Historic Colt Revolvers Stolen, Then Recovered, Now Owned By Travelers
http://blogs.courant.com/connecticut_insurance/2011/05/historic-colt-revolvers-stolen.html
The city of Paterson, N.J., has had bad luck with its Colts -- it keeps losing them to Hartford.
First it was legendary firearms magnate Samuel Colt, who closed his gun-making factory, the Patent Arms Manufacturing Co. in Paterson, and auctioned off its equipment in 1842. He later opened a plant in Hartford that changed the face of American industry. It is still headquartered today in West Hartford.
Then, two Colt revolvers made in the early years of the Paterson plant and worth hundreds of thousands of dollars were stolen in 1998 from the city-run Paterson Museum.
For years, the museum director and city officials hoped the guns would turn up again. And they did last year. Now they're being held as evidence in the local police department.
In order for the Paterson Museum to keep the guns, however, the city would have to return an insurance payment of $235,000 that it received after the theft from Travelers. But the city spent that money years ago, and now it doesn't have the cash. Just two weeks ago, Paterson laid off 125 police officers.
That means The Travelers Cos. Inc., which has its major presence in Hartford, is the default owner of two Paterson Colts, some of the most treasured firearms in the history of U.S. manufacturing.
"Patersons are highly sought after, and adding to the zest is the fact that they've been stolen," said Herbert G. Houze of Cody, Wyo., an author, firearms expert and curator of the major Colt show at the Wadsworth Atheneum a few years ago.
Although the guns are sitting in Paterson's police station, they may be far from returning to the city's possession, dashing hopes that the crime would be solved and the museum made whole.
When an insurance company pays a claim for a rare item with subjective value, such as an antique firearm, that sets up an odd arrangement. Paterson officials said the insurer isn't looking for the present value of the Colts, or any accrued interest on the claim. Travelers only wants the amount it paid to the city 13 years ago, according to city officials.
That creates a conundrum for Paterson. If the guns are worth more than Travelers paid in 1998, the city could pay the claim and sell the guns for a profit. But the less-than-mint condition of the guns suggests that the claim amount might be more than their current value. The only way to find out the real value would be to sell the guns at auction and see how much collectors are willing to pay.
The pistols were nabbed in a smash-and-grab late on the night of Sept. 30, 1998, at the Paterson Museum. Thieves broke into the museum office, tripped the burglar alarm and fled with about $200 in petty cash, a replica Texas holster model Colt worth about $300, a 1930s Smith & Wesson police revolver that belonged to a former Paterson police officer and had no significant value, and two wooden cases about the size of cigar boxes.
Those plain-looking cases happened to contain a .28-caliber Colt Paterson Baby, or pocket model No. 1, in its original case with extra accessories that came with the gun, and a .31-caliber Colt Paterson No. 3 belt model revolver also in its original case with accessories, said Museum Director Giacomo DeStefano.
The pistols were in DeStefano's office on a photographic copy-stand, and not on display, because the museum had better quality versions of these Colt Patersons for its exhibit.
DeStefano was out giving a lecture to a historical society the night of the theft. He returned to the museum to bring back a slide projector when he discovered the burglary. He called Paterson police, who had already responded to the security alarm and come to the museum, finding no one there.
Artifacts in the museum's exhibit space were left untouched in the heist. DeStefano says he is positive the thieves were looking only for cash and items they could sell at a pawn shop. That's because they came back later the same night and took a stereo in the office, but again left alone the collection of 31 antique Colt Patersons on display at the museum.
The city filed a claim with Travelers and received $95,000 for the .28-caliber pistol and $140,000 for the .31-caliber pistol.
No Prosecution
Years went by without any leads on the crime. Then, last November, DeStefano got a call from an antiques dealer who said a man in Butler, N.J., about 16 miles northwest of Paterson, was attempting to sell the stolen Colts on the Internet.
"I had heard it so many times before -- people would call and say, 'Someone is selling your Patersons,'" DeStefano said.
