University of Pennsylvania Law School
Penn Law: Legal Scholarship Repository
Faculty Scholarship
1994
The Case Against Statutes of Limitations for Stolen
Art
Stephanos Bibas
University of Pennsylvania, [email protected]
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Notes
The Case Against Statutes of Limitations
for Stolen Art
Steven A. Bibas
In the
mid-1960's,
a mailroom clerk at the Guggenheim Museum in Nev.
York City stole a Marc Chagall watercolor entitled
The Cattle Dealer.
Musemn
officials did not notify the police, the FBI, Interpol, or other museums or
galleries of the theft. In
Dealer
1967,
Jules and Rachel Lubell bought
The Corrie
from a reputable New York gallery and displayed it in their home for
over two decades. After learning of the painting's location in
1985,
museum
officials demanded its return. When Mrs. Lubell refused, the museum began
a lnwsuit that dragged on for years.1 Mrs. Lubell claimed ownership as an
�
adverse possessor and under the statute of limitations. In 1991, the New York
Court of Appeals sent the case back to the trial court for a determination of the
relative blameworthiness of the parties, further prolonging the litigation.'
The balancing-test approach adopted by the New York Court of Appeals
in Guggenheim exemplifies one of several tangled threads in the law of stolen
! . See Solomon R. Guggenheim Found.
v.
Lubeil, 569 N.E.2d 426, 427-28 (NY. 199l)
!
:wting th:lt
iaws uit bcg�tn on Sept. 28, 1987); Richard Perez-Pcfia. Sui! 01·er Clwgali 1-\(uerco!ur Is Soiled DaY
Tria! Swrts, N.Y. TIMES, Dec. 29, 1993, at B:l (noting that lawsuit was settled on Dec. 28. 1993 ).
Af:er
2. Solomon R . Guggenheim Found. v. Lubell. 550 N.Y.S.2d 618. 619 lApp. Div. 1990). certified
�!lk'Stion answered und (�f!'d, 569 N.E.2d 426 (N.Y. 1991 ).
3. Guggenheim, 569 N.E.2d at 431. After the t··ial on remand began, the partie:' tlnally settled d1 ..�
ia-..-..·suil on December 28, 1993. Under the settlement. Mrs. Lubell will kt;ep the p::!inting. but she and th�
two dealers who sold the painting will pay the Guggenheim Museum an undisclosed sum of mon(:\'. p,:r-:z­
Peria. supra nc)te I.
2437
The Yale Law Journal
2438
[Vol .
1 03: 2437
chattel s .4 Many of the commentators who have written about statutes of
limitations for personal property advocate adverse possession, a doctrine
bonowed from l and l aw.5 Other authors endorse a multi-factor b a lancing of
the equities cal led the discovery rule, an approach similar to the one adopted
6
in Guggenheim. Related doctrines , such as the due diligence and l aches rul e s ,
a l s o balance t h e rel ative equities of t h e part i e s . 7
A ll of these approaches are flawed. Adverse posses s i o n , a doctrine that
works well for real e state, i s not s u i ted to the very different rea l m of movable,
concealable personal property. B ecause it ignores an owner's diligence, adverse
possession doctrine hurts diligent owners who have reported thefts but are
unable to fi nd their property.
automatically
Since multi-factor balanc i n g
tests
do not
award title to theft victim s , they do not adeq uatel y deter
trafficking i n stolen goods . Adverse possession l aw and b al ancing tests do not
automaticall y reward theft reporting, n or does e i ther doctrine rou t i n e l y penal ize
the purchase of stolen property. Thus, neither approach creates adequate
4. Though the term "chattel'' technically does not include intangible persona! property, for the sake
of readability this Note uses "chattel" and
"
personal property" interchangeably because the distinction is
not important for this Note's purposes.
5.
See infra Par1 I.B. Each author stresses a different justification for adverse possession of chattels.
See Patty Ger:;tenblith, The Adverse Possession of Personal Property, 37 BUFF. L. REV. 119, 163 (1988)
( undersco ri n g need to protect good faith and commercial certainty); R.H. Helmholz. \Vrongflli Possession
of Chattels: Hornbook Lmv and Case Law. 80 Nw. U. L. REV. 122 L 1235-36 ( 1986) (stressing importance
of quieting title); Nicholas D. Ward. The Georgia Grind: Can the Common Law Accommodare rhe
Problems of Tirle rn !he Arl World, Observations on u Recem Case, 8 J.C. & U.L. 533, 554 ( 1981-1982)
(relying on ''the need f(Jr repose''); Comment, 14 RUTGERS L. REV 443 . 444-45
( 1960) ( st ressi n g need to
quiet titles and bar stale claims). These recent articles have not moved beyond the older literature, which
relied on
similar reasons in support of adverse possession of chattels. See J.B. Ames, The Disseis·in of
Chmtels (pt. 2). 3 HARV. L. REV. 313 ( 1890) (assimilating ::1dverse possession of chattels to adverse
possession of land); John P. Dawson, Frartdulent Concealment and St(l{utes of Limiwrion, 31 MICH. L.
( 1933) (favoring protection of reliance interests); William F. Walsh, Tirle bv Adverse
L.Q. REV. 532. 536 (\939) ( emphasi zing need to bar stale claims).
6. See infra Part l.D; see also Paula A. Fran zese. "Georgia on Mv Mind"-Rejlections on O ' Keeffe
v. Snyder, 19 SETO >' HALL L. REV. I 11989) (implicitly endorsir.g discovery rule); John G. Petrovich,
Comment. The Recoven• of Stolen Art: Of Paintin gs . Statues. and Staill!es of Limitations, 27 UCLA L.
REV. 1 1 2 2 , II 5 I ( 1980) ( advocating discovery rule that would balance defendant's interest in repose ,
REV. 875, 897-901
Possession (pl. I), 16 N.YU.
piaintitTs interest in meritorious claim, problems of proof, and hardship to faultless plaintiff).
7.
Laches and due diligence doctrines ternper· statutes of limitations by taking into account the owner's
diligence and other factors relevant to the fairness of returning the chattel. See infra Part l.D; see also
Sy d n ey M. Drum, Comment. DeWeerth v. Baldinger: Making Ne11· York
a
Haven
j(n
Stolen Art?, 64
N.Y.U. L. REV. 90Y. 942 (1989) (endorsing demand-and-refusal rule as qualitied by laches); Leah E. Eisen,
Commentary, The Missing Piece: A Discussion of Theft, StaTutes of Limitations. and Title Disputes in the
Art Wol'id. 8\ J. CRLvl. L. & CRIMINOLOGY I 067 . I 100-0 I (1991) (endor si n g version of due diligence rule);
Stephen L. Foutty, Recent Development, Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg
& Feldman Fine Arts. Inc.: Enlrenchment of r!re Due Diligence Requirement in Repln·in Actions for Srolen
Art, 43 VAND. L. REV. I S3Y. 1841 (1990) (endorsing due dil i gence rule): Andrea E. Hayworth. Note, Stolen
Arrwork: Deciding Ownership Is No Prerry Picture.
43 DUKE L.J. 337, 374-83 ( 1993) (endorsing demand­
Is It Anyway.? Title Displlles
and-refusal rule as qualified by laches): Charles D. Webb. Jr., Note, W hose Art
und Resolurions in Art Thefr Cuses, 79 KY. L.J. 883,895 (\990-1991) (endorsing version of due diligence
rule). Though these commentators treat the differences between laches and due dilige n ce as significant.
I.E notes similarities between the two and
rule adequately
Part
Part Il.D argues that both rules are far too vague. Thlls. neither
deters the buying of stolen art.
S tatutes of Limitations for Stolen Art
1994]
2439
i ncentives to report thefts and deter the buyi n g of stolen art.8 Judges and
academics h ave been too preoccup i ed w ith ex post d i s pute resolution to see the
ex
ante
i m p act
of thei r rules
upon
future behav i or.
Therefore,
current
approaches fuel the market for stolen goods and encourage more thefts .
This Note's the s i s i s s i mp le: v icti ms of art thefts who promptly report the
thefts to the p o lice and to a computerized theft database s h o u l d n ever be
l e g a l l y b an·ed from recover i n g their property. I n other words, statutes of
l i mitations should not appl y to actions brought b y owners who h ave promptly
taken two s i mp l e steps to protect their legal titles. Often , a so-ca l l e d bona fi de
purchaser (B FP) i s negl i gent when i nvestigating title to an artwork. Now that
an i nternational computerized art-theft regi s try is available, b u y ers should be
encouraged to check the regi stry and shoul d be held l i ab l e i f they fai l to do s o .
Part I of t h i s Note surveys the arguments commentators h ave marshalled
in suppor1 of statutes of l i mi tati o n s for personal property and con s i ders the
j u d icial trend toward restrictin g protection of B FP's . Courts have gradual l y
offered more protection to owners b ut have done s o ad hoc, suggesting that the
time is ripe for wholesale l e g i s l ative reform . Part II criticize s the arguments for
protecti n g B FP's from d i l i gent owner s ' c l ai m s . Part III outl i ne s an alrernative
le gal reg i me that would protect a B FP if and only if the owner h ad not
reported the theft. Thi s Note concludes that protecti n g owners by abol i shing
l i mitation
periods for many
types
of personal
property
would
be both
economical l y efficient and morall y j ust.
I. LIMITATION PERIODS FOR CHATTELS: COMM ENTATORS AND COURTS
To understand why the current l aw i s unsatisfactory, one must understand
what rhe l aw is and how it arose. Adverse posses s ion, for i n stance, is a land
law doctrine that courts first i mported i nto cases i n v o l v i n g stolen animals .
Adverse possess i on may have suited stolen horses in the l ate nineteenth
century, but i t works poorly for smalL concealable objects ( s u c h as artworks)
in a h i ghly mobi l e society. Reco g n i z i n g that this real-property doctrine is
i n appropriate for most personal property, courts and commentators h ave moved
toward c ase-by-case bal anc i n g of the rel ative d i l i gence and b lameworthiness
of each theft v icti m and e ach buyer. Judges and academics have gradually
recognized that theft v icti m s often deserve to recover thei r art from buyers of
stolen goods . B ut because no one has advocated bri ght- l ine rules. the law has
perpetuated perverse i n centives for buyers not to i nvestigate title and has failed
to encourage victims to report thefts, as Part II argue s .
8 . The Cultural Property Implementation Act already covers cultural. archaeological. o r ethno!t>:;i·:a!
19 U.S.C. �� 2601
2607 ( 1988). See gene wily Paige L. Margules. Note, /ntemationcli Art Theft and the 11/egol !rn{'ort unci
Export of Cultural Propertv: A Study of Relevant Val11es, Legislation. and Solutions. 15 SU!'FOU:
TRc\l'SNAT' L L.J. 609 ( 1992). Therefore. this Note does not deal with works that t'all under chc;! A<:t
property stolen from another country's museums. monuments, or public institutions.
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2440
[Vo l .
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Sect i o n A lays out the common law rule that protects an original o wner's
title to
stolen
goods .
More
than
a century
ago,
Ameri c a n
court s
and
commentators began supporti ng adverse posses s i on of chattels, a d octr i n e that
favors buyer s . S ection B explores thi s approach . More recent l y, courts have
drifted away fro m protect i ng buyers by temper i n g l i mitation p er i o d s i n v ar i ou s
c i rcumstances . I n a r t theft cases i n particular, they have been l e s s w i l l in g t o
find for p os sessors than m o s t academics w o u l d b e . Sections C a n d D cons i der
doctri nes the courts have used to curta i l protection for buyers of stolen art: the
demand- and-refusal rule, the l aches rule, the due d i l igence doctri n e , and the
d i scovery rule. Section E considers the reasons behi n d the gradual eros ion of
protect ion for possessors . When courts face real cases involving real people,
judges and juries i ntuitively b l ame the possessor because he9 is usually the
least cost avoider and is at least as negligent as the theft v icti m . C ourts have
i ncreasi ngly favored owner s , but they h ave done so in an ad hoc fas h ion. As
Pan III argues , Congress should replace th i s ad hoc j udicial appro ach w i th an
exp l i cit, bright-line rule that would deter art theft.
A.
The Common Law of Stolen Property
At c o mmon law, a th ief ' s title is void . 10 The thief cannot g i ve a buyer,
even a BFP, good t itle.'' Thu s , a buyer does not take title i f s omewhere back
in the b uyer ' s chain of title a claim rests on theft. 1 2 Over the past century, the
various doctri nes of limitation periods described below have carved out
excepti o n s
to
this
rule.
Nevertheless ,
the
U n i form
C ommercial
Code
perpetuates the common law rule: unles s one of the i i m itat i on doctri nes
applies, title remai n s in the original owner. 13
9 . This '<ote uses male pronouns for buyers a n d possessors a n d female pronouns for owners a n d t hef t
victirns.
l 0 . .'iee 3 WiLLIAM BLACKSTONE, COMMENTARIES * 1 45 (describing rationale underlying actions for
replevin and detinue: ''For there must be an end of all social commerce between m::m and man. u nless
pri-.·are possess io n s be secured from u njust invasions: and. if an acquisi tio n of goo d s b y either force or
fr:!ud were al!owed to be a sufficient ti tle, all property would soon be confined to the most strong, or the
most cunning: and the weak and simpleminded pa rt of man k in d (which is by far the rnost n u merous
d1vision) could never be secure of their possessions.").
11. Kunstsammlungen zu 'Weimar v. Elicofon. 678 F.2d 1 1 50, 1 1 60 (2d Cir. 1 982); Ward. supra note
5. at 549 & n.94.
12. Suburban Motors v. State Fann Mut. Auto. I ns., 268 Cal. Rptr 1 6. 1 9 (Ct. App. 1 990); Schrier
v. Home lnclern. Co . . 273 A.2d 248, 250-5 1 (D.C. 1 971 ); lnmi-Etti v. Aluisi , 492 A .2d 917. 923 (Md. Ct.
Spec. App. 1985).
D. See U.C.C. �§ l-103 (stating that pre-U.C.C. common law still app lies except where displaced by
p3rt i cular U.C.C. pro\'isions), 1-20 I (32). (33) (defini ng purchase and purchaser i n terms of passage of t i tle
via 'IOiuntary transactions), 2-403( I) (stating that purchaser acquires a l l ti t l e that transferor had) ( 1988); see
dso \\!ebb ..wora note 7. at 884 & n.l2 (citing these \JC.C. se c t i o n s). The U.C.C. does protect a BFP who
buys from a seiler with voidable ti t l e. U.C.C. § 2-403( I) ( 1988). But a voidable title. whi·�h :�rises. for
instanc�. when a check is dishonored, is very different from a thi ef's void title. Ward, supra note 5, at 5J.950. Since�' thief has no title to transfer. not even a voidable title, a purchaser from a thief acquire,; no title.
S tatutes of Limitations for S tolen Art
1 994]
B.
2441
Adverse Possession of Chattels
Academic Literature
1.
Under adverse posses sion doctrine, a possessor w h o has act u a l , exclu s ive.
open, notorio u s , continuous, and hostile pos session of land under a claim of
right for the s tatutory period can take good title and thereby defeat the origi n al
owner ' s claim . 1 4 Academics have long argued that adverse posses sion of
chattel s is desirable for precisely the same reasons that adverse posses sion of
l and is: n amely, to punish the original owner ' s del ay, to protect the pos sessor's
settled e xpectations, and to avoid the evidentiary prob l e m s caused by stale
cl aim s . 1 5
S ome authors have recognized differences between realty and personalty
but have nonetheless supported adverse possession for both . John Dawson. for
instance, n oted that the usual requirement of open and notori o u s possession
does
not
fit
chattels
well
because
chattels
are
movable
and
often
incon s picuous . 16 Nonethel e s s , he supported adverse pos se s s i on of chattel s as
a vvay of protecting a B FP ' s reliance interest. 1 ' S i m i l arly, Patty Gerstenbl i th
notes that e ve n if a possessor uses personal property openly, notorious l y, and
visibl y .
a
d il igent
owner
may
stil l
have
no
not ice
of
her
property's
w hereabouts . 18 Thus , Gerste nblith say s , courts face a d i fficu l t choice betvveen
two innocent parties . 1'� Nevertheless,
she supports adverse posses s i on of
chattel s because it protects commercial expectations and rewards posses sors'
good
faith . 20 In
her opinion,
an adverse possess i o n rule that relies
on
possessors ' good faith is a clear, predictable, fair substitute for the requirement
of open and notorious possession. 2 1
14. See JESSE OUKEMINIER & JA�IES E. KRIER. PROPERTY I 00 (2d cd. 1988). See gE"IIemi/1· CH.·\RI.ES
( 1961 ). Note one important dJ!lerence between land and chattek
i.e .. title �esting on a document.
See DUKEMINJER & KRIER, supra. at I 04. Title deeds exist for land. m�lking the color of title rcLjuircmcn�
useful for weeding out undocumented claims. In contrast, because there are no stand�rd docurne;'t'. nr· titie
C. CALLAHAN, ADVERSE POSSESSION
Many jurisdictiom requi re that an adverse possessor have color or title,
for most chattels, it is impossible to apply the color of title test to chattels.
15. See, e.g., Ames, supra note 5 , at 323-25; Walsh, supra note 5. at 535-36. Sn·crai •xurks t;·..:at
adverse possession of chatt els only brieAy and make the analogy between land ::tnd chatteh in oa:,sing.
taking it for granted that the two deserve like treatment. See. t>.g., 3 AMERICAN L'.W Of' PKOi'E:RTY � 15.15.
at 837 (A. James Casner ed. 1952); Comment, mpra note 5. at 444-45.
16. Dawson, supra note 5, at 893-99.
17. !d. at 897-901.
18. Gerstenblith, supra note 5, at 124.
19. See id.
20. !d. at 163.
21.
!d. at 162-63.
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2442
2.
[ Vol.
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Case Law on Adverse Possession
By b arring untimely suits by owners to recover property, statutes of
l im itations i n directly defeat the common law rule that a thief cannot p a s s ti tle .
