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Art Talk is a series of rotating columns which explore current issues in the art market.
19th & 20th CENTURY ART HISTORY
COLLECTING CONTEMPORARY
INVESTING IN ART
INSURING FINE ART
MANAGING DAMAGED ART
ART LAW
· Limits of Ownership 1
· Limits of Ownership 2
· Statute of Limitations
· The Discovery Rule
· Nazi Confiscated Art
· Abandoned Property
· Taxation
ART THEFT
ART TERMS
ART LINKS
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ABANDONED PROPERTY
an excerpt from
ARTFUL OWNERSHIP
by Aaron Milrad
The Law Relating to Abandoned Goods
Common Law-Classification
of Found Property
In common law, found property is classified into four categories:
1. abandoned property;
2. lost property;
3. mislaid property; and
4. treasure trove.
These categories comprise different entitlements to ownership.60
Abandoned Property-U.S. Law
Property is abandoned when its owner
gives it up absolutely, voluntarily relinquishing possession
with the intention of terminating ownership and without vesting
it in any other person.61 An act of abandonment includes both
the intention to abandon and the external manifestation of abandonment
in fulfillment of that intention.62
It has been repeatedly held by the courts that intention is the
most important factor in determining whether abandonment has
occurred, as there can be no abandonment without the intention
to abandon. Abandonment is therefore tantamount to throwing away
property. The finder of an abandoned object has a right to title
to the object against all others, including the former owner.63
Such a finder would acquire title by occupancy, namely
by taking possession of "property without an owner"
with the intention of appropriating the property for her or his
own use.
Special rules of abandonment apply in some cases. For example,
the U.S. government may not abandon its title to certain of its
property without an act of Congress, although it may abandon
the use of such property.64 Also, wrecks (defined narrowly
as property cast on shore after a shipwreck and broadly as shipwrecked
goods in general) may be treated somewhat differently from other
abandoned property. In British common law, a wreck belonged to
the Crown unless it was reclaimed by the true owner within a
year and a day from the date the goods were seized by the finder.
Although that is also accepted in the United States, it has been
held in some cases that no length of time will divest the owner
of property found afloat in the sea.65 Modern courts tend to
take the view that, once abandoned, a wreck has no owner.
Lost Property
Property is legally "lost" when the
owner has parted with its possession involuntarily, whether through
negligence, carelessness, or inadvertence, and does not know
its location. Thus, an object that was voluntarily laid down
is not lost, even if the owner has forgotten where it is. (Such
an object is classified as "mislaid" property and is
discussed below.)
In common law, the finder of lost property acquires title to
the property if he or she appropriates it with the intention
of taking possession. Merely finding the property does not result
in acquisition of title. The title so acquired is good against
all but the true owner of the property. However, as is discussed
below, this common-law rule has been superseded in many jurisdictions
by statutes setting out detailed procedures for dealing with
lost goods.
Mislaid Property
When the owner of property voluntarily
and intentionally puts property somewhere and subsequently forgets
where it is, the property is mislaid. Thus, for example, an art
object found carefully concealed is more likely mislaid than
lost. In common law, the finder of mislaid property acquires
no ownership of the property; it belongs to the owner of the
premises on which the property is found, against all but the
true owner.66
Treasure Trove
Treasure trove may be seen as a type
of mislaid or lost property. It is usually defined as any found
gold, silver, coin, or currency concealed by the owner. In order
for property to be classified as treasure trove, its owner must
be unknown or likely to be dead, as the treasure has been hidden
for a long time.67 Usually, if the owner can be identified, the
property is not treasure trove. The finder of treasure trove
takes title to it against all but the true owner. Some jurisdictions
have declined to recognize the concept of treasure trove.68
Shipwrecks
There has been substantial interest in sunken
ships and the artifacts found within and about sunken ships in
recent years. The discovery of the Titanic has led to
discussions as to the appropriateness of removing artifacts from
sunken ships. As well, it has attracted the interest of treasure
hunters who seek the lost bullion and treasures of abandoned
ships.
In the United States, both the federal government and individual
states have passed legislation as "trustees of the public
interest" to ensure protection of the historical and archaeological
significance of shipwrecks.69
Historically, the British and Canadian courts have found that
title to abandoned property found on or under the sea is vested
in the Crown. The U.S. rule, however, was that title to such
recovered ships and artifacts belonged to the finder unless there
was legislation providing that it belonged to the state or federal
government. In either situation, the property must have been
abandoned; that is, the owner must have expressly and publicly
abandoned the property or items recovered from ships sunk long
ago, and no owner appears to claim them.70
The U.S. federal government passed the Antiquities Act of 190671
and the Archaeological Resources Protection Act72 of 1979 to
assert title to ancient vessels sunk near the coast. The Antiquities
Act was an attempt by the United States Congress to deter the
plunder of historic American sites. It established a screening
process to limit and control access to sites on federal land
and required that antiquities be housed in museums or universities.73
However, in Treasure of Salvors Inc. v. Unidentified Wrecked
and Abandoned Vessel, the court of appeals ruled that the
Antiquities Act applied only to lands owned or controlled
by the federal government. Ships outside the territorial waters
of the United States are free of any claim by the United States
and are "up for grabs."74 For a wreck to fall within
the concept of the act, there are three tests that must be met:
1. the wreck must be abandoned;
2. it must be located on the submerged lands of the state in
issue; and
3. it must be embedded in the sea floor or determined eligible
for listing in the National Register of Historic Places (National
Register).
