Road to Recovery

You’ve located a valuable painting the Nazis took from your family. But 50 years have elapsed and the current owner insists it’s rightfully hers, is it?

We have found that, on occasion, being lawyer-columnists for Art & Auction can have unanticipated consequences. Recently, we received a telephone call from one faithful reader who said he had a claim involving an Old Master painting looted by the Nazis—not our everyday client problem.

The caller told us that the work had been seized from his grandfather, a German Jew, and was now in the hands of a well-known New York collector, who had apparently bought it in the 1970s from a prominent Midwestern dealer. Our new client spotted the painting hanging over the mantelpiece in the collector’s town house during a cocktail party, and remembered it from an album of family photographs. He believed the work was currently worth several hundred thousand dollars, and he wanted the collector to return it or to compensate him for his family’s loss. His question to us: What to do now?
Our first step was to get more information on the history of the work since it was last seen in the Berlin home of our client’s grandfather. This was not an easy task, considering that the grandfather, who had died many years earlier, had fled Germany with his family in the late 1930s with little more than the clothes on his back and no formal documentation on the painting. Among the spotty evidence we had pointing to his ownership was some correspondence mentioning the picture and several faded photographs showing it hanging over a sofa in the house in Germany. But the images were too blurred to prove conclusively that this was the painting now owned by the New York collector.
To further complicate matters, there was some question as to whether our client’s grandfather had simply abandoned the artwork when he fled, or possibly sold it to the Nazis under duress. Nor had family members made any serious effort to search for the painting after the war. As our client explained to us, they were busy rebuilding their lives in America and simply gave up hope of recovering it. Until, that is, he happened to look up from his glass of chardonnay at the party.
When we approached the collector on behalf of our client, we were met with a less-than-warm reception. As far as she was concerned, her late husband had paid a gallery good money for the work 20 years earlier, and had invested a considerable sum in restoring it. Moreover, she had refrained over the years from buying comparable works by the same artist because she already owned this one. She remarked that during the past 50 years the painting had appeared in several public exhibitions and catalogues, including the artist’s catalogue raisonné (which did not list our client’s family as part of the work’s provenance). If our client was so keen on having the painting returned, why had he and his family been so ineffectual in searching for it?
The collector’s attorney was equally unmoved. He argued that even if our client’s story was true, the painting had not, strictly speaking, been stolen. Instead, it had been legally confiscated or perhaps sold under the laws of Nazi Germany, and so our client’s title had been extinguished long ago. We countered that in the State of New York art pillaged by the Nazis is indeed considered stolen, as reflected in the 1966 landmark decision in Menzel v. List.
That case involved a Jewish plaintiff, Erna Menzel, who tried to recover a Marc Chagall painting that she and her husband had left in their apartment in Brussels in 1940, when they fled the invading Nazis. The Menzels searched for the painting after the war and she finally located it in 1962, recognizing it in an art book that named as the owner a certain Albert List, who had bought the work for $4,000 in 1955 from the Perls Galleries in New York. When List refused to hand it over to Menzel—arguing that her claim was barred by the statute of limitations—she sued him, demanding that he return it or reimburse her for its current value of $22,500. The court ultimately ordered List to return the painting, ruling that the taking of private property not needed for the waging of war is unlawful.
In our case, the collector’s attorney next argued that whether or not the painting had been stolen by the Nazis, his client was an innocent buyer. He produced a copy of the invoice showing that the work had indeed been purchased from a gallery many years before. But we responded that although the collector and her husband may have been unaware the painting was stolen, she still lacked good title to it. In the U.S., it is a general rule that a thief has no title to stolen goods and cannot pass good title to a buyer. As a result, we argued, the work still belonged to our client.
Continuing this game of legal cat-and-mouse (in which, as our mother likes to say, it is always better to be the cat than the mouse), her lawyer contended that even if everything we had told him was true, our client was still out of luck because his claim was time-barred by the statute of limitations. He pointed out that many decades had passed since the alleged theft of the painting (which, being good students of history, we already knew), and that New York’s statute of limitations for the recovery of personal property is only three years (which we also knew). He noted the public interest in settling title after a reasonable period of time, and argued that property owners cannot, in the immortal words of Black’s Law Dictionary, simply “slumber” on their rights.
