Could Appeal Overturn Government's Victory?|
September 13, 2012
This article was originally printed in Numismatic News.
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The trial phase of the Langbord family’s attempt to regain control and ownership over 10 double eagle gold pieces dated 1933, found in a safety deposit box funded by Philadelphia jeweler and part-time coin dealer Israel Switt, is now at an end. But that isn’t the end of the story.
Most likely, it marks the beginning of an appellate court stage of this long proceeding that makes Dickens “Bleak House” look like a short story, since the origins of the claims, defenses, determinations of liability, and damages, all go back almost 80 years ago to the final production of gold coins for circulation at the Philadelphia Mint.
U.S. District Court Judge Legrome Davis on Aug. 29 rejected the request of Joan Langbord and her two adult sons for the government to return the coins, or pay for them, preferably at the only market selling price of $7.59 million apiece. Langbord is the daughter of Switt, whose name is threaded all through the history of 1933 double eagles.
For those who have any familiarity with the story, these 10 coins are like a case of deja vu – the cast of characters that litigated the case more than a dozen times over a period of nearly three quarters of a century is also back.
The latest chapter began in 2003, when Joan Langbord – the now elderly daughter of Switt – discovered a total of 10 uncirculated 1933 $20 gold coins among belongings of her father in a bank vault. Switt died at age 95 in 1990. She sought counsel.
Langbord’s lawyer, Barry Berke, sent the 10 double eagles to the U.S. Mint in September 2004, along with a lawyer’s letter asking for authentication and assistance. It took Dr. George Hunter, the Mint’s technological guru, months to examine them, but on Aug. 11, 2005, he reached his conclusion: the coins were genuine, but they would not be returned. The Mint claimed the 1933 Saints were illegal to own.
The Mint announced the hoard and the seizure on its website, where only a short time before it had trumpeted how the King Farouk 1933 $20 was a unique coin that the Mint “legalized” in time to sell it through a 2002 Sotheby-Stack’s auction.
The Mint then shipped the coins to Fort Knox, Ky., where they were placed in the secure gold depository, along with the remnants of millions of other gold coins struck prior to 1933 that were then melted after a presidential order by FDR that essentially recalled all but numismatic pieces.
With the coins in custody, the Langbord family’s choice was to acquiesce or to sue the government. Berke, who litigated the Farouk specimen seizure from 1996-2001, claims his clients did the right thing in notifying the government of the hoard and was equally adamant that they are entitled to keep the coins.
L.G. Barnard had one seized in the mid 1940s; the government litigated in Tennessee on a theory of replevin. The government had the coin, which it seized from the collector, who claimed he was an innocent purchaser for value. The court held that Uncle Sam could be Uncle Scrooge and keep the coin without compensating Barnard. (U.S. v Barnard, W.D. TN 1947). Col. John Flanagan and J.F. Bell had theirs plucked from sale catalogs in 1944.
In the 1950s, James A. Stack, a well-known collector who is completely unrelated to the famous New York rare coin dealer firm, also was involved in a governmental seizure. He sued in state court and Federal Court in New York and lost (Stack v Strang, 2d Cir. 1951; Sup. Ct. NY 1953). In 1945, three more examples belong to Charles Williams, F.C.C. Boyd and James McAllister were found and seized. All of these pieces trace their origin back to Switt, as does the one that was licensed by the Mint for export to King Farouk of Egypt, and eventually the subject of a court drama in the 1990s – which the government litigated and settled rather than lose.
Trial by jury is never a sure thing. The experts conjectured as to how the coins left the Philadelphia Mint and, in the end, the jury did not believe Langbord’s story – and essentially found that the coins were purloined and illegally removed from the Philadelphia Mint. Once that was accepted, the rest wasn’t hard because American law provides that a thief cannot pass good title.
So when Judge Davis ruled Aug. 29 after last year’s trial that he was not about to overturn the jury verdict, that meant that it would be up to appellate lawyers to ask the U.S. Court of Appeals for the Third Circuit to find judicial error and send the matter back for retrial, so this drama can go on for years to come.
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