Though most statutes of limitations for recovering personal property do n ot
mention the requirements for adverse p o s s e s s ion of land, courts have read s uch
standards into the statutes .22 This approach was firmly settled by the first
quarter of this century. The maj ority of reported cases on adver s e p o ss e s s i on
of chatte l s
between
1870 and 1930 involved horses, cattle, sheep, and
m ul e s . 23 Thi s case law, crafted to fit stolen animals that remained i n one
state, did not work nearly as well when i t was later extrapolated to cover
smaller, concealable goods (such as artworks) that h ad been tran s ported to a
d ifferent state or nation . B ecau se adverse possession of chattels u n fair l y
penalizes theft victims w h o cannot find their goods, many j ur i sd ictio n s have
re p laced adverse possession law with various balancing-test doctr i n e s .24
25
In the seminal case of Dragoo v. Cooper,
C ooper s ued to recover a
sto len horse from Dragoo, a B FP who h ad held the horse for four years . The
court held for Dragoo. "[W]e perceive no valid reason w h y the rul e of
construct i o n adopted in s uits relating to realty [ i . e . , adverse pos s e s s ion] s h a l l
not b e appl ied i n actions for the recovery of personalty."26 T h e court claimed
that the p o licies of quieting titles and preventing l aws uits apply equally to
chattels and land . 27 The Dragoo scenario recurred i n different state s , \Vi th
d ifferent animals, over the next s i x decades. Courts gradually i m ported more
and more of the l and law tests i nto the law of chattels . One court, for example,
s tr essed that a possessor had held openly and notoriously.28
22. O'Keeffe v. Snyder, 405 A.2d 840, 847 (N.J. Super. Ct. App. Div. 1 979),
rev'd and renwndc,f
nn
other grounds, 4 1 6 A.2d 862 (N.J. 1 980).
23. Another recurring case involved fixtures of which fo!lTler owners or occupants of land retained
ownership, but which they left behind and only belatedly returned to claim. Courts recognized that such
tixturc' were personal property but nonetheless applied adverse possession doctrines. See, e.g., Isham v.
Cudlip, 179 N.E.2d 25 (Ill App. Ct. 1 962) (applying adverse possession to house sold as chattel); Chapin
'�·. Freeland, 8 N.E. 1 28 (Mass.
1 886) (applying adverse possession to counters in general store); Preston
v. Briggs. 16 Vt. 1 24 ( 1 844) (applying adverse possession to barn). Applying adverse possession to fixtures
makes ;ense. because fixtures share many characteristics of land: durability, high value. responsiveness to
investment, and locational stability. The owners could have returned to claim their fixtures at any time;
their delay was thus blameworthy.
24.
See infra Part LC-D.
''
72 Ky. (9 Bush) 629 ( 1 873).
26
fJ at 632.
27. See id.
28. Dee v. Hyland, 3 P. 388, 388 (Utah 1 883) (awarding title to BFP of horse even though owner hacl
notiried sheriff, ranchers, and cattle drovers of theft). Another court noted that a BFP had been "claiming
:tnd holding [a mue] notoriously and adversely." Hull v. Davidson, 25 S.W. 1 047, 1047 (Tex. Ci'.. App.
i 894). One c:.1se stressed a BFP's "open, notorious, and undisputed possession [of a stolen mare! under an
honest claim of right." Leavitt v. Shook, 83 P. 39 1 , 39 1 (Or. 1 905). Another case rested its decision on a
posse3sor\ having held openly, notoriously, peaceably, and exclusively. Adams v. Coon, 1 29 P. 85 1 , ci52
(Old:J.. 1 913). Several cases expressly permitted tacking. E.g., Gaillard v. Hudson, 8 S .E. 534. 534 i,G�.
I :3S9); Gatlin v. V:mt, 91 S.W. 38, 40 (Indian Terr. 1 905), aff'd .wb rwm. Vaught v_ Gatliil, ! 20 P 273
(Okla. 1911 ) . Tc.cking is a doctrine that permits a possessor to add the length of time his :il':l!er posse" sed
I
I
S tatutes of Limitations for S tolen Art
1994]
2443
Animals are mobile and thus hard to fi n d . To address this problem, some
courts interpreted the open-and-notorious t e s t to require that the possessor hold
the property open l y and notoriously i n the vicinity of the theft: "[I]t has been
uniformly held that the two-year statute of l im i tation i s appl icab l e to an action
for the recovery of stolen property, where the property is held in open and
notorious possession
Dragoo court
and within the jurisdiction of the court."29
Likewi se, the
declared that "departing from the state" woul d toll the statute of
l imitations.30 This doctrine guaranteed the owner a reasonable chance to find
her animal and bring suit.3 1 In contrast, where a possessor hel d a mare openly
and n otoriously i n the locale of the theft, he deserved title because of the
owner ' s "utter l ack of diligence" in finding and recovering the mare .32
With t h i s refinement of the open-and-notorious test, adverse possession
may have worked well for livestock i n the l ate n i neteenth century. Animals,
l i k e l and, are durabl e , valuab l e . and responsive to investment , such as feeding
and medical care . The requirement o f open and notorious possession i n the
j urisdiction insure d l ocational stabi lity. Animals grazed on open land and were
v i s i b l e to the public. M any animals bore brands or distinguishing marks that
un iquely identified them from a distance.33 Communities were much smaller
and word of mouth much more potent. If a stolen horse stayed in the owner's
community for several years without being fou n d , it w as re l atively likely that
the owner had n either acti vely l ooked for it nor alerted her n eighbors.
P u n i shing
an
o w ner's
l aziness
might
have
made
sense
in
small
rural
communities-adverse possession law baned stale claims and rewarded the
possessor for feeding and caring for the animal .34
But this reasoning was p l ausible only when one coul d b l ame delay on an
mvner's l aches (i . e . , l ack of d iligence). Over time, comm u n i ties grew l arger,
people grew more mobile, and courts extended adverse possession to less
noticeable goods. Furthermore, the tol l i n g of s tatutes of l i mitations for property
outs ide the j urisdiction disappeared from the case l aw.35 These changes made
it incre as i ng ly i mplau sible to blame o wners for not bri nging suit sooner.
Courts that h ad to assign the loss to one of two i nnocent pa11ies split i n
thei r approaches. Most interpreted open and notorious u s e to mean using
" piece of property to the length of his own possession in com pu ting whether the adverse posse,.sion period
has run.
29.
Torrey v. Campbell, 175 P. 524. 525 (Okia
30.
Dra g oo v. Cooper, 72 Ky. (9 Bush) 629, 631 ( 1873)
1918) (emphasis added)
3 1. Carlin. 91 S W. at 40.
32. Luter v. Hutchinson, 70 S.W. 1013. 1014 (Tex. Civ. App. 1902)
33.
See Torrev, 175 P. at 525 (noting thal cow had distinguishing marks.
so anyone looking for her
could have identified her).
34. Note that rewarding possessors for caring for animals is an a l ogo us to re ward i n g maritime salvagers
& CHARLES L. BLACK. JR . . T!iE LAW OF
AO/.l!RALTY 532 (2d ed. 1975).
35. TI1is author hcts fou n d no cases decided after 1918 that tolled a statute of !imitations because
property w<!s outside the jurisdiction (except where there had been affirmative fraudulent concealment)
for s alvagi ng the property of another. See GRANT GILMORE
The Yal e Law Journal
2444
[Vo l . 1 03 : 2437
property as ope n l y as an ord i n ary owner w o u l d ; these courts u s u a ll y s i de d w i t h
posse ssors . F o r example, one c ase h e l d that u s i n g a typewriter i n p l a i n v i nv
in
a
b u siness counted as o p e n and notori o u s posse ss ion . 36 A n O [ h e r c a s e
treated u s e of a v io l i n i n a possessor ' s h o u s e and at music l es s o n s a s
s u ffi c i e n t l y o p e n a n d notoriou s . 37 In a third case, h a v i n g a piano i n o n e ' s
house s u fficed a s " p u b l i c " use, e v e n though t w o witnesses testifi e d that t h e y
h ad not k n o w n about t h e p i an o .38 Another court treated t h e use of bonds for
l o an c o l l ateral as suffici e n t because the possessor "h [e ] l d the bonds as o p e n l y
a n d notoriou s l y as the nature of t h e property w o u l d permi t . ·d9
A small m inority of c ourts read "open and notorious" as req u i r i n g u s e that
an owner was l ikel y to d i s c over; these c ourts usually s ided w i th o w n e r s . The
S upreme C ourt of Californi a h e l d that u s i n g a piano in one ' s h o u s e "was not
open and n otori o u s , but c l an destine, and the owner was w i thout the means o f
know i n g i n whose possession i t actually was . "40 An O k l ah o m a c ourt asked
whether the possessor held a d i amond ring "open l y and notori o u sl y . . . w i t h i n
p l ai n t i ff ' s v i c inity so t h a t p l a i nti ff had a reasonable opport u n i ty of k n o w i n g the
r i n g ' s whereabouts .".J 1 Utah l aw went even further and tol led the s t at u te u n t i l
a n o w n e r h a d actual knowl edge o f facts that s h o u l d h ave put her o n n o t i c e . J 2
T h e s e c ases began the trend toward insuring fa irness t o o w n e r s . Th i s foc u s on
the owner ' s knowledge and c u l p ab i l ity presaged the laches and d i s c overy rules,
d i s c ussed below i n Part l . D . As a res u l t of these conc erns , such m aj or
j u ri s d ictions as New York and New Jerse y have abandoned adverse p o s s e s s ion
l a w i n favor of balan c i n g-test doctrines.43
C.
The Demmzd-and-Refusal Rule
One l i n e of c ases holds that an owner ' s cause of action agai n s t a B FP does
n o t a c c r u e until the owner demands that the B FP return her p roperty and the
------- ·---------
36. B u rroughs Adding Machine Co. v. B i vens-Corhn Co., i I ') P 2J 5 8 _ 59 ( O k l a . i 04 1 1 .
_' 7 _ Reynolds v. B agwe l l . 1 9 8 P.2 d 2 1 5 , 2 1 7 (Okla. 1 94 8 ) : t/ U n i ted States -.. One S trad i vari u s
K i e,;dwdter Vi o l i n , ! 97 F . i 57 . 1 5 9 (2d C i r. ! '1 1 2 ) ! k e e p i n g v i o l i n o n t�thie � � t h o m e �end show i n g i t t o
guests prev·er.ted to! ! i n g of statute of l i m i tations for concealment: n o t < � n adverse possessiun case, however)_
33. Connor \ . Rl\vk i n s . 9 S. W. 684, 685 (Tex I 8 8 8 ) _ The re p orted o p i n i o n she J.s nu l i ght o n whc'
these \'.:� tr�e�;��s vve re . Presumably. the y \v e re ca l l e d to tesu fy becau.•;e they v.:ere Jcqut.�l n tcd w i t h the
pu:-,sessor.
J Ll Joseph '-'. Le sncvich, 1 5 3 A . 2 d 349, 357 ( N .J. Surer. Ct. App. D i v . 1 95 9 ) W h i l e the paragraph
r"rorn w h i ch the quot::nion comes discusses the lack o f fraud u l e n t concealment. the preceding paragraph
rn�.kes clear that p os;e ss i o n need o n l y be open and notorious enough to ne g a t e a charge of fraudulent
c o nceal ment, reg:).rd!ess of an O\vner's i gnorance.
-10. San Frrmc i s co Credit Cl eari n g B o us e v. We l l s , 239 P. 3 1 9, 3 2 1 (Ca l . 1 92 5 ; .
4 i . R i es i n g e r ' s Jewelers, I n c . v . Roberson. 5 8 2 P. 2d 409. 4 1 3 ( O k l a . Ct. A p p . 1 9 7 8 ) (holdi ng thoJt
v·.v n c r ' :-; opportunity to know ring1S \'>'' hereabouts was substLtntial question of t�act prec l u ding s u n1n1ary
j u d g:nc n t ) .
42. I'vi<;dsen ;. iVladsen. 2 6 9 P. 1 3 2 . 1 34 ( U tah 1 92 8 ) .
-:3 . Se< inji·d Part ! . C - D .
Statu tes o f Li mitmio n s for S t o l e n A rt
1 994 ]
2445
B FP re fu s e s . 4-l I n c o n tras t , a cause of action ari ses at once aga i n s t a t h i e f o r
other wro n g d oer, and s o n o demand is neces sary.-'5 For examp l e , t h e demand
n:q u iren1ent protects a B FP from cri m i nal prosec u t i o n for p o s s e s s i o n o f a
s t o l e n car u n t i l t he O\v ner has demanded its return and the BFP h as refu s e d .
T h e rationale for d e m a n d a n d refu s a l , i n c o n texts o ther t h a n l i m i ta t i o n periods,
i s t h Ctt t he BFP, u n l ike the t h i ef does n o i n te nt i o n a l wrong b y holding the
propert y a n d th erefore s h o u l d not be liable u n t i l made a ware o f the owner ' s
c l a i m .4A T h e req u i rement fos ters pri vate d i s pute resolu t i o n and i mm u nizes a
BFP fro m c i v i l and c ri minal l i ab i l i ty for the t a k i n g (though he m ust s t i l l return
the property) . .)� In other w or d s , the rule is supposed to protect a BFP by
postpon i ng l i ab i i i t y u n t i l after he learns of the theft v i c t i m ' s c l ai m a n d refuses
to h on o r it.
W i t h o u t exam i n i n g the p o l ic ies behind the rule , several c o ur t s have applied
the d e m a n d- a nd-re fu s a l requ irement to t o l l statutes o f l i m itati o n s until the
owner makes a demand and the p o s sessor refuses to return the property . .Jx
Tho ugh t h i s v e rsio n o f the r u l e e x tends to all types of c hattel s , a n u mber of
t hese cases have i n v o l v e d stolen an o r artifac ts .�9 S i n c e t h i s rule a l l o w s the
O \v ner t o b ri n g s u i t no matter how much t i m e has e l ap s e d between the t h e ft
and her demand, c o urts that s y mpath i ze w i th owners use the rul e ·'as a b u l wark
a g a i n s t the h a n d i work o f evi l , to g u a rd t o rightful owners the fru i ts of the i r
\ abors . · ·:i'l
Though s y m p a t h y for theft v ic t i m s is u n derstan d ab l e , the method c h o s e n
tu
p ro t e c t these v i c t i m s i s not . The pure demand-and-refu s a l req u i re me n t
c v i �.cerates l i m itation periods by a l l o w i n g o wners to p o s t p o n e m a k i n g a
demand i ndetl n itely. l t helps th i eves. Cor w h o m the s tatute of l i m itations runs
-+·+. SeF.
:·rurn
t ' . g. .
(J ! I k t
v.
Robens. 5 7 N . '( 2 � I l i) / 4 } . Ndtc that i..k rn �tnd-ant.i-rcfusal cases cornc pri m a ri l y
N t \\' YorK cuurh.
-+5. See. e.g . . o · connel l v. C h i c ag o Park Dist. 3-l f\i . E . 2 J 836. S-lu ( ! ! ! . 1 9"1 1 l ( hu l J i n g that. where
p�.) s:,e :-i � i o n w��s t o n i o u ;; at outs..:t. i i 1 n i t a t i o n perioJ bcg�1n r u n n i n g ��t o n ce �tnU Liter den!Jnd did n ot stan
ir ru n ;1 i :i g 'tga i n ) ; S o ! o nwn R. Guggenhcirn f'nund. v. L ube l l . 569 N . E ::cl 426, -+29 ( N . Y. 1 9<J I ) :
Ccr�tt.: n b i i t h . .\.!ipru note 5, :.tt i 39 n . 6 1
-�6. G e r s r. c n b l l t h . sur,ru i l ( 'J te .5 , a t ! 3 2 <:; 3 .
-+ 7 . /d. a t 1 33-J-L
4 �\ . i:'. g . . K u n > t :; 1 m rn l u n g � n zu Wei m ar v. E l i c o i o n . 678 F 2 J I i 50. 1 1 6 1 ( 2d C i r. 1 9 C\ 2 ) ( deal i n g w i t h
a n ' tuien i n WoriJ War Ji); Goodbody & Co. v. McDowe l l , )J() F2d i l -!9 . 1 1 5 1 (5th C i r. 1 976i ! >hare'
ot' :'lUC K ) : Repu b l ic ot" Turkey V, M e rropo l i tan iVl useum u r i\rr, 7 6 2 F. S u p p . H . .:J-5 t S D . N . Y. ! 990 1
( �'t rt ! fi.:.CLS Stl) k n frun1 Turk i s h buria! mounds ) : i n te r:, uuc �·; l fg . Co. \'. I n terst�te Prod s . Co . . 408 P.�d ..J./ 8 .
-+S l (,i \ lon t. 1 �65} ( 1nachinery a n d po\ver wJ.go n ) : Guggenlu: im, 569 N . E . 2d at 4 29 (stolen C h aga1l
w :llcr,� olor;; i'vk nzei v. L i ;t. 267 N . Y. S .2d go-l. 809 r S u p . Ct. 1 966) ( C h ctga!l pa' n t i ngs p l u ndered by Naz i s ) .
modified un r;!hcr ..;u>!lnds, 2 7 9 �! . Y. S . 2 d 6 0 :) l Ap!). D i v. 1 967). modi_/imrion rn· "d. 246 N . E. 2 d 7.:1-2 ( N . Y.
! ';J6S}) : St..' t:' ulsu D u 1·y�:a v . .--\ndre1.vs. 1 2 �..,: Y. S . -+ 2 . -L) ( S u p . C t . I R90) ( h oldir:g Lhat statute of l i n1 i t �Hions
b e g a n tci r u n u p (m demand for return of stolen hor�c:. but no t rnc n ti o n i n g r�fus(.} l ) .
-l-9. Se c: , e.g. , cases c i ted SIIJ-!ru n o te .+:). �/fany o f t h e (· ascs ( i tcJ i n t h a t foot note a r c frorn Ne'.v York .
8 e c [iU :.-e �'-Je w York is an Qrt mecl.:.:t ��nd m<.my m u s e u m plainti ff� :.t:;; rhcrc. m �my· stolen art cas�s fal l \\'i thin
the der.1arh:l --and-rc:fns�_d rlJ!e..
50. i'v/::n:.e! . 267 ;\i. 1... S . 2J �tt 8'20: sl· e � : ;'su KiliiS!s�unm!un,�en �u \ Vc·inwr. 678 F2J at I ! 56 ( ;· u l i n g o n
- t: i t by pbinriff ··.d1�..1 :11�1d,� dt,; m ��nd 2 1 ye�ir�.- <-LFl·:r th�ft'L
The Yal e Law Journal
2446
[Vo l . 1 03 : 2437
at once,5 1 \.vhile harming innocent buyer s . And far from servi n g its original
goal of protecting a B FP from lawsuits, it makes him perpetually v ul nerable
to s u it.
B ecause of these problems , most courts have abandoned the p ure form of
the ru le. S ome cases h ave addressed these problems b y run ning the l im itation
period from the time when an owner first gained the right to make a demand
( i. e . , the time of the theft or conversion) .52 This change effectively abol i s hes
the dem and requirement. Other cases , as the next Section s h o w s , h ave used
l aches
and
due
diligence
doctrines
to
soften
the
demand- and-refusal
requirement.
D.