Although the lawyer was right about the three-year statute of limitations, this prompted a key question: At what point does the statute of limitations begin to run? He took the position—which we refuted—that it began on the date when our client should have discovered (given its visibility in exhibitions and catalogues) the location of the work and the identity of the person who possessed it. This “discovery rule,” as it is known, is the prevailing rule in the U.S., including the Midwestern state where the dealer who sold the painting operated. The lawyer argued that our client had ample opportunity years ago to find the work and assert his rights, and his failure to do so in a timely fashion meant that his claim was now time-barred.
To support his position, the lawyer cited the famous case DeWeerth v. Baldinger. That dispute concerned a German woman, Gerda DeWeerth, who had entrusted a Claude Monet painting she owned to her sister in 1943 for the duration of the war. Her sister kept the work hidden in her castle in southern Germany. American soldiers eventually occupied the castle, and when they left, the picture was gone too. Gerda DeWeerth tried unsuccessfully to locate it for a number of years and gave up her search in 1957.
Unbeknownst to DeWeerth, the Monet appeared on the market in 1956, when a Swiss art dealer consigned it to a New York gallery, which in turn sold it to Edith Baldinger for $30,900. The work hung in Baldinger’s apartment from 1957 to 1983, and was twice exhibited publicly in New York. Finally, in 1981, DeWeerth’s nephew spotted the painting in a catalogue raisonné of Monet’s works. It was then valued at some $500,000. DeWeerth demanded its return, Baldinger refused, and litigation ensued. But the court dismissed DeWeerth’s claim as time-barred, reasoning that she had not conducted a continuous and diligent search.
Returning to our case, we pointed out that although the discovery rule enunciated in DeWeerth v. Baldinger holds throughout much of the U.S., it is not currently applied in New York, where our client, the art collector and the painting were located. Instead, we explained, New York has adopted the “demand and refusal rule,” which dictates that the statute of limitations for the recovery of personal property begins to run when the owner demands the return of the work and the possessor refuses. Under this theory, we argued that our client’s claim was not time-barred, since only recently had the demand for the work been made and refused.
The demand and refusal rule was recognized in Kunstsammlungen zu Weimar v. Elicofon. Two 15th-century portraits by Albrecht Dürer from the collection of the Weimar Art Museum had been hidden in a residence in Germany for safekeeping during World War II but were stolen in 1945. Edward Elicofon, a lawyer living in Brooklyn, bought the paintings a year later for $450 from an American serviceman, who said that he had purchased them at an open market in Germany. When the Weimar museum learned of the works’ whereabouts in 1966, it asked Elicofon to hand them over. He refused, and argued that the claim was time-barred because the statute of limitations ran from the date he purchased the paintings. The court disagreed, holding that the statute of limitations ran from the time Elicofon refused the museum’s demand, and consequently ordered him to return the works.
As our legal wrangling with the collector’s attorney suggests, U.S. courts are divided on whether the demand and refusal rule or the discovery rule should be applied to determine when the statute of limitations begins to accrue in matters of stolen art. This question becomes even more important when, as with our case, ownership of an artwork passes through different legal jurisdictions that may not apply consistent legal theories. Our position was therefore made more complicated because we could not be absolutely certain which rule the court might invoke.
At the end of the day, however, we triumphed. The collector’s attorney recognized that there was a strong likelihood that a New York court would apply the demand and refusal rule to our case, and his client wanted to avoid being known as the “hostess with the Goering.” She agreed to return the painting to our client without compensation (although our client did reimburse her for expenses such as restoration and insurance). Of course, the collector was still free to seek recompense from the dealer who sold the work, and who may have had a duty to inspect the title more carefully.
In addition to presenting fascinating legal issues, cases such as this one pose tough moral dilemmas, because they involve two innocent parties—the original owner and the current party in possession, who may have had no way of knowing that the work was stolen. In our particular situation, one result seemed fairly certain: Our client was not going to be invited back for cocktails.

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