¹ See Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 427–28 (N. Y. 1991) (noting that lawsuit began on Sept. 28, 1987); Pérez-Peña, Richard, Suit Over Chagall Watercolor Is Settled Day After Trial Starts, N. Y.Times, Dec. 29, 1993, at B3Google Scholar (noting that lawsuit was settled on Dec. 28, 1993).

² Solomon R. Guggenheim Found, v. Lubell, 550 N. Y. S. 2d 618, 619 (App. Div. 1990), certified question answered and aff'd, 569 N. E.2d 426 (N. Y. 1991).

³ Guggenheim, 569 N. E.2d at 431. After the trial on remand began, the parties finally settled the lawsuit on December 28, 1993. Under the settlement, Mrs. Lubell will keep the painting, but she and the two dealers who sold the painting will pay the Guggenheim Museum an undisclosed sum of money. Pérez-Peña, supra note 1.

⁴ Though the term “chattel” technically does not include intangible personal property, for the sake of readability this Note uses “chattel” and “personal property” interchangeably because the distinction is not important for this Note's purposes.

⁵ See infra Part 1.2. Each author stresses a different justification for adverse possession of chattels. See Gerstenblith, Patty, The Adverse Possession of Personal Property, 37 Buff. L. Rev. 119, 163 (1988)Google Scholar (underscoring need to protect good faith and commercial certainty); Helmholz, R. H., Wrongful Possession of Chattels: Hornbook Law and Case Law, 80 Nw. U. L. Rev. 1221, 1235–36 (1986)Google Scholar (stressing importance of quieting title); Ward, Nicholas D., The Georgia Grind: Can the Common Law Accommodate the Problems of Title in the Art World, Observations on a Recent Case, 8 J. C. & U. L. 533, 554 (1981–1982)Google Scholar (relying on “the need for repose”); Comment, 14 Rutgers L. Rev. 443, 444–45 (1960) (stressing need to quiet titles and bar stale claims). These recent articles have not moved beyond the older literature, which relied on similar reasons in support of adverse possession of chattels. See Ames, J. B., The Disseisin of Chattels (pt. 2), 3 Harv. L. Rev. 313 (1890)CrossRefGoogle Scholar (assimilating adverse possession of chattels to adverse possession of land); Dawson, John P., Fraudulent Concealment and Statutes of Limitation, 31 Mich. L. Rev. 875, 897–901 (1933)CrossRefGoogle Scholar (favoring protection of reliance interests); Walsh, William F., Title by Adverse Possession (pt. 1), 16 N. Y. U. L. Q. Rev. 532, 536 (1939)Google Scholar (emphasizing need to bar stale claims).

⁶ See infra Part 1.4; see also Franzese, Paula A., “Georgia on My Mind”–Reflections on O'Keeffe v. Snyder, 19 Seton Hall L. Rev. 1 (1989)Google Scholar (implicitly endorsing discovery rule); Petrovich, John G., Comment, The Recovery of Stolen Art: Of Paintings, Statues, and Statutes of Limitations, 27 UCLA L. Rev. 1122, 1151 (1980)Google Scholar (advocating discovery rule that would balance defendant's interest in repose, plaintiffs interest in meritorious claim, problems of proof, and hardship to faultless plaintiff).

⁷ Laches and due diligence doctrines temper statutes of limitations by taking into account the owner's diligence and other factors relevant to the fairness of returning the chattel. See infra Part 1.4; see also Drum, Sydney M., Comment, DeWeerth v. Baldinger: Making New York a Haven for Stolen Art?, 64 N. Y. U. L. Rev. 909, 942 (1989)Google Scholar (endorsing demand-and-refusal rule as qualified by laches); Leah E. Eisen, Commentary, The Missing Piece: A Discussion of Theft, Statutes of Limitations, ami Title Disputes in the Art World, 81 J. Crim. L. & Criminology 1067, 1100–01 (1991) (endorsing version of due diligence rule); Foutty, Stephen L., Recent Development, Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc.: Entrenchment of the Due Diligence Requirement in Replevin Actions for Stolen Art, 43 Vand. L. Rev. 1839, 1841 (1990)Google Scholar (endorsing due diligence rule); Hayworth, Andrea E., Note, Stolen Artwork: Deciding Ownership Is No Pretty Picture, 43 Duke L. J. 337, 374–83 (1993)CrossRefGoogle Scholar (endorsing demandand-refusal rule as qualified by laches); Webb, Charles D. Jr., Note, Whose Art Is It Anyway? Title Disputes and Resolutions in Art Theft Cases, 79 K.Y. L. J. 883, 895 (1990–1991)Google Scholar (endorsing version of due diligence rule). Though these commentators treat the differences between laches and due diligence as significant. Part 1.4 notes similarities between the two and Part 2.4 argues that both rules are far too vague. Thus, neither rule adequately deters the buying of stolen art.

