Choice "D" is correct. Every sale includes a warranty that the seller has title unless the warranty is specifically disclaimed or the facts give the buyer notice that there is no such warranty. The warranty is not disclaimed by general disclaimers such as the one here disclaiming "any and all warranties."Choice "a" is incorrect. Any seller, including a merchant, can disclaim the warranty of title but the method here (general disclaimer) is not a sufficient disclaimer.
Choice "b" is incorrect. The warranty of title is not disclaimed by general disclaimers such as the one here disclaiming "any and all warranties."
Choice "c" is incorrect. There is a warranty of title implied in every sale, breach of which gives rise to an action for damages. The fact that the buyer here turned over the stolen merchandise to its true owner does nothing to alleviate the seller's breach of warranty.