Who here won this box for $6k

[TangoFoxTrot]

No, b/c the toolbox is the collateral for the loan. Remember, it's a secured loan. If you buy it, take it, whatever, from the original owner, you posess stolen property, whether you were aware of it or not.

If what you're proposing above is true, what's to stop someone from taking anything he takes out a specific loan against, then transferring that property to a friend, a relative, etc.? Then the person who took out the loan declares bankruptcy and the tool truck company can't recovery the money or the box.

Now the tool truck company getting their toolbox back is another matter. That's what I think can vary from state to state, the laws governing repossession.

What I'm saying is how the law looks at this in the real world, I'm not trying to make a "moral" case for being a deadbeat or buying stolen property.

If a person took out a loan and then sold the item, the original buyer would be the one to go after, not the second-hand buyer. The scenario you describe could happen to every person who owns a credit card, that's why there's risk involved with giving out a credit card and why there's a 20% interest rate.

I have a credit card with over a $20,000 limit. I could go on a spending spree and do the same thing at any time. I could buy a bunch of flat-screen TV's and sell them to my friends, and then declare bankruptcy. If the TV's had serial numbers and were traceable, it wouldn't make a difference, the area of dispute is between me and the credit card company, not the people I sold the TV's to. The company giving out the loan can sue me and try to get back what their owed, but they can't go after the people that I sold the TV's to.

If a car dealer got a loan from the bank and couldn't pay the revolving loan, would the bank be able to take back all the cars the dealer sold to people? Of course not, even if all the sales were traceable and had recorded VIN's, the dispute is between the bank and the dealer.

Years ago, I bought a big screen TV on credit through the store and it had a serial number. If I missed a payment and sold that TV to a friend, would the cops go after him? No, the loan company would go after me because I was the one that signed the contract.

I'm not trying to defend people who buy stolen property, I'm only saying that it's not the buyers responsibility to make sure every second-hand item they buy from someone has been paid off in full. Possession is 9/10ths of the law, and the "powers that be" usually looks at situations like this as a civil dispute between the original buyer and seller.

 

[Nealcrenshaw]

Wow,This threads still going?

 

[Skyline]

@Tango

All your examples do little to establish anything except that you just don't get the concept of a secured loan. A more valid comparison would be a car purchased with a car loan. If you sold it without permission of the finance company,( if you could actually do such a thing,) the finance company could repossess the vehicle if the loan was not paid, no matter whose possession it was in. A financed toolbox is the same thing, with the exception of the fact that the state does not get involved with the title process.

 

[Lookin4'67Galaxieconv]

If a person took out a loan and then sold the item, the original buyer would be the one to go after, not the second-hand buyer. The scenario you describe could happen to every person who owns a credit card, that's why there's risk involved with giving out a credit card and why there's a 20% interest rate.

Jeesus, man! Listen...a credit card debt is UNSECURED which means if the debtor defaults, there is no collateral backing up the debt. I'm going to ignore your example below because IT DOESN'T APPLY.

A truck tool box loan is a SECURED debt, which means if the debtor defaults, he owes the BOX BACK TO THE ORIGINATOR OF THE LOAN.

Your lengthy explanation doesn't apply b/c an UNSECURED DEBT (credit card) is treated differently than a SECURED DEBT (car, toolbox, etc.) by the law.

I hate to tell you this, but yes, you could buy a used toolbox for several thousand dollars...or dirt cheap, either way...and it could have a lien on it by the manufacturer and NOT BE YOURS b/c the original owner had NO RIGHT TO SELL THE BOX TO YOU.

Now it may not be easy for Matco, for example, to repossess the box, but that's another issue.

 

[Hiball]

My head is starting to hurt.

 

[krusty the clown]

let me try this again.......

the finance company is NOT going after the second purchaser for the balance due. HOWEVER the box is collateral on a loan and if the loan defaults they will try to recover THIER property.

 

[Nealcrenshaw]

Good points Tango!!
But if the box has no tag on it,It is suspect,do you still make the deal?

 

[Lookin4'67Galaxieconv]

Good points Tango!!

You mean the one where he doesn't understand the difference between a secured and an unsecured debt?!

Or the one where he thinks breaking a signed loan purchase agreement is a civil dispute in the eyes of the law?

 

[krusty the clown]

Good points Tango!!

not necessarily

If a car dealer got a loan from the bank and couldn't pay the revolving loan, would the bank be able to take back all the cars the dealer sold to people? Of course not, even if all the sales were traceable and had recorded VIN's, the dispute is between the bank and the dealer.{

if the floorplan was secured they could, but you would have to read the contract......still not apples to apples.

