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The Perils of Buying and Selling Art at the Fair: Legal Issues in Title

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Art, Cultural Heritage and the Market

Abstract

The possibility that an artwork has been stolen or that there are questions concerning the provenance of a work, affects every aspect of the art market. Collectors may remain at risk for claims asserted against their artworks decades after acquisition. Sellers may be caught in the middle of a dispute between an original owner (or heirs) and good faith purchaser.

As the art world has become increasingly global, disputes over ownership have grown more complex. Common law and civil law countries have different laws governing legal title and statutes of limitation or prescriptive periods. The outcome of a title dispute will depend on which country’s law applies—the country where a critical sale took place, the country of the residence of the current owner or that of the original owner or heirs.

This article explores these complex issues by first tracing the labyrinthine journey of a valuable painting by the Nicolas Tournier (1590–1639), The Carrying of the Cross (c. 1632), which was purchased by a Parisian dealer at Sotheby’s auction in Florence in 2009 and sold the following year to a London dealer at The European Fine Art Fair (TEFAF) in Maastricht. The work was shown again at TEFAF in 2011 and then at the Salon Paris-Tableau, where it was confiscated by the French government, claiming it as a work missing (possibly stolen) from a public collection for almost 200 years.

Under French law, works in public collections are inalienable and imprescriptible. This article examines hypothetical outcomes if the laws of the US, UK and Italy applied. Different jurisdiction, different law—different result.

While the Tournier case may very well be exceptional (after all, most works sold at TEFAF are not missing from museum collections for centuries), it underscores the vulnerability of the art market, even at a fair whose vetting procedure is widely considered the most stringent in the world. To minimise risk, buyers and sellers are well-advised to exercise thorough due diligence. How confident will buyers be in coming years?

Judith B. Prowda is an attorney and Senior Lecturer at Sotheby’s Institute of Art-New York, where she teaches courses on Art Law and Ethics and Policy in the Art Profession in the Masters of Art Business program. Her law practice concentrates on art law, copyright and entertainment law, as well as mediation and arbitration. She is the author of Visual Arts and the Law: A Handbook for Professionals (Lund Humphries 2013). She thanks William L. Charron, Kibum Kim, Richard Lehun, and Van Kirk Reeves for their discerning comments to earlier drafts, and Chrissie Cahill, Fordham University School of Law, for her excellent research assistance. This article is dedicated to the late Professor David J. Bederman (1961–2011), Emory University School of Law, whose insight, vision, and dedication continue to be a source of inspiration.

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Notes

  1. 1.

    Sayre (2011); BBC News (2011).

  2. 2.

    Le Monde (2011).

  3. 3.

    Le Monde (2011).

  4. 4.

    Daily Star (2011).

  5. 5.

    See Ordinance No. 2004-178 2004.

  6. 6.

    Other works recently reclaimed by the French Ministry of Culture include Edgar Degas’s Blanchisseuses souffrant des dents and Jules Breton’s La fille du pêcheur. See Art Media Agency (2011).

  7. 7.

    Code du patrimoine , Article L112-8.

  8. 8.

    See infra text accompanying notes 36–40 (discussing how the “just compensation” provision contained in Article 7(b)(ii) of the UNESCO Convention does not apply in the US and that the US did not accede to UNIDROIT).

  9. 9.

    Mautner (1991), p. 95 (citing Casner and Leach 1950, p. 179). See also Merryman et al. (2007), p. 151.

  10. 10.

    Charente Libre (2011).

  11. 11.

    Le Point (2011); Le Monde (2011).

  12. 12.

    Rykner (2011).

  13. 13.

    See TEFAF Maastricht (2013a), pp. 40–49.

  14. 14.

    The Pictura Section is solely vetted by non-exhibitors. TEFAF Maastricht (2013a) at p. 41.

  15. 15.

    TEFAF Maastricht (2013a), at p. 41; TEFAF Maastricht (2013b).

  16. 16.

    TEFAF Maastricht (2013a), at p. 41.

  17. 17.

    Dobrzynski (1998).

  18. 18.

    Baker (2010).

  19. 19.

    Baker (2010).

  20. 20.

    See Art Loss Register (2013). See also Art Loss Register (2011).

  21. 21.

    See Art Loss Register (2011).

  22. 22.