Laches, Due Diligence, and the Discovery Rule
Courts in chattel replevin cases have adopted doctrines various l y l a beled
as l aches, due d i l igence, and the discovery rule, all of which rest on ad hoc
bal ancin g of myriad relevant factors . Cases such as
Guggenheim
have appl ied
the doctrine of l aches to insure that an owner does not delay in l o cating the
possessor and making a demand .53 This approach in v o l ves a m ul t i -factor
b al anci ng of all the equ ities , includ ing the owner ' s d i l igence, the buyer ' s
behavior, a n d prej ud ice t o the buyer.54 F o r instance, though the G u g genheim
Museum never reported the theft, the court left open the p o s s i b il ity that the
museum cou l d recover if other factors wei ghed in its favor 55 This b a l ancing
method resembles the discovery ru le discussed below.
O ne S econd Circuit case,
De Weerth v. Baldinger,
interpreted New Yor k
l a w a s req u i ring an owner t o use reasonable dil igence to ! ocate a n d demand the
return of stolen property 56 The court l aid down no guidelines for h o v; much
d i l igence
would s u ffice,
s a y in g
only
that d il igence "depends
upon
the
circ umstances of the case."57 B ecause the ow ner had neither p ub l ic ized the
theft n or u sed post-World War I I mechanisms for recoverin g stolen art , the
S econd
Circuit
reversed
the
d istrict
court's
fi nding
of
d i l i gence
as
erroneous .5� As a federal court si tting in a diversity action, the S econd Circuit
5 1 . Sr:e supra note 45 and accompan y i n g text.
52.
1 980):
See. e . g . . A I -Roc Prods. Corp. v. U n i o n D i me Sav. B an k . 425 N Y. S .2d 5 2 5 , 526 ( App.
Fe de 1·a l
v. We ldon,
53.
D 1 v.
I n s . Co. v. Fries. 355 N . Y. S . 2 d 74 1 , 747 ( C i v. Ci. 1 974); see nlso Stroganoff-Scherbatoff
420 F Supp. 1 8 , 22 n . 5 iS D . N Y. 1 976) (dictum).
See. e.g. , Repub l i c of Turkey v. Metropolitan M useum of An. 762 F Supp. 44. 46-47 ( S . D . N . Y.
1 99 0 ) ; Solomon R. Guggenheim Found. v. Lu bel l . 569 N. E . 2d 426, 43 1 ( N . Y. 1 99 1 ) Two comme n t ators
c1 d v ocate t h i s appro�1ch . See Drum. supra note 7, at 942-43: Hayworth. supm note 7. at 3 7 3 .
5 4 . See. e . g. . Guggenheim, 569 N . E . 2 d at 43 1 .
5 5 . See id. at 4 3 1 .
56. il36 F.2d 1 03 , 1 08-09 ( 2 d C i r. 1 98 7 ) , cert. denied. 436 U . S . ! 056 (1988). S evered c o m rn e n t ato!·s
<:JJdorse t h i s ;:pproach. See E i sen. supra note 7, at I I 00; Foutty, supm note 7, at 1 8 60: Webb. supra 1 1 <Jte
7. at 395.
5 7 . De Wcr:nh, 8 3 6 F2d at 1 1 0 ; see also Foutty. supra n o t e 7 . at 1 860 i ' " [ D jeterm i nation of due
J i ! i gcnc� i ,; fact sensitive and m u s t b e m a d e on a cl!se- by-case basis . .
..) .
5 8 . De Weenh. 836 F. 2d at 1 09- 1 2 .
Statutes of Limitations for Stolen Art
1 994]
p urported
to
predict
how
New
York
courts
thereafter, the New York Court of Appeal s , in
would
2447
rule .59
Guggenheim,
But
shortly
rej ected the d ue
diligence ru l e as a misunderstanding of New York l aw.60 Indeed, because the
facts of each case differ, the
Guggenheim
court rejected the very idea of
codifying w h at actions con stitute laches or diligence . 6 1
S e veral courts have explicitl y adopted a so-call e d discovery rule for the
recov ery of chatte l s , usually in cases i nv o l ving stolen art.62 Under the rule,
courts b alance a l l the equities of the case,63 incl uding when a dil i gent owner
w o u l d have l ocated the chatte l , in deciding whether it would be fair to t o l l the
statute o f l imitation s . I n 0 'Keeffe v.
Snyder,
for example, Georgia 0' Keeffe
sued a B FP for replevin of three stolen p aintings .64 The intermediate court
applied adverse possession law and held that a possessor could not gain title
without displ aying art openl y and notoriously in a museu m . 65 The New Jersey
S upreme Court eschewed adverse possession law because it ignores an o w n er ' s
acti o n s and because the test for open and notorious use o f land does n o t fit
m o st chattc l s .66
Instead ,
the court adopted an
equitabl e
discovery
rule,
focus i n g on the owner ' s diligence but also considering "the equitab l e cl aims
o f all parties . "67 Unlike adverse possession, the discovery rule p l aces the
burden on owners to j u stify deferring the limitation period.6� The court
refused to l ay down rules about how diligent theft victims should be.69 The
two other art cases app lying the discovery rule have likewise i n terpreted the
59. fd at I 06. I 08.
60. Solomon R . G uggenheim Fou n d .
6!.
62 .
/d.
v.
L u be l l . 569 N . E.2d 426, 429-30 (N. Y 1 99 1 )
:Jt 430-3 1 .
.A.utocephalous Greek-Orthodox C h u rc h o f C y pru s v. G ol d b e rg & Fe l d m an F i n e A "l s . I n c . . 9 1 7
2 7 8 . :2S8-89 ( 7th Cir. 1 990) ( app ly i ng dis c o v ery rule to stolen mosaics ) , arl. denied. i 1 2 S C t . 3 7 7
( 1 99 1 l : S e n fe l d v . B r:m k of Nova Scotia Trust Co. (Cayman) Ltd . 4 5 0 S o . :2d 1 1 5 7 . ! I 6 2 ! Fl a . D i s t . C t .
A p p . J 9 S4) (a ppl y i n g di s co v er y r u l e t o stolen money ) ; O ' Keeffc v. Sn y d e r. 4 1 6 A . 2 d 8 b 2 . 870 ( i ' U . i 980)
(app l y i n g di scovery ru l e to ac tion for replevin o f stolen pai n t i n g s ) : see a/sn Mu c ha v. K i n g . 792 F.2d 602.
6 1 1 - 1 2 (7th C i r. 1 9 86) (" A l thou gh the tide i n I l li n o i s is runn i n g strongly i n favor of the d i scovery rule .
F. 2 d
it m u s t remain a matter o r· speculati on whether an I l l inois court would apply i t i n a case such as th i s
" ) : CAL. Civ. ?ROC. CODE § 33 8 ( c ) \West Supp. 1 993 ) (adopting disco very rule tor· stolen artworks
PRELI :VIIN ARY DRAFf Ut,IDROIT CONV ENTIO'-i 0'-i STOLEN OR
I L LEGA LLY EXPORTED C U LTU R A L OBJECTS art . 3(3) (Int'l Ins!. for the U n i fication of Private Law 1 993 )
( U n i droit Study LXX-Doc. 40) ( p roposi n g harm o n i zation of cou mries· laws. under w h i c h statute of
and scientific and hisrorical art i facts);
limitations for c u l tural obj ects w o u l d run from when owner knew (or. alternatively. s h o u l d have k nown)
o f obj e c t ' s whereabouts ) .
6 3 . T h i s ru l e ' s v ag u e nes s i s the f a u l t of the courts, w h i ch have never enumerated l i st s u f w h at factors
rn�mer in this i n q u i ry or how heav i l y t o w ei g ht each one. They merely te l l th e finder uf fa,:t to detcm t i nc
w hCit would he fai r in a l l the circumstances. including the c i rcumstance of w he n a re as o na b l y d i l i gent o w n c: ;·
would have found h e r art.
64.
65.
4 1 6 A.2d at 864-65.
0' Kee ffe v. S nyder, 405 A.2d 840. 845-46 ( N.J. Super. Ct. App. D i v. 1 9 7 9 ) . ,.,, d und rctnw;;!d.
4 1 6 A.2d 862, 863 ( N .J. 1 98 0 ! .
66.
4 ! 6 A . 2 d a t 87 1 -72.
Jd. at 8 7 2 .
0 8 . !d. at 873.
69. Se" 'd.
67.
[ Vo l .
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2448
1 03 : 2437
rule as requ m n g a fact-speci fi c inquiry into the equities and the amount of
d i l igence require d . 70
Despite the profusion of l abel s , the laches , due d i l igence, and discovery
rules are s i milar if not equivalent. These flex i b l e balancing tests weigh the
owner ' s d i l i gence a n d delay, the buyer ' s innocence a n d rel iance, t h e e x i s tence
of prej ud ice , and other equitable factors. For i n s tance, the di scovery r u l e l ooks
at when the owner knew or should have known of the art' s l ocation . One
cannot, however, assess when an owner should have known without first
asking what steps a d i li gent owner should have taken, and s o the d i s covery
rule i s akin to due d i ligence .
Two commentators advocate a due d i l i gence approach based on g u i deli nes
for what buyers and owners must d o to preserve their right s . 7 1 They claim
that the law cannot set out definitive standards for evaluating due d i l igence i n
circumstance s . 7 2
all
I n s tead,
courts
deve l op
should
"rebuttabl e
presumpt i o n [ s ] " base d on a buye r ' s checking theft registries a n d b uy i n g from
established dealer s . 73 These rules of thumb would also require theft v icti ms
to publicize searche s , check catalogues of an art i s t ' s work, a n d notify the
police .
N e i t her
author,
however,
proposes
bright- l i n e
any
standard s . 1·1
Likewise, the d i sco very rul e is quite flex ible. Three commen tators endorse the
d i scovery rule b ecause of its equ itab l e , fle x i b le multi-factor b a l an c i n g test.7"
Note that the lach e s , d i l igence, and d i scovery doctrines are much more
favorable to theft victims than i s adverse posses s i o n . These new ru l es give
v ictims some power o ver when they lose their rights to sue. T he incre a s i n g
prevalence of t h e s e rul e s i s e v i dence of a trend toward protecting m a n y theft
v ictims at the e x p e n s e of B F P ' s . The next S ection spec ulates about why courts
have moved i n th i s d irec t i o n .
70.
See A u tocephalous G reek-Orthodox C h urch of Cyprus
v . G o l d be rg
F'2d '2 7 8 . 2 8 9 !7th C i r. 1 990) ( " [ T [ hc due d i l i gence determ i nation is
.
& f e l d m an Fine 1\ns, I n c . . 9 I 7
h t g h l \ " Ltct-scn s t t t \ e and must
be dec i ded o n a case-by-case bas i s . " ' ) (quot i n g Autocephaluus Greek-Orthodox C h u rc h ui Cyprus ' ·
(]old berg & feldman Fine Ans, I n c . , 7 1 7 F Supp. 1 3 74, 1 3 8 9 ( S . D . f n d . 1 9 8 9 J l . cert. denied, ! ! 2 S. C .
3 7 7 ( I 99 1 ) ; M u c h a v . King, 7 9 2 F . '2 d 6 0 2 . 6 1 l ( 7th C i r. i 9 8 6 ) ( noting th�t couns w i l l not � p p l y d i s cuve r v
ru l e "if problems of proof created by the passage of time outweigh the h a rd s h i p to a p l a i ntiff who cou l d
nut a s a p ract i c al matter have sued a n y earl ier than h e d i d . " ) .
See Webb, supra n ote 7 . a t 896-98; Eisen, supru n o t e 7 , at 1 09 2 .
S e e Webb, supra n ote 7 , at 8 9 7 ("[N]o e xhau stive qandards for w h l: t constitL:tes due d i l i g e n c e
. " ): E i sen. supra note 7 . at I 092.
could be set out to cover e v e ry s i tuation .
7 3 . Webb, supra n ot e 7 , at 897.
74. !d. ; Ei sen, supra n ot e 7 , at 1 092.
71.
7 '2 .
7 5 . See Petro v i c h . supra note 6, at I 1 5 6-5 7 : see u lso Franzese . .l'llp ru note 6. at 2 2 ( o b l i q u e l y p r< • i s i n g
discove�y m l e i ; Ward,
supra note 5 , a t 54 1 (endors i n g di scovery r u l e i n pas s i n g ) . Because the di scovery
m l e someti mes su bord i n ates a possessor's repose to a d i l igent mvn e r ' s ri g h t s , the lead i ng proponent o f
adverse possession for c hatte l s critic izes t h i s m l e . ln Gcrste n b l i t h ' s view, O 'Keejfi' "si gni ficantlv
u nderm i nes the policy of the statute of lim i tations" favoring repose and u nfai r l y ass i m i lates an i n nocent
possessor to a \v rongdoer. Gerste n b l i th, supra note 5 , at ! 44 . S h e prefers adve r:,c posse s:�illn bcc2.use
focuses on the possessor's acts and good r�ith rather than the o w n e r \ d i l igsn c,.:. !d. at 1 45 .
:t
S tatutes of L i mitations for S tolen Art
1 994]
2449
Whv Co u rts Have Gradually Restricted Protection for Buyers
E.
I nteres tingly,
though
most
academics
endorse
l imitation
periods
for
chattel s , c ourts have been much l e s s enthusiasti c . A s noted, courts have
i nc reas i n gly tempered statutes of l imitatio n s in ways favoring o wners . In the
ten reported c ases i n v ol v i n g art or artifacts i n which possessor s i n v oked the
statute of l i m itatio n s , the only two that held for the possessor relied on the
owne r ' s utter l ac k of d i li gence i n locating the art.7 6 Five of the cases ruled
for the owner outri ght.77 Three other c ases proceeded for further fact fi n d i n g ,
d e s p i te evidence of the owne r ' s l ack of d i li gence i n t w o of them . 78
This j ud i c i al drift favors d i li gent owners and even some not-so-d i l i gent
o wners out of sympathy for theft victims. Courts have bec ome i nc reas i ng ly
u n c omfortabl e w i th award i n g title to possessors because possessor s often buy
u n der suspicious c ircumstances w ithout i nvestigatin g title. For instance, o ne
b uyer bought two priceless fifteenth-century Dlirer paintings for $450 from a
former soldier who showed up at the buye r ' s home and cl a i med to have bought
the paintings in G ermany. 79 In another case, a n art dealer purported to b e l ieve
a s e l le r ' s story that a n unnamed a i l i n g archaeologist had suddenly deci ded to
sell
rare
Byzantine
mosaics.
Though the
mosaics
were
in
Munich,
the
American dealer rus hed to c lose the transaction in S w itzerland, a country to
which buyers of stolen art fl oc k in order to cl aim S w i s s l aw ' s protection of
buyers 80 Even when there are no affi rmative hints of theft, buyers often do
l ittle to investigate t i tle, relying solely on a s e l l e r ' s word. x 1
S ome co urts have given owners leeway e ven w h e n they have n o t been
d i l igent. A lthough the 0 'Keeffe court backed away fro m an extreme pro- v ictim
d octri n e , it left open the pos s i b i l ity of rec overy despite the owner's fail u re to
7b. De\Vcerth
v.
B aldi nger. 836 F . 2 d 103. I 1 1 - 1 2 ( 2 d C i r. 19 8 7 ) .
c er/ .
deni ed . 486 U S 1 056 11988):
D esi d eri o v. D ' A m bros i o . 463 A . 2 d 986, 9 3 8-39 ! N . J . S u p e r. Cr. Ch. D i v. 1983).
77
Autocephaious Gr·eek-Onhodox Church of Cyprus
v . Goldberg
F 2d 2 7 8 ( 7th C i r. 1 9 9 0 ), cerr. denied, 1 12 S. Ct. 3 7 7 (1991); Mucha
& Feldman Fine Ans, Inc , 917
King, 792 F.2d 602 ( 7 t h C i r.
v.
1 9 8 6 ) : Kunstsarnrnlu ngen zu We imar v. E i i c o fon. 678 F.2d 1 1 50 (2d C i r. 1 9 8 2 ) ; Redmond v. New Jersey
2 8 A.2d 189 ( N . J . 194 2 ) : Menzel v. List. 267 N . Y. S .2d 804 ( S u p . Ct. 1966), modified on
H istori c a l S oc ' y,
Nher grounds. 279 N . Y . S . 2 d 608 (App. Div. 1 967). modification r�v·d, 246 N. E. 2 d 742 i N . Y. 1 969) .
7 8 . Rep u b l i c of Turkey v. Metropol itan Museum of Art, 7 6 2 F . S u p p . 4 4 ( S . D . N Y . 1 9 9 0 ) ; 0 ' Keeffe
-. . S nyder. 4 ! 6 A . 2d 862 ( N .J . 1 9 80) ( no t r n g evidence of owner's l ac k of d i l i gence); S o l omon R.
Guggenhei m Found. v. Lube l l . 569 N . E . 2 d 426 ( N . Y. 1991) f sarne ) .
/ 9 . 5<'<' Kllnsisan!mlun;.;en .� II Weimar, 6 7 8 F.2d a t I I 55-56.
80. So· Stanley Meisler, Art & iharice, L . A . T I M ES , Nov. 12, 1 CJ89, iVL1gaz i n e , at 8. l 0- 1 1 . The facts
Jescri bed i n the text gave rise to the A u toceplwlulls Greek-Orthodox Ch u rch cas e . 9 I 7 F.2d at 279-84.
Even Pablo Picasso was g u i l ty of i gnoring h i n ts of theft. When a fr i e n d sold him s t o l e n Iberian
sculptures that Picasso h.:.d ,; een in the Louvre. "deny it thou g h he might. Picasso must have realized
n a c t l y \vhat he was b e i n g offeree!. " John Richardson. Picasso Anwng Thieves. VAI\ITY F.<\ IR, Dec . I 993 .
;.tt 1 9 8 , 204. i'k verthcles>, b e c a u s e "he had to possess these objects," P i c asso "de l u d [ e d j himself' i nto
;H :cepl i n g the t h i e f ' s s t ory. ld. at 204, 2 2 4- .
3 1 . E. g . . P o n e r v . Wertz, 416 N . Y. S .2d 254. 257, 2 5 9 (App. Div. 1979 l ( noting that buyer d i d n o t
i n q u i re about seller's reputa b ! l i t y nor h i s tit l e to painting, i n k e e pi n g w i th c u st om among buyers that "it
i s d e e m ed pnnr prJ.ctice to probe ' ' i n to ti tle } .
The Yale Law Journal
2450
searc h for the p ainti n gs
Guggenheim
unt i l twenty - s i x
years
[ Vo l .