⁸ The Cultural Property Implementation Act already covers cultural, archaeological, or ethnological property stolen from another country's museums, monuments, or public institutions. 19 U. S. C. §§ 2601, 2607 (1988). See generally Margules, Paige L., Note, International Art Theft and the Illegal Import and Export of Cultural Property: A Study of Relevant Values, Legislation, and Solutions, 15 Suffolk Transnat'l L. J. 609 (1992)Google Scholar. Therefore, this Note does not deal with works that fall under that Act.

⁹ This Note uses male pronouns for buyers and possessors and female pronouns for owners and theft victims.

¹⁰ See 3 William Blackstone, Commentaries^*145 (describing rationale underlying actions for replevin and detinue: “For there must be an end of all social commerce between man and man, unless private possessions be secured from unjust invasions: and, if an acquisition of goods by either force or fraud were allowed to be a sufficient title, all property would soon be confined to the most strong, or the most cunning; and the weak and simpleminded part of mankind (which is by far the most numerous division) could never be secure of their possessions.”).

¹¹ Kunstsammlungen zu Weimar v. Elicofon, 678 F.2d 1150, 1160 (2d Cir. 1982); Ward, supra note 5, at 549 & n.94.

¹² Suburban Motors v. State Farm Mut. Auto. Ins., 268 Cal. Rptr. 16, 19 (Ct. App. 1990); Schrier v. Home Indem. Co., 273 A.2d 248, 250–51 (D.C. 1971); Inmi-Etti v. Aluisi, 492 A.2d 917, 923 (Md. Ct. Spec. App. 1985).

¹³ See U. C. C. §§ 1–103 (stating that pre-U. C. C. common law still applies except where displaced by particular U. C. C. provisions), 1–201(32), (33) (defining purchase and purchaser in terms of passage of title via voluntary transactions), 2–403(1) (stating that purchaser acquires all title that transferor had) (1988); see also Webb, supra note 7, at 884 & n.12 (citing these U. C. C. sections). The U. C. C. does protect a BFP who buys from a seller with voidable title. U. C. C. § 2–403(1) (1988). But a voidable title, which arises, for instance, when a check is dishonored, is very different from a thief's void title. Ward, supra note 5, at 549–50. Since a thief has no title to transfer, not even a voidable title, a purchaser from a thief acquires no title.

¹⁴ See Jesse Dukeminier & James E. Krier, Property 100 (2d ed. 1988). See generally Charles C. Callahan, Adverse Possession (1961). Note one important difference between land and chattels: Many jurisdictions require that an adverse possessor have color of title, i. e., title resting on a document. See Dukeminier & Krier, supra, at 104. Title deeds exist for land, making the color of title requirement useful for weeding out undocumented claims. In contrast, because there are no standard documents of title for most chattels, it is impossible to apply the color of title test to chattels.

¹⁵ See, e.g., Ames, supra note 5, at 323–25; Walsh, supra note 5, at 535–36. Several works treat adverse possession of chattels only briefly and make the analogy between land and chattels in passing, taking it for granted that the two deserve like treatment. See, e.g., 3 American Law of Property § 15.16, at 837 (A. James Casner ed., 1952); Comment, supra note 5, at 444–45.

¹⁶ Dawson, supra note 5, at 898–99.

¹⁷ Id. at 897–901.

¹⁸ Gerstenblith, supra note 5, at 124.

¹⁹ See id.

²⁰ Id. at 163.

²¹ Id. at 162–63.

²² O'Keeffe v. Snyder, 405 A.2d 840, 847 (N. J. Super. Ct. App. Div. 1979), rev'd and remanded on other grounds, 416 A.2d 862 (N. J. 1980).