    However, the claim of the original owner may be barred by statute of limitations or one of the equitable defences such as laches (sleeping on one’s rights), as illustrated in Solomon R. Guggenheim Foundation v. Lubell, 77 N.Y.2d 311, 569 N.E.2d 426 (1991). The Guggenheim case is discussed infra text accompanying notes 54–67.

  23. 23.

    N.Y. U.C.C. §1-201(19).

  24. 24.

    N.Y. U.C.C. § 2-103(1)(b).

  25. 25.

    See Kunstsammlungen zu Weimar v. Elicofon 1982, p. 1158 (describing the German doctrine of Ersitzung, which awards title to the holder upon 10 years uninterrupted good faith possession).

  26. 26.

    Code Civil [C. civ.] art. 2276 (Fr.) (2013).

  27. 27.

    Code Civil [C. civ.] art. 2276 (Fr.) (2013).

  28. 28.

    C. civ. art. 2261(Fr.) (2013).

  29. 29.

    C. civ. art. 2272 (Fr.) (2013).

  30. 30.

    Zivilgesetzbuch [ZGB], Code Civil [CC], Codice Civile [CC][Civil Code] 10 December 1907, SR 210, RS 210, Article 934 (Switzerland).

  31. 31.

    Bundesgesetz über den internationalen Kulturgütertransfer [Federal Act on the International Transfer of Cultural Property] Article 32, Systematische Sammlung des Bundesrechts [SR] 444.1 (Switz.), available at http://www.ifar.org/icp_legislation.php?docid=1236186669. See also Schoeps v. Museum of Modern Art 2009, p. 467; Weber (2006), pp. 99–102.

  32. 32.

    Article 1153 Codice civile [C.c.] (Italy). See Merryman (2008), pp. 278–279; Reeves (2000), p. 455.

  33. 33.

    Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property 14 November 1970, in force 24 April 1972, 823 UNTS 231.

  34. 34.

    Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property 14 November 1970, in force 24 April 1972, 823 UNTS 231.

  35. 35.

    Merryman (2008), pp. 280–283.

  36. 36.

    UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects, 24 June 1995, in force 1 July 1998, (1995) 34 ILM 1322.

  37. 37.

    UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects, 24 June 1995, in force 1 July 1998, (1995) 34 ILM 1322, Article 4.

  38. 38.

    See Status of the UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects—Signatures, Ratifications, Accessions, http://www.unidroit.org/english/implement/i-95.pdf. Accessed 22 May 2013.

  39. 39.

    Menzel v. List 1966.

  40. 40.

    Menzel v. List 1966, pp. 301–302.

  41. 41.

    Menzel v. List 1966, p. 302.

  42. 42.

    Menzel v. List 1966, pp. 304–305.

  43. 43.

    Menzel v. List 1966, pp. 304–305.

  44. 44.

    Menzel v. List 1966, p. 316.

  45. 45.

    Menzel v. List 1966, p. 316.

  46. 46.

    Menzel v. List 1966, p. 316.

  47. 47.

    Menzel v. List 1969, p. 97.

  48. 48.

    There was in effect in New York, at the time List purchased the painting and the time of the Menzel replevin action, a counterpart to Section 13 of the Uniform Sales Act. Section 94 of New York Personal Property Law provided that “In a contract to sell or a sale, unless contrary intention appears, there is: 1. An implied warranty on the part of the seller that * * * he has a right to sell the goods * * * 2. An implied warranty that the buyer shall have and enjoy quiet possession of the goods as against any lawful claims existing at the time of the sale.” Menzel v. List 1969, p. 96.

  49. 49.

    Menzel v. List 1969, p. 97.

  50. 50.

    Menzel v. List 1969, p. 97 (citations omitted).

  51. 51.

    Menzel v. List 1969, p. 98.

  52. 52.

    Menzel v. List 1969, p. 98.

  53. 53.

    Solomon R. Guggenheim Foundation v. Lubell 1991.

  54. 54.

    Solomon R. Guggenheim Foundation v. Lubell 1991, p. 321.

  55. 55.

    Solomon R. Guggenheim Foundation v. Lubell 1991, pp. 314–316.

  56. 56.

    Solomon R. Guggenheim Foundation v. Lubell 1991, p. 316.

  57. 57.

    Solomon R. Guggenheim Foundation v. Lubell 1991, p. 316.

  58. 58.

