Tort against third party recipients of the proceeds of theft?
December 9, 2007 4:02 PM   Subscribe

Hypothetical legal question: My father stole a horse from SomeCorp, which rented horses for profit. My father subsequently made his money by renting out the horse and later the horse's progeny. All my dad's money was made off that horse, or its progeny, or off of money derived from money made off that horse. When he died, my dad left his money to me. Can SomeCorp successfully sue me, a third-party recipient of the proceeds of the theft? What laws and precedents would be the basis for SomeCorp's suit against me?

Can SomeCorp sue me for the replacement cost of the stolen horse? Can SomeCorp sue me for the loss of revenue it would have made by renting the horse and the horses' progeny? Can SomeCorp sue me for money my dad made off of investments, investments which were made with money made off that horse? Can SomeCorp sue me for money it potentially could have made by investing its profits on the horse, but did not make because my dad stole the horse?

What if the horse-thief was my grandfather, who willed the money to my father, who used the willed money to purchase life insurance that named me as a beneficiary?

What it was my great-grandfather who stole the horse, and I am only indirectly benefit from that theft, through various instruments (wills, insurance, other instruments)?

If the horse-thief has descendants other than me, who also indirectly profited from the theft, can SomeCorp sue each for the full value of its loss, or must SomeCorp's recovery from each descendant be proportional to the benefits that descendant received proceeding from the theft?

What must SomeCorp prove to win its case and recover damages?

I'm looking for laws and precedents that would support SomeCorp's suit.



Note: you are not my lawyer. My father is not dead ad is not a horse-thief (nor are any of my ancestors, so far as I know). I am not the recipient of any money or other benefits proceeding from theft. This is a hypothetical question.
posted by orthogonality to Law & Government (17 answers total) 4 users marked this as a favorite
 
Can SomeCorp sue me for the replacement cost of the stolen horse?

Of course, SomeCorp can sue you for pretty much anything. A better question is will SomeCorp sue you for the theft.

SomeCorp probably realized a loss due to the theft and moved on. They may have made a claim against their insurance company. Recovering the loss now will probably cause no end of trouble with the insurance company. My guess is that if anyone is interested in recovering the losses, it would be the insurance company, but they may only know that it paid out for the theft of 15 horses to SomeCorp in 1932, not the specifics of each theft.

Your defense might be along the lines of: "yes, we have a family story about how that first horse was stolen, but everyone who tells the tale names a different corporation. PROVE that we stole it from SomeCorp." Without some strong documentation, such a suit would be costly and unlikely to return any positive value back to shareholders.
posted by b1tr0t at 4:12 PM on December 9, 2007 [1 favorite]


(I am a software developer, but I'm not your software developer. Everything I know about law comes from a perl script that makes random word associations)
posted by b1tr0t at 4:13 PM on December 9, 2007 [6 favorites]


The answer might vary by state, but I think pretty much everywhere the statute of limitations would have expired long ago in your hypothetical. So, no, they couldn't sue.
posted by kingjoeshmoe at 4:16 PM on December 9, 2007


b1tr0t writes "Your defense might be along the lines of: 'yes, we have a family story about how that first horse was stolen, but everyone who tells the tale names a different corporation. PROVE that we stole it from SomeCorp.' Without some strong documentation, such a suit would be costly and unlikely to return any positive value back to shareholders."

Thanks for the answer, but that's not my question; and assume that SomeCorp can easily prove the ownership of the horse, its theft, and the identity of the thief. I'm not asking if it's in SomeCorp's benefit to sue, but what laws or cases would make it possible for SomeCorp to have a tort against "me".

This is for a story I am writing.
posted by orthogonality at 4:18 PM on December 9, 2007


assume that SomeCorp can easily prove the ownership of the horse, its theft, and the identity of the thief.

Wouldn't they have done something already if they had all that information?
posted by Weebot at 4:26 PM on December 9, 2007


Ortho - leaving aside the question of statute of limitations and inheritances, your questions about whether you can sue for the replacement cost or the lost profits or the profits made by the thief all have to do with the "law of remedies." Generally, yes, in some cases you can sue to "disgorge" the profits (or "unjust enrichment") made with the stolen goods instead of just getting the replacement cost.

One really interesting case that's kind of related to your question I heard about had to do with a suit in a U.S. court involving a Saudi (I think) oil company. The contract specified that Sharia law was to be used, and so the U.S. court applied Sharia. Since profits are not allowed under Sharia, the measure of the damages could not be lost profits. However, Sharia law does recognize the concept that if you steal someone's cow, you have to give them back both the cow and any calves it later had. Under this theory, the Saudi company had to pay out a whole bunch o' cash.
posted by footnote at 4:36 PM on December 9, 2007


Interestingly, this seems related legally to something that's actually been going on in the last few years. Certain groups which claim to represent American blacks have tried to file class action suits against certain corporations for damages, because those corporations historically benefited from slavery, or because those corporations acquired other corporations which benefited from slavery.

