Art Talk is a series of rotating columns which explore current issues in the art market.

    · Limits of Ownership 1
    · Limits of Ownership 2
    · Statute of Limitations
    · The Discovery Rule
    · Nazi Confiscated Art
    · Abandoned Property
    · Taxation



an excerpt from
by Aaron Milrad

Ownership of an object entitles the owner to possession of the object. However, from time to time possession is obtained by a party other than the owner and without the permission of the owner. As earlier indicated, such possession is adverse possession and may come about through a variety of means. Unfortunately, one of the most common means is by obtaining a stolen object. The object may thus be in the possession of such party but not be accompanied by title or ownership. Issues arise as to the knowledge of the possessor of the stolen goods and any duty that may be required of such possessor at the time that possession is offered to that party. Is there a requirement that the possessor take reasonable care or make reasonable efforts to determine ownership? What if this is not done? Does the original owner who has lost or had the object stolen have a duty to take action to make the world aware of the theft? How long can the possessor of the stolen object lay claim to that object when it is later discovered by the original owner? Are there any intervening laws that try to balance the rights of an innocent possessor or purchaser against the rights of the original owner from whom the object was stolen? Also, was the work really stolen or was it abandoned? If it was abandoned, what rules apply? How is it proved that there was an intent to abandon and that the work was not simply mislaid? Are there any special rules that apply to abandoned goods? These are some of the issues that will be dealt with in this chapter.

Stolen Objects - The theft of precious properties has become an epidemic. Stealing art and art objects from individuals and private collections has always been a fact of life; however, art thefts from museums, governments, and even churches are now becoming prevalent. Some of these thefts are facilitated by lack of security, especially for insiders; others have resulted from increased political and economic turmoil, which facilitates theft of cultural property. Even disposing of stolen art has become easier: the increasing value of art objects has contributed to the number of unscrupulous intermediaries willing to risk selling stolen art, forgeries, and reproductions.

Art theft has become so prevalent that Italy recently issued a catalog of stolen art treasures, L'Opera Da Ritrovare (Works to Recover). Organized crime has become interested in art theft because it has become so lucrative... so lucrative, in fact, that it is probably the third most profitable international criminal industry, after drug smuggling and the illicit arms trade. The thieves have become so organized and skillful that investigators feel increasingly outmaneuvered. Only ten to fifteen percent of stolen art is ever recovered. Few thieves are convicted and their sentences are usually short; few police forces have either art experts or the time to pursue art thieves.[1]

Of late there have been a number of sensational art thefts from public institutions. The National Gallery of Modern Art in Rome was robbed of two van Gogh paintings and one Cezanne painting. The Isabella Stewart Gardner Museum in Boston was robbed of paintings worth as much as $200 million; stolen paintings included works by Vermeer, Rembrandt, Degas, and Monet. The Scream by Edvard Munch was stolen from the National Gallery of Norway and later recovered. Eight works by Picasso and Braque, worth more than $60 million, were stolen from a modern art museum in Stockholm, Sweden; most of the stolen artwork has been recovered except for the Braque. The list goes on: twenty paintings by van Gogh from the Rijks museum in Amsterdam; works by Dali and Matisse, worth more than $40 million, from a museum in Rio de Janeiro; three paintings by van Gogh, worth close to $100 million, from the Kroeller-Mueller in the Netherlands; and the largest theft to date from a commercial gallery-works by old masters amounting to $6 million stolen in New York City.

Even churches have not escaped this trend. One thief broke into a Catholic high school south of Buffalo, New York, a few years ago. When he was caught, his automobile trunk was full of religious vessels stolen from Catholic churches throughout the Midwest and upper New York State. The thief had a number of prior arrests, including thefts from at least ten churches in South Dakota; he had continued his art-theft career after he escaped from a South Dakota prison.

Of course, there are also attempts that go awry: in London, a plot to steal art treasures from Britain's National Gallery turned to farce when the three robbers found the wheels of their getaway car clamped because it was illegally parked. None of the thieves had enough cash to pay the fine and get the clamp removed, so they jacked up the car and tried to do it themselves. Police spotted them and searched the car, finding a marked-up plan of the museum indicating a room full of van Gogh paintings worth $240 million.

Often art "insiders" are involved in thefts from both public institutions and private collectors. For instance, a former University of Scranton history professor and expert on Chinese porcelain was given access, because of his credentials, to many public museum storerooms. He "rescued" porcelains from oblivion and donated them to museums where they would be appropriately displayed and appreciated. The Federal Bureau of Investigation found at least a hundred pieces in his apartment.

In another insider case, an employee carried out a series of thefts from the Prado Museum's warehouse in Spain. Stolen items included arms, armor, and fragments of Gothic and Baroque altar pieces.