1 03 : 2437
after the theft . 8 2
I n the
case, the museum had not n ot i fied l aw enforcement agenc i e s , nor
h ad i t notified other museums , galleries, or artistic organizat i o n s . 83 O n the
other hand, the buyers could have d i sc overed Guggenhe i m ' s o wnersh i p b y
consulting a c atalogue of Chagal l ' s work, but they had neglected t o d o s o . 84
N o t i n g that the equities d i d not favor either p arty, the court deci de d n ot to bar
the owner's c l ai m desp ite its l ac k o f d i l i gence. G i vi ng too much prote c t i o n to
buyers, and p l ac i n g the burden of l oc at i n g stolen art on owners , " w o u l d , [the
court] b e l i e ve [d], encourage i l li c it trafficking in stolen art."85 The court c ited
Governor C u o mo ' s fears that craft i ng a rul e too favorable to b u y ers \vo u l d
make New York a haven for stol e n art.86 Accord i n g l y, t h e c o u rt " p l a c e [ d ] the
burden of i n ve s t igating the provenance of a work of art on the potential
purch aser" and remanded the c ase for an equitabl e balanc i n g o f the p art i e s '
c l aims.87
The
Guggenheim
case i s reveal i n g . Even where the owner c o u l d h ave done
much more to recover the art, the c ourt refused to favor the buyer for fear of
encour ag i ng theft. The c ourt recognized that buyers
have the power to
i n ve stigate provenance and, by doing so, can curtail the market for stolen art.
It therefore saw no moral reason to favor buyers and treated both p arties as
e q u a l l y g u i l ty. Note that the g a l lery that sold the p a i nting to the Lube l l s bought
it from a dealer who had bought it from the suspected thie f. x8 Evidently,
n either the dealer nor the g a l lery had thoroughl y verified the art ' s title . If the
i aw p l aced the l o s s on buyers, a buyer could sti l l recover the v al ue o f the art
from the gallery by s u ing for breac h of warranty o f title . s9 Art dealers , as
repeat p l ayers , are wel l - suited to i nvestig ate title and to spread the risk of l oss,
'vv hich suggests that the l aw sh ould u l ti mate l y place l osses o n dealers . Part I1
develops these ideas further.
J udges and j ur i e s have felt the need for change, but they s t i l l operate
w i t h i n a framework of outmoded doctrines. The next Part e x p lores the themes
of fairness and abi l ity to i n v e s t igate and shows how they undermine the
arguments for favoring buyers over d i li gent owners under any c i rc umstance s .
Bec ause c ourts have chipped away a t statutes of l i m itations for b uyers . the l a w
i s i n fl ux and thus breeds l itigat io n . The flaws e xposed i n the n e x t Part support
a wholesale retreat from statutes o f l imitations . It is time to crystal l ize the
8 2 . O " Kc:�ffe v. S n y d e r. 4 1 6 A . 2d 862, 866 ! N . J . 1 98 0 )
8 � . S o l o m o n R . Gugge n h e i m Fou n d . v. Lubel l , 5 6 9 N . E.2d 426, 428 ( N . Y. 1 99 1 )
84. S o l omon R . G u g g e n h e i m Found. v. Lube l l , 5 5 0 N . Y. S . 2 d 6 1 8 , 6 2 3 l Ap p . D i v . 1 990). cerrificd
qu �stion m1.m ered and (!f! "d, 569 N . E.2d 426 ( N . Y. 1 99 1 ) .
8 5 . Guggenheim. 569 N . E . 2 d at 4 3 1
86. !J at 430.
3 7 . !d. at 43 l .
R S . Sec id J.t 4 2 3 ; Ptrez-Peila, supra note 1 .
S Q . Sei'. e.g . . tv.le nzel v. L i st. 2 6 7 N . Y. S . 2 d 8 0 .1. i\08 ( S u p . Ct. 1 966) ( noti n g t h :Jt b u y ·�r w h o i1ac: r o
rei.u r·n [":t i n t i n g to o w n e r recouped i t s m:�rket val u e from g a l lery that s o l c.J p � i n t i n g to huy.�rl. n;o,/ifi,·d. 2 :9
>i Y S . :� d GD� l A pp. D ! v. 1 967). nwdificoriun re;'d. 246 N . E.2d 7.12 ! N .Y ! 969 ) .
Statutes of Limitati o n s for S tolen Art
1 994 ]
245 1
courts ' v ague intuitions i nto a rule c l e ar e nough to p rovide g u idance to buyers
and theft victi m s .
II.
THE C ASE AGAINST PROTECTING BUYERS O F STOLEN ART
The gradual j ud i c i al s h i ft i n favor of theft v i ct i m s suggests that current
rules protecting b u y ers of art and other c h attel s are unsati sfactory. Proponents
of s tatute s of l i m i tations rely on three rel ated argument s : l i m i tation periods
i ncrease
the
marketab i lity
of
chattel s
by
obv i at i n g
burdensome
title
investigation; they prote c t moral l y blameless possessors ; and they prevent
courts from becoming m ired i n e v identiary problems raised by very old, so­
c a l l e d stale c l a i m s . First, this Part rebuts these three arguments . Section A
argues that, though l i m itation periods are touted as fosterin g marketabi l ity of
c hatte l s , max i m u m m arketab i lity i s not a v i rtue but a v i c e because it fac i l itates
art theft. Section B refutes the moral arguments for protecting buyers. Section
C contends that v al ues of j u stice, effi c iency, and i nternational comity outwe i g h
t h e problems rai s e d b y s t a l e c l aims a n d that, i n a n y e v e n t , old c l a i m s do not
cause m any e v i denti ary prob l e m s . In addition to rebuttin g the three arguments
l i sted above, this Part rai se s one in dependent obj ection to the c urrent law.
Section D criticizes the d i sc overy rule, l aches, and due d i l i gence doctrines as
too v ague and thus too unpredi ctable to generate proper incentives.
A.
Focilitoting A rt Soles Encourages Theft
Many commentators argue for l i mitation periods b y noting that they
i n c re ase marketabil ity of c h attel s b y q u ieting title .90 In other words, statutes
o t' l i m i tations foster commerce by l imiting or obviating any title searc h that a
buyer must undertake before buying an artwork. This arg ument rests on the
unstated , fl awed p re m i se that the l aw should always max im i z e marketabi l i ty.
B ut the l aw ' s goal s hould not be to maximize marketab i l ity per se, but rather
to achieve optimum marketabi l i ty by inducing buyers to w e i gh the costs of
i n vestigation against its benefits . 9 1 If art h as a readi l y d i scernibl e , honorable
provenance, there is no i mpediment to its sale. The c l oud over an artwork's
t itle ari s e s when its provenance i s unclear or questionab l e . B u t t h i s i s prec isely
w here the law s h o u l d make buyers cautious and encourage them to investi g ate.
In some case s , buyers buy u nder suspic ious c ircumstance s . 9 2 B uy ers often
90.
Se�. e.g. , Gerste n b l i t h . supra note 5, at 1 60-6 1 , ! 63 ; Helmholz, supra note 5, at ! 2 3 5 - 3 6:
Comme nt. supra note 5 ,
9J
at 444-45.
Courts should not, hov.:ever. e1nploy vague, case-by-case balancing tests to \Veigh these costs and
infra Part II.D. A bright- l i ne rule placing l i a b i l i ty o n buyers would make buyers i nte rn a l i ze
Sec
inji·a text ac co m pan y i ng n o t e 1 5 3 .
9 2 . See supra notes 79-SO and accompan y i n g text. The i nq u i ry i n to a possessar\ goc�d L: i r :-�
neccs:.;.ari l :;,: re l i e s on h i s testin1ony and vers i o n of the events. A s Part I I . D �ngu c s , this m;_tkes it l_i i ffi c u l t
;_,e neti t s . See
t h e costs of searc h i n g and the costs of not searc h i n g , prod u c i n g an opt i m a l amount of i n vestig�tic- n .
[Vo l .
The Yale Law Journal
2452
1 03 : 2437
rely on a gallery ' s reputation without requesting any other evidence o f t i tle 93
'· ' [I ] n an industry ·w hose transac tions cry out for verificat i o n o f . . . title . . .
i t i s deemed poor prac tice to probe . . . . " ' 9·1 Even reputable auc t i o n h o u s e s
s u c h a s S otheby's h a v e been k n o w n not t o investigate title.'J s
Statutes of l imitations may have been necess ary to achieve optimum
marketability in a b y gone era when investi gation was d i fficu l t, c o s t l y, time­
c o n s u m i n g , and incomplete. B ut today, b u yers and merchants c an readily
investigate title . They can consult a
catalogue raisonne
of an art i s t ' s work to
determine the lineage and most recent owners h i p of each work 90 A n d , s i nce
1 99 1 , they have been able t o c o n s u l t an international c o mputerized database
of s to l e n art. 9 7
Bec ause s tatutes o f l i mitations promote maximum marketabi l i t y rather than
optimum marketabi lity, they increase the profitability of art the f t and thus
enc ourage more thefts. As of
1 990, art theft was second o n l y to drug
s muggling as the most l u c rative crime i n the world ,% i n vol v i n g two to s i x
bil lion doll ars worth o f art eac h year.99 O n e q u a rter o f these thefts happen i n
Americ a. 1 00 T h i e v e s operate acc ord i n g t o t h e l mv of supply a n cl d e m a n d ; the
deman d for s tolen art f u e l s theft s . 1 0 1 L o g i c and anecdotal evidence sugge:;t
m o re ''' i n q, _s ti gatc
on possessors c-.; �1 n t c .
9 3 . See. e.g. , Me n ze l v. L i st, :2 4 6 N . E. 2d 7 4 2 . 7-+3 t �i . Y. 1 9691 i ' Th� [ ddcn-:!:.m t '> l knC'.\. n <:: : h i ;;g nf
the pai n t i n g ' s prev ious h i story �md made no i nquiry concern i n g i t . be i n g conter.t t o rely o n ! he re p u tab i l i ty
of the Paris g all ery as to authenticity and t i t l e , . ) .
94. P o rte r v. Wertz . 4 1 6 N . Y. S . 2 d 2 5 4 . 2 5 9 l App. O i ':. 1 Sl 79 1 r q uoting d i s t r i c t C<lt ' > t "pi n ; ,,/1 ) , nc' : i n ;
th��t buyer d i d n ot i n v c·:-ti g atc � e l ! e r \ reputabi l i ty n r veri fy c l a i m C1 f c);,vn,�r� h i r ) : s [ · e c�l.,· ( , () ' K eeffe '­
S n yder. 4 1 6 A . ::' d 8ti2. S 7 2 ( N . J . 1 98 0 ) ( . . [ P [ai nti n g s worth vast s u m s of m o n e y s u :n d t i nc·s are bought
\V i t h o u t i n q u i ry �bout the i r pro v e n :·, n c c . · · ·J ; J ames \Va h h . It :\· u S'u·nl, Ti\lL. Nov. 2.:� . i 99 : . � tt .� 6. ;�. 7
( S[:.lt i n g that. accord i ng to New York Pol ! c c un dctecti \·c R i c harJ Vol p e . art thie\'O:: S :-itL.:cecd o n l y throug�1
many cases for c o u rts to d i scern e x p os t when a poss•c s s or cou l d �mel should have d n n e
Therefore. it i s b e t t e r t o create i n ce n t i v e s by p l ac i n g the r i s � of loss
n e g l i gence or comp l i c i t y of gal leri e :; and c o ! l c c tnrs l.
95. See Grace G l u ec k . \V/;o OH'tU Stoien ,·\rlljac() ('ollrJ:Sf' Conjronrs i 1 ,\tfuse:un, :\ . Y. T l .\ i ES . r\r n
�0, 1 9Y 1 . at : -\ l . 8 .3 ( i m p l y i n g r_ hat. t h o u g h Sothc: b y ' s s o l d a n i L�cl :.t:Jd L"t1ccLed : ·ur pn:�:. i b it.: i l leg:_d
e x portati o n . 1t d i d not i n ve,ti gate poss i b i l i ty of thett ) : Carol Vog e l . iv!u .\ e!lll! ,I(eel's Sw!cn A rr!f(u ; Co!ie�e
Gels Cush, N . Y T t \I ES . Apr. I I . 1 99 2. at A 1 4 ( same ) : s,·c also 0- ! e nzcl v. L i :;t. 2 6 7 N Y. S . 2 d :)1).;. 00<)
t S u p . C t . 1 966) ( " A rt gai lerics of s u c h st:.1 1H.l i ng assun1c. ·-.v i thoul the necessity o f i n q u i ry, that an �-.l (:--:>r (d
sale cons t i tutes a represe ntation of auLhenticity �lnd good t i t l e ... ). mnd�_fit:d on (Jl/zer groun:ls. 279 N . ·Y. S . 2 d
6 0 8 ( App . D i v . 1 967). nwdifiuuion rn· 'd. 2 4 6 N . E . 2 J 7 .\ 2 ( N . Y l lJ69 i.
96. A curu toc�· u e raisonnd ! s a detl n i t_ i vc l i s t i ng (usu;:d i y by a prumincnt �1rt �:: \.pert ) u f �:>:c ry kilU\\'il
�u1work b y a part i c u lar art i s t . Fc1r each \�:ork. lhc cawlo g u c u s u a l l y c o n t a i n ;-; ; ; r:h; -.; J c � : l de :�._: ri p � i o n
!. i n c l u d i n g a n i l l ustrat i o n ), a hi s t o ry o f e x h i b i t i o n s o f the wor�. t h e w o r k \ prove n ance, a n d p u b ! i :; h e : l
refere nce:-; t o the \};ork. l! suai iy, o ne catalogue b�con1cs the def1 ,�itiYc reference: wor�: o n \l." hich :-...:: hfdars
�1.nd n1erchants rely when d i scussi n g an :1rt i s l · � work�. See De \Vecnh \". B.1ldi nger. � 3 6 F. =:c� ! ! n . ! 1 � t :2d
C i r. 1 98 7 ) : l'vlary lvlcKenna. C o m m e n t . Prnhlemutic Pro � ·enance: ToH':tl"f.l u Coh e re.:u {. i.· z i fi.'(/ Staies .'-'r:[ir:\·
on rhe lntenwrinnul Trade in Culture!! Propdrry, i 2 U. P:\ . J. INT' L B L; S . L . 8 3 . l (Li n . �;2 9 i i ') 1.l ) / .
97.
lnternotiuual An Loss
RegisttT Opens Jfn·
Research, New York. N . Y. ) . Feb. 5 . I 99 1 . l.l\ I :
s,-,.
Business . .-').,RT.' <E\VSLF.TTER ( l n r. ' l Fou :xi. r·ur :\r�
ulsn infi-o Pan I l l ( ctdv occ:t i n " s o l u t i o n ba>d c•::
i n ternation�d databases).
98. Don L. Boroughs et a \ . . Th e Iiiddcn A rl r:( Th:!jl. f..) . S . N :: -..., · s :._\:. \VORLD REP., Ar;r. �. l 990.
':!9 .
Wahh. Sllf'r<l note 9+. at 86-8 7 .
3"
; '
\ 00 . :V I aria F u c n t�2 . A n Thefts: Boid .)'n·nkcs Turn u ?u�_t ir: FBi Cr{!cks Do\\'.'� u '>· C'rin!t'S Niv�·. T .� ·\
TODAY. June 29, 1 9 9 3 , at B .\ .
1 0 ! . ! d ( " ! B ]ecausc drt s ti l l fctchc� goCJ(j lli One: y. .
· � t l h<::ft i s i n crl.!a�: i ng !·or ·. f!!C �-��l.�l ) n : ��r=>�· .J"
. . . · ' '; i q uoti nE! Donalc..l ;\1 a:;on_ e x - FB 1 :lrt theft i n \· �_qj g�nor i : PiL·us::ns -� tnr! Rruqu .. .·_.. S:ni:·n _f"-·. ·1il .'� /!; ': , ' : , , - -
1 994]
S tatutes of Limitations for S to l e n An
2453
t h at l aw s protec t i n g buyers h a v e encouraged theft and created h a v e n s for
02
B ecause buyers presently bear the costs of
lau ndering stolen an . 1
investi gatim:
�
v
title but do not internalize the c osts of fai l i n g to i n v e s t i v
cr ate ' t he "
)
�
do too l ittle t i t l e searc h i n g and buy too much stolen art.
I nstead o f m ax i m i z i n g m arketab i li t y by prote c t i n g buyers o f s t o l e n goods,
03
the l aw should c re ate i ncenti ves for buyers to i nvestig ate provena n c e . 1
But
adverse p o s s e s s i o n l a w, b y foc u s i n g solely o n a possessor ' s acts o f p o s s e s si o n
after purchase.
maximizes marketab i l i ty a t t h e c o s t o f fai l i n g to c reate
i n c e n t i ves t o i n v e s t i gate. And the d is covery r u l e , l aches, and due d i l i ge n c e
tests a r e so u n c ie ar that, a s P a r t I I . D argues, they do not g u i de behavior.
B e c ause these r u l e s do not strongly enc ourage i n vestigation , t h e y a l s o c re ate
too much m arketab i li t y . B y fac il itating art s a l e s , the l aw fac i l i tates art theft .
B.
Buyers Do Not Merit Repose Because Owners Who Report Thefts Ha ve
Momlly Stronger Claims
.
S o me authors arg ue that l im i tation periods for c hattel s are good bec ause
,
J oc� '
These commen tators seem to b e arg u m
repos e .
. g
they protect poss e s sors
t h at a posses sor mora l l y deserves repose. T h i s arg u me n t rests o n t h e fal l ac i ous
p re m i s e that a possessor has a s tronger moral claim than an owner who has
reported a theft.
First, because a b u y e r c an eas i l y i n ve s t igate an artwork ' s
provenance,
he
is n e g i i ge nt if h e fai l s to investigare fu l l y. When the owner has n ot i fied
author i t i e s and t h eft database s , a buyer i s more c u l p able even i f this b l ame
------------- ---:'-i . Y Tl \ l r:s_ "' o '·- 9_ 1 993. at C � iJ 1 ' ' 1 -" i ' the price pf masterpieces h as soared. the b l a c k - m a r k e t demand
�cpr pctcc. i n s p t ri n g i h c fr.s
" \ ; Wa l s h . 1 u,nru note '14. at �6 l " [ l ] n satiahlc d e m a n d for art w o r ks a n d
cu r t i q u i t i c: s - - has raiscu pnccs anu so cncumagcd t h eft ) ; s e c \
1 'k i s lcr. supru Jh)le 8 0 . at 3 7 ( " ' I f someone
·s a ; ; \.' to cJ\1 '� l :w:-Co l u ;n b i an ani i n the l ' n i tcu S t a t.:s. people w i l l bring [ the art [ to the U n i ted St:!tcs. - - �
has
1 q u o t i n g /vi ex i c a n offici ell Marcntes
1.