This time was different. DeStefano noticed that one of the cases the Butler man had was missing a spare accessory for the gun, a spare cylinder, which matched a missing accessory in a case stolen from the Paterson Museum. The Butler man also mentioned the replica that was stolen.
DeStefano called the police. He and two Paterson police detectives posed as antiques dealers and arranged to meet the Butler man at a neutral location in Garfield, N.J.. The value of the guns made the Butler man nervous about inviting people to his home, DeStefano said.
DeStefano sensed that the guns were the ones stolen from the museum as soon as he saw them. He took the Colt Patersons in his hands and disassembled them to see the serial numbers.
"I was pretty calm up until I saw the serial numbers, and I started shaking inside. ... Then I gave the detective the nod," DeStefano said.
The detectives and DeStefano told the Butler man their real identities, and he cooperated with an investigation. The man, whom neither DeStefano nor police would name, is not a suspect in the theft.
The Butler man said he discovered the guns stuffed under insulation in the attic during a renovation project on a house that he bought a few years before, DeStefano said. The home had several owners between the time the pistols were stolen in 1998 and the time they were recovered last year.
Police still don't have a lead in the crime, but it's no longer an active criminal case.
Paterson Police Lt. Ron Humphrey, who was the original detective on the case in 1998, said that even if someone walked into the station and admitted the crime, he couldn't arrest that person for it. The five-year statute of limitations has expired.
Like A Shipwreck
The city of Paterson has struggled financially for years, selling off property to balance its budget even before the recent layoffs.
The city council has discussed the antique Colts, but isn't about to buy them back, said Paterson Budget Director Russell Forenza.
"It would have always been a strain," he said, reflecting back to better economic conditions, adding, "If Travelers would like to make a donation, that's not a problem."
If the city is unable, or unwilling, to pay the insurance claim from its $237 million budget, the burden is on Travelers to determine how long to wait before taking hold of the pistols.
Travelers declined to comment, saying it does not discuss dealings with its customers.
And what happens to items that are recovered after an insurer has paid a claim? There's a long history of that.
"Such things go back to shipwrecks," said Robert Hartwig, president of the Insurance Information Institute, a property-casualty trade group.
The earliest form of insurance dates back to marine coverage in England during the 17th century for ships and their cargo. Sometimes, a ship would become victim of the sea and the owner would file a claim. If the shipwreck is later discovered, the insurer owns the cargo until the original owner gives back the claim money, Hartwig said.
It's the same scenario for stolen cars or artwork. If the item is recovered after an insurer paid a claim, and the policyholder isn't able to pay back the claim money, the insurer sells the property for the best possible price.
"This is common: a car is stolen, and the car is recovered," Hartwig said. "Insurers don't have garages full of old cars. They sell them off."
An auction is a likely venue to get the best price, Hartwig said. The price that the guns get at auction depends on their condition, said James Ferrell, a specialist in arms and armor with Bonhams & Butterfields auction house. It's anyone's guess if they will sell for more or less than Travelers paid on the insurance claim.
If the Paterson Museum's Colt Patersons are sold at auction, it's unlikely they would end up at the Museum of Connecticut History, which has the state's most impressive public collection of Colts, said museum administrator Dean Nelson.
"We actually do have some choice Patersons here," Nelson said.
Besides, Nelson said, "It would be far out of our realm of active bidding."
Private collectors, on the other hand, are likely to be interested in such rare guns. The Paterson plant made only 2,850 pistols and fewer than 2,000 rifles, carbines and shotguns, DeStefano said. Nobody knows how many survived and are in good shape today, though experts estimate about 10 percent are known to exist.
Even fewer are available in the original case with accessories.
"Placing these into the market can create a lot of excitement," said Wes Dillon, a firearms coordinator with the James D. Julia Inc. auction house, a premier seller of investment-grade firearms.
