Under New York law an innocent purchaser of stolen goods becomes a wrongdoer only after refusing the owner's demand for their return. Until the refusal the purchaser is considered to be in lawful possession. Where the demand requirement is substantive, that is, where a demand and refusal are requisite elements of the cause of action, it accrues and the statute of limitation begins to run only after such demand and refusal. Where the demand is merely procedural, that is, where demand and refusal are not requisite elements of the cause of action and the defendant's actionable conduct was complete prior to demand, the N.Y. C.P.L.R. § 206(a) governs and the limitation period begins to run when the right to make the demand is complete.
Intervening plaintiff grand duchess and defendant purchaser appealed the order of the Eastern District of New York, which granted summary judgment dismissing their claims of ownership of two paintings. Judgment of ownership of the paintings was granted to intervening plaintiff, an art collection, and plaintiff, the Federal Republic of Germany. Plaintiff Federal Republic of Germany commenced suit against defendant purchaser seeking possession of paintings, which were stolen in 1945, and which defendant purchased from an American serviceman. Intervening plaintiff grand duchess and intervening plaintiff art collection also asserted claim to the paintings. The district court granted summary judgment in favor of intervening plaintiff art collection, and dismissed the claims of both intervening plaintiff grand duchess and defendant. The grand duchess and the purchaser appealed.
Were the paintings were personal property by succession as opposed to vesting of title in favor of a subsequent purchaser?
The grand duchess argued that the paintings were personal property by succession, and the purchaser argued that he was a good faith purchaser. The court affirmed the grant of summary judgment to the art collection, finding that the grand duchess produced evidence affirming that the art collection held title, and that a cause of action against the purchaser for the return of the painting was not barred by the statute of limitations. The suit was filed within three years of the time that the purchaser refused a demand to return the painting. The order granting summary judgment to the art collection was affirmed because evidence produced by the grand duchess supported valid title in the art collection. Further, the purchaser's claim was properly dismissed. He was not entitled to possession as a result of purchasing the paintings from a thief.