in stolen art is the fastest-growing crime in the United States
and the third largest part of international criminal activity.
The civil law countries of Europe tend to protect subsequent,
innocent purchasers.Export laws must be enforced
by the exporting country, not the importing country.
Barridoff Galleries of Portland, Maine listed an oil painting of gulls
at Monhegan Island in their auction catalog of August, 2002. The catalog
mentioned that the painting had a brass plate that said ‘‘Treasury Department
Art Project.’’ The United States Attorney intervened. The painting was
withdrawn from the auction and the U.S. Attorney has sued for the return
of the painting to the United States.1
General Services Administration is searching for paintings with Treasury
Department brass tags. Most of these paintings were produced during the
1930s and 1940s by the Works Progress Administration (WPA). The paintings
were produced by artists working on hourly wages for the WPA. Most are
owned by the federal government since Congress has never passed legislation
authorizing their sale or disposition. More than 10,000 of these paintings
in Stolen Art is Big Business
in stolen art is the fastest-growing crime in the United States and the
third largest part of international criminal activity. The Chinese believe
that stolen art has become the largest illegal export from their country.
It is estimated that thieves take 30,000 pieces of art per year in Italy,
and 6,000 in France. Insurance companies pay between $3 billion and $5
billion per year on stolen art insurance claims. There are numerous reasons
for the flourishing trade in stolen art.
conflict has always been a harbinger of activity in stolen art. The tragic
plunder of art by the Nazis in World War II is well documented and is
still being addressed by our courts. Recent fighting in Afghanistan where
the museum in Kabul was looted, in Beirut where the museum has been shelled
for more than 15 years, and of course, the tragic looting of the museums
in Iraq, promise a whole new influx of stolen art. The fall of Communism
and the rise of organized crime in Russia and Eastern Europe will also
supply more stolen art to international markets. But war is not the only
cause of art theft.
theft is structurally different than the theft of other property. Valuable
works of art are relatively small, easily hidden, and easily moved both
within and out of a country. Many thefts of art are never reported to
the police. Victims of art theft fear that if the theft is publicized,
other thieves will try to capitalize on their lack of security. Many also
believe that publicity about the theft will just drive the art further
Purchaser v Theft Victim-Owner
to Interpol, most art thieves break and enter private homes or, secondly,
churches. Collectors and connoisseurs rarely perpetrate these crimes.
More often, criminals steal art in order to sell it for money. Art theft
victims will probably not find their property in the hands of a thief,
but more likely, in the hands of a subsequent, innocent purchaser. When
this happens, the courts are presented with a cruel dilemma. Should the
property be awarded to the subsequent, innocent purchaser or the art theft
victim? Both are innocent victims of criminal activity. The courts are
split on how to deal with this issue.
Civil Law and Innocent Purchasers
civil law countries of Europe tend to protect subsequent, innocent purchasers.
A bona fide purchaser, i.e., a person who purchases property for value
and without notice that it is stolen property, will prevail in Switzerland,
a major art trading country, five years from the date of the theft. In
Japan, the waiting period is two years after purchase, in Luxembourg seven
days, and in Italy there is no waiting period, the bona fide purchaser
owns the property at the time of purchase.
protection of bona fide purchasers in civil law countries is important
in Michigan. Thieves will probably not chose to sell their stolen property
in the community where it was stolen. One of the advantages of stealing
art is that it can easily be transported. The victim of art theft in Michigan
may very well have to sue for its recovery in another state or country.
If art stolen in Michigan finds its way to Italy, a prospect that is becoming
even more likely with the breakdown of border checks within the European
Common Market, a subsequent bona fide purchaser will own it. Ironically,
that art could be brought back to the United States by the bona fide purchaser
or its successors and the United States courts may be obligated to recognize
the title acquired by the law of the country where the property was located
at the time of sale.2
Law and Theft Victims
law countries are not as friendly to the claims of the subsequent, innocent
purchaser. Under the common law, a thief does not acquire any title or
ownership interest in stolen property. Since the thief has no title, the
thief cannot convey title to another purchaser, even if that purchaser
is an innocent purchaser for value. But subsequent purchasers have defenses
when the owner sues for possession of stolen property.
states have statutes of limitations limiting the period of time for bringing
a cause of action to recover property. That period of time will vary from
state to state. Michigan’s statute of limitations for the recovery of
personal property is six years.3
But when does the statute of limitations begin to run, i.e., when does
the cause of action accrue? There are two different answers.
courts in the United States have held that the statute of limitations
begins to run when the owner knew or should have known the facts needed
to recover the property. This depends upon a detailed, case-by-case analysis
by the trial court. The case of Autocephalous Greek-Orthodox Church
of Cyprus v Goldberg & Feldman Fine Arts, Inc4
dealt with rare mosaics of Christ and his disciples (very few likenesses
of Christ and his disciples survived the iconoclasm) purchased by Peg
Goldberg, an Indianapolis art dealer. The mosaics had been taken from
the Cypriot Church of Kanakaria during the Turkish occupation of the island
in the late 1970s. Goldberg paid $1.08 million for the mosaics in one-hundred-dollar
bills and brought them back to Indiana. But Cyprus wanted them back.
government of Cyprus had been looking for the mosaics. They had contacted
the United Nations, the press, museums, and leading scholars in the field.
