What about stolen coins? Due diligence essential from buyer, auction house

Readers Ask column from the May 12, 2014, issue of Coin World
By
Published : 04/25/14
Text Size

I would like to ask Coin World’s “Collectibles and the Law” columnist Armen Vartian for his thoughts about a topic that came up during a recent coin club gathering. 

If a bidder at an auction wins a coin that is found to be stolen, how does the winning bidder get reimbursed?

Who has the burden of proving legal ownership for the coin: the auction company or the winning bidder? 

Additionally, how is a statute of limitations involved that might limit the time someone has to bring a claim?

Any info would be greatly appreciated.

Louie Joo, Gray, Tenn.

According to Vartian, due diligence — from both the buyer and the auction house — is at the core of the answer. 

Vartian wrote: “Let’s start with the auction company’s consignment agreement. Part of every standard consignment agreement is a warranty of title from the consignor. In other words, an auction house will not accept a consignment unless the consignor warrants that he or she owns the coins free and clear of any other claims. 

“If the items turn out to be stolen, the consignor would be in breach of that warranty, and the auction house could recover the auction proceeds. 

“If settlement hasn’t yet occurred, presumably the auction house would withhold those proceeds while the matter is cleared up. The winning bidder would be the beneficiary of that claim.”

You are signed in as:null

Please sign in or join to share your thoughts on this story

No comments yet