Can someone please explain to me what the result would be based on the following scenario?
Let’s say I have a very rare coin. Being the smart person I am, I have it insured. Then let’s say that someone steals it from me. I get reimbursed per my insurance policy and life goes on.
Now, let’s say that the coin has, years later, ended up in a garage sale and some guy buys it and finds out it is very valuable.
Does the guy who bought it at the garage sale get to keep it since the insurance company paid the original owner for it? (That was the outcome on an episode of Pawn Stars that my husband and I watched.)
OR
Does it actually go back to the insurance company since they paid the claim to the original owner?
If the second guy can be considered a bona fide purchaser, then the coin is rightfully his, regardless of whether it was stolen or not, and regardless whether you had it insured or not.
Really? Could you point to a relevant state law that codifies that (especially for personal non-real property)?
Because wikipedia also says this (Nemo dat quod non habet - Wikipedia):
Now, I didn’t go to law-talking guy college, but to me, that says the person who bought stolen property doesn’t get to keep it, even if they didn’t know it was stolen.
The way I read UCC 2-403, the buyer at a yard sale doesn’t get any protection because the person holding a yard sale isn’t “a merchant who deals in goods of that kind." It would have to come from a shop that sells rare coins. Similar problem for the TV show story because UCC 2-403 specifically exempts pawn shops.
I may be mis-remembering but I recall stories of pilfered art that has to be returned to the original owner…even if it is many decades later and the current owner didn’t know it was stolen art.
I think this is the obvious answer. It is not distinguishable from any other similar coin. But aside from that, why would anything you bought at a yard sale come to the attention of some insurance company to begin with?
I think you stopped reading a little too soon. You quoted from a section discussing fraud (including things we might not really think of as fraud, such as bounced checks to a supplier, etc.).
But the next section of the linked article says (footnotes removed by me):
So, a good-faith purchaser does not in fact get to keep stolen property, in general.
I do want to point out that very few rare coins are unique, so proving that her coin is the one that that is being sold at the garage sale would be very hard to do.
However, going back to the OP: assuming something is known to be stolen, does it revert to the Insurance company or to the original owner?
When an insurance company pays out on stolen property, they now own it should it be recovered. You may be given the option to purchase it back, or return the payout and take the item. Imagine if this wasn’t the case; insurance fraud would be a license to print money.
Many, if not most, rare coins are certified, enclosed in sealed plastic “slabs” that are individually numbered. Certification shows the coin is authentic, and that its grade meets some standard. It costs about $40 to get a coin certified, so it’s only worth it for coins whose value varies significantly depending on its grade.
But that doesn’t sound like the kind of coin that would 'end up at a garage sale", like in the OP.
Presumably, there would also be paperwork on this coin, and everyone (including the heirs of the owner) would recognize it as something having some value.
Generally speaking, insurance policies contain a provision for “right of salvage,” meaning that any insured item on which the policy pays for a total loss becomes the property of the insurer if recovered.
As a matter of fact, this issue hardly ever arises. In fact, I wasn’t able to find a single appellate case anywhere in the US where it was addressed (other than disputes between insurers and maritime salvage claimants).
Ok, what started this all was an episode of Pawn Stars. Rick had purchased a very old shekel from some guy who said he got it in a box of stuff he bought at a garage sale. The police came to the pawn shop and took it as it was part of some stolen property. They brought it back to the store though, later in the show, saying that the insurance had paid out to the owner so it belonged to Rick. This was in Las Vegas. It’s also a stupid TV show so we didn’t know if that was actually what would really happen or not. All in all, we really didn’t care too much and forgot about it until recently.
In the past week or so, we heard a story about a guy who found out that a rare coin he had been told was fake was, in fact, REAL and worth a ton of money. Quotes from the stories we heard on TV (on actual News shows - not Pawn Stars) said it was like finding a fortune when you bought something at a garage sale.
So, being that we were drinking and talking about this (nothing good tends to come of that scenario), we wondered if a hypothetical guy bought an item that had previously been stolen (but insured and insurance paid the original owner) at a garage sale and it turned out to be very, very valuable, would hypothetical guy get to keep it or would the insurance company get it back? This bothered my husband more than myself because if the insurance company DOES get it back in reality, that meant that Pawn Stars lied to him.
I told you that no good tends to come out of scenarios where we are drinking, talking and watching bad TV.