The court found that their efforts were sufficient to toll the statute
of limitations since they had exercised reasonable diligence in searching
for the stolen art. Their cause of action did not accrue until they discovered
the identity of the possessors. Even though the mosaics had been stolen
in the 1970s, the owner’s cause of action to recover them did not accrue
until late 1988 when they discovered who had them. Cyprus’ lawsuit was
timely. But there is another significant test of when a cause of action
for return of stolen art accrues in a common law country.
Law— Laches and Demand, Refusal Rule
York, a major center for the trade in art, is more protective of the owner’s
rights to recover stolen art. In 1964, the New York Appellate Division
ruled in Menzel v List,5
a suit to recover possession of a Chagall painting lost to the Nazis in
1940, that the New York three-year statute of limitations did not begin
to run until the owners had demanded its return and been refused by the
possessor. The New York Court of Appeals re-affirmed the demand-refusal
rule in Solomon R. Guggenheim Foundation v Lubell6
but ameliorated the harshness of that rule to the innocent purchaser by
acknowledging that the court should also look at the defense of laches.
In that case the museum had failed to notify any law enforcement agency,
museum, gallery, or art expert about the theft. The Guggenheim claimed
that it had remained silent in order to avoid driving the art further
underground. The court remanded the case to the trial court to determine
whether the Guggenheim was guilty of laches, i.e., whether it had unreasonably
delayed seeking the return of the painting and whether that delay had
prejudiced the purchaser.
York is in the minority in applying the demand and refusal rule to the
accrual of a cause of action for replevin. Michigan case law seems to
reject the demand-refusal rule.7
But even New York ameliorates the harshness of this rule to the art purchaser
by considering whether an unreasonable delay in seeking return of the
property has caused prejudice to a subsequent purchaser.
Databases and Art Theft
the church in Cyprus lost its mosaics, it was required to contact a number
of sources to provide notice that their property had been stolen. Today,
there are a number of internet databases that provide information on stolen
art. Probably the most prominent art loss database is the Art Loss Register
ALR is a for-profit corporation with offices in New York and London. It
was formed with the support of Christie’s, Sotheby’s, and a number of
art insurance brokers like Lloyd’s of London. It is currently the world’s
largest independent database of stolen art and antiques. It contains information
on nearly 100,000 pieces of stolen art and antiques. The important new
presence of these computer databases has implications for every owner
of valuable art.
of Export Laws
laws must be enforced by the exporting country, not the importing country.
The United States will not disturb otherwise lawful possession just because
the property has been illegally exported from another country.9
But illegally exported art may cause other concerns.
Jeanneret v Vichy10
the Second Circuit Court of Appeals considered the legal ramifications
of the sale of an Henri Matisse painting that allegedly had been illegally
exported from Italy. Although it is clear that the United States government
will not disturb possession of such a painting in this country, there
are other practical problems. First, this is a painting that may be subject
to seizure or other legal remedies if it is taken back to Italy. But more
importantly, a vice-president of Sotheby’s testified at the trial that
the painting, which he appraised at $750,000 if it had been legally exported,
would have no value if it had been illegally exported since ‘‘no reputable
auction house or dealer would be prepared to handle it.’’
court considered whether the sale of such an illegally exported painting
would violate the implied warranty of title. Although the federal court
was reluctant to rule on such an important matter of state law, the issue
of breach of the implied warranties in sale must be considered when any
illegally exported art is sold. It is important for Michigan lawyers to
note that Canada has legislation prohibiting the import of illegally exported
cultural property and providing for the seizure of such property.11
But there is even more reason to be concerned about illegally exported
United States v McClain12
the defendants were indicted under the National Stolen Property Act for
smuggling pre-Columbian artifacts out of Mexico for sale in the United
States. The defendants argued that they could not be prosecuted for violating
Mexico’s export laws but the prýsecution relied on a different theory.
The government of Mexico had declared in 1972 that all pre-Columbian artifacts
in the country belonged to the government. Although the court re-affirmed
that the United States would not enforce Mexico’s export laws, it held
that if the defendants knew of the national laws vesting ownership in
the country of origin then they could be convicted of an offense under
the National Stolen Property Act. In McClain, the defendants made
statements showing that they knew they were stealing when they exported
the antiquities from Mexico.
theft victims must report their loss as soon as possible. Whether the
art is in a civil law country or a common law country; or whether the
art is in a discovery rule state or a demand-refusal and laches state,
the court will want to know whether the victim took steps to notify any
potential, innocent purchasers.
art purchaser must check to see whether the art is stolen. How much checking
will depend upon the circumstances. The major auction houses usually check
their art for sale with the computer databases, but many private sellers
do not. A check of internIt databases for stolen art is a minimum for
most good faith purchasers.
Challenging the GSA on WPA Art by Samuel Pennington, Maine Antique
Digest, October 2001.
Restatement (Second) of Conflict of Laws, section 247 (1971).
MCLA 600.5813; MSA 27A.5813.
917 F2d 278 (CA 7, 1990), reh’g denied.
253 NYS2d 43 (App Div 1964).
550 NYS2d 618 (App Div 1990), affirmed, 569 NE2d 426 (NY 1991).
See Goodwill Industries of Detroit v Whitsitt, 367 Mich 569, 116
NW2d 783 (1962) and Trail Clinic, PC v Bloch, 114 Mich App 700,
319 NW2d 638 (1982).
See United States v McClain, 545 F2d 988 (CA 5, 1977), cert denied,
444 US 918 (1979).
693 F2d 259 (CA 2, 1982).
Cultural Property Export and Import Act, R.S.C. chs. 46–54 (1975) (Can.).
Supra n 7.