A hidden difficulty for auction houses

[Rich Klein]

Here is a story from today's Dallas Morning News about a Kennedy Family letter that was in the possession of Heritage at one time.

http://www.dallasnews.com/sharedcont...r.3ffe31b.html

Love to hear any comments on this. But I believe this is an hidden issue for auction houses that in many cases they do not have control over

Regards
Rich

[D. Bergin]

I think an unspoken fear in the collectibles industry is becoming more and more prevalent over the years.

Theft is obviously a crime and should not be condoned.............however, it seems a family member only has to claim an item was stolen, whether it be 10,20,30 or more years down the road..............once they realize it has value, in order to make claim to that item.

If there was initially a police report I understand it's pretty cut and dry............but items are sold off by relatives, given away by the celebrity themselves and sometimes even tossed away or forgotten and sold off from defaulted storage facilities all the time.

I'll probably get bashed for this but I don't agree to an automatic title down the line to something because you are a blood relation to the person in question. I think it's disengenuous and sets dangerous precedent.

I don't know if the letter in question was stolen or not..............but it doesn't seem like anybody made claim on it until there was a value attatched to it.

[Rich Klein]

If you don't even know a letter is missing? I get your point; and I know someione would articulate this better than I will -- but as the song Big Yellow Taxi said: "You don't even know what you got till it's gone".

In this case; it appears someone got possession of a letter, and that letter has made the rounds since.

The point of this one is for Heritage and any one else who might have had the letter along the way -- what if you do some research; find nothing wrong and sell the item after getting what you believed was proper provenance.

And if you are a family member that is famous; do you examine what could be HUNDREDS of auction catalogs, remember this part of the autograph industry is far wider than sports, each year. I'm just saying that this is an hidden difficulty for auction houses.

Remember we had the same issue come up with the Harry Wright letters that Hunt was going to auction in July.

Rich


Rich

[D. Bergin]

Originally Posted by Rich Klein

If you don't even know a letter is missing? I get your point; and I know someione would articulate this better than I will -- but as the song Big Yellow Taxi said: "You don't even know what you got till it's gone".

Rich


Rich

.........."it's a slippery slope" as the cliche goes.

Who's to say Ethel Kennedy didn't give it away..........or as the story goes, let a worker haul off some items in return for cleaning up a room or doing a job?

It happens all the time.

To a lot of people it's just paper. They don't believe or care whether it holds a certain type of value to a bunch of other people.

Did Ethel Kennedy have to clear it with the rest of the Kennedy clan every time she had a garbage pick-up or had somebody clean out an office?

Just to be clear these are just possibilities..............I'm not assuming to know what happened at all.

[Exhibitman]

The question in many of these situations boils down to evidence: If the item was in a public collection you can be 100% certain that it did not leave the collection lawfully without full documentation of a sale. However, if the item is claimed to have been taken from the originator, like this letter, the case will turn on what evidence exists. The plumber told his son it came from a bunch of junk that Mrs. Kennedy told him he was to get rid of/could have. The Kennedy clan says no way. Since everyone is dead, however, we effectively have battling hearsay evidence issues, with perhaps none of it being admissible in court. If we never know what might have happened, no one is realistically going to be convicted.

There are also bona fide purchaser issues. In some states a thief or con man can convey clear title to a bona fide purchaser; in other states, not. It varies.

And how long is long enough before it becomes impossible to undwind? The statutes of limitations, criminal and civil, comes into play. If this item was stolen a decade ago and the person who claims it was stolen knew of the item's status, he might be prevented from reacquiring it for failure to sue soon enough to get it back and there might be no prosecution. It will depend on the state laws and where jurisdiction lies.

[D. Bergin]

Originally Posted by Exhibitman

It will depend on the state laws and where jurisdiction lies.

I think a lot also depends on the last name of the alleged victim.

I'm not sure the FBI gets involved if I file a police report that Bob's Antiques down the street from me has a love letter my father wrote to my mother 40 years ago and has since gone missing.

[Rich Klein]

Your family is likely not going to show up as pubilc figures .

The Kennedy's are. Listen; my only point on this; as has been borne out; is that the auction company has some issues that we as collectors do not always realize. And my question is what steps does an auction house have to take.

Rich

[D. Bergin]

Originally Posted by Rich Klein

Your family is likely not going to show up as pubilc figures .

The Kennedy's are. Listen; my only point on this; as has been borne out; is that the auction company has some issues that we as collectors do not always realize. And my question is what steps does an auction house have to take.

Rich

So only public figures warrant protection from the FBI?

This makes me a little sad.



On a serious note, I'm not sure auction houses can do much more then make consignors sign ownership of title papers and research the items as much as the available information allows them to.

It's a hazard of the business I guess.

[drc]

I had an expensive item that a celebrity lawyer's said was stolen from the celebrity. I won't go into the details, but evidence/research proved it was not. I presented this info the lawyer and never head back from him again. What bothered me about the episode was the lawyer didn't say it he had reason to believe it might or could have been stolen, but that it was stolen when this turned out to entirely false and impossible.

The meat of the story is that, due to money dispute, the celebrity never attended a big event and so the organization chose not to give the celebrity the item. It was documented who the organization instead gave the item to (an official who did show up to the event) and that that it was later purchased directly from this official's family. In short, the celebrity was never given, owned or even physically touched the item, much less could have had it stolen.

Yes, items are stolen. But do I think one should simply go by a celebrity's, family member's or family lawyer's say so? The above story should give you a good hint as to the answer.

[Rich Klein]

And I think you realize this; is that for my family (and probably for yours) we're not going to have letters our ancestors wrote show up in public auctions for thousands of dollars

I still think there is a tricky slope for auction Houses in so many ways; and how much does the AH has to do to make sure nothing is wrong. Do they have to have every item checked out by the FBI?

Rich

P.S. A good friend of mine back in my Jersey days bought a ton of gold/silver/jewerly in his store. And anything they were not sure about was reported to the Elmwood Park, NJ police and run through their system to make sure it was not stolen. And I believe that was NJ state law at that time.
Is the next step to have anything an auction house gets in checked out by the Feds?

Like I said; this is a real hidden problem

[drc]

Rich, I don't believe this will be the case with memorabilia auctions.

If you have the consignor sign a statement of ownership/provenance (where bought from if not the whole known history) and the auction does reasonable diligence and follow through on questionable situations or particularly significant items (Elvis' wedding ring, for example), that is enough. There's no need to have all lots run through the FBI-- would be a rather pointless exercise anyway, as I don't know what the FBI could do when handed a 1895 football noseguard anyway. There already are laws and procedures for recouping money for sold stolen items.

Keep record of from who you purchased an item from. If the item turns out to be stolen, this is the person from where you get a refund. If that seller was also innocently wronged, he would get a refund from the person he purchased from-- and so on down the chain. It doesn't matter if the auction house or consignor was an innocent victim, the sale was not legal-- in fact, legally speaing there was no sale-- and you get your refund.

If you purchase a stolen item from an auction house, you would get your money the auction house or consignor-- you wouldn't have to worry about finding the original source. The auction sale was not a legal sale (the owner didn't even know his stuff was up for sale!), so you get your money back from that sale.

[Exhibitman]

David, as I tried to point out above the law is actually much more complex and highly fact dependent as to whether there is a sale or not. It is not as simple as "no sale" in all cases.