So far most such suits have been tossed in court, mainly on the basis of lack of standing by the plaintiffs. But examination of the arguments made by both plaintiffs and defendants might give you some insight into the legal issues involved.

(Of course, one interesting aspect of this is that when those corporations benefited from slavery, it was legal.)
posted by Steven C. Den Beste at 4:37 PM on December 9, 2007


This may be a slightly tenuous comparison but companies who were the financial benefactors of slave labor in the 1880s were sued in 2002 by decedents of slaves.
posted by bottlebrushtree at 4:41 PM on December 9, 2007


Well there's no question that you would have to give SomeCorp the stolen property back -- the original horse.

Then there's the question of additional damages beyond that they might sue for. You are hypothesizing that they might claim that all income resulting from the existence of that horse and its offspring were lost to them and should be paid back. But I think that would only really work if the horse itself were somehow irreplaceable (and its offspring had the same qualities that made it irreplaceable). If it were just a horse, then they bought another horse to replace it after it was stolen and that horse (and its offspring) did all the things that the stolen horse (and its offspring) would have done, so the only real additional loss to the company was the cost of the replacement horse -- after they had the replacement horse they were back on track and getting the same they would have had if the horse hadn't been stolen.
posted by winston at 5:11 PM on December 9, 2007


If the horse-thief has descendants other than me, who also indirectly profited from the theft, can SomeCorp sue each for the full value of its loss, or must SomeCorp's recovery from each descendant be proportional to the benefits that descendant received proceeding from the theft?

You could sue just one tortfeasor for all the damages of multiple tortfeasors who caused a single harm---this is called "joint and several liability." Then, in most if not all states, that one tortfeasor could turn around and sue the other tortfeasors in a separate suit, or could bring them into the original suit by "impleading" them. This is called "contribution." Most (all?) states have a "contribution among tortfeasors " law.
posted by footnote at 5:40 PM on December 9, 2007


footnote: So, if my dad were in a horse-rustling gang with orthogonality's dad, then after SomeCorp sues orthogonality for a zillion bucks, orthogonality can sue me for the half of that zillion which my dad was ultimately responsible for? Wacky...
posted by hattifattener at 6:25 PM on December 9, 2007


Not to say that this is what's going on or anything ... but I know it is currently finals time for law schools. I'm suffering through it myself right now. This question seems really strange and off the wall - and I hope is not some sort of take home final you might have. (not knowing if you are a law student or anything. I have seen law students ask take home questions on forums before)

So ... if you are a law student, and this is a take home final, this is probably a violation of your honor code.

Other than that .... statute of limitations have probably run for any action the Corp could bring.
posted by Arbac at 7:13 PM on December 9, 2007


Er, it hadn't occurred to me it's Law Finals time, as I am not a law student. A perusal of my answers in AskMefi strongly suggests I write software for a living.
posted by orthogonality at 7:22 PM on December 9, 2007


A perusal of my answers in AskMefi strongly suggests I write software for a living.

Yah I thought as much, but you never know. Lots of software people in law school these days. Patents and all.
posted by Arbac at 7:34 PM on December 9, 2007


I cut out the middle man and patented my lawbot.
posted by b1tr0t at 9:43 PM on December 9, 2007


I'm in law school, reading this thread during class. Statute of Limitations aside, you'd probably just have to give back the replacement horse. If SomeCorp shows that they would have made $X because of the horse, they could probably get those damages out of you too.
posted by craven_morhead at 5:47 AM on December 10, 2007


Ortho, came back to reread. Some further comments I can make:

1. If this is for a story, keep in mind that you don't need the law to be true, you can bend it.

2. If you want to have the company be able to sue and you want to get around the statute of limitation, you'd generally need to find some kind of hook like "concealment" to keep the tort alive. I envision something like, the father and son were engaged in a conspiracy to hide the theft of the horse from the corp., and took ongoing actions in support of that conspiracy. So, for example, once a month they hid the horse in the barn because that's when someone from somecorp would drive by to visit family (or whatever, you're the writer, not me).

3. Somecorp could potentially get all the profits, though it would require legal research (that I won't do because I'm not your lawyer) to make sure. The legal theories you'll want to look up are "disgorgement" and "unjust enrichment".
posted by kingjoeshmoe at 4:21 PM on December 10, 2007


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