1 02 . F o r i n s t:>Jll'C. S w i tzerland harbors --notori ous auc t i o n s . . . whose mai n p u rpose i s to esta b l i s h
dedc n t i a l s t'or a ,lubi(Jli:< \\'<)rk' o t an. BCJ.\1\ I E B L' Rt'; l !.o, ;-. 1 , TilE A RT C R I S I S 45 ( 1 975 ) . In t h e c:�sc < > f the
s10kn Cypriot H y za n t i ne mosaic:; di scussed abO\'C. t h e ;;ale t o u k p i :�cc i n a G e n e v a airpon. pre s u m ably
i.lc:c:�u;;c of S w i tzcri:t n J · s i:�x l :� w ;; _ i\· le i sicr. supro note SO. at I I . B ritai n ' s anachro n i s t i c protection o l ' those
w h o b u y stolen goods frcHn a few ;;tuwtori i y d e s i g n ateu "march0s ou1-erts" h:1s m:�de those markets
"cl::aring houses for s t o l e n goods. S o b i awrrt is th i ;; abuse that a Dan i;;h tour company a u ·:eni;;es coach trips
tu B crmondsey [ i n Lo nuon I in the early hou r;;, to buv ;; t o len good;;." Harriet Crawley. Forger th,o Vi,/e,j.
11 :< iimr Puintin.>-:s n er · r� Aji'er, D .·\ I L'>' TELEGRAPH ( Lonuon). June 1 6. 1 99 2 . at 1 6 . Many ot her c u u n t r i co.
h�1vt: bx l aws t h � t protc:-�t bu ye r s and su e n cou r ag e art l au n dering. Ser: Boroughs et a ! . . supra n o te 9 8 , at
i 3 [ lkcrv i n g j a p an's l a x laws ) : Consunce LO\\' C il th : d , The ]U[WIICSC Con necrion . w.,\LL ST. J . . l\'iar 2'. .
1 990. a t i\ 1 3 ( same); Wa lsh. supru note 9.:1. a t 8 7 ( noting l a x i t y o f bws r n S\\·itzerland, L i ec h tcnsre i n . and
C a v rn:�n i s l a n d s ) : i.f I r v i n Molotsky. 3 U.S. Age11cics U1se cew of An-Claim Bili. N . Y TLviCS. J u l y 2 ' .
l % 6 . at C : 5 (report i n g that S t a t e Dep;.;nme nt, J u s t i c e Department. and U n i ted State:; I n formation Agency
urged Gov. Mario Cuomo to v cw 'hort slatu:e o f l i m i tations for rec o veri n g ar·t for f'ear o f making New
'r'ork a h;1ven for sLolen art and encoura g i n g theft ) .
i UJ . The ! a's shou i d �d�o i ncrcu:)c i ncenli\"CS for o w n e rs t.o report thefts so th�!t buyers c a n f i n d out
ctbu,n s to l e 11 artworks. Se� inj/'u Pan l ll . A- 8 .
I 0-L Se:: Da\:..:son, supra nolc 5 . at 397 & n . 6 3 : Gersten b l i th. supru note 5. at 1 60 -6 1 . 1 63 ; \V<-trd .
'
.'�'tlpru n o cc :;, a t .5 5 4 , 5 5 8 : sec u!so H t l n1hnlz. sur1ru lll1tC 5. :lt i 236-37 ( e nclors i n g sec u r i ty of pos:-;c�sor :)
: i il e l .
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does not amount to bad faith. Commentators oversimp l i fy the s i tuation by
talking about two innocen t part i e s ; a b uyer i s l ikely to be s e veral s hades more
culpable than an owner who has reported the theft.
B uyers often buy through art dealers and galleries. Those b u y ers c l a i m to
b e i n n ocen t because they rel y on the advice of reputable profes s i o n a l s . T h i s ,
however, i s an insufficient reason to e xonerate buyers . T h e i s s u e i s n ot o n l y
whether buyers
b u yers
should
in fact
r e l y on merchants , but a l s o whether w e th i n k that
rely on merchants w ithout seeing evidence of a title s e arch. In
other word s , the efficiency and practical ity of title
investigation should
i n fl uence the law's assessment of i n n ocence . Current law does not g i ve a b u y er
enough incentive to make sure that h i s seller has verified t i t l e . Furthermore.
in deciding where to p l ace the loss, one must cons ider the actual i nc i dence of
the loss : who w il l actually wind up paying the b i l l ? If the l o s s fal l s on the
b uyer, the b uyer can recover an indemn ity from the vendor for breach of
warranty of title under the Uniform Commercial Code . 1 05 Thu s , the real
choice is between placing respon s ib i lity on the theft victi m and p l acing it on
the
merchant
(or
the
buyer
if
there
is
no
solvent
merchant) . 1 06
As
knowledgeable repeat p layers , merchants can spread the r i s k o f l o s s , i n s ure
agai n s t i t , and develop routine title search procedures . In addi t i o n , merchants
are more b lameworthy than theft v ictim s because they h av e bought ( direct l y
o r i n d irectly) from a thief. W h e n b u y i n g art from a nonmerchant, a buyer
could spread the risk of loss by purchasing title insurance . 1 07 The cost of
such i n surance would b e proportional to the s ize of the cloud around the title,
thus making stolen artworks much l e s s marketable. These factors a l l s uggest
that the law ought to p l ace the loss on the buyer I n order to encourage
merchants to verify title and to encourage art buyers to buy fro m rep utable,
solvent merchants who i nvestigate .
I 05. See U . C . C . � 2-3 1 2 ( I )(a) ( 1 988) (stating that every sale contract i n c l u des warranty of t i t l e ) ;
Deborah D. Hoover, Note, Title D isputes i n r h e Art Marker: An Emerging Dutv of Care for Art ivferchanrs,
51 GEO. WASH. L . REV. 443, 449-50 ( 1 983).
1 06 . O ne m i g h t ask why the law shou ld pl ace losses on buyers if the l a w ' s u l t i m ate aim is to make
losses rest o n merchants. There are good reasons to p l ace l i ab i l i ty on buyers even though they w i l l u s u a l l y
recover i ndem n i ties from merchants. I f o n l y merchants wen! h e l d l iable, buyers w o u l d have an i ncentive
to
bypass art dealers, because dealers would have to i n c rease p u rchase price' to retlect the risk of be i n g
h e l d l i abl e. I n c o ntrast, placing l i ab i l i t y on buyers w o u l d encourage them t o d e a l w i th reputable, solvent
merchants who in vestigate. Buyers would have strong incentives not to buy from fl y-by-night or i nsolvent
merchams because, i f they did so, they m i ght be u n able to recover i ndemnities. By serv i n g as self- i nsurers
or t aking out t i t l e i n s u rance o n behalf of all their customers. merchants would perform a risk-spreading
fun c t i o n . To protect themselves from l iabil i ty and di srepute, these merchants would i n vest i gate artworks'
pro venance. In short, p lacing l i abi l i ty on merchants to the exclusion of buyers w o u l d drive buyers i n to
s h auy back-al l e y transactions; p l acing l i a b i l i ty on buyers but pro v i d i n g for i ndem n i ties from merchants
would bring art sales aboveground, fac i l i tati ng the k i nd of scrutiny that would make the sale of stolen art
d i ffic u l t and u nprofitable.
I 07 . Title i nsurance may not have arisen yet because i n temationai art-theft databases are a very recent
phenom e n o n . See Gregory Jensen . Worldwide Reg isters Botrle A rt Tl1efi Epidemic, WASH. TIMES, J u ne 1 4 ,
I 990, at E3. N o w that they e x i st , it should be pos,ible to use these databases to estimate risk and set a
p:·c m 1 un1.
S tatutes of Limitations for S to l e n Art
1 994]
245 5
A s Part I I . D argu e s , c ase-by-case determ ination i s unre l i ab l e and costly,
i n adequatel y deters thefts , and creates c o llective action probl e m s . Thus, the l aw
should p l ace the risk of loss on that c l as s of persons more l ike l y to be
b l ameworthy,
n amely
possessors .
Doing
so
would
create
the
certain,
predictab l e , ex ante i ncentives needed to deter carel e s s n es s . 10 8
Fina ll y, one c a n draw an analogy between an i nnocent owner ' s i g n orance
and d i sabi lities s u c h as i nfancy, i n s an ity, and i mprisonment, a l l of w h i c h tol l
09
the runn i n g o f adverse possess ion o f l a n d . 1
I n these c a s e s , the l aw
subordi n ates a pos sessor ' s repose to an owner ' s fair chance to b r i n g an action .
Like w i s e , where an owner can not brin g s u i t out of blameless ignorance of who
has her c hatte l , the l aw shou l d treat her i g norance as a di s ab i l ity and s o toll the
l i m i tation period .
It i s i mportant to d i s t i n gu i s h owners who report thefts from o wners who
do not. The l atter, by sleeping on the i r rights, may have i nduced detri mental
rel i an c e by an i nnocent purc haser. They may have less than honorab l e motives
for not reportin g , s uc h as try i n g to evade state, in heritance, and capital gains
taxes upon recovery and try i ng not to provoke a tax aud it. 1 1 0 E v e n honest
moti ves for not reporti n g are often s e l fi s h , such as a des i re to avoid dry i n g up
the market for a stolen artwork and thereby driv i n g i t further u n derground. 1 1 1
As Part II.D argues , t h i s motive i s rational for indiv iduals but c o l lectively
encourages art theft because not publ i c i z i n g
has
the
ex ante effect of
encourag i n g future thefts . The l aw should solve t h i s c o llective action problem
by p ressuring all theft victims to report thefts and by reward i n g the m for doing
so.
C.
Stale Claims
L i mitat i o n periods are often justified as a
way of forec l o s i n g stale
c l ai ms . 1 1 2 Accordi n g to this argument, old c l ai m s present thorny ev identiar y
p ro b l e m s . Witnesses die; memorie s fade ; rece ipts d i sappear. Rather than
a l l ow ing a theft v i c t i m to sue a B FP ' s heir who has n o knowledge about the
dece ased B FP ' s p urchase, or tryi n g to reconstru c t m i s s i n g evidence, the law
s hould a vo i d these vexi n g questions. By refu s i n g to hear suits brought after the
statute of l i mitations has run , the law promotes judicial eco nomy, i n s ures
fai rne s s to pos ses sors, and deters delay i n bri n g i n g suit.
Even if abo l i s h i n g l imitation periods would i nduce more old c l ai m s , other
values outwei g h the costs of stalenes s . First, abo l i sh i ng l i m i tation periods
1 08 . See infra Part II. D.
to
! 09. CALLAHAN, supra note 1 4, at 7 5 .
! 1 0. See J u d d Tully, Hot Art, Cold Cash, J. ART, Nov. 1 990, at 1 , 4 (sugges ting that art theft victims.
avoi d scrutiny by t a x collectors. do not report thefts).
i 1 1 . See S o lomon R . Guggenheim Found. v. Lubell. 569 N . E . 2 d 4?.6, 43 1 (NY 199 ! ) .
l ! 2. See supra note 1 5 . sources cited there i n , and accompan y i n g text.
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would abol i s h the perverse i ncentive to drive art u ndergro u n d for the statu tory
period . S e c o n d , we have i ncreas i n g l y accepted problems of staleness as the
price of j u stice . Many tort victims c an not di scover thei r i nj ur ie s or the c au s e s
of those i nj uries for m a n y y e ars . I n such c a s e s , fairness to i n nocent v i c t i m s
and deterrence of tortfeasors s up port relaxation of statutes o f l i m itatio n s . For
example, asbestosis and medical malpractice c ases that aris e fi fty years after
the alleged torts present proof problems, but competing values ( s u c h as fairness
and deterrence)
requ i re
us
to tolerate
staleness . 1 1 3
Likewi s e ,
in
adverse
possession of land, we tolerate stale claims brought by an owner s u ffering a
disability again s t a possessor; fairness to the disab led trumps stalene ss . 1 1 � A n
owner ' s i n ab i l ity to fi nd her stolen art i s analogous to a d i s ab i l ity. When an
owner has reported a theft, stalen e s s is a price worth paying for j ustice . 1 1 "
Furthermore, very stale c l ai m s are not a l arge pro b l e m for the l aw o f
replevi n . E v e n without limitation perio d s , an owner would n o t bri n g a c entury­
old claim, s ince her evidence would have decayed to the p o i nt that she would
See. e.g. , F e rn a n d i v. S tru l l y. 1 73 A . 2 d 2 7 7 ( N . J . 1 96 1 ) ( e xte n d i n g l i m i t a t i o n perilld out o f
patient who did n o t i mmediately discover wing nut that surgeon h a d left i n h e r abdomen ) .
1 1 4. See supra text acco m p a ny i n g note I 09.
1 1 5 . For e x am p l e , the values of j u st i c e and i n ternational c om i ty shou l d out•x e i g h the prob l e m s of stale
c l aims i n suits b y fo rei g n nations to re co ve r their national t re asu re s . Many p l ai n t i ffs in U.S e�rt cases have
been n a t i o ns seek i ng to recover t r e as u re s p l u n dered from the i r muse u m s . g ra v e s . �1nd churc h·� s . See. <'.g . .
A utocepha lous Greek-Orthodox Ch u rch of Cyprus v. G o ldberg & Fe Iuman Fi ne Art s . i n c . . 9 i 7 F 2u ::: 7 g
( 7t h C i r. 1 990) ( a l l o w i n g Republ i c o f Cyprus a n d c h u rc h to recover mosaics stokn from c h u rc h i . c e 1 '!
denied. I I :?. S. C t . 3 7 7 ( 1 99 1 ) ; K u n s tsam m l u ngen zu We i mar \'. E l i-:ofon, 673 F.2d \ I SO (:?.d C i r. i 'J f-; 2 )
( a l l owi n g F e d eral Repu b l ic o f Gerrn;Jny t o recover pai n t i ngs appare n t l y stolen h y .-\ m e ricetn G l fl'om
m useum du r i n g World War I I ) : R e p u b l i c of Turkey v. i\1ctroro l i tan i\ l u .s e u m u t· :\ l't. 7 6 2 F. S u pp. ,q
( S . D . N . Y. 1 9'J0) (a l lo w i n g Turkey to s ue to recover· a r t i facts exca\'ated fn.1 1n b u r i al mou nds ) : W i l l iam H .
H o n a n . / 1 's Finu/1.1· A g reed: GermanY To Reguin u Srulen Trrn•e. N . Y T I \ H·:� . F e h . 2 6 . i 0 9 ::' . a t C 1 5 : \ Lu1
Rose, Greece Sues j(Jr MYcenaean Gold, ARCHAEOLOG Y . Scpt.-Oc· t . \ 99 3 . �!t 26: ,.,,<' uiso LkWecrth '- .
B ald i n ge r. 8 3 6 F 2 d I 0 3 ( :?. d C i r. 1 9 3 7 ) ( h o l di ng u n t i m e l y s u i t b v \Ves t ()c r m �m r;:; t i l)iu! t o rcc"vcr pai n t i n g
:;to l e n from home by A me r i c an G I duri ng World Wctr l l ) . c e rr denied. � K 6 U . S
I IJ ) ( , \ 1 9 ::\ :) 1 : John
Darn t on , Repmriaiing rile lnvenrorv of Hisrory. N.Y T l \i ES . Sept. I 'J. 1 99 3 . � .l :. \\.eek i n Rc\ i c w ; . at l
L i m i ts on pl u n d ere d fl;Jt i o n s ' ri gh t s to recover m i g ht h arm re l at i o n s w i th these cou n t ri e s . For exam p l e .
N e w York considered e n ac t i n g a short st at u te of l i m i tation:; for a rt i n museums w replace i t s dcmand-and­
rcfus;JI r u l e . Molotsky, mpru note ! 0:?., at C 1 5 . But th e U S . St ate Depart m e n t . ltht i c e Dcparunem, �md
U n i ted S tates I n formation Agency al l str o n g l y u rge d Governor Mario C u unw ro v c w the h i ! L it!. He did
v e t o the measure, c i t i n g i n ad e quate notice to o t he r countr i es a nd the State Departme n t ' s fears that New
Yor� would b e c o m e a h a v e n for l oote d an. T h e s t r e n u o u s objec t i o n s of the t h r e e t'eck rai agen·� i c:; suggco, t ·;
that res t ric t i n g fore i g n countries' rights to recover stolen art would str:,in d i p l o m a t i c rela�ions. Cj U::O \.". R D
D . D U B OFF, THE DESKBOOK O F A R T LAW 1 20 ( 1 97 7 ) ( no t i fy t h a t nations "!.eel u b l i gated tu � i d a fri e n d l y
n ati o n i n re co v e ri n g o n e o f i t s d i sp l aced n a t i o n a l treas u r e s " )
F o r s i m i iar reasons, Congress refused to pas s the C u l t ural Property R e p o s e Act. which would h�:\ c
es tab li shed a fi ve-year statute of l i m i ta t i o n s for fore i g n governments. S. 1 5 2 3 , 99th C o n g . . l st Scss. r 1 9 :)5 ) :
1 3 1 CO:"'G. REC. E2249 (daily e d . lvlay 1 6, 1 98 5 ) ( sta te me n t o f Re p . Gepharclt, d i scus s i n g H . R . : 3 39 \ ; s�e
Drum, supra note 7 , at 9 1 9 . The C u l tural P rop e rty l m p le m e n t;Jtion ,:.. u a l ready protects other n a t i o n s · ri ghts
to recover s tol en c u l tural, archaeological, and e t h n ologi ca l property. S.ce supra note 8 . Pru,ecti n g nat i o n s ·
ri gh t to re c o v e r stolen an w o u l d further the c o m i ty c on cern s t h a t t h e Act part i a l ly acld;·esse:;
\Vh i l e ;1 l o nger s t atute of l i m i tat i o n s w o u l d arneli orate these prob l e m s . i l \n.nd d n o t cun1 p l e t c l y :-: n] \-e
the m . ,.\ny a rt i fi c i al lim itation p e ri o d would cut o ff ;J nation's right to recov.:r C�ftcr an uhi tr<Jry n urnbcr L•t'
y�ars (except for a balancing test, w h i c h would be subject to the o bj e c t i o n s i n hrt l l . D J As the c�rses c i ted
abo c· c show, decades often e l ap se before nations locate stokn artworks. Thus, l i m i t at i o n ren ods \';vul:J
u n fni riy p t2 n al i ze n ations that d i l i ge n t l y att e mp t to re c o ver t h e i r J.rt. resu l t i n g tn d i p ! un1�u i c fri u i on .