In Italy, a university professor and art critic who served as advisor to the Italian minister of culture in the 1980s, was arrested on charges of armed robbery, kidnapping, and conspiracy to commit fraud. Benincasa was charged with defrauding a wealthy fruit merchant by selling him, in April 1993, fake paintings allegedly created by Canaletto, Titian, Rouault, and Toulouse-Lautrec. The paintings were valued at more than $3 million.[2] The professor was found innocent of all charges.

Other insiders have included people such as the nurse's aide of James Johnson Sweeney, the first director of the Guggenheim Museum. When he was eighty-five years old, a Joan Miro painting he owned was stolen. Some months later his nurse's aide appeared at a gallery on Madison Avenue with the painting in a shopping bag, offering it for sale. The dealer immediately recognized Seated Woman, one of the icons of twentieth-century art. He asked the woman to come back the next day on the pretext that he would have to research the work. A quick call to another art dealer with expertise on Miro identified it as belonging to Sweeney. When the woman returned the next day, she was apprehended and charged by the police; the painting was returned to Sweeney. The year after Sweeney's death, the painting sold at Sotheby's for $900,000.

When the nurse's aide was named in the newspaper as the thief, a New York reader called the police to say that her Remington drawing had disappeared while the nurse's aide had worked for her. Earlier, the International Foundation for Art Research (IFAR) had received an inquiry about the drawing from another collector, who wanted to know if the work had been stolen; at the time it had not been noted as stolen. IFAR called the collector and told him that the work was stolen and from whom. The collector immediately returned the drawing to its owner and was compensated by the thief's embarrassed children.[3]

In addition, we are faced with the ongoing tradition of public museums being ransacked during times of political turmoil. The Kuwait Museum lost many of its finest Middle Eastern and Arabic treasures during the war with Iraq. With the breakup of the Soviet Union, an international black market is swallowing up art treasures from Eastern Europe. Museums in Russia as well as churches and religious sites in the Czech Republic, Slovakia, and other Eastern European countries are being ransacked. Antiquities, religious icons, art objects, and historical art are objects of choice for international gangs and professional thieves. Often these works reappear only years later at auction or for sale by private dealers.

Works stolen in countries suffering political and economic turmoil are often "exported" without proper export documentation. The resulting violation is twofold: first, the theft of the works, and second, their export without proper cultural-property documentation and government clearances.

An adjunct to stolen art and art objects is the theft of copyright in such personal property. This includes the reproduction of such works in both two and three dimensions without the knowledge or authority of the copyright holder. The copyright holder may be the original creator of the work or, depending on the time of purchase or transfer of the ownership in the object, it may also be the collector of the work, or the heirs or beneficiaries of the owner, creator, or transferee of such rights.

Another form of theft is the unauthorized replication or counterfeiting of art and art objects. Such forgeries have appeared with greater frequency in recent years, often due to increased prices in the marketplace for the originals of such works and better means of reproduction now available. Authentication becomes of greater concern than ever before, as does the provenance of the personal property. As will be seen from the various cases discussed in this and other chapters, discussion of the issue of authenticity becomes public most often when works are offered at public auction whose authenticity is questioned either prior to sale or thereafter, giving rise to substantial legal concerns affecting the rights of the owner, the auction house, and the purchaser.

With art values going up, there is no shortage of intermediaries and dealers prepared to trade in stolen artwork and art objects and even willing to alter them to disguise their identities. Recently, a frieze missing since 1989 was found in a Madison Avenue gallery. Depicting the head of a youth with curly hair, it was a fragment of a 1,900-year-old marble frieze that had been part of a colonnade in an ancient Roman city. Thieves had stolen the fragment from a warehouse in Italy five years earlier. When it was found, the gallery had cut the frieze down in size, removed the excavation identification number, and labeled it as a fragment from a second-century sarcophagus.

Next Installment: Limits of Ownership, Stolen Property, Part 2

About the Author

Aaron M. Milrad is a member of Fraser Milner, Barristers & Soliciters, a Canadian national law firm headquartered in Toronto. At Fraser Milner he provides specialized legal services to clients across Canda, the United States, and other countries who are involved in the visual, performing, and literary arts, music, publishing, media, and mutlimedia. Mr. Milrad also provides consulting services, including strategic planing and marketing for creators, companies, nonprofit organizations, and foundations and tax estate planning for creators, collectors and arts professionals.

To purchase a copy of Artful Ownership, please contact:
American Society of Appraisers, International Headquarters, 555 Herndon Parkway, Suite 125, Herndon, VA 20170

Author's Notes
Note from the Editor

ISBN 0-937828-03-3

Copyright © 2000 by the American Society of Appraisers and Aaron M. Milrad.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical photocopying, recording or otherwise, without the prior written permission of the American Society of Appraisers, P.O. Box 17265, Washington, D.C. 20041. (800)272-8258

Printed in the United States of America.

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