A hypothetical about a consigned coin that gets lost or stolen...

[MarkFeld]

I promise, this really is a hypothetical, though it certainly could happen and almost certainly has occurred before.....

 

An established client (client A) consigns a coin to his dealer (dealer), with an agreement that client A will receive $1000 if/when dealer sells the coin.

 

Dealer sends the coin to a client of his (client B ) on approval. Dealer has known client B for years and has had many transactions with him, all of which were problem-free.

 

Client B receives the coin safely, likes it and informs dealer that he is going to buy it for the quoted price of $1100.

 

Subsequent to that but before payment is made, however, coin gets stolen from client B along with lots of other valuable items. Now client B either can't or won't pay dealer for the coin.

 

What does dealer owe client A for the coin?

 

$1000?

Nothing?

Half of the $1000?

Other?

 

Does it matter whether there is any realistic chance that the coin will be recovered in the foreseeable future?

[MunkyMan95]

$1,000. The agreement was that Client A would get $1,000 if/when the dealer sold the coin. The dealer mailed the coin, and had considered it as sold. It's the dealer's responsibility to pay Client A for the coin.

[bsshog40]

I would think that the dealer would make good on the $1000. But then before this is done, I would check into either Client A or Client B having any type of insurance on the coin. Actually I would have recommended insurance be on the coin before ever being sent. I realize this scenario is stolen from client B's premises, so did client B have insurance for personal belongings of stolen coins location? I would think that somewhere in the midst of ownership of a coin valued at $1000, there would be insurance somwhere that would cover theft.

[coinman1794]

Yes, the dealer owes client A $1,000. I don't see any other options here - to be honest - unless client A chooses to give the dealer a break

[IGWT]

The dealer is liable for the owner's loss unless there is an express agreement shifting the risk to the consignor. IIRC, a consignee or bailee (the dealer in this case) is strictly liable, and I'd expect that the dealer has insurance to cover the loss.

[zrlevin]

I'd say that Client B owes the dealer $1100, and the Dealer owes Client A $1000.

[MarkFeld]

I hate unanimous opinions So, in order to try to make it a somewhat tougher call - would it change your answer if client B had not committed to buy the coin before it got stolen?

[zrlevin]

No.

[gmarguli]

I hate unanimous opinions So, in order to try to make it a somewhat tougher call - would it change your answer if client B had not committed to buy the coin before it got stolen?

 

No. Client B has an obligation to protect the coin. If it is stolen then he owes the dealer for it.

 

Dealer owes Client A the $1,000 as he has that same obligation.

[MikeKing]

the dealer owes client A $1,000.00 no matter what happens to that coin once it's in his hands.

 

that's what insurance if for.

[MarkFeld]

the dealer owes client A $1,000.00 no matter what happens to that coin once it's in his hands.

 

that's what insurance if for.

Mike, I agree, but, once the coin has been delivered, I don't think the dealer's insurance policy will cover him. And, even if it did, the applicable deductible would negate any funds coming to the dealer.

[MikeKing]

I understand that, but once it passes from client A's hands to the dealer, it's no longer client A's responsibility, it's become the dealer's.

[MarkFeld]

I understand that, but once it passes from client A's hands to the dealer, it's no longer client A's responsibility, it's become the dealer's.

I must agree.

[pendragon1998]

The dealer owes $1000 or the coin to client A. Client B owes $1100 or the coin to the dealer. Client B's insurance (if he's lucky) owes client B $1100.

 

Whoever was in possession of the coin owes either the coin itself or its asking price to whomever they took it from.

[WoodenJefferson]

There is a certain "Risk" factor for client A, the Dealer and for client B.

 

Client A should trust the Dealer as to the negotiate price.

 

The Dealer should trust client B that a coin he does not own is now in the hands of a third party.

 

Client B should trust the dealer that if something beyond their control goes wrong, the dealer will make it right with client A.

 

note: client B will have to support facts, police report, insurance denial claims, etc. before dealer can ponder next step as to how to deal with A or with B

 

If the supporting facts are conclusive, the Dealer is clearly in the middle and as with any scenario that could possibly happen in between, the Dealer is ultimately responsible for the outcome of this transaction.

 

The Dealer is required to pay client A $1000, the original negotiated price.

[MrEureka-migration]

What if the coin is probably only worth $500 and there is a significant chance that the coin will be recovered?

[rbrown4]

I have watched this post today and am happy to see the responses that have been posted. Perhaps I am too simplistic or old fashion, but to me, immediately I would expect all parties to offer responsibility and to discuss amongst themselves the remedy. In my mind, the dealer clearly has the responsibility of the coin. If Client B refuses to offer compensation, I myself would take issue with that. If I was Client B, regardless if I had insurance or not, would feel responsible for the coin and offered to cover the cost. In the end the dealer should make good with Client A and if Client B is not on board, then so be it and move on. (although I would have a very negative opinion of Client B)

 

What goes around comes around.

 

Rey

[WoodenJefferson]

If the coin is recovered, it becomes the property of the dealer, to do with as he/she pleases, for what ever amount they can get no less. (proceeds of the sale to recover personal loss or to pay back insurance company to avoid fraud)

 

The dealer should have known before sending out for third party veiwing that the coin was no where at the $1000 value level and returned it to the first party ASAP.

 

Greed has not been figured into this equation which would throw this or any other scenerio way out of whack!

 

Mr. Eureka, glad to see you responding to threads here. Your knowledge to a forum of Numismatics is invaluable.

 

 

 

edit: a word "no" omitted

[fcloud-migration]

Yep, the dealer owes the seller plain and simple. The dealer could be out if the intended buyer doesn't make good. The intended buyer should have insurance (homeowners of whatever) to cover the loss. If he doesn't have insurance, he is still out.

[just-john]

I would say dealer owes party A consigner $1000.00 because A was not part of the transaction between dealer and party B any other agreements between dealer and B are there own . A should be out of the picture and paid. Dealer and B should talk to their insurance companys worst case each writes off loss on their taxes and we all pay a little

[michael]

 

What does dealer owe client A for the coin?

 

 

$1000

[Frank Provasek]

If the dealer had bought and paid for the coin directly for $1000, the fact that it was lost or not paid for would not be an event that should cause the original source to suffer a loss. Thus, $1000.

[James_OldeTowne]

I read no other posts before giving my answer.

 

The client must be made whole. Given that, the coin dealer's insurance should cover the loss. If he's not insured, he must cough up the cash!

[TJ'S Coins]

Regardless of what loss is covered by insurance or if the stolen coin is ever recovered:

 

Client B owes the dealer $1100;

The dealer owes client A: $1000.

 

If the coin is recovered, it goes to Client B. What he does with it afterward is his business. It reminds of the sign - "You break it; you own it!" In this case "If it is stolen while in your possession, you own it and must make good for it."