Cornpared t o t h e t w· i n v al ue s o f fai rness a n d corn i ty, s t � l c n e s:� i s a m i nor C<)fl C C l n .
1 1 3.
fairness to
S tatutes of L i m itatio n s for S tolen Art
1 994]
2457
be u n able to bear her burden o f going forward with the evidenc e . 1 1 6 Thu s ,
even w i thout a doctrine o f d e j ure l imitation periods for c hatte l s , proof
problems would often result in de facto l im itatio n periods.
In
those cases i n
w h i c h a v i c t i m c a n satisfy her burden o f proof, however, statutes o f l im itatio n s
arbi trar i l y foreclose s u i t s that a r e not trul y stal e . Additionally, an o w ne r ' s
desire to get art b a c k a s soon as s h e l oc ates it, before h e r e v i d e n c e d e c ay s ,
should d i s c ourage delay. 1 1 7 To protect a B FP whose evidence h a s decayed,
a c o u rt could take these proof problems i n to account i n its decision o n the
meri t s , i n stead of using a statute of l i m i tations to foreclose the suit as a
thre shold m atter. Furthermore, i f all thefts were reported to a c omputerized art­
theft
database,
the
database
would
serve
a
recordkeepi n g
fun c t i on
by
preserv i n g theft reports a n d evidence o f title i nvestigations b y B FP ' s . 1 1 "
Fi n a l l y , clear rules req ui r i n g i mmediate reporting of thefts and i m m e d i ate s u i t
u p o n d i s c overy of an artwork ' s location ( a s proposed in Part
III )
would further
deter delay by theft v ictims.
D iscoverv Rules, Laches, and Diligence Tests A re Too Uncleor
D.
Courts that u s e the d i scovery rule for recovery of chatte l s h a v e adopted a
fle x i ble version that rel i e s on a multi-factor balan c i n g of the e q u i t i e s and
c u l p a b i l i ties of the part i e s . 1 1 9 Likew i s e , courts h ave softened the demand­
an d-refu s al rule by i mport i n g a laches inquiry that balances the relat i ve
2
b l amewort h i n e s s of the part i e s . 1 0 S everal commentators endorse m u l t i -factor
balan c i n g
t-le x i b le . 1 2 1
s tandard s .
i n stead
of adverse
possession
bec ause
the
former
is
more
One c o u rt that applied a due d i l i gence test refu s e d to J ay out
1 22
Even the two commentators who favor c learer vers i o n s o f due
! i 6 . Granted. o l d s u i t s \'. OulJ sti l l h a v e some n u i s ance v a l u e ; p l a i n t i ffs m i g h t therefore s e e k l ucrative
s e t t l e me nts by bri n g i n g meritless strike s u i ts. Courts c o u l d allevi ate t h i s prob lem by u s i n g s u m m ary
j u d g ment aggre s s i v e l y to weed out sui ts l ac k i n g e v i dentiary support.
1 17
cume
One could arg u e that a fraudulent c l ai mant ("pseudo-owner") m i g h t wait m any years and then
fo rw a rd after
o.
purchaser ' s e v i dence o f owners h i p hGd decayed. But there i s l i t t l e reason
ro
t h i n k that
t ;wny pseudo-owners would come forward. Even i f pseudo-owners d i d make c l o. i m s . they wou l d face
m u l t i p l e lcpl obstac les under the rule advocated in t h i s Note. Most i mportantly, a theft v i c t i m ' s recov e t·y
of property from a BFP would be barred if the v i c t i m had n o t i m mediately reported the loss to reg i stries
a n d to the poli c·c. who could i n v e sti g ate claimed losses. Second. pseudo-owners w o ul d need to adduce other
t '- i de nce of cn1 nership. such as a receipt . testimony o f others. or an insurance company l i s t i n g . These p i ec es
o f e v idence would be subject to adversarial testing, which should weed o ut perjury and forgery. Th ird. art
changes h an d s ;x:ri od i c�il y. and at each sale buyers would check theft registries und er t h i s Note's plan. See
;r,fru Pan l l l . A . Thus, the i ssue of theft is l ikely to be resolved w i t h i n a decade o r two o f a cheft l i s t i n g .
i s f o r art h e l d by museums. but museums keep good records and s h o u l d therefore be
�bie to re!ute spurious :li k ��tJons Fnurth, the law could i m pose c i v i l and cri m i n al p e n al t i e s for fraudulent
The one nception
c iJ.i n1 s .
1 1 8 . T'ne Art Loss Register. 2. c o m pute riz ed art-theft database. keeps a record o f a l l searc h e s . See 1nfra
n o te ! 46 . Th i s record would allow a B FP to verify that he had usee\ the database to i n vesti gate ti tle .
1 1 9 . See supru te.·d accomp�m y i n g notes 62-70.
i 2 0 . S e e st�p ra. t e x t accon1 p a n y i n g notes 5 3 -54.
1 ., ,
See Sl lfl rtl n ote 75 and accornpanying tex t .
J ..... t .
D�Wee:1h '-'. B a\ ci i r: �er. 8 3 6 F 2 d 1 03 . 1 1 0 ( 2 d C i r. 1 9 8 7 ) ("The question of what c o rNi t u te ·.
l
j
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d i l igence l ikewise shy away from bright-l ine ru l e s . Under C harles Webb ' s and
Leah E i s e n ' s approaches, the l aw would require art theft victims to use "the
best help a v a i l able" but would give no definitive guidance a s to what methods
are best. 1 23
Fle xibil ity is i ntuitively appeali n g . S upple guidelines a l l o w j ud ge s and
j urors to take account of the equities i n i n d i v i dual cases, e n ab l i n g courts to
mete out i nd i v iduated j u stice. Furthermore, for many years there w a s no s i ng l e
b e s t way of reporting thefts a n d investigating title, so t h e l aw w a s u nable t o
prescribe a hard-and-fast r u l e for all cases.
Neverthele s s , the fl e x i b i lity of these tests i s a l i ab i l i ty, not an asset,
because they are too vague. U nder l aches and discovery rule s , c o u rt s must gaze
at the entire set of facts and p i ck the more deserving p arty. This approach
gives p arti e s n o guidance e x ante about what they are supposed to do. For
i nstance, the
any
Guggenheim
"common
c ourt, i n the name of fl e x ibility, refu s e d to set o ut
standard [ s ]"
of d i li gence
for owners
to
follow. 1 24
Vague
bal anc i n g tests fai l to create c lear incentives for an owner to track down her
goods and for a possessor to investigate an artwork ' s provenance before
b u y i n g . For deterrence to work, s anctions must be pre d i ctable and certai n .
These muddy rules d o not ass ure that a possessor w i l l p ay for h i s neglect, and
therefore d o not deter a p o s sessor ' s negligence i n investigating title. The
murkiness of these rules breeds l itigation . It makes settle ment l e s s l ikel y and
s u m mary j udgment impos s ible because of the need for a ful l trial on the
e q u ities
upon
remand .
1 25
And
vagueness
can
breed
s u bj ecti v ity
and
arbitrariness.
Even the clearest proposals that have been offered are not c l e ar enough.
Webb ' s and Eisen's proposals for rebuttable pres umption s and g u i d e l i n e s
w o u l d be a n i m p rovement o v e r c u rrent standardless doctr i n e s . Howe ver, Webb
and E i s e n sti l l insist that "no exhaustive standards for w h at c o nstitutes due
d i l i gence could be set out to cover every situation . " 1 26 By requ i ri n g v ictims
to " seek the best help availab le" while refu s i n g to spe c i fy which methods
w ould be necess ary and suffi c ient, 1 2
7
these proposals are v u l nerable to the
u n reasonable delay in mak i n g a demand . . . depends upon t he c i rcumstances of the case."). cen. denied,
486 U S I 056 ( i 9 8 8 )
! 23. We bb , supra n o t e 7 , a t 8 9 7 ; see also E i s e n , sllpra no t e 7 , at ! 092.
\ 24 . See Solomon R . Gugge n h e i m Found. v. Lube l l , 569 N . E.2d 426. 43 1 (N.Y. ! 99 1 ) ( ho l d i n g that
d u r i n g further proce e d i n gs , trial court would have to balance all equi ties and c i rc u m stances. but refusing
to l ay ou t
! 25 .
g u i d e l i nes as to how d i l i ge n t owner must be).
See id.
l :Z6 . We bb, supru note 7, at 8 9 7 ; see also E i s e n . supra note 7, at 1 09 2 .
1 27 . Webb. supra n o t e 7. at 8 9 7 . A charitable read i n g of Webb's argument m i g h t stress tha� becc�use
i nformation tech nology w i l l evolve, JUdges should be able peri od i c a l l y to update the steps o w ne rs and
buye r.; s h o u l d take. Even so. this Note's approach w o u l d work better. First. updati n g of reporti n g duties
through clear legi s l ation rath e r than ad hoc cases so that owners and b u y e rs have adequate
Consider an C!nalogy to !and registration: i f th e law t o id buyers to register in ·'the best systems
ava i l able·· racher than in the county clerk's office, the unclearness would b ree d confusion-{!ven i f courb
ha.j th� pLw:er to make ad hoc detem1 i nations of w h i c h sy stem would be best. Second. even if re gistries
s!"10u!d
notice.
occur
S tatutes of Limitations for S tolen Art
1 994 ]
s ame uncl e arness obj ections made above . 1
28
2459
B ec ause of the advent of a
computerized art-theft database, it is now possible to spell out exactly what
steps theft victims and art buyers shoul d take. A s Part III arg u e s , the l aw
s h o u l d c raft a c lear rule that rel ies on this new technology.
It might seem that trial c ourts would appropriately penalize a possessor ' s
n e g l i gence a n d reward an owne r ' s rel ative innocence i n most c as e s . B ut this
arg ument ignores the problems with ex post adj ud i c ation . B al a n c i n g tests are
u nreliable because they force courts to rely on a possess o r ' s self-serving
testi mony about h i s state of mind and the steps he took to investigate.
Furthermore, and most i mportant of all, theft victims suffer from a
col lective action problem. For each individual owner, it may be a rational
"tactical decision" not to pub l i c i ze the theft and thereby avoid driving the
stolen art "further underground . " 1 29 According to this reasoning, p u b l i c izing
a theft makes a s tolen artwork dangerous to try to sell . This danger keeps the
art in the thie f ' s hands for a long time until the "hot" art cools down, thus
30
The Guggenheim court, l ookin g at an
delaying the owne r ' s rec overy. 1
isolated case, made the mistake of using this ex post perspective in its
balancing test . 1 3 1 B u t the calculus changes when we move from ex post,
individual, tactical decis ions to ex ante, societal, strategic choices. From the
s oc ietal point of view, it makes sense to require publicity and theft report i n g
i n o n e c a s e s o that future thefts become l e s s l ucrative a n d t h u s l e s s like l y t o
occ ur. 1 32 The s i tuation i s analogous to ransom: though p a y m g ran s o m may
improve technologically, an owner's d u t y
to report specified i n formation w i l l remai n the s am e . Data from
old registries could presumably be i mpor1ed i nto new ones. Even if better methods come along, th e basic
databases w i l l remain serviceable and solve the problems of i n formation e x c han g e .
I 2 8 . A note by Deborah Hoover suggests that, to qual i fy as good faith purchasers, art merchants
should be requi red to i n vestigate title ·'whenever the c i rcumstances o f a transaction cal l for further i n q u i ry."
Hoo ver, supra n ote I 05, at 464. Thi s remedy su ffers fram three Aaws. First. it p l aces no expl i c i t obligation
o n theft victims to report losses. I f report i n g i > n ot req u i red or strongly encouraged. a buyer's i n qu i ry may
be useless. Second. the remedy apparently applies only to merchants. See id. at 463. Thi s proposal could
create a perverse i ncentive that wou l d drive art sales out of the hands o f re pu ta b l e dealers and i n to back­
:.il iey transac tions. Instead of bei n g lax about private transa.ctions, the Jaw should encourage scrutiny by
reputable dealers. Third, this u n c lear proposal woul d require i n vestigation "whenever the ci rcu m stances of
transaction c a l l for further i nq u i ry." As argued, the law needs bright- l i ne standards to deter theft, reduce
a
l i tigation. and create clear i ncentives for both victims and buyers. This vague form u l a is subject to aii the
objec tions to unclear doctri nes made above.
1 29 . S ol o m o n R . Guggenhei m Found.
\'.
Lu be l l , 569 N . E.2d 426, 428, 43 I (N .Y. 1 99 1 ).
To A dopt Discovery Rt<ies in An
Replevin A ct i on s : A Comparative Study. 7 0 TEX. L. R E V . 1 43 1 , 1 436 ( 1 992) ("[M jost owners fear that by
report i n g the thefts they would e l i m i nate the thief's market for the stolen art and thereby force the i r art
\ 30 . Steven F Grover, Note, The Need for Civii-Lmv Nations
underground . " ) .
I 3 1 . See Guggenheim, 5 6 9 N . E.2d at 43 ! .
1 3 2 . See Frankl i n Feldman & B o n n i e B u rnham, An Art
Thefr Archive:
Principles and Reaiization, ! 0
C O N N. L. R E V . 702, 723 ( 1 97 8 ) (arguing that, once word gets out that a large computerized database exi sts
see also Grover, supra note i 30.
( n ot i n g that one major reason that theft databases m i ght not deter art theft i s that many victims do
and that victims are uo; i n g i t. the database ' s existence w i l l deter art theft);
at
1 439
not
report thefts).
pe n a l i ze s el k r:,
to buy.
he m u s t bear the cost o f i nvestigatio n . ! f he d i scovers that the artwork was stolen and �efuses to buy it. che
A n dealers face an analogous collective action problem under a regime that does not
of stolen art. If an i n d i v id u al art dealer i n q u r res about the provena01ce of an artwork that he warHs
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benefit an i n d iv i du a l owner, it winds u p h ar mi n g future owners b e c a use the
e x pectat i o n o f ransom enc ourages more thefts . 1 33 B ut judges m i s s this p o i n t
b e c ause t h e y act e x p o s t a n d c a s e b y c a s e , as t h e Guggenhe im c ou rt ' s
m i s gu ided reas o n i n g exem p l i fi e s . T herefore, we c annot c o u n t o n c ase- by-case
i nq uiry to gen erate an o p t i m al amount o f detenence .
I n s u m , fl e x i b i li ty i s a l i ab i lity w h e n one i s try i n g to g e n e r ate p r e d i ctable
i ncentives a n d deterre n c e . I n stead of fl e x i b i li ty and v ague admon i ti o n s to be
d i l igent, w e need bright- l i ne rules. Bec ause b u y ers are, as a c l as s . better able
ro avoid losses a n d more blameworthy than owners who h a v e re ported theft s ,
the l a w s h o u l d p l ace t h e burden of i n vestigation on possessors.
We h ave
al most come ful l c ircl e .
I n the n ineteen th
c e ntury.
c o u rts
abandoned the c ommon l a w ' s absolute protection of owners by a d opti n g
adverse p o s s e s s i on of c hatte l s . T h a t r u l e h a s eroded e v e r s i nc e . as c ourts have
become i ncreas i n g l y concerned with fai r n e s s to theft v i c t i m s a n d d i s c ourag i n g
theft . T h e c u ne n t doc tri nal muddle, h o wever, i s u n s at i s factory. I t i s t i me to
return to a r u l e as c lear and s i mp l e as the com mon l aw, but o n e that c re ates
strong i nc e n t i ves for buyers and owners to use modern i n formati o n tec h n ology.
The next Part sets out such a rule.
III.
A B OLISHING PROTECTION FOR B UYERS OF REPORTED STOLEN A RT
Congress s h o u l d c lean up the m uddled s t ate of the l a w by adopt i n g a
bright- l i n e rule . 1 3� Though s tate l e g i s l atures or courts could adopt re fo r m s ,
congre s s i on a l l e g i s l at i on w o u l d assure c l ar i t y a n d u n i form i ty. 1 .;5 This Note ' s
p roposal i s s i mple : If a n owner h a s p romptly notifi ed t h e poi ice a n d the art­
t heft database , she s h o u l d face no legal b ars to rec over i n g her art. J f a n o w n e r
h as not done so, her claim s h o u l d be barred against a B FP bu t not against a
bad faith holder. The s e t\VO rules are prospe c t i v e ones de s i g n ed to gene rate
i n c e n t ives . For theft s that have occurre d before these ru les are ado pted, d i l i ge nt
owners s h ou l d be a b l e to recover.
seller rnay j u s t sell i t to anot her. less scru p u lous Jeakr. Th u s . i n v e � t i gation i s u nproiltah!e <md hont:.:��t
merchants labor u n der a c o m pe ti t i ve d i sadvantage.
To m·ercornc t h i s disincentive. the i a '-'. sho•.!ld i m pose
supra text «ccompan v i n g notes ! (JS-07 .
1 3 3 . See 3 LYNDEL V. PR OT!" & P.J. O ' KEEFE. L.-\\V A \ D THr: C L '! .TL'R.-\L H E R I TAGE 'V!O\T\I !ONT 3 3 2
l i abil ity on sel lers of stolen art.
See
( 1 9 39)
134. See supra Pan I l . D i"or �in e x p l an at i o n of the n e e d f o r c lear ruie:;.
1 3 5 . L e g i s l a t i ve ac tion is preferabk to j u d i c ial action b·2 cause of the nee<.l to I'Wdi fv federai a n d s t a t�
s ta tute s o f l i m i tations . .-\lso. a l e g i s l ature i s better able to h o l d heari n g s for c. ] J inte;·esteJ part t e s and t.o
a n n o u n c e a detailed prospec t i v e rule app l i c a b l e to a l l ca:.;e:;, rarher than j u s t a rerro�;pe(· t i 'iC ru l e for the c a s e
a t hand. Federal action i s preferllble tn s tate action bccau�e traffi c k i n g in stolen an i s !nt ..::qmc- t�nd
i n ternJtional. \Vi thout a feder[!\ law. d i � p�ri!te state \a�.,·s might i nduce foru m shorp i ilg �:.nd rni ghr encot!rag�
art buyers to Hock to the state wilh the most lax l a w s . f=u nhern1ore, d i \'crgent state 1 2\VS n;igf:l t1fr'ec t
d i pl om::!tic re l a t i o n s v.:i th plu ndered n�tions seeking t o recover [ h e i : national tr�asu:-c.s fro��·1 An1erican
buyer�.
S tatutes of L i m itat i o n s for S to l e n Art
1 994]
A.
