hypothetical auction scenario

[bruffsup]

I will not name anyone but curiosity about this situation inspires me to pose this question. Let's just call it a rare desirable 7 figure value car that descendants of the original purchaser have inherited not knowing anything about it's value and have consigned it to a leading auction house at the last moment before an auction. Because the original owner rarely if ever drove the car it is in mint condition and the auction company in haste makes a major blunder calling it a replica or reproduction. The car is sold for less than the cost of a repop! Any legal implications here ? Probably just a crazy story but if true will certainly be the a very big deal once the details are known and I won't be the one to reveal anything more!

[Shop Rat]

Not sure on the legal issues, but it sure sounds like no one did their homework on this one. Sounds like they need to hire a lawyer experienced in this type of litigation.

It would be very sad if someone at the auction house did something underhanded to get the car sold as a reproduction, knowing it wasn't, so that someone they knew could get it cheap.

Keep us informed as this unfolds please.

[DaveBerg]

Speaking as a licensed auctioneer I can tell you that virtually all of those individuals and/or companies conducting auctions for a living carry some type of errors and omission insurance policy. Obviously in this case the auctioneer appears on the surface to have made an error. However, while that is the first place I would research I would also say that some element of fault is also with the consignor. Most if not all States require that a contract exist between the consignor and the auction company. That being the case the consignor would have had to approve the vehicle's description stated in the contract. Surely the word replica or such word have been used if it was to be sold that way. Assuming this why would the consignor approve the contract? Carrying this further if the auction house stated the vehicle was a reproduction while knowing that it was indeed authentic then one could make a pretty good argument for fraud. In that scenario criminal action could be looked into. My main question in this picture though is why would anyone inheriting something that was obviously very good, consign it at the last moment to a sale? Why not another sale down the road? With all of the information out there today so easy to use I would find this to be almost as negligent as the stated event itself.

[Restorer32]

Would like more details but at first glance this has all the markings of an "urban legend". You know, old lady sells a low mileage Chevy dirt cheap and when the buyer picks up the car it turns out to be a rare Corvette? Somewhat hard to believe that a "leading auction house" would make such an amateurish mistake. Maybe the seller thought it was a replica and described it as such to the auction house. What about the title? If the seller was in fact the "original owner" wouldn't that tell the tale?

[Steve Moskowitz]

Jeff, I believe you will be right. I just got an answer from the President of a "leading" auction company and he had never heard of this issue. Word travels fast in that arena so I suspect it is in fact some type of rumor.

Always great to see a post from an expert so thanks to Past AACA President Dave Berg for posting!

[Guest bofusmosby]

First of all, there are a lot of ignorant people out there. It wouldn't surprise me to find that someone inherited a very valuable item, and caring about nothing but the money, might sell something dirt cheap, while thinking all along they got a good deal of money for it. I can not believe that any good auction would not catch such a blunder. Stranger things have happened though.

[Reatta Man]

LOL....just remember guys, this hobby is sometimes called "horse trading" for a reason.

EVERYTHING is an illusion at an auction....from both the seller and the auction house's perspective. And, potential buyers are walking around with books lookiing for paint codes, serial numbers, part numbers and other details for a reason....they are either trying to seperate the smoke and mirrors from reality, or they have already gotten burned once.

Is that $400,000 'authentic' whatever REALLY worth $400,000, or was it worth more or less?

Ask 5 people who looked at that car and were there when it sold, and you will get 7 opinions. Wait til tomorrow (or tonight, if beer is involved) and you will get 15 opinions out of those 5 guys.

As for greedy kids wanting to sell dad or grampa's vintage, mint whatever for LESS than it is worth? Most of the time, those little darlings are trying to get MUCH MORE than the car is worth, which creates a different set of problems for the auctioneer....like trying to convince greedy heirs that their car is worth $60,000 instead of $180,000...because they saw that number in some book or magazine article.

[bruffsup]

If you think this is urban legend then think again as the buyer is a seasoned expert and spoke with me directly. He is over the moon about his purchase.

[1937hd45]

If this a true event could you please tell us if it is a Pre WWII vehicle or something new? :confused:

If you think this is urban legend then think again as the buyer is a seasoned expert and spoke with me directly. He is over the moon about his purchase.

[Seldenguy]

Barry, according to your post we are discussing a 7 figure auto? That equates to a minimum of one million dollars. Seems rather inconsistent with reality. Surely in a publicized news medium somebody would notice that it wasn't a reproduction. There are stories that Duesenberg's are found languishing away in warehouses, carriage houses etc. and dragged out for unknown amounts. But you are speaking of public auctions are you not? Hard for me to understand without some more in depth information. If you are speaking of the high end Classics with rebodied coachwork,all the houses bring this to the bidders attention.-- Bob

[trimacar]

OK, so let's turn this around on the buyer.

An auction is a public event, and a collector car auction obviously has numerous people who know their way around old cars.

