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Stolen Property and Unjust Enrichment

Interesting recent case: Man Tracks Down Classic Camaro Stolen 16 Years Ago:

Edward Neely of Jefferson, Mo. has his baby back. Or at least his stolen 1969 Camaro.

Nicknamed “Chelsey Pearl,” Neely purchased the car when he was 18. In 1995, the car was stolen, and hadn’t been seen since. That is, until he spotted it in an online ad.

Armed with a report from the Syracuse police, Neely hightailed it out to Utah last week, where the car was located. It’s since been returned to its rightful home in Missouri.

Owner Brent Dockery had no idea that the car was stolen, reports the Deseret News. The VIN number had been altered. However, police were able to verify the vehicle after locating the original VIN in a door panel.

That was sufficient enough to transfer ownership to Edward Neely. Dockery may have purchased the car, but he did not legally obtain title to the stolen Camaro. Neely’s rights never terminated.

There is still one more legal issue left. Dockery installed $10,000 in upgrades, according to the Associated Press. He wants to remove them from the vehicle.

If Neely does not agree, a court may order him to return the upgrades if easily removable. Otherwise, he might be on the hook for their value. This is because the upgrades are technically the property of Dockery. It would also be unjust to allow Neely to benefit from their presence.

The first part seems to be a basically libertarian result: the owner of the car remained the legal owner, and thus was able to get it back, even if an innocent, third-party, good-faith purchaser had bought it in the meantime. He can go after his own seller, if he wants, to try to get his purchase money back, but if not, he suffers, not the real owner of the car.

The last part is more difficult. Sure, the improvements that the later buyer put into the car should be returned, but what about the parts that cannot easily be removed? It looks like the original owner might have to compensate the last guy based on the doctrine of “unjust enrichment.” Is that doctrine libertarian? Who can say. It does not seem completely unreasonable, at least in some of its applications, as here. But I’m not so sure it is compatible with libertarianism even here. It seems to me that the guy who improved the car took the risk that he was improving a car that he might not own. And his bet backfired.

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{ 3 comments… add one }
  • Jim October 26, 2011, 3:31 pm

    I will make an argument for sake of discussion.

    I purchase a house for $200,000 and spend $200,000 in upgrades. I later sell the house for $230,000 during the financial collapse, losing $170,000.

    In the case of the Camaro, the owner spent $10,000 on a car whose resale value in effect went to zero.

    Why is he entitled to anything back? How are the two examples significantly different? For in a very real way, the market determined the price of the Camaro.

    In fact, the latest owner should feel lucky he is not prosecuted or sued for possession of stolen property regardless of how he attended to it while in his possession. The law loves to play in gray areas. That is where the trouble is.

    • Stephan Kinsella October 26, 2011, 5:59 pm

      “Why is he entitled to anything back? How are the two examples significantly different? For in a very real way, the market determined the price of the Camaro.”

      BEcause you have a property right in physical objects, not in their value. The market value of the car is irrelevant. The original owner owns the chassis, the steering wheel, the seats, even if it’s “worth” nothing on the market.

      • Jim October 29, 2011, 6:15 pm

        I tend to agree with you. But an obstinate part of me wishes to respond with the pound of flesh argument, which unlike your last paragraph, left the flesh intact:)

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