Years ago, I bought a big screen TV on credit through the store and it had a serial number. If I missed a payment and sold that TV to a friend, would the cops go after him? No, the loan company would go after me because I was the one that signed the contract.

once again you'll have to read the contract. most store credit cards are revolving accounts not installment loans (like a toolbox loan). revolving accounts are unsecured, installment loans are......

 

[Nealcrenshaw]

If a car dealer got a loan from the bank and couldn't pay the revolving loan, would the bank be able to take back all the cars the dealer sold to people? Of course not, even if all the sales were traceable and had recorded VIN's, the dispute is between the bank and the dealer.

I can understand this.

If a seller sells a box that hasn't been paid off,why doesn't Matco just sue the original contract holder, why even go thru with a repossesion? Can't this debt if the seller doesn't pay just be written off on their taxes?

 

[krusty the clown]

what really surprises me is there are several tool dealers past and presant who have contributed to this thread, who have first hand experience with this subject, and STILL some people will continue to argue about it.

 

[Joe H]

Jeesus, man! Listen...a credit card debt is UNSECURED which means if the debtor defaults, there is no collateral backing up the debt. I'm going to ignore your example below because IT DOESN'T APPLY.

A truck tool box loan is a SECURED debt, which means if the debtor defaults, he owes the BOX BACK TO THE ORIGINATOR OF THE LOAN.

Your lengthy explanation doesn't apply b/c an UNSECURED DEBT (credit card) is treated differently than a SECURED DEBT (car, toolbox, etc.) by the law.

I hate to tell you this, but yes, you could buy a used toolbox for several thousand dollars...or dirt cheap, either way...and it could have a lien on it by the manufacturer and NOT BE YOURS b/c the original owner had NO RIGHT TO SELL THE BOX TO YOU.

Now it may not be easy for Matco, for example, to repossess the box, but that's another issue.

Exactly. However if you unknowingly bought a box from someone that wasn't paid off and matco had it repossessed from you then you could go after the guy that sold it to you in court. However until the box is paid off it is property of the financing company no matter who has possession of the box. Hence why it is very important to do your homework when purchasing one of these boxes used especially if it is a newer one.

 

[krusty the clown]

I can understand this.

neal it's not apples to apples. it would be if the comparison was to the dealer not paying matco for the box. OR if the original purchaser of the vehicle sold the car to a buddy while still owing a balance..........think about it!

 

[Nealcrenshaw]

We're not arguing we're discussing.

 

[Lookin4'67Galaxieconv]

what really surprises me is there are several tool dealers past and presant who have contributed to this thread, who have first hand experience with this subject, and STILL some people will continue to argue about it.

Nothing surprises me about this subject. Every single thread on this, there's always a few people who won't accept that just b/c they buy something used, it may not be their's to own. If it was a car, I think they'd get it, but b/c it's a toolbox, they can't make that connection.

 

[krusty the clown]

Nothing surprises me about this subject. Every single thread on this, there's always a few people who won't accept that just b/c they buy something used, it may not be their's to own. If it was a car, I think they'd get it, but b/c it's a toolbox, they can't make that connection.

maybe if they had titles

 

[Nealcrenshaw]

Anyone watch Operation Repo? Whenever they come to reposses a car they always seem to have some paperwork with debt holders name and the item in question.

Now a toolbox repossesor would have paperwork with original debt holders name,not mines.
Now don't get me wrong i'm all for paying for things that you should pay for I.e loans, But after i just paid 6K for a box you think they're going to take it?

 

[Lookin4'67Galaxieconv]

I'm outta here fellas. Have a good night!

 

[krusty the clown]

Anyone watch Operation Repo? Whenever they come to reposses a car they always seem to have some paperwork with debt holders name and the item in question.

Now a toolbox repossesor would have paperwork with original debt holders name,not mines.

and what difference would that make?

if that car was in the possetion of someone who's name wasn't on the paperwork they could still reposses it.

 

[krusty the clown]

But after i just paid 6K for a box you think they're going to take it?

yes.........of course you could shoot the repossesor but then you'd still lose the box.

 

[Nealcrenshaw]

Exactly how did we get on this subject anyway??

I was just referencing a good deal.

 

[M900]

Didn't you know, Dave? Nobody knows M900's name.

Not even his mom!

Wow, man, you act like I pissed in your breakfast...
WTF?

he's a double 0 naught naught agent

No, nothing that interesting.
Im simply an actor.(Refer to the first line of my sig.) Now let me ask you a question. How many actors do you think go by their birth name?
If you guessed <1% you would be correct. Therefore, for someone in my line of work it would be unusual if I DID go by my real name...