A car is in the mix, labeled a reproduction, but obviously many people would realize it's an original, valuable, car. No one talks to the auction company? Does it make your acquaintance proud to know he "stole" the car at the auction, or that he took advantage of the situation?

I love finding deals like everyone, but at some point, I couldn't live with myself if I took extreme advantage of a seller, as someone seems to have done in this scenario.

Finding a good or fair deal on a car is what we all strive for. Buying my Packard sight unseen at the (collector) sellers price, and being offered $10K more than I paid for it (by a buyer talking to the seller who had my deposit, and was a stand up guy about it) is a great and fair feeling. Purchasing a car under known false representations (in this case to the buyer's advantage) is not kosher, in my opinion. A few thousand under market is one thing, a fraction of real value is another.

[Rusty_OToole]

Let's put the shoe on the other foot. What if Mr Collector overpaid for a car under the impression it was something it was not? What if he found out afterward that the car was really worth half what he paid? Would the seller give him back half his money? I seriously doubt it.

If Mr Collector bought the car and paid for it, it is his. Good, bad, or whatever. He did not lie to the seller or deceive him in any way.

Now if the seller claims the auctioneer was incompetent that is another issue. Good luck with that one. I have sold antiques at auction and got way less than half what an antique dealer friend told me to expect. I suspect the auctioneer of buying most of the items for himself but can't prove it so tough noogies for me and serves me right for trusting an auctioneer.

[elcamino72]

As an attorney who practices in this field, I can tell you that Dave Berg is correct.

The owner of the car contacts the auction house ... the owner then comes up with and/or ultimately approves the vehicle's description. If the word replica was used, the owner would have had the opportunity for this to be corrected if the owner saw this and thought it was the real deal.

Now, if the auction house mislead the owner into thinking the car was a replica when it was real and tricked the owner into selling the car as a replica when it was real then this may be actionable.

Without more, this sounds fishy.

It could be however that everyone was wrong (which happens) and everyone thought the car was a replica when in fact it was real. In this case the auction house would have to prove that it did not know the car was real (which may be difficult) given the level of knowledge we generally impute to "experts". Auction houses, especially those versed in the collector car market can be held to a higher standard of care by the courts.

Also there are very few cars that actually trade in the seven figures ... when one shows up it doesn't go unnoticed, replica or not.

Edited September 22, 2010 by elcamino72 (see edit history)

[bruffsup]

I have told a friend who knows someone who works for this auction company. I am thinking they might want to cover this up as it may not bode well for them. which is why I am not saying anymore.

[trimacar]

A well known auction company, and it's being "covered up?" Not going to happen in this media centered world.

[Dave Mellor NJ]

In every issue of Hemmings there is a review of two major national car auctions with descriptions of defects,average expected prices for condition,provenance,etc. I agree with most of the posters that if this is a valid transaction the truth will come out. they also have auction coverage in Old Cars but not in as much detail. I also agree with some of the posters that when there's funny business going on it's the buyer who's the victim,like the guy in Virginia who sued for millions(more than he paid) when he suspected collusion and bid-fixing.

[Restorer32]

This car wasn't a Tucker Convertible was it? Just asking.

[Guest bofusmosby]

I disagree with some here. If I were to walk into a thrift store, and see an old painting that had $2 marked on, BUT I thought it was an original painting worth thousands, I would NOT go to the store manager and tell him or her this. I would buy it and find out for sure. I am not dishonest, I'm just always looking for the deal of a life-time.

I do not fault the buyer of the car, I fault the auction house. Its their business to KNOW what these items are, and an ideas as to their value. Of course, this is assuming that this auction house is a good, reputable one.

[Rusty_OToole]

I disagree with some here. If I were to walk into a thrift store, and see an old painting that had $2 marked on, BUT I thought it was an original painting worth thousands, I would NOT go to the store manager and tell him or her this. I would buy it and find out for sure. I am not dishonest, I'm just always looking for the deal of a life-time.

I do not fault the buyer of the car, I fault the auction house. Its their business to KNOW what these items are, and an ideas as to their value. Of course, this is assuming that this auction house is a good, reputable one.

I'm with you except for the part about the auction house taking responsibility. Unless you can prove fraud I don't think you can do a thing to them. Their job is to sell the item to the highest bidder. If the seller is afraid the bids will not go high enough they can always put a reserve on.

There are stories going back centuries about valuable paintings or antiques being bought at auction for pennies on the dollar and being "discovered" by a sharp eyed dealer or connoisseur. Some were sold and resold several times at a cheap rate, discovered, and sold several more times at steadily rising prices. So who knows what is true value?

[Rusty_OToole]

By the way a seven figure value is $10,000,000 minimum. What kind of car is worth that much dough to begin with? A previously unknown Bugatti Royale? What?

There should be enough clues in the original post for you auction mavens to identify the car in a flash.

A $10,000,000+ car, previously unknown, in the hands of the heirs of the original owner, been in storage and hardly driven since new, recently sold by mistake as a replica by a major auction house.

A free lollipop for the first person to correctly identify this car. If it exists and is not just another urban legend.