The James D. Julia auction house sold a Colt Whitneyville-Walker in 2008 for the highest price ever paid at auction for a single firearm -- $920,000 -- according to Auction Central News.
"It creates a lot of excitement any time a new item is dangled in front of affluent buyers for a relative bargain," Dillon said.
Houze -- who wrote "Samuel Colt: Arms, Art and Invention" to coincide with a traveling exhibit sponsored by the Wadsworth Atheneum Museum of Art, and other books about antique firearms -- said the Colt Patersons are the most sought-after because they're the earliest, and the ones in Paterson's police station would certainly draw an audience of affluent bidders.
Even though it's likely the pistols will be auctioned and become the property of a private collector, DeStefano holds out hope they eventually will return to a museum, preferably the Paterson Museum. That's how the museum got these Colt Patersons in the first place -- they were donated by the estate of Paul Applegate Jr., of Morristown, N.J., in 1982.
"That's the thing," DeStefano said. "Hopefully, they'll end up back here one day."
That creates a conundrum for Paterson. If the guns are worth more than Travelers paid in 1998, the city could pay the claim and sell the guns for a profit. But the less-than-mint condition of the guns suggests that the claim amount might be more than their current value. The only way to find out the real value would be to sell the guns at auction and see how much collectors are willing to pay.
The pistols were nabbed in a smash-and-grab late on the night of Sept. 30, 1998, at the Paterson Museum. Thieves broke into the museum office, tripped the burglar alarm and fled with about $200 in petty cash, a replica Texas holster model Colt worth about $300, a 1930s Smith & Wesson police revolver that belonged to a former Paterson police officer and had no significant value, and two wooden cases about the size of cigar boxes.
Those plain-looking cases happened to contain a .28-caliber Colt Paterson Baby, or pocket model No. 1, in its original case with extra accessories that came with the gun, and a .31-caliber Colt Paterson No. 3 belt model revolver also in its original case with accessories, said Museum Director Giacomo DeStefano.
The pistols were in DeStefano's office on a photographic copy-stand, and not on display, because the museum had better quality versions of these Colt Patersons for its exhibit.
DeStefano was out giving a lecture to a historical society the night of the theft. He returned to the museum to bring back a slide projector when he discovered the burglary. He called Paterson police, who had already responded to the security alarm and come to the museum, finding no one there.
Artifacts in the museum's exhibit space were left untouched in the heist. DeStefano says he is positive the thieves were looking only for cash and items they could sell at a pawn shop. That's because they came back later the same night and took a stereo in the office, but again left alone the collection of 31 antique Colt Patersons on display at the museum.
The city filed a claim with Travelers and received $95,000 for the .28-caliber pistol and $140,000 for the .31-caliber pistol.
No Prosecution
Years went by without any leads on the crime. Then, last November, DeStefano got a call from an antiques dealer who said a man in Butler, N.J., about 16 miles northwest of Paterson, was attempting to sell the stolen Colts on the Internet.
"I had heard it so many times before -- people would call and say, 'Someone is selling your Patersons,'" DeStefano said.
This time was different. DeStefano noticed that one of the cases the Butler man had was missing a spare accessory for the gun, a spare cylinder, which matched a missing accessory in a case stolen from the Paterson Museum. The Butler man also mentioned the replica that was stolen.
DeStefano called the police. He and two Paterson police detectives posed as antiques dealers and arranged to meet the Butler man at a neutral location in Garfield, N.J.. The value of the guns made the Butler man nervous about inviting people to his home, DeStefano said.
DeStefano sensed that the guns were the ones stolen from the museum as soon as he saw them. He took the Colt Patersons in his hands and disassembled them to see the serial numbers.
"I was pretty calm up until I saw the serial numbers, and I started shaking inside. ... Then I gave the detective the nod," DeStefano said.
The detectives and DeStefano told the Butler man their real identities, and he cooperated with an investigation. The man, whom neither DeStefano nor police would name, is not a suspect in the theft.
