Recently, there have been two well-publicized cases of stolen (and now collectible) vehicles being recovered decades after their thefts. The first involved a 1968 Corvette stolen in New York in January 1969, which was recovered while being loaded onto a container ship bound for Sweden in January of this year. To add to the owner’s bad luck that year, his insurance company also refused to cover the loss and wouldn’t compensate him.
The second case was that of a 1965 Shelby GT350 that had been stolen in 1979. This car was lost until several months ago when it turned up for sale on eBay with a VIN tag identifying it as a different lost Shelby. It was identified as the stolen car in question only because its hidden Ford VIN tag was listed in the eBay ad and was identified by the registrar of records of the Shelby American Automobile Club.
The next step in both cases was remarkably similar: When the vehicles, stolen decades earlier, were located – one on a pier and one in cyberspace – they were immediately impounded by the respective local police forces so that their rightful owners could be identified. It’s at this juncture that these two, heretofore strikingly analogous cases diverge, as the prior owner of the Corvette was quickly (and permanently) reunited with his lost love, while the owner of the Shelby at the time of its theft, while identified, did not get his car back. We’ll now get into the unique circumstances in each case that yielded such disparate results for the theft victims.
Not surprisingly, the resolution of each case – and cases of this type – turns on who has legal title to the recovered vehicle. Note the use of italics here, as the term “legal title” refers to who has ownership in the eyes of the law and not who has a physical piece of paper marked “title.” After all, most of us know how we could mail order one of those.
Legal title – that is, ownership – can be transferred, of course, through sale or assignment but (fairly obviously) not through theft. Further (with some exceptions) the buyer of a stolen vehicle, even an innocent one, doesn’t acquire legal title to the stolen vehicle when he takes possession of it, because the seller never had legal title to transfer. It is this fact that explains the return of the Corvette: The original owner retained legal title to the vehicle at all times – having never sold or assigned it to anyone – the fact that he did not have possession of the car due to the theft was irrelevant to his legal ownership interest. Therefore, when it was recovered it was returned to him as its legal owner.
The difference in the case with the Shelby is that its owner did assign ownership to someone else: namely his insurance company. When it became clear that the Shelby was not going to be recovered, the owner of the Shelby settled with his carrier for the then-appropriate sum of $6,500. In return, the carrier took title to the vehicle, which they retained until it was recovered. Thus, in the Shelby’s case, its insurer – not the owner at the time of the theft – has a legal ownership interest in the vehicle. Still, despite the fact that the Shelby is a $150,000+ car today, we should not feel too bad for its prior owner: $6,500 was fair compensation at the time, and had the owner invested it wisely at the time, it could have appreciated even more than the Shelby has to date.
Nevertheless, there is a lesson in these two dichotomous outcomes, and it is that when a vehicle is stolen, its owners should be mindful that if they receive payment for their loss from their insurance company, they are permanently giving up all of their rights to the vehicle in question should it be recovered later. This generally doesn’t seem like a bad thing at the time (I am sure the Shelby’s owner was happy with his $6,500 check) but it is material and should be considered at the time of payment, so that there are never any surprises should the vehicle be located 30 years later.
Alex Leventhal is an attorney and car collector living in New York City. His early practice experience included the representation of new-car dealers and dealer groups engaged in complex transactions, as well as other merger and acquisition business. Alex currently owns a Ferrari Berlinetta Boxer 365 GT4 and a Dino 308 GT4, along with an Aston Martin V-8 Vantage and other European collector cars. He's also director of the Aston Martin Club of North America.