[Rusty_OToole]

In the same vein, a Jackson Pollock painting bought in a thrift store for $5 is now for sale in an art gallery for $50,000,000.

CBC News - Art & Design - Controversial Pollock for sale in Toronto

[bruffsup]

Go to the back of the class Rusty. 7 figures is $1 million, 10 million is 8 figures! believe me if this car is the real deal it is $2 million plus, purchased for under 100K not very long ago !

[Restorer32]

So why the secrecy? What car is it? What auction house?

[West Peterson]

A 1930 Packard boattail speedster recently sold for under $100,000, which was probably a good buy weather it was real or not. However, it is far from a $2 million car if real.

[West Peterson]

Also, a D-type Jaguar sold in the $60,000 range recently, which was also a good buy even if it was fake. If it was real, then we're looking at seven figures.

[bruffsup]

Bingo !

[mdsbob]

Hate to say this Rusty, but you figure counting seems to be suspect...

Seven figures is $1,000,000 or could be $9,999,999...Pretty big swing in dollars but both amounts contain 7 figures.

Trimacar...

I tend to see transactions in much the way you have expressed...Sure, looking for a bargain but would want integrity associated with the deal...

What would you think of someone who bought an orphan marquee that well informed people who follow that marquee thought was being offered for sale at more than it was worth. A "dealer" bought the car and for a time indicated it as part of his "collection"...But low and behold it does come on the market at almost 3.5X the asking price when informed people thought it was too high. It was on the market for at least a couple of years, and I think was sold but I do not think anywhere near the dealers original asking price.

To me, there wouldn't be any integrity associated with the transaction if the dealer had been able to snag a fish...But trolling is certainly what he was doing.

[Wowabunga]

At an estate yard sale, in their dollar box, I bought a hand crafted doll made from a "joy" dishwashing lotion bottle ( the one with the feminine shapely body ). I turned the doll over and stuffed way up into the bottom of the dress was a $50.00 bill.

I debated quietly if I should note this to the estate family members... who seemed to be having a royal good time selling off all the stuff. So I reasoned that the money was orginally put there for a "rainy day fund" and at the time I was doing the financial "two step" and certainly needed the cash for some new all weather tires. Yes I bought the doll for the asking price.

15 years later I wonder now if I should have returned the money, or was I right in keeping the money and putting it to good immediate use, or am I just a dirty old man for looking up the dolls dress ?

Edited September 22, 2010 by Wowabunga (see edit history)

[Guest bofusmosby]

or am I just a dirty old man for looking up the dolls dress ?

Yup, you got my vote!

Rusty

What I was aluding to was if the auction house was a top-notch house, and they knew what they were selling was NOt a replica.

[trimacar]

Wowabunga, the question is not why you were looking up doll's dresses, but why are you looking at dolls to buy in the first place? Hmmmmm..... but I digress....

There are some nice D-type replicas out there. If the fellow bought one represented as a replica, but now he thinks it's an original, he needs documentation and inspection by knowing people to ascertain that he does, indeed, have an original.

As replicas, clones, or (my personal least favorite) tributes get built, then time blurs the distinction between repop and original. This goes way back, too; I remember walking the Hershey field once with a very knowledgable friend, and commenting on what a beautiful 1910 Whatsit that was, a touring car....and his immediate comment "yeah, it was a nice field find in the 50's, most of the body was missing, Harrah's restored and added that whole rear end to match what they thought was original..."

And now, the car is represented as all original, as the history of the car gives way to what the new owner wants to be true.

Moral issues aside, first confirm that it's a real car.

[bruffsup]

my friend tells me he contacted the family and they say their father bought it brand new in 1957 and rarely drove it!!!

[Guest Silverghost]

First~ Not all auction houses know what they are selling.

Was this a car auction house?

Second: With the amounts that you are thowing around I find this entire story hard to believe !

[Tom M]

Bingo !

So Barry said Bingo to West post of the "D-type Jaguar sold in the $60,000 range recently". Could this be the car he is talking about????

[Rusty_OToole]

Go to the back of the class Rusty. 7 figures is $1 million, 10 million is 8 figures! believe me if this car is the real deal it is $2 million plus, purchased for under 100K not very long ago !

Guess I need to learn how to count.

[1937hd45]

Is someone going to die if the facts come out as to what the car is that started this thread? I for one don't give a rodents back side, just come clean and tell us what the mystery car is/was? What's the big deal?

[bruffsup]

it has been identified. Read the thread! I am worried about legal repercussions or possibly worse as this is a major auction house . I have mixed feelings about this as I am happy for my friend if it is true this is a major score for him but it also casts a bad light on a company that I thought had impeccable credentials. That said, major auction houses are far from infallible, just look at the fraud and convictions with Christies and Soethebys in the 90's.

[Steve Moskowitz]

"if it is true"...that is the key. Conjecture here without knowing all the facts from both sides is futile. This thread will not deteriorate into a witch hunt. If there is a story here, as someone has previously pointed out it will come out in due time.