The Butler man said he discovered the guns stuffed under insulation in the attic during a renovation project on a house that he bought a few years before, DeStefano said. The home had several owners between the time the pistols were stolen in 1998 and the time they were recovered last year.
Police still don't have a lead in the crime, but it's no longer an active criminal case.
Paterson Police Lt. Ron Humphrey, who was the original detective on the case in 1998, said that even if someone walked into the station and admitted the crime, he couldn't arrest that person for it. The five-year statute of limitations has expired.
Like A Shipwreck
The city of Paterson has struggled financially for years, selling off property to balance its budget even before the recent layoffs.
The city council has discussed the antique Colts, but isn't about to buy them back, said Paterson Budget Director Russell Forenza.
"It would have always been a strain," he said, reflecting back to better economic conditions, adding, "If Travelers would like to make a donation, that's not a problem."
If the city is unable, or unwilling, to pay the insurance claim from its $237 million budget, the burden is on Travelers to determine how long to wait before taking hold of the pistols.
Travelers declined to comment, saying it does not discuss dealings with its customers.
And what happens to items that are recovered after an insurer has paid a claim? There's a long history of that.
"Such things go back to shipwrecks," said Robert Hartwig, president of the Insurance Information Institute, a property-casualty trade group.
The earliest form of insurance dates back to marine coverage in England during the 17th century for ships and their cargo. Sometimes, a ship would become victim of the sea and the owner would file a claim. If the shipwreck is later discovered, the insurer owns the cargo until the original owner gives back the claim money, Hartwig said.
It's the same scenario for stolen cars or artwork. If the item is recovered after an insurer paid a claim, and the policyholder isn't able to pay back the claim money, the insurer sells the property for the best possible price.
"This is common: a car is stolen, and the car is recovered," Hartwig said. "Insurers don't have garages full of old cars. They sell them off."
An auction is a likely venue to get the best price, Hartwig said. The price that the guns get at auction depends on their condition, said James Ferrell, a specialist in arms and armor with Bonhams & Butterfields auction house. It's anyone's guess if they will sell for more or less than Travelers paid on the insurance claim.
If the Paterson Museum's Colt Patersons are sold at auction, it's unlikely they would end up at the Museum of Connecticut History, which has the state's most impressive public collection of Colts, said museum administrator Dean Nelson.
"We actually do have some choice Patersons here," Nelson said.
Besides, Nelson said, "It would be far out of our realm of active bidding."
Private collectors, on the other hand, are likely to be interested in such rare guns. The Paterson plant made only 2,850 pistols and fewer than 2,000 rifles, carbines and shotguns, DeStefano said. Nobody knows how many survived and are in good shape today, though experts estimate about 10 percent are known to exist.
Even fewer are available in the original case with accessories.
"Placing these into the market can create a lot of excitement," said Wes Dillon, a firearms coordinator with the James D. Julia Inc. auction house, a premier seller of investment-grade firearms.
The James D. Julia auction house sold a Colt Whitneyville-Walker in 2008 for the highest price ever paid at auction for a single firearm -- $920,000 -- according to Auction Central News.
"It creates a lot of excitement any time a new item is dangled in front of affluent buyers for a relative bargain," Dillon said.
Houze -- who wrote "Samuel Colt: Arms, Art and Invention" to coincide with a traveling exhibit sponsored by the Wadsworth Atheneum Museum of Art, and other books about antique firearms -- said the Colt Patersons are the most sought-after because they're the earliest, and the ones in Paterson's police station would certainly draw an audience of affluent bidders.
Even though it's likely the pistols will be auctioned and become the property of a private collector, DeStefano holds out hope they eventually will return to a museum, preferably the Paterson Museum. That's how the museum got these Colt Patersons in the first place -- they were donated by the estate of Paul Applegate Jr., of Morristown, N.J., in 1982.
"That's the thing," DeStefano said. "Hopefully, they'll end up back here one day."
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