 

[scooby074]

Great "discussion"

My understanding is this.

The tool company (finance) has a right to the merchandise (toolbox in this case)

It would then be up to the purchaser to sue the seller to recover his loss.

The Finance company would also sue the seller to recover any moneys still owing on the box or any other costs involved.

The buyer wouldnt have a right to the box as it wasnt the sellers to sell.

 

[krusty the clown]

Great "discussion"

My understanding is this.

The tool company (finance) has a right to the merchandise (toolbox in this case)

It would then be up to the purchaser to sue the seller to recover his loss.

The Finance company would also sue the seller to recover any moneys still owing on the box or any other costs involved.

The buyer wouldnt have a right to the box as it wasnt the sellers to sell.

finally.....someone who gets it

 

[Hiball]

No, nothing that interesting.
Im simply an actor.(Refer to the first line of my sig.) Now let me ask you a question. How many actors do you think go by their birth name?
If you guessed <1% you would be correct. Therefore, for someone in my line of work it would be unusual if I DID go by my real name...

**** business?

 

[Nealcrenshaw]

"To Each his own"

 

[southernfriedcj]

Have any of you truck guys ever repo'ed a tool box from someone who purchased it from a deadbeat seller?
If so how did you go about it?
I have sold a lot of big ticket items in the past few years and I couldn't find any of the buyers to save my life.

 

[autoace]

man.......i can't believe some people can't get it.

I get it Krusty I have never seen any company take the boxes or tools back, and I have worked with some deadbeats. "Secured" is relative, what is a 10K box worth once it is delivered? 4K?.......Even a car off the lot losses 30 to 40% or its value once you drive it 2 miles. Matco, Snap-on etc..........know they are selling "subjective, whatever someone is willing to pay" boxes on credit, with no real established value, except their high retail prices. There is no NADA for tool boxes. Most of the time, by my observation, there must be more money lost reclaiming the stuff; because it is rarely done. That being said, the loans are semi-secured, and I am sure the risk is built into the retail prices, the dealers may take a hit, but Matco etc....technically gets paid.

I always pay my bills, and have Cornwell Tech Credit, Cornwell and my dealer were paid for my scanners, the day I bought them. An independent finance company holds the debt. That company could attach wages, and put liens on one's house if they don't pay, but I bet they would never come after the equipment, it isn't worth squat after delivery.

Moral of the story, don't give credit to sub 700 credit scores, and don't give much credit to non-home owners, etc............and this junk won't happen soo much.

 

[ihredo4]

Great "discussion"

My understanding is this.

The tool company (finance) has a right to the merchandise (toolbox in this case)

It would then be up to the purchaser to sue the seller to recover his loss.

The Finance company would also sue the seller to recover any moneys still owing on the box or any other costs involved.

The buyer wouldnt have a right to the box as it wasnt the sellers to sell.

Well That settles it for me then. I will NEVER buy a Snap-on, Matco, Cornwell, etc box then. Especially if I spend a lot of money on something I dont own. They are about as worthless as a WIFE.

 

[quneur]

The point that a lot of people are missing, has to do with equipment purchase contracts. Every one that I've seen has a clause in it that states the purchaser cannot resell the equipment before it's paid off, without the lenders permission. To do so violates the contract and gives the seller the right to either demand full payment or return of the equipment.

Mtwaterguy gets it. Alot of companies finance their big item equipment. Par example, if you were to open a machine shop, you would most likely get financing for your equipment through the bank or some other financial institution. Then say, the business fails for some reason six months later. Do you have the right to sell that $20M CNC machine? Even if you did find another company willing to buy it for say $2K, is the company entitled to keep the machinery because they didn't know it wasn't yours to sell?

If the courts did allowed it, what's preventing me from setting up my own shop with only spending pennies per thousand or millions of dollars? Get a dupe to finance machinery, sell it to me, bankrupt themselves, then re-hire him to my new shop with new machinery (where I could pay more since I didn't have to finance anything).

 

[Flash21]

I have followed all of the dialog and understand the secured loan thing.

So...here is what I want to know:

1) How often does a company really go to the expense to reposses a toolbox (in the real world) from the 2nd, 3rd, 4th, etc owner? That has got to cost a good amount of money and I can't imagine they would go through the expense unless the balance was substantial.

Matco, I can understand since they keep a database. However, take SO for example. They don't even have records if the box is paid for or not! (by SN)


Now that all of the information is in the thread, I would like to hear from who I consider the experts on the subject (former or current truck dealers):

2) What can one do to protect himself/herself when they are buying a non-Matco truck box that may have been bought on credit? What documents should be delivered or process should followed to protect a potential buyer? I think this is key for those people that are looking to buy used boxes and don't want a tool company showing up at the door demanding their property.


