The ethical dilemma I would face would be whether or not to have anything further to do with Mr. X:

"Then the action was given a fancy finish and was sent to a noted engraver to cover up the weld marks." Nice, really nice.

"I was not swindled or anything, since I knew the rifle when it was a 32RF and since I worked with Y when the 32-40 disaster occurred." Were the intermediate buyers also aware of this action's history? See what I mean?

I guess my delicate sensibilities are offended.