., .
value of another without authorization, or by threat or deception, and ... [i]ntend[ing] to deprive the other person
permanently of the use or benefit of the thing of value.” (emphasis added). Theft by deception as set forth in
subsection 18-4-401(1)(a) requires proof that the victim relied on a swindler's misrepresentations, which caused
the victim to part with something of value. .
The language of the stolen property statute states that the statute applies to property obtained by theft and that
for the purposes of the stolen property statute. Hence, based upon the plain language of the stolen property
statute and , we determine that the stolen property statute appears to apply in this case.
Having analyzed the stolen property statute, we now examine .
The Uniform Commercial Code
West asserts that the trial and district courts should not have applied in this case. He offers two primary
official comments to indicate that only subsections (2), (3), and (4) apply solely to merchant transactions, we
conclude that subsection 2-403(1) applies to non-merchant transactions. Thus, we continue our analysis to
ed.2004).
Subsection 2-403(1) protects good faith purchasers for value. The provision requires that goods be “delivered
under a transaction of purchase.” . As we have noted, under the UCC, a purchase is broadly defined as “taking
by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other
voluntary transaction creating an interest in property.” . (emphasis added). Voluntary means “proceeding from
pertinent part, that “[w]hen goods have been delivered under a transaction of purchase, the purchaser has such
power [to transfer good title to a good faith purchaser for value] even though ... [t]he delivery was in exchange for
a check which is later dishonored, or ... [t]he delivery was procured through fraud punishable as larcenous under
the criminal law.” . This language indicates that a transaction of purchase is not thwarted simply because a
purchaser failed to provide payment that met the seller's expectation. To employ West's rationale that
payment is made.” . We deem it significant that subsection 1.5 demarcates livestock transactions; its only effect
is to require payment before a buyer has power to transfer title. This amendment to the Colorado UCC statute
suggests that, by requiring payment before the power to transfer can attach, livestock transactions are to be
treated differently than other transactions controlled by the statute. Therefore it is logical to conclude that a
purchaser of non-livestock goods possesses the power to transfer those goods upon receipt of the goods from the
voidable title passes.” . The argument that the term “transaction of purchase” indicates that the true owner did
not intend to enter such a fraudulent transaction fails “in light of the clear policy of to enable the good-faith
purchaser to prevail.” Hillman, supra, ¶ 5.04[2] n. 95 (citing 3A R. Dusenberg & L. King, Sales & Bulk Transfers
Under the Uniform Commercial Code § 10.06[1] (1982)).
We note that courts in other jurisdictions have applied subsection 2-403(1) to similar types of fraudulent, though
holding that no voluntary transfer had occurred); (holding that an exchange in which a man purchased *1044 an
airplane using an invalid check was a transaction of purchase sufficient to confer voidable title to the purchaser
regardless of the purchaser's larcenous intent).
Having concluded that West delivered the Corvette under a transaction of purchase, we continue our examination
© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
of subsection 2-403(1) in order to determine if Roberts obtained good title to the Corvette. The provision allows a
person with voidable title to transfer good title to a good faith purchaser for value even under certain conditions,
including when the transferor paid in cash or with a check that was later dishonored, or when the transferor
otherwise procured the delivery through fraud punishable under criminal law. . Specifically, subsection (1)(d)
states that a good faith purchaser may obtain good title to property even if the transferor acquired the property
“through fraud punishable as larcenous under the criminal law.” We begin by noting that West does not dispute
that Roberts is a good faith purchaser for value.
Section 18-4-403 of the Colorado Criminal Code provides that any Colorado law referring to larceny “shall be
interpreted as if the word ‘theft’ were substituted therefore.” As the trial court found, Wilson could be charged
Roberts.
Subsections (1)(b) and (1)(c) might also be relevant, depending on whether a cashier's check is
considered cash, as West implies, or a check. However, we need not analyze this issue because we
conclude that subsection (1)(d) applies in this case.
IV. Application
effectively identical to the current provision, was enacted in 1861 as a territorial law. The UCC provision, which
addresses in detail several types of scenarios, is more specific than the stolen property statute. We therefore
hold that prevails over the stolen property statute.
The original version of the statute provided that “[a]ll property obtained by larceny, robbery or burglary,
shall be restored to the owner; and no sale, whether in good faith on the part of purchaser, or not, shall
(1978) (“Where the goods are stolen from the original owner, both the common law and the Code preserve the
original owner's ownership rights ... notwithstanding subsequent sales.”). However, provides an exception to
that general rule. *1045 Comment 1 to hints at such an exception in the context of subsection (1), explaining
that “subsection (1) provides specifically for the protection of the good faith purchaser for value in a number of
specific situations which have been troublesome under prior law.” official cmt. 1, C.R.S. Each of the specific
distinguished from robbery-type theft because the original seller has a better opportunity to prevent that type of
theft:
In general voidable title passes to those who lie in the middle of the spectrum that runs from best faith buyer at
one end to robber at the other. These are buyers who commit fraud, or are otherwise guilty of naughty acts
(bounced checks), but who conform to the appearance of a voluntary transaction; they would never pull a gun or