Edit: I wanted to add that if this was a really big problem for tool truck companies, it seems to me that they should put something on their website as a FAQ and have a process for perspective buyers to use to ensure they are buying something that is paid off.

 

[scooby074]

Well That settles it for me then. I will NEVER buy a Snap-on, Matco, Cornwell, etc box then. Especially if I spend a lot of money on something I dont own. They are about as worthless as a WIFE.

Well after its paid off and you own it, you can do whatever you want with it.

I think theres nothing stopping you from selling it early,so long as you pay off your account with the proceeds from the sale. However im not sure what ,if any penalties would apply for early payment.

 

[35mastr]

I get it. Been there and had to repo boxes. But in this case as Neal buying this box.

How many people give out there full information when buying from a private party?

The only way it could be found is if someone tried to warrenty parts off of it.

 

[Happyshooter]

No, not in most American states. We (mostly) use the UCC in our states. The seller (legal term in this instance that means the guy who bought it from snap on and is now selling it to you) is selling to you the buyer.

If you the buyer purchased in good faith the legal question is whether you had notice. Notice is done through the UCC filing system in each state, usually through the secretary of state. In other words, did the creditor (say snap on here) properly file a UCC notice. Since revised article 9 came out about 10 years ago, this also means did they properly comply with the model search logic--which is its own legal/admin question for court.

Anyhow, before you the buyer buy you need to check the UCC system for the seller. If there is a filing, don't buy. If there is a filing, made properly, and you didn't check or you missed it, things start to get bad.

Depending on the state, so this is a general overview, your state may vary, if the creditor had a proper filing and you purchased anyway, you take ownership of the tools/box with the same title the seller had, a voidable title. That means the creditor can send someone to a place of business to try to pick up the goods in a peaceful manner. In some states they can also try to do that from a home--but not as many states.

The creditor, their agent (the repo man), or both are on the hook for illegal activities during the repo, including breach of the peace. In other words, if the snap on guy finds out you purchased a box from his customer and comes to your home and starts kicking the door and yellling the cops are coming to arrest you, video it--you have hit the legal jackpot.

The proper legal step for the creditor is to file--what most states call--a claim and delivery action. For example, snap on finds out you purchased a box from one of their customers, they think they filed the UCC correctly, they sue you with the goal of the suit being a court order against you to turn over the box. During that suit you get to argue something back against the creditor--most of the time in these suits the argument is they didn't file correctly (that model search logic stuff) so 'I wouldn't be able to find your filing with a reasonable search'.

If the creditor 1) screwed up the filing or didn't do one, and 2) you acted in 'good faith' as part of the purchase (a legal concept and term of art just for the uniform commerical code--but at its heart you acted as a reasonable and honest buyer would and you paid a fair value)-- then you as the buyer get better than the seller's voidable title, you get good title even against the creditor.

If you get the good title legally, then the creditor is out of luck as far as your tools go. They are reduced back to suing the seller for the money he owes them.

The lesson here? Check the UCC before you plunk down 6k on a box of tools, keep the results of that check, and get something in writing from the seller showing that you paid some reasonable amount.

Great "discussion"

My understanding is this.

The tool company (finance) has a right to the merchandise (toolbox in this case)

It would then be up to the purchaser to sue the seller to recover his loss.

The Finance company would also sue the seller to recover any moneys still owing on the box or any other costs involved.

The buyer wouldnt have a right to the box as it wasnt the sellers to sell.

 

[jacob_coulter]

i wish that was the case here.......

on one repo i did the cops were called by the shop owner, who was refusing to let me repo a box that a former employee left. the police would not allow me to remove the box even though i had a signed contract. they said it simply wasn't thier job to determine who gets to keep the box and if i didn't leave peacefully i would be arrested for tresspassing.

I think your own anecdote Krusty shows that most law enforcement agencies don't look at this as stolen property, despite the fact that it had a serial number and a contract. Much less if a second buyer came along later and legally paid for the item from the original seller. Most police officers would tell the dealer they needed to take that person to court and sue them if they want it back, which is just not going to happen.

I think that's the point people are making here, the law usually treats matters like this differently than something like a car with a VIN that's recorded by a state agency with a legally recorded title. You can buy all sorts of things used and who knows what sort of preexisting arrangements or contracts the original parties had?

The tool truck finance companies are not going to go after the guy that bought it after the fact from the original lendee, and the cops aren't going to go after them either. The tool truck dealers should be careful about who they "lend" $20,000 boxes to, and make sure they have real collateral to back it with. If you make high-risk loans, you'd better be ready to deal with deadbeats.