    The case of DeWeerth v. Baldinger held that New York limitations law required a showing of reasonable diligence in locating stolen property (in this case, a Monet painting that had been stolen during World War II), and that DeWeerth had failed to make such a showing. DeWeerth v. Baldinger 1987, p. 112. In light of the Guggenheim v. Lubell holding that reasonable diligence was no longer a requirement in locating stolen property, DeWeerth brought a motion to recall the prior mandate and vacate the judgment. The court denied her motion. She moved for relief pursuant to Fed.R.Civ.P. 60(b)(5), and was granted her motion and Baldinger was ordered to surrender the Monet. Baldinger appealed and the court reversed, citing the doctrine of finality. DeWeerth v. Baldinger 1994, pp. 1274–1275. In the end, DeWeerth lost her 10-year battle to regain the Monet. Perhaps the outcome in DeWeerth v. Baldinger would have been different if it had been brought after Guggenheim v. Lubell, since this case did away with the due diligence requirement in the limitations context. Nevertheless, De Weerth v. Baldinger may still constitute persuasive authority as a laches case, and was specifically reaffirmed by the court in Guggenheim v. Lubell in the laches context.

  59. 59.

    Solomon R. Guggenheim Foundation v. Lubell 1991, pp. 315–316.

  60. 60.

    Solomon R. Guggenheim Foundation v. Lubell 1991, p. 320.

  61. 61.

    Solomon R. Guggenheim Foundation v. Lubell 1991, p. 321.

  62. 62.

    Solomon R. Guggenheim Foundation v. Lubell 1991, p. 321.

  63. 63.

    See Reyhan (2001), p. 998.

  64. 64.

    See also, In re Flamenbaum, 2013 N.Y. LEXIS 3127, 2013 NY Slip Op 7510 See also, In re Flamenbaum, 2013 N.Y. LEXIS 3127, 2013 NY Slip Op 7510 (suggesting a possible narrowing of the laches defense under New York law, with the courts also being asked to consider whether the claimant could have discovered important information had the claimant, or the claimant's predecessors, undertaken efforts to look).

  65. 65.

    Rhodes (2011), p. 151, n. 2.

  66. 66.

    See Vineberg v. Bissonnette 2008, p. 57.

  67. 67.

    OKeeffe v. Snyder 1980, pp. 500–505.

  68. 68.

    OKeeffe v. Snyder 1980, pp. 500–505.

  69. 69.

    OKeeffe v. Snyder 1980, pp. 484–485.

  70. 70.

    OKeeffe v. Snyder 1980, p. 485.

  71. 71.

    OKeeffe v. Snyder 1980, p. 491.

  72. 72.

    OKeeffe v. Snyder 1980, See Charron (2013), pp. 502–505.

  73. 73.

    Bakalar v. Vavra 2010.

  74. 74.

    Bakalar v. Vavra 2010, pp. 137–139.

  75. 75.

    Bakalar v. Vavra 2010, pp. 137–139.

  76. 76.

    Bakalar v. Vavra 2010, p. 139.

  77. 77.

    Bakalar v. Vavra 2008, p. 17.

  78. 78.

    Bakalar v. Vavra 2008, pp. 18–20.

  79. 79.

    Bakalar v. Vavra 2008, pp. 16–17. See also Greek Orthodox Patriarchate of Jerusalem v. Christies 1999, pp. 4–5 [applying the law where the sale took place (France), not from where the work was allegedly stolen more than 30 years earlier]. A different choice of law rule, the interest analysis, was applied in Schoeps v. Museum of Modern Art. Schoeps v. Museum of Modern Art 2009. Under the interest analysis, the court will apply the law of the forum with the more significant relationship to the parties and the property at issue. Schoeps v. Museum of Modern Art 2009, p. 468 [citing Restatement (Second) of Conflict of Laws § 245 (1971)]. The following five factors are to be considered in determining which forum’s law will govern a contract dispute: (1) the place of contracting; (2) the place of negotiation; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile or place of business of the contracting parties. Schoeps v. Museum of Modern Art 2009, p. 465. See also Yip (2010), pp. 14–15.

  80. 80.

    Bakalar v. Vavra 2008, pp. 20–23.

  81. 81.

    Bakalar v. Vavra 2008, pp. 21–23.

  82. 82.

    Bakalar v. Vavra 2008, p. 25.

  83. 83.