The act then provides that the federal government of the United
States may assert title to such wrecks. If title is so asserted,
the government may then transfer title to the wreck to the appropriate
state for administration, management, and regulation.
Congress then enacted the Abandoned Shipwreck Act of 1987
to protect underwater archaeological treasures in state waters.75
The test for abandonment is the common-law rule of renunciation
of title or abandonment inferred by lapse of time and, in the
case of wrecks, the failure to pursue salvage efforts by the
owner.76
Archaeological Resources Protection Act
The Archaeological Resources
Protection Act gave more precise identification than the earlier
Antiquities Act to items of cultural significance and their protection.
It established a structure to oversee excavation of these items.
The archaeological resources were defined as objects more
than one hundred years old that constitute "material remains
of past human life or activities which are of archaeological
significance" and can be removed from federal lands only
pursuant to a government permit. If the object is found on tribal
land, removal also requires the consent of the tribe, and the
object remains the property of the landowner; it must be held
in a museum or university and cannot be sold in the private market
except to qualifying institutions.78
Place of Finding
In applying the law regarding found
property, the place where the object was found may be of significance.
This is because property located in a privately owned place is
considered to be in the constructive possession and protection
of the owner of the place; thus, such property cannot be lost.
As property that is not lost cannot be found, the law regarding
found goods has no application where a chattel is found in a
private place.
In general, when property is found in a place that is not private
and is classified as lost property, the finder is not affected
by the ownership of the place where it is found.79 However, if
the object has been buried or embedded in the soil, the owner
of the land takes title against the finder but not against the
true owner. Treasure trove is an exception to this rule: the
owner of the soil in which treasure trove is found does not acquire
title to the treasure by virtue of being the owner of the soil.80
Duties and Liabilities of Finder to Owner
In general, the finder of property must restore the property to its owner
if such owner is known. If the owner is unknown, the finder must follow any
procedure required by statute for discovering the owner and give
any claimant a fair opportunity to inspect the property. It has
also been held that the finder of lost property, by taking
possession, assumes the duties of a bailee without compensation.81
Such a finder may therefore be liable for any damages caused
to the property as a result of not properly carrying out the
duties of a bailee, for example, protecting the object.
Statutory Control of Lost (or Found) Goods
Lost property is under statutory
control in many jurisdictions. For example, Iowa Code chapter
556F prescribes the following: Any person who finds lost goods
or money whose value is at least five dollars must inform the
owner, if known. The finder is entitled to ten percent of the
value of the goods or money restored to the owner. When the owner
is unknown, the finder must, within five days of finding the
property, take the property to the county auditor, who enters
the description and value of the property, along with the finder's
affidavit, into the lost-property book. The finder must then
advertise the finding of the property, posting notices at the
locations and with the frequency stipulated by the statute. If
no person claims the property within twelve months of such posting,
the right to property vests irrevocably in the finder. If there
is a claimant and the claimant and the finder cannot agree upon
true ownership, the matter is to be resolved before a district
judge. The statute also stipulates the penalty for failure to
comply with the statutory procedure. (Iowa has statutes dealing
with property presumed to have been abandoned, also, as in the
case of unclaimed funds in a bank account.)
Laws regarding lost goods differ from jurisdiction to jurisdiction.
For example, under Michigan's Lost Goods Act, if the true owner
is not found within the prescribed time, the value of the goods
is divided evenly between the finder and the township in which
the goods were found.82
Statutes and Common Law
There are two views as to
the scope of the application of statutes such as the Iowa Code
discussed above. One view is that such statutes apply only to
found property classified under common law as lost property;83
the other view is that statutes concerning lost property apply
to all found property, regardless of its common-law category.84
In the former view, lost-goods statutes do not apply to mislaid
or abandoned property or to treasure trove (if the jurisdiction
recognizes treasure trove); the ordinary rules of common law
apply to these categories of found goods. In the latter, broader
view, lost-goods statutes have superseded common law, and no
preliminary classification of found property is necessary before
applying them. The court in the Willsmore case stated
that such an expansive interpretation of the Lost Goods Act was
desirable because, unlike common law, the act provides certainty
of title by vesting clear title after a set period of time; encourages
honesty in finders by providing penalties for not complying with
the act; provides protection to the finder; and generally provides
"a reasonable method of uniting goods with their true owner,
and a plan which benefits the people of the state through their
local governments."85

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
Disclaimer
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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