C is corrent because Baker fraudulently induced Able to sell the painting to Baker; therefore, Baker only held a voidable title for the painting. A person with a voidable title may transfer good title to a good-faith purchaser. Thus, Able has no course of action against Gold, a good-faith purchaser. However, Able is entitled to recover damages from Baker.
A is incorrect because Baker held a voidable title to the painting and may transfer good title to a good-faith purchaser. Because Gold is a good-faith purchaser, he has received good title to the painting and Able has no course of action against him.
B is incorrect because rescission would involve placing both parties in the position they occupied prior to the contract. Able would not be able to rescind the contract because Baker has transferred good title to a good-faith purchaser.
D is incorrect because Baker held a voidable title to the painting and can transfer good title to a good-faith purchaser. Thus, Able has no course of action against Gold, a good-faith purchaser.
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