246 1
Ovvners Who Report Thefts to Police and the Datczbase Sho uld
A utomatically Win
Ow ners w h o report thefts to the p o l i c e and the theft database s h o u l d face
n o l e g a l bars to recovery. 1 36 The l aw ' s prescription for o w n e rs ·w o u l d be
c lear and s im p l e , as opposed to an impre c i s e command to be d i l i ge n t . T h i s rule
'-V O u l d stron g l y e n c ourage owners to report thefts to the p o l i c e
and the
datab a s e . It w o u l d stro n g l y e n c ourage b uyers to i nvestig ate a n artwork ' s
provenan c e , s ince an o w n e r c o u l d always rec l a i m her art i f t h e a r t h a d be e n
reported sto l e n , regard l e s s o f the buyer ' s good fai t h . I n add i t i o n . t h e c l arity of
the law \VO u l d reduce l it i gation c osts by enabl i n g owners to get s u m mary
j udgment
an d by e n c o uragi n g possessors to settle out of c o urt . 1 37
Th is proposal w o u l d w ork because a possessor can protect h i m s e l f by
c hec k i n g the theft regi s t r y a n d a n owner can report her l o s s to the reg i stry.
Good reg istry systems obvi ate the need for l i mitation periods . For i n stance. the
Torren s
system
of land title
regi strat i o n
abo l i s hes
adverse
possess i o n . 1 _;:;
Ideal ly, one would want a title registrat i o n system for a l l art, n o t j u s t sto l e n
art. 1 3 9 8 u t that s ystem w o u l d requ ire p as s i ng l e g i s l at i o n 1 � '1 a n d negotiat i n g
i n te r n ational
treat i e s . I t w o u l d require potential v i c t i m s t o reg i ster the i r
:trtworks before t hefts , w h i c h many are reluctant t o d o . 1 4 1 I t w o u l d also i nc ur
huge startup c o s t s , anathema i n t h i s era of fiscal frugality T he Torr e n s system
has not taken root because o f its cost and i nc o n v e n i e n c e . 1 4 ' There is l i ttle
! 36. A n owner. however, wou l d sti l l be subject to the st:.ttutc o f l i m i tations after s h e d i scov ered the
dttwork ' s possessor and i ts whereabouts. This proposal docs not l i cense d e l av in b r i ng i n g suit crkc :1n
u·x n c r actual l y has a l l the fac ts needed to sue.
i j 7. Compare t h i s proposal t o the current c l o u d i n e s s of the law. u nder which many adverse' P'Y::;ession
case:, h a v e b e e n l i t i gated for years. See, e.g . . Kunstsam m i ungen zu We i m a r v. E l icofon, 678 F 2d 1 ! 5 0 ,
1 1 5 3 1 2 d C i r. I 9 8 2 ) I d e c i d i n g i n favor of o w n e r r n 1 9 8 2 i n su i t ti led i n 1 969 ) ; DeWeerth v. B al d i n ger. :� 36
i'-'. 2 d 1 03 , 1 06, I 1 2 (2d C i r. 1 9 8 7 1 (rul i n g in favor of p os s e s s or i n 1 9 8 7 i n S L! i t ti led i n 1 9 8 � 1 . cerr. Juu, cf.
l86 U.S 1 056 1 1 9 8 8 1 : o · Keeffe v. S ny d e r. 4 1 6 A . 2 c! 8 6 2 . 864. 067 ( N .J . 1 9 8 0 1 (re m a n d i n g s u i t fikci r n
i 9 7 6 tor :idu i t i ona! tac t - fi nd i n g i n 1 980); S o l omon R . Guggenheim F u u n d . v . Lube i l , 569 N . E .2cl 42o. -1 2 8 29 i N . Y 1 9'J i J (remand i n g s u i t ti led i n 1 98 7 l·or add i t i onal fact-fi n d i n g i n 1 99 1 ) : Pcrcz-Pena. Sllf 'ru nu t e
: ( no t i n g that Guggenheim case w e n t back for trial and was s e ttl e d i n December 1 99 3 ) .
1 3 8 . See Myres S . M c D o u ga l & John W Brabner- S rn i th. Lnnd Title hnns(er: A RegrcssiCJn. 48 Y \ i C:
L . J . 1 1 2':> . i I 3 0 ( i 9 3 9 ) . Un d e r the Torren s system, a p ro ce edi ng analogous to a q u i et t i t l e a c t i ,;n is used
to require a l l who may have c l a i m s to a p iece of l a n d to assert thei r c l a : m s . After this procee d i n g , the
reg i s try i s s u e s a conc l u s i ve certi fi cate of t i t l e l i s t i n g a l l i n terests in the parcel ol. l a n d . A l l l ater c l a i illS rn ust
be registered. \vhereupon the reg i s try i s s ues an updated certificate. The ] a\V does n c; 1_ recog n i ze u n rc g i �� �.(�red
i mercsts . such as a d v e rse possessi o n that b e g i n s after the q u i e t t i t l e acti o n . To se l l a registered p i e.:· e of
! a n d . the s e l l e r must s u rre n d e r the oid cerriticate of t i t l e . and a nnv one i s the n i ssued to the h u y c: r. .5·
id. at ! 1 29�3 ! .
i 3 9 . See Hoover, supra note 1 05 . at c+5 8 - 5 9 .
i 40. See id. i n contrast. s t a t e s w i thout l i m itation p e r i o d ,ratutes c o u l d adopt t h i s Note ' :; propoc.ai
_ -cnn m o n bw developrncr;t, because theft reg i strie s are �iready in pbce.
1 4- l . Ivl any art O\vncrs try to h i de t h e i r assets to avoid estate taxes. for e x a m p l e . Th u ·� . a t i :. k· n= g i :< t ry
\'Jouid be i nc o m p lete a n d wouid fai l . Te lephone I n terview w i t h Dr. C o n s t m
: ce Lowenthal. Excc u l ! '- c�·
D i rccwr. I n t ' i F o u n d . for Art Rese:Jrch (hn. 24, 1 994 ) [ h e re i n after Luwenthal ! n te rv i e \v j . M u s c 'J !l1S and
governntents, however, a r e tax-exempt a n d u s u a l l y do not try to h i de their J.ssets. s o a ti t l e r�g i \ tr: !Tl i � h :
1Furk fo; those e n t i t i e s .
! 4- 2 . .S"eE DL'KE\llt\ ! E R '� K R I ER , supro note i 4 , at 769. F o r an e x p LHn t i n n o f th(: Tot·;-,� n:�
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reason to think that a Torrens system for art would succeed e i ther. Granted ,
artworks , unlike land, are created every day and could b e registered b y their
artists w i thout having proceedings to adj udicate the rights o f third p arties . B u t
registerin g art already i n c ircu l ation w o u l d require giving worldwide n otice t o
all potential third p arty c l a i mants a n d holding j ud i c i al proce e d i n g s t o prote c t
those c l ai mants . Thu s , a title registry for art w o u l d face the same c osts and
inertia that have stalled the Torrens scheme.
I n c o n trast to a title registry, a theft registry requires only t h at theft victi m s
report art thefts . The advent o f computer networks and high-qual ity d igitized
color i m ages h as made possible the recent creation of an i nternational theft
registry. 143
Register,
A
maj or
has
been
descriptions
international
operating
for
computerized
three
and p hotographs of thousands
database,
years . 1 44
The
The
Art
d atabase
of stolen items
in
Loss
stores
a central
computer. 1 45 For a s mall fee , buyers c an search the reg i s try. 1 46 The Art
supra note 1 3 8 .
1 43 . See Telephone I nterview with Rayburn B . Dobson, Chief Executive Officer, I nt' l Registry o f
A ntiques & F i n e Arts (Jan . 26, 1 994) [hereinafter Dobson I nterview] (explai n i n g that registries were not
feasible u n t i l recent advent of optical storage systems on computers).
1 44 . See ARTNEWSLETIER, supra note 97, at I . In addition, certain l aw enforcement agen c i es keep
databases of stolen art. The FBI maintains a National Stolen Arts File, I n terpol keeps a database called Art
Program, I ta l y ' s Carab i nieri (the equivalent of the FBI) has a large database, Canada runs the Canadian
Heritage I n formation Network (CHIN) for an i n Canadian museums, and the German B u ndeskri m i nalamt
police unit at Wiesbaden keeps a database. Grover, supra note 1 30, at 1 440 (discuss i n g FB !); Telephone
I ntervi ew w i th Caro l i n e Wakeford, The Art Loss Register (Feb. 4 , 1 994) [ here i nafter Wakeford I ntervie w ]
(discussi n g B undeskri mi nalamt); Lowenthal I nterview, st�pra note 1 4 1 (discussi n g F B I , I n terpol, and
Carabi n ieri ) . None of these law enforcement databases is accessible to the public. !d. A nother private art­
theft database called Lasernet Theftl i n e began operation in 1 990, Jensen , supra note 1 07 , but went out of
busi ness i n August, 1 99 2 , Wakeford I nterview, supra.
The Art Loss Registry is a for-profit en terprise run by the International Foundation for Art Research.
Lloyd's of London, and the Bri tish I nstitute for the Protection of C u l tural Property. A RTN EWS L ETT E R ,
supra note 9 7 . Other backers of t h e database i nc l ude Christie's, Sotheby 's, the B ritish A n tique Dealers
Association, and the venture capital company 3i. !d. There is no reason to supplant this private database
with a public one, given fiscal constraints and the respon s i veness of private en terprises to thei r clie nts'
needs. Cf Dobson I n terview, supra note 1 43 (advocating pri vate registries as way of head i n g off
government reg ulation of the an market, which could be c umbersome and costl y and m i g h t even open door
for govern ment reallocation of art ) .
Because t h e l aw wou ld require victims to u s e t h e registries, o n e m ight worry about control l i n g
excessive fees. O n e approach wou l d b e t o have a public board regulate fees, much as commi ssions regulate
uti l i ties' fees. This approach, however, i s o n l y necessary when there i s no competition to regulate prices.
Even competition between two databases i s sufficient to regu l ate prices and tenns of service. Lexis and
Westlaw, for i nstance, hold a duopoly over on-line databases for legal research and yet have strong
i n centives to compete ior market share by i n n ovating and offeri n g free use to students. A nother approach
would req u i re The Art Loss Register to accept theft l i sti ngs for a modest set fee, but would allow it to set
its own prices and terms of service for searches by buyers. To generate competition, the F B I would expand
its network i nto a ful l -service database accessible to the public. B ecause theft victims would have to report
their losses to both databases, the price of reporti n g thefts would require reg u l ation . B u t s i nce thefts would
be l i sted w i th both registries. buyers would need to check only one registry, and thus competi tion would
regulate the ptice of buyer searches.
1 45 . Lowenthal I n terview, supra note 1 4 1 (stating that The Art Loss Register has 50.000 records,
i nc l u d i n g many color images; each record contains victim's name and address, i nsurer, police report
number, date of theft, location of theft, value (which must be greater than $ 1 000), artist. date of creation.
med i u m of the anwork, measurements, and any i n scriptions). If, as thi s Note urges. the law required
registration of thefts and encouraged buyers to consult the registries, i n surers would have a strong i ncentive
to req uire the i nsured owner to fi l e photographs and descriptions with the i n surer. Ct: Russ B anham. Here
S tatutes of L imitations for Stolen Art
1 994]
Loss
Registry
automatically
searches
auction
2463
c atalogues
for
S otheb y ' s ,
Christi e ' s , and Phillips, 1 47 thus protecting those w h o buy from these auction
house s . Likewi s e , galleries could offer this service to their b u yers as p art o f
c l o s i n g t h e s a l e . T h e existenc e of a theft registry will enable insurers to assess
risk and thus offer inexpensive title i nsurance .
Under the U n i form Commerc i al Code, a sales c ontract i n c l udes a w arranty
of good title . 1 4 8 If an owner reclaims her stolen art, a buyer can use this
w arranty to recover h i s loss, i . e . , the market value of the art, from the
merchant. 1 49 Thu s , once the l aw guaranteed the owner ' s rec o very of her art
and the buyer ' s rece ipt of an i n demnity, galleries and auction houses would
i nvestigate
title
for
buyers . 1 50
As
noted,
merchants
are
well-placed
to
investigate, spread losses, and i nsure against losses . 1 5 1 Therefore, the law
should p l ace the risk of loss on buyers because the actual inci dence of that loss
w i l l fall on merchants and because doing so will encourage buyers to b u y from
reputable, solvent merchants who investigate . 1 5 2
One m i g h t argue that checking title i n all c ircumstances w o u l d b e unduly
burdensome and costly. However, there i s l ittle reason to believe that this is
true, given that The Art Loss Register automatically checks every item offered
for s ale at maj or gal leries and auction house s . Moreover, the l aw would n o t
d irectly require buyers ( o r merchants) to investigate ; b u t , b y i m p o s i n g strict
l iability upon them,
Today,
it would
give them extremely strong incentives to
Gone ](Jmorrow: Fine Art Losses C a n Be Mitigated b y Upg rading Security and Raording rhe
!denriry of Each Piece, I N S . R E V . . Oc t. 1 990, at 5 3 , 5 8 (c iting Dr. Constance Lowenthal, who argues that
good recordkee p i n g " ' would so improve the chances of recovery that i n surance compan ies could consider
g i v i n g d i scou nts to those who do i t" ' ) . Indeed, i n surance companies could go fUI1her and demand color
photographs of all i nsured items.
1 46 .
ARTNEWSLETTER, supra note 97, at 1 . I n d i vi dual theft victi ms can register thefts i n The Art Loss
Register for $40 per i te m . Prospect i v e buyers can request searches for $50 per item. I nsurance companies
negoti ate con tracts provi d i n g for u n l i mited use of the database for $4000 to $40,000 per year. The auction
houses o f Sotheby 's, Christie's, and Phi l l ips pay an u n d i sclosed fee for automatic searc h i n g o f the i r auction
catalogues for pai nti ngs and drawings. Lowenthal I n terview, supra note 1 4 1 . Note that the registry keeps
track of "whe n , why, and by whom any i nq u i ry i s made. Trac k i n g a stolen at1work even through people
who refuse to handle it for sale i s key to i ts recovery .
1 47 .
." ARTNEWSLETTER, supra note 9 7, ;:�t I .
Lowenthal Interview, supra note 1 4 1 .
1 48 .
U . C . C . § 2 - 3 1 2( l )(a) ( 1 9 8 8 ) ; see Hoover, supra note 1 05 , at 449-50.
1 49 .
E g . , Menzel v. List, 267 N.Y. S .2 d 804, 807-08, 820 (Sup. Ct. 1 966) c�mnou n c i n g jury verdict
award i n g possessor $22,500 market value, not $4000 purchase price, from gallery that sold painting to
h i m ) . modified, 279 N Y.S . 2 d 608 ( A pp . Div. 1 967), modification rev 'd, 246 N . E . 2 d 742 ( N . Y. 1 96 9 ) .
Statutes of l i m itations shou l d n o t i mpede such c laims, a s long a s t h e l i m i tation period d o e s not beg i n
ru n n i n g u n t i l discovery of t h e defect i n title. Cf DUKEMINIER & KRIER, supra note 1 4. at 649 (no ti ng that,
i n contract for sale of land, statute of l i m i tations for covenants of general warranty and q u i et e njoyment
does not heg i n to run until some future act, such as assertion of superior title, d i sturbs buye r ' s ownershi p ) .
1 5 0. S e e generally Hoover, supra note 1 05 .
1 5 ! . See supra text accompany i ng notes I 05-07. O n e migh t argue that placing l i abi l ity o n buyers who
'.v i i i get i<1dem ni ties from merchants wou l d dri ve a wedge between the two, souri ng their relati onship. This
fear i s unfounded. Both buyers and merchants would want to i n sure that art has not been stolen. Merchants.
by m a k i n g title searches a routi n e part of closi n g sales, would safeguard both themselves
and their
customers. It would be i n merchants' econom i c i nterests to keep the i r customers happy and to avoid the
l i abi l i ty that would attach to sel l i n g stolen art.
1 52 .
See
supra notes 1 05-07 and accompany i n g text.
The Yale Law Journal
2464
[ Vo l .
1 03 : 2437
i nvestigate . 1 5 3 B uyers (or merc hants) could then weigh the c o s ts a n d benefits
of searc h i n g through database s . If a painting had come directly from the arti st,
and the artist ver i fied its title, the c osts of c hecking would outweigh the
benefits and so merchants would not c heck d atabases. I n most c ircu mstan c e s ,
however, provenance i s suffi c iently u nprovable to j ustify a merc h a n t ' s adopting
a proph y l actic rule requiring a search for v i rtually every p i ece o f art s o l d .
I ndeed, this Note ' s proposal w o u l d b e cheaper than tho s e t h a t d o not
spec ify what steps theft v ictims must take. Webb , for instance, says that theft
victims s h o u l d have to "seek the best help available," suggest i n g that they
should avail themselves of a plethora of method s . 1 54 I n c ontrast, this Note ' s
proposal, by laying out two necessary and s ufficient steps for owners t o take ,
would avoi d needless duplication of report i n g . B y c oncentratin g d ata i n one or
two re posito r i e s , th i s propos al would tell buyers and owners e x ac t l y w h e re to
s h are information and so would min imize the c osts of investigating and
reporti n g .
The
Guggenheim
c ase 1 55 highl i ghts o n e problem that registries w o u ld
fac e . In that case, the museum was uncerta i n of the date of the theft because
the p a i n t i n g was stolen from storag e . 156 Large museums, which m a y have
m i l l io n s of artworks. di splay only about one tenth of their c o l l e c t i o n s at any
one t i me . The res t often stays in storage for years, where thefts may go
unnoticed . 1 57 Thus, before an inventory re ve aled a theft, a thief c o u l d res e l l
a s t o l e n artvvork t o
a B FP, w h o w o u l d b e u nable t o find out a b o u t t h e theft
( u n less a catalogue ra isonne noted the museum ' s owners h i p ) .
The b l ameless BFP seems t o deserve protection in t h i s case, espec i al l y i f
no
ca ra log ue
m i so n n e l i sts the p a i n t i n g . Neverthele s s , s o u n d p o l i c y reasons
favor g i v i n g theft vi ctims a grace period in which to discover and report a
theft. First, i f the l aw protected a BFP, it would create an incentive for thieves
to set up c o l l u s ive transfers to l a un de r art q u i ckly before an owner c o u l d report
;:t
theft. It might be d i ffic u lt ex post to d isti n g u i s h blame l e s s buyers from
opportu n i stic fencers. A grace peri od, on the contrary, would c h i l l hasty and
:s usp i c i ous p urchases. Second, art merc hants could carry i ns ur an c e , protecting
b u yers agai n st the possib i lity of a rec e n t theft and spreading the costs of theft.
I SJ.