 

[krusty the clown]

I think your own anecdote Krusty shows that most law enforcement agencies don't look at this as stolen property, despite the fact that it had a serial number and a contract. Much less if a second buyer came along later and legally paid for the item from the original seller. Most police officers would tell the dealer they needed to take that person to court and sue them if they want it back, which is just not going to happen.

I think that's the point people are making here, the law usually treats matters like this differently than something like a car with a VIN that's recorded by a state agency with a legally recorded title. You can buy all sorts of things used and who knows what sort of preexisting arrangements or contracts the original parties had?

The tool truck finance companies are not going to go after the guy that bought it after the fact from the original lendee, and the cops aren't going to go after them either. The tool truck dealers should be careful about who they "lend" $20,000 boxes to, and make sure they have real collateral to back it with. If you make high-risk loans, you'd better be ready to deal with deadbeats.

well the case i stated was on truck credit......NOT company finance so your reply does not apply. and your last two points have already been proven false by the tool dealers who are members here.

 

[Costner]

So if you can buy a huge yellow box for $6k and it is considered a deal, is this black Macsimizer for $7k overpriced?

http://sd.craigslist.org/tls/1566736044.html

I've seen the guy post it a few times over the past month or so...obviously no takers yet.

 

[Flash21]

Happyshooter - THANK YOU for that explanation on how a buyer can protect him/herself. I think it is the first I've seen that explains how to protect yourself in the event that the company can't tell you if it is paid for over the phone like Matco.

Very informative!

So if I understand correctly:

1) You check the UCC filing system in your state and verify no records for the model number / serial number you are purchasing.

2) You get a signed bill of sale that you bought it in good faith and paid a resonable price.

You should be covered. Correct? I just want to cement my understanding.

Of course, the hassle of the court proceedings, etc, will probably outweigh any 'deal' you are getting on the toolbox anyway...even if you are allowed to keep it in the end so I guess it really is buyer beware.

 

[Happyshooter]

Close, the UCC search is based on the Seller's names. For example, you are buying from Mike Smith who does business as Smith's Garage per his government D/B/A. You search Mike Smith, Michael Smith, Mickey Smith, Smiths Garage, and Smith's Garage.

If Mike Smith owns Smith's Garage, LLC, then search all the above, without the LLC (model search logic again).

If snap-on filed against Mike, there will be a filing by them that you have to pay to download that will have the description (anything from tool box serial number 99XXXX, to 'all assets'). Note that the filing may not be by snap-on, it could be from his bank, or a leasing company, or anyone really. Download and read all the filings against Mike to be safe. Hint, if there is more than one I would bet money at least one is an all assets filing.

You don't have to do this in most states if you are buying from a reseller or tool company (not a pawnshop). This is because of another part of the UCC that says if you are buying from a company that usually sells goods of that type, you get good title. Pawnshops are usually excluded from that rule so you have to check to be safe. Then, again, snap-on is unlikely to trace the box through a pawnshop.

Can this get pricey? Heck, yes. Back before Delphi went bankrupt, I had to check some filings for a client for a hyper legal point. I spent over $500 just in downloading filings from the UCC system, and several thousand dollars in time reading them all.

In this case, if there is just one filing I, myself, if I was buying, would pay the $5 or $10 to download and read it. More than one? Walk away.

 

[Flash21]

Thanks again Happyshooter!

It seems to be more complicated if you can't use the serial number or model number to search for in the UCC filing system. This subject is very interesting from the legal perspecitive...it could be toolboxes or any asset..I've never knew much about the topic of secured loans.

Example:

In the situation that someone buys a box from the original seller that is under the secured loan contract and then resells to a 3rd owner:

Using the process above:

The 2nd owner checks the UCC and let's assume finds no records on the original owner. The 2nd owner buy the box and sometime later, sells it to a 3rd owner. The 3rd owner checks the UCC filing system on the second owner and finds nothing and then buys the box. During the period the 2nd owner held the box, the first owner defaults on their secured loan. The 3rd owner would never know that unless they demanded the names of all prior owners and ran querys on them all. (More than likely all the names aren't available)

Right?

I have to believe there is a process that tool dealers use to take trade-ins on boxes that don't originate from the company they own a franchise for. Like in the case where a tech is buying a new Matco box and is trading in Snap-On box to the Matco dealer. Does the Matco dealer run a query with the UCC filing system on the techs name and refuse the deal / trade if records are found? If not, what methods do they use? Current / former dealers weigh in!