Ethical Dilemmas: Community Charities, Inc., Essay Example

Ethical Dilemmas

The first ethical issue category in relation to the Kagens, the silverware, and the purchaser Karen Makefield is that Makefield kept the silverware which was worth $3,500 when it did not belong to her. Although she did not outright steal the silverware and did pay for it ($15), she is still apparently guilty of taking property under false pretenses as noted by Marianne M. Jennings.

Secondly, Makefield is guilty of hiding information, both from the owners of Community Charities and the Kagens. Obviously, when Makefield first spotted the silverware at the resale store, she knew the value of the silverware which prompted her to purchase it immediately for $15. This is why she refused to return the silverware to Community Charities and to the Kagens. And third, Makefield is guilty of taking unfair advantage of Community Charities and the Kagens. Since the Kagens accidentally included the silverware in another bag of old clothing donated to the resale store, Makefield was probably told this by Community Charities when they called her and asked her to return the silverware.

Perspectives of the Parties

From the perspective of Community Charities, Inc., it is surprising that the owners and/or operators of the resale store did not immediately recognize the true value of the Kagen’s silverware which was given to them as a wedding present. This is supported by the fact that Community Charities sold the silverware to Makefield for the incredibly low price of $15. In effect, Community Charities did the right thing when they called Makefield and asked her to return the silverware. Therefore, Community Charities is not guilty of any sort of unethical behavior and cannot be held responsible for selling the silverware at such a low price to Makefield. They are after all a charitable institution.

According to the charitable organization Society of St. Vincent de Paul which has been in business in the United States since 1845, they admit that the chances of recovering items accidentally donated are slim–“If an accidental donation can be found, St. Vincent de Paul will be happy to return it. If the donation was made recently, it might not be too late to locate the item in the store” (“Society of St. Vincent de Paul”). However, for the Kagens, it was too late because their silverware was sold immediately to Makefield.

From the perspective of the Kagens, their lawsuit against Makefield to force her to return the silverware is based upon good title, a legal term that refers to the ownership of property (i.e., physical property like the Kagen’s silverware) which is free of claims against it and can be resold, such as buying something at an auction, which makes the buyer or purchaser the legal owner of the property (Hill 154). However, it would be up to a court of law to determine if Makefield has or does not have good title to the silverware.

From the perspective of Karen Makefield, when she saw the silverware at Communities Charities, she obviously knew that it had some value, and when she bought it for $15, she certainly must have been elated. This does not make her a good faith purchaser, due to knowing that the silverware was valuable and not telling the people at Community Charities that it was worth much more than a mere $15. But from her perspective, she did pay for the silverware which negates the suggestion that she stole it, at least from a legal standpoint. But Makefield did take unfair advantage of Community Charities by not telling them that the silverware was valuable. Also, the silverware cannot be deemed as lost property, due to the fact that the Kagens accidentally placed it in a bag of old clothing donated to the charity.

The Entrustment Rule

As outlined in the Uniform Commercial Code which presents laws and regulations related to selling and buying commercial goods and products, when a product or item (i.e., the Kagen’s silverware) is entrusted or given to a merchant (i.e., Community Charities) that sells goods, in this instance for resale, and the “merchant sells the goods to a buyer in the ordinary course of business,” the buyer (Karen Makefield) automatically assumes the good title to the product or item. However, under the rules of entrustment, a merchant is entrusted with products or items that are left at his/her business with the intent to either deliver the goods back to the owner or to sell them, such as with a pawnbroker (“Title, Risk, and Insurable Interest”).

As for the buyer, this is ordinarily “a person who, in good faith and without knowledge that the sale violates the ownership rights or security interest of a third party, buys in ordinary course from a person in the business of selling goods” (“Title, Risk, and Insurable Interest”). However, this does not apply with pawnbrokers. Thus, one could say that Community Charities is a sort of pawnbroker, due to accepting donations that will be resold to buyers like Karen Makefield. But when Makefield realized the true value of the Kagen’s silverware and failed to tell the charity about it, this negated her good faith as a buyer. Therefore, from an ethical viewpoint, since Makefield knew that the silverware was valuable, she effectively violated the Kagen’s ownership rights. Thus, as a kind of pawnbroker, Community Charities cannot be held as an entrustment entity which unfortunately will make the recovery of the silverware almost impossible in a court of law.

Works Cited

Hill, Gerald N. The People’s Law Dictionary: Taking the Mystery Out of Legal Language. New York: MJF Books, 2002.

Jennings, Marianne M. Business: Its Legal, Ethical, and Global Environment. Mason, OH: South-Western Cengage Learning, 2006.

“Society of St. Vincent de Paul.” 2014. Web. 30 May 2014.

“Title, Risk, and Insurable Interest.” 1998. Web. 30 May 2014.