In practice, as t h e rest of the paragraph i n the main text argues, the disti nction would not be
poi n t i s that buyers would be free to undertake an econom i c a l l y effi c i e n t level of
: n '< cstigatinn. w h i c h i n practice would generally amount to routine i n vestigation. Note al s o that the l i a b i l i ty
t:i n"t perfe c t l y st ri ct ; as Part I I J . B argues, b uy e r s who do not i nvestig ate should prevail over victims w h o
te rri b l y i m portant. ;vr y
d o il Ot report their losses.
i 5.f . See Webb, supra note 7 , at '697.
1 55 . S o l omon R . Guggen h e i m Fou n d . v. Lube l l . 56 9 N , E.2d 4 2 6 ( N . Y. I 99 1 ) .
I 5 6 . S e e 1 d . a t 4 2 8 . W h i l e t h e the ft m u s t h3.ve occurred between ! 965 a n d 1 96 7, t h e m u s e u m claimed
that i t d i u not know o f the the ft unti l it com p leted its decennial i nventory in 1 97 0 . !d.
1 5 7 . Te lephone I n t e r v i e w w i th E l i zabeth Reynolds, Chief Regi strar, Brooklyn Museum (Jan. 20, 1 994)
[ hc re i n ; t fter R e y n o l d s i n te r v i e '.v j . It is. however. reasonable to expect i n d i v i dual theft v ict i m s to repon thefts
w i i h i n a i·ev.' weeks. L i kewise. once a v i c t i m has learned t h at a theft has occurred, that victi m needs only
'' -,·cry short tim�, perhaps o n e or t w o weeks, to report t h e theft. T h e only problem i s guaranteeing that
: n :- r i tu t i o td v i c t i m s have e n o ugh time to di scover the i r losses before the l i mitation period e x p i re s .
S tatutes of Limitations for S t o l e n Art
1 994]
2465
G i v i n g o wners a short grace period would create incentives for them to
inventory collections frequently and repmt thefts prom p t l y . G i ven the advem
of bar code s ystems that fac i l i tate computer-aided i n ventori e s , a s i x - m o n tli or
one-year grace period for museums might b e rea s on abl e . 1 58 ( A better way to
solve this problem would be to computerize m u s e u m catalogues and l i n k them
to theft databases, effectively creating a t i tle r e g i s try for museu m s . One
c o m pany, the I n ternational Regi stry of Antiques and Fine Arts , is try i n g to
c atalogue museum collection s . 1 59 As argued, h o wever, such t i tle regi stries
may not b e practicable or w idespread i n the near future . Y 6 0
I n short, theft registries allow an owner to p u bl i c i ze her loss and enable
a buyer to c heck the title to his purchase. Pl a c i n g l i ab i l ity on b uyers and thus
effectively o n merchants would encourage merc h an t s , the least cost avoiders,
to s top trafficking i n stolen art. 1 6 1 A n d by depre s s i n g demand for s tolen art ,
this Note ' s proposal would diminish the incentives to steal and hence reduce
art theft s .
B.
0Hmers Who Do Not Repori Thefts to Police and the Database
There are three possible scenarios in which o w ners do not report thefts. I n
the first, t h e B FP h a s checked theft databases, foun d n o l isting o f the thdt , and
s o went ahead and bought the art. The buyer s h o u l d w in in th i s situation . He
has detrimentally relied on the owner 's fai l ure t o rep o rt the theft an d h a s acted
prudently i n c hecking the database. I n contrast , the theft v i c t i m has been too
sloth fu l even to take two s i mple steps to notify b u y e r s . Th u s , the owner i n t h i s
1 58 .
Large m u �'eun1s c u rre n t l y i n ve n tory their c o l l e c t i o n s a l
n1o;-;t
once e very li '\;_·
L u t :.:: n
yc�tr:\.
Lowe n thal I n terview, supru note 1 4 1 . Howe ver, technology e x i sts that wuu!J perm i t i n ,·cmories far more:
l"requently. ComputerizeJ bar code i n v e n tory systems arc w i d e l y a v a i l ab l e th:.�t rnake it possible fc>r C\ " C I 1
the l arg est m useums t o i n ve ntory t he i r c o l lections once e v e r y six m o n t h .'. . The systcrn> arc s i m p l e e no u g h
that n i gh t guards could i n ventory objects e:1ch night as they made the i r round:;. One system on the market
uses t3mper-proof. forgery-proof bar codes th:.tt frus tr:.tte attempts
to
re move a bar code and pbce it
on
anoth e r object. Bar c ode t<:�pe that c o n t a i n s a hologram of the p i c ture b e i ng coJcd "" i l l soon he �l\· a i Lt b l c .
Dobson Interv iew, supra note 1 43 . O n l y a m i nority o f museums c u rre n t l y usc b a r code < n ,·en tc>ry :'\':'tc n r s .
Reynolds Interview, supra note ! 57 . Bec<:�use such systems a r e avai l a b l e a n d cou ld s o h·e the p ro h k m o r
d e l ayed notification o f buyers, t h e law shou l d encourage the i r u s e by i m pos i n g a grace period :ts :;hurt a s
i s feasible, n a m e l y si x months to one y e a r for museu ms. A l tern::�ti ,· e l y. museums could s e t u p �ik' i r O\\·n
t i t l e regi stries and l i nk them to the databases, obv i a t i n g the need for c o n s t a n t i n ventori e s .
1 5 9 . Dobson I n terview. .wpra n o te 1 43 (stati n g t h a t I nt ern a t i o n a l R e g i stry of A n t i ques 2 � Fine A rc s
is sett i n g u p eat::�logues for t h e C l ark A r t \l useum, t h e M u s e u m o f Americarr l nd i ;_;n .-". n . a n d the
B randywine Museum and is negotiating with other museums; h ow e v e r . that c o m p a n v ' s focu:; i s o n Eu.-npe.
where European U nion law w i l l soon req u i re national registra t i o n of art ) .
1 60 . See supra n o t e 1 4 1 a n d accompanying text ( noting pro b l e m s t h a t title registries face b u t ,:!so
no t i ng that tax-exempt museums may have fewer d i s i n centive s
to
reg i s te r than ta.x -dodging pri ,·ate
i n d i v iduals have).
. 1 rhc(l
theft. i t be..:orn·"s
re l at i ve l y s i m p l e for a merchant o r buyer to i n vesti gate and avoid b u y i n g that .s tolen :mwork: henc·c
merchants (or buyers i n sales wi thout merchants) arc the least cost avoiders. When et merch:mt buys r n good
faith, an owner's fai l u re to report a theft i s just as m u c h ::1 fac tor in rromo t i n g srekn an ;, . ,; " buyer's u r
merchan t's f::�ilure to i n vestig::�te.
161.
Note that merchants are only the l e ast co;,t avoiJerc; when an owner has a l rcadv ··eported
or the merchant buys u n der suspicious c i rcumstance s . Whe n an o w n e r· has reported a
The Yale Law Journal
2466
[ Vo l .
1 03 : 2437
s i tu ation i s more c u l pable and i s the least cost avoider. To make a registry
system effective, the law must p u n i s h those who fail to fi l e . 1 62
The second possible scenario i s one in which the possessor i s a thief,
fencer of stolen goods , or other bad faith holder. For reasons of morality and
discouraging theft, bad faith holders s hould not be able to as sert the statute of
l i mitations as a defense . 1 63 Thieves deserve no repose from the rightful
owner ' s c l a i m .
T h e third, toughest c a s e i s t h e one i n
Guggenheim,
where an owner who
did not report a theft sued a B FP who did not investigate title . B ec ause both
p arties are equally guilty of not takin g action , and because the o w n e r ' s fai l ure
to report did not induce the purchas e , fairness does not lean one way or the
other. In the c as e of two lazy p arti e s , Webb advocates penalizing the buyer
because he l acks good faith and probabl y has not detri menta l l y relied on
having the c h atte l . 1 64 B ut the l azy buyer seems no l e s s culpable than the l azy
owner. Furthermore, the buyer may well have relied on having the c hatte l . T h i s
l i n e of reasoning d o e s n o t d i stinguish l azy owners from l a z y buyers.
Favoring l azy owners would undercut this Note ' s polic y of forc i n g o wners
to register thefts . Purely by c hance, some lazy owners would rec over their
c hattels w h i l e others would not. B ec au s e of the col lective action problem
discus se d above, 1 65 owners might take their c hances and not report thefts i n
the
hopes
that
doing
so
would
keep
the
artwork
from
being
driven
u nderground. If a s ignificant number of owners did so, the incentives for
b u yers to investi gate would dimin i s h . B ecause buyers' incentives h i nge on
owners '
report s , strengthening the i ncentive for owners to report would
encourage both p arties to take appropriate steps . I n other w ords, the s ituation
i s asy mmetri c : Placing losses on buyers would discourage report i n g by ow ners .
In c ontrast, p l a c i n g losses on owners would encourage owner reportin g . And
because owners who report losses would automatic ally w i n against buyers ,
p l ac in g
losses
on
owners
who
fail
to
register would
e n c ourage
buyer
i n vestigation. Therefore, to strengthen incentives for both p artie s , the law
1 62 . U . C. C . § 9-30 1 cmt. 9 ( 1 98 8 ) (noting that U . C . C . ' s subord i nation o f u npe rfecte d security interests
hGs "a p u rp o se- i n common w i th s i m i lar rules i n all fi l i n g and recordi ng systems-to i m pose sanctions for
not adhering to fi l i n g or recording requirements," for othe rw i se registry systems would be i neffect i v e ) .
1 63 . See supra Part ! . A ( d i scussi n g common l a w rule that thieves do n o t take good t i t l e ) . F o r t h e se
purposes, bad faith must mean more than a mere failure to check theft databases or other acts o f s i mple
negli gence. Bad faith must embrace reckless and w i l lfully blind acts, for otherwise the law would p ro tect
c o l i u s i v e transactions designed to fence stolen goods. To determ i ne bad faith, then. courts should l oo k
a
series of o bj e c t i ve factors that suggest affi rmati v e b l i ndness to su s p i ci ous
c i rc umst a n c es .
at
s uc h as: whether
a pai nti ng has been cut out of i ts frame; wh e the r t he buyer b o ught at a price so t'ar below market value as
to be su s p i c io us ; whether the buy e r took no steps whatsoever to i nvesti g a te title; whether the s e lle r 's story
ilbout t i tle was i m plaus ible; w he t h er the seller was an established art merchant; and whether the sale v;as
hurried or took p l ac e in a suspicious location (such as the Geneva ai rport , which was used to gain the
protection of lax S w i ss laws i n a sale of B y za n ti n e m o sai c s, supra te x t accompan y i n g note 8 0 ) .
1 64 . S e e Webb, supra note 7, at 896 (argu i ng that persons l a c k i n g g ood faith deserve no protecti o n .
and s t i pubtively d e fi n i n g buyers w h o fail to i nvestigate ti tle a s persons lacking good fai t h ) .
I 65 . S e e supra t e x t accompanying notes 1 29 - 3 3 .
S tatutes of Limitati o n s for S tolen Art
1 994 ]
2467
should p l ace losses on owners by foreclosing a suit by a l azy owner against
a l azy B FP.
C.
Dealing with A rt That Was Stolen i n the Past
The i mpetus behind the c lear rules described above is to generate strong
i ncentives to i nvestigate and report thefts. One c an not, however, i n fl uence
transactions that have already taken p lace. Thus , the e x ante focu s of this Note
is i nappropriate for dealing with past thefts.
It i s , however, important to c larify the future duties of v i c t i m s of past
thefts. To put future buyers on notice, victims who wish to retain their rights
to recover should be required to register their thefts with the police a n d the
d atabase w i t h i n one year of the enactment of thi s proposal . 1 66
Next, one must ask who should win as between a victim of a p a s t theft
and
a
B FP
who
has
bought
stolen
art
before
the
enactment
of
this
proposal. 1 6 7 For reasons of morality and efficienc y, victims should usually
win. As a c l a s s , buyers are at least as negligent as owners, since they often
buy u nder s u s pi c ious circumstances and neglect to investigate .
1 68
Lett i n g
owners rec over i s c o n s i stent w i t h t h e l a w ' s deeply rooted protec tion o f
property rights and its refusal t o treat a theft as a legal transfer of title . 1 6 9
B uyers w i ll often be able to recoup their losses from the merchant who sold
them the artwork . 1 7 0 Merchants of stolen art are both blameworthy ( since
they are i n the best position to i nvestigate title) and capable of bearing and
spreading losses via i n surance. M erchants may in turn be able to pass their
losses up the chain of title until the loss eventually rests on the one who
bought
directly
from
the
thief1 7 1
and
so
is
most
culpab l e .
Finally,
i n ternational c omity also favors protection of victims . 1 72
C lear rules
are
less
important when they c an not
generate
ex
ante
incentive s , though they still serve to reduce l itigation cost s . Thus, the law
could
temper
this
pro-owner rule
w ith
a
somewhat clearer
lache s . 1 73 To reduce l itigation costs, courts should eschew
version
of
Guggenheim's
v ague balancing a n d should annou nce what steps by an owner automatically
defeat a l aches defense. 1 74 If a n owner took n o s i g n i ficant steps to report a
1 66 .
One year is an arbitrary period. Any short t i m e period wou l d suffice, provided it gave v ictims
e n o u g h notice yet was not so long as to leave future buyers needlessly u n i n formed.
1 67 .
As argued. bad faith holders should never w i n . See
1 68 .
See supra notes 92-97 and accompanying text.
sr;pra tex t accompanying note 1 63 .
1 69 . See Eisen. supra note 7, at 1 098-99; Hayworth. supra no te 7, at 3 7 5 - 7 6 .
1 70 . S e e supra t e x t accompan y i n g note I 05 (discussing merchant's l iabil ity for breach of warranty o f
title).
171.
In theory, t h i s person cou l d recover from the thief, b u t i n practice t h e thief is nowhere t o b e
found.
1 72 .
See sr1pra note 1 1 5 .
See supra Part I . D (describ i n g current doctri ne o f laches).
1 74 . See Solomon R. Guggenheim Fou nd. v. Lubel l , 569 N.E.2d 426, 43 1 ( N . Y. 1 99 1 ) (dec l i n i ng to
1 73 .
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2468
[Vo l . 1 03 : 243 7
theft (such a s n o t i fy i n g the p o l i c e o r a catalogue raisonr ui) a n d t h i s s il e n c e
prej u d i c e d t h e b u y e r l a c h e s s h ou l d b a r recovery. W here a b u y e r h as take n
,
p a i n s to inve stigate a n d found noth i n g because of an owner ' s l aziness, the
ow n e r s h o u l d p ay for h e r sloth.
CONCLUSION : OTHER T!'PES OF C H ATTELS
Does the fore g o i n g reaso n i ng apply to other types of c h attel s ? It w o u l d b e
a m istake
to lu m p a l l c hattel s together w ithout further thought, j u st a s i t w a s
a m i s take t o l u mp real a n d personal property together for purposes of adverse
p os s e s s i o n doctr i n e . Neverth e l e s s , many of the arguments set o u t above a p p l y
w ith great force to goods besides art.
C hattel s for w hich there are a l re ady title re gistries, s u c h as motor v e h i c l e s
and thoroughbred a n d pedigreed a n i m al s , a r e most s i mi lar t o art. D e a l e rs c o u i d
c h e c k t i t l e j ust as galleries and auction houses wou l d c h e c k for a rt b u y e rs .
B ecause of t h e e x i ste n c e of registries, buy er s of these g oo d s are t h e l e a s t c o s t
a v o id e r s .
The arg u m e n t a g a i n st p rotec t i n g buyers i s s o m e w h at weaker for other
val u a b l e . u n i que go o d s
,
such as expe n s i v e j e w e l ry, a n t i q ue s
a n d electro n i c
,
i tems bear i n g serial n u m be r s . I t i s q u i te p o s s i b l e t h a t abo l i s h i n g b u y er
p ro t e c t i on for t h e s e goods would e n c ourage t h e c re a t i o n of a t h e ft reg i stry.
Furthermore , t h e re is alre ady a theft registry of s o rt s in the i n t e r s t a te c o m p u ter
net\vorks of l aw e n forc ement a g e nc i e s such as the FB I . By re p o rti n g a t h e ft to
the authorities,
a n owner c o u l d e ffe c t ivel y put buyers on n ot i c e , e s p e c i al l y
if
the c o m p uter network s c o m m u n i c at e d w i t h vendors.
To u g h cases i n c l u d e fun g ible a n d i n e x pe n s i v e g o ods for w h i c h a re g i stry
.
would be m ore h a s s l e t h a n it i s wort h . The reason i n g advanced in t h i s Note
h i n ge s o n the a v a i l a b i l ity or at l e a s t fea s i b i l ity. o f· re g i s tr i e s
.
,
w h i c h e n able
b u y e rs to prote c t t h e m s e l v e s . Vl'here t h e re arc n o reg i s tries and i n ve s t i g a ti n g
title
would
be
c ostly
or
i m po ss i b l e
this
.
Note · s
reaso n i n g
is
l arge l y
i n ap p l ic a b l e . B ut t h e question m a y b e moot. The l a w may n o t matter m u c h for
fun g i b l e and inexpe n s i ve g o o ds
.
because �m o w n e r w i l l face i n s u rm o u n table
pro b l ems in i d en t i fy i ng and recoveri n g s u c h goo d s . S earc h c o sts may be h i g her
than the goo d ' s v a l u e , d e te rri n g an owner from l ooki n g for i t . E v e n if she d oe s
search, the owner w i l l be u n l i ke l y t o s u e
t o rec o v e r
i nexpe n s ive goods afte r
several y e a r s . Therefore , even i f there i s no de j ure l i mi t a t i on p e r i o d , there w i l l
be de facto adverse posses s io n .
The
<m s \v e r s L o the fore g o i n g q u e s t i o n s are less i mp o r t a n t
than as k i n g the
q u es t i o n s in the first p l ac e . Commentators have repe atedly stre ssed buyer
pr�: t e c t i o n ...-v h ile ignoring the importance of i n c e ntives to i n ve::;ti g::tte and report
t h e ft s . Perhaps the fore g o i n g case study of art w i l l s park d e b ate about \vho i s
s-:: ;:
r·o ··�h c ! c�tr du-� d i i igenc� r.:poning req u i rement for
art
thefl vicrin1s).
1 9 94]
S tatutes o f Li m itatio n s for S t o l e n Art
2469
best placed t o prevent the sale o f sto l e n goods and who i s m o st b l ameworthy.
Only by foc u s i n g on these questions can we dry u p the m arket for stol e n
goods a n d s o reduce the incenti ves t o steal .