    Bakalar v. Vavra 2010.

  84. 84.

    Bakalar v. Vavra 2010, pp. 143–144.

  85. 85.

    Bakalar v. Vavra 2010, p. 145.

  86. 86.

    Bakalar v. Vavra 2010, p. 142 (quoting Solomon R. Guggenheim Found. v. Lubell 1991, p. 320).

  87. 87.

    Bakalar v. Vavra 2010, p. 145.

  88. 88.

    Bakalar v. Vavra 2010, p. 147.

  89. 89.

    Bakalar v. Vavra 2012.

  90. 90.

    Vavra v. Bakalar 2013.

  91. 91.

    Art. 1153 Codice civile [C.c.].

  92. 92.

    Merryman et al. (2007), p. 151, cmt. 5.

  93. 93.

    Merryman et al. (2007), p. 151, cmt. 5.

  94. 94.

    Winkworth v. Christie Manson and Woods Ltd. 1980.

  95. 95.

    See Oxford Dictionaries, http://oxforddictionaries.com/definition/english/netsuke?q=netsuke.

  96. 96.

    Winkworth v. Christie Manson and Woods Ltd. 1980, pp. 498–499.

  97. 97.

    Winkworth v. Christie Manson and Woods Ltd. 1980, pp. 501, 509.

  98. 98.

    The theft occurred in England, the owner was domiciled there, the owner was unaware that the work had been removed from England or voluntarily returned to England, and the case was before an English court. Winkworth v. Christie Manson and Woods Ltd. 1980, pp. 502–503.

  99. 99.

    Winkworth v. Christie Manson and Woods Ltd. 1980, p. 509.

  100. 100.

    Winkworth v. Christie Manson and Woods Ltd. 1980, p. 497. The case ultimately settled, with the action discontinued against Christie’s and both parties agreeing to the sale of the objects. The proceeds from the sale were kept in escrow pending the resolution of the proceedings.

  101. 101.

    Rhodes (2011), p. 151, n. 2.

  102. 102.

    See Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc., 1999, p. 7; Sanchez v. Trustees of the Univ. of Penn., 2005 U.S. Dist. LEXIS 636, p. 2 (S.D.N.Y., 18 January 2005).

  103. 103.

    See Vineberg v. Bissonnette 2008.

  104. 104.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, p. 7.

  105. 105.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, pp. 2–3 (citations omitted).

  106. 106.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, p. 3.

  107. 107.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, pp. 4–5. The Patriarchate is an order of monks “devoted to large-scale educational and philanthropic activities and to protecting Christian holy places in the territory that is now Israel, Jordan, and the Palestinian authority.” Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, p. 4.

  108. 108.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, pp. 8–9.

  109. 109.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, p. 13 (citing Kunstsammlungen zu Weimar v. Elicofon 1981, pp. 845–846). The choice of law analysis in Greek Orthodox Patriarchate of Jerusalem v. Christies Inc. has been effectively overruled by Bakalar v. Vavra 2010.

  110. 110.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, p. 14.

  111. 111.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, pp. 14–15.

  112. 112.

    Greek Orthodox Patriarchate of Jerusalem v. Christies, Inc. 1999, pp. 23–24.

  113. 113.

    Under Law 92-1477, enacted on 31 December 1992, export permission can be denied only for “national treasures,” a category which includes classified works, as well as objects “of major (‘majeure’) interest for the national patrimony.” Export of other works of “artistic interest” requires permission, which may be denied once. Under Law 2000-643 m, as of 10 July 2000, the minimum period between applications for export permits was reduced from 3 years to 30 months, and provides a procedure for purchase by the government that “takes into account prices on the international market.” If the government fails to act within 30 months, the export permit must be granted. Merryman et al. (2007), pp. 139–140, cmts. 1–3.

  114. 114.

    Works such as the Poussin would enter the US duty free, so it is unclear why the dealer imported the work’s value as US$0, exposing himself to criminal liability and the painting subject to possible seizure and confiscation. Merryman et al. (2007), p. 168, cmts. 6–7.

  115. 115.

    Merryman et al. (2007), p. 168, cmts. 6–7.

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Prowda, J.B. (2014). The Perils of Buying and Selling Art at the Fair: Legal Issues in Title. In: Vadi, V., Schneider, H. (eds) Art, Cultural Heritage and the Market. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45094-5_6

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