²³ Another recurring case involved fixtures of which former owners or occupants of land retained ownership, but which they left behind and only belatedly returned to claim. Courts recognized that such fixtures were personal property but nonetheless applied adverse possession doctrines. See, e.g., Isham v. Cudlip, 179 N. E.2d 25 (111. App. Ct. 1962) (applying adverse possession to house sold as chattel); Chapin v. Freeland, 8 N. E. 128 (Mass. 1886) (applying adverse possession to counters in general store); Preston v. Briggs, 16 Vt. 124 (1844) (applying adverse possession to barn). Applying adverse possession to fixtures makes sense, because fixtures share many characteristics of land: durability, high value, responsiveness to investment, and locational stability. The owners could have returned to claim their fixtures at any time; their delay was thus blameworthy.

²⁴ See infra Part 1 3–4.

²⁵ 72 Ky. (9 Bush) 629 (1873).

²⁶ Id. at 632.

²⁷ See id.

²⁸ Dee v. Hyland, 3 P. 388, 388 (Utah 1883) (awarding title to BFP of horse even though owner had notified sheriff, ranchers, and cattle drovers of theft). Another court noted that a BFP had been “claiming and holding [a mare] notoriously and adversely.” Hull v. Davidson, 25 S. W. 1047, 1047 (Tex. Civ. App. 1894). One case stressed a BFP's “open, notorious, and undisputed possession [of a stolen mare] under an honest claim of right.” Leavirt v. Shook, 83 P. 391, 391 (Or. 1905). Another case rested its decision on a possessor's having held openly, notoriously, peaceably, and exclusively. Adams v. Coon, 129 P. 851, 852 (Okla. 1913). Several cases expressly permitted tacking. E.g., Gaillard v. Hudson, 8 S. E. 534, 534 (Ga. 1889); Gatlin v. Vaut, 91 S. W. 38. 40 (Indian Ten. 1905), aff'd sub nom. Vaught v. Gatlin, 120 P. 273 (Okla. 1911). Tacking is a doctrine that permits a possessor to add the length of time his seller possessed a piece of property to the length of his own possession in computing whether the adverse possession period has run.

²⁹ Torrcy v. Campbell, 175 P. 524, 525 (Okla. 1918) (emphasis added).

³⁰ Dragoo v. Cooper, 72 Ky. (9 Bush) 629, 631 (1873).

³¹ Gatlin, 91 S. W. at 40.

³² Luter v. Hutchinson, 70 S. W. 1013, 1014 (Tex. Civ. App. 1902).

³³ See Torrey, 175 P. at 525 (noting that cow had distinguishing marks, so anyone looking for her could have identified her).

³⁴ Note that rewarding possessors for caring for animals is analogous to rewarding maritime salvagers for salvaging the property of another. See Gilmore, Grant & Black, Charles L. Jr., The Law of Admiralty 532 (2d ed. 1975)Google Scholar.

³⁵ This author has found no cases decided after 1918 that tolled a statute of limitations because property was outside the jurisdiction (except where there had been affirmative fraudulent concealment).

³⁶ Burroughs Adding Machine Co. v. Bivens-Corhn Co., 119 P.2d 58, 59 (Okla. 1941).

³⁷ Reynolds v. Bagwell, 198 P.2d 215, 217 (Okla. 1948); cf. United States v. One Stradivarius Kieserwetter Violin, 197 F. 157, 159 (2d Cir. 1912) (keeping violin on table at home and showing it to guests prevented tolling of statute of limitations for concealment; not an adverse possession case, however).

³⁸ Connor v. Hawkins, 9 S. W. 684, 685 (Tex. 1888). The reported opinion sheds no light on who these witnesses were. Presumably, they were called to testify because they were acquainted with the possessor.

³⁹ Joseph v. Lesnevich, 153 A.2d 349, 357 (N. J. Super. Ct. App. Div. 1959). While the paragraph from which the quotation comes discusses the lack of fraudulent concealment, the preceding paragraph makes clear that possession need only be open and notorious enough to negate a charge of fraudulent concealment, regardless of an owner's ignorance.

⁴⁰ San Francisco Credit Clearing House v. Wells, 239 P. 319, 321 (Cal. 1925).

⁴¹ Riesinger's Jewelers, Inc. v. Roberson, 582 P.2d 409, 413 (Okla. Ct. App. 1978) (holding that owner's opportunity to know ring's whereabouts was substantial question of fact precluding summary judgment).

⁴² Madsen v. Madsen, 269 P. 132, 134 (Utah 1928).

⁴³ See infra Part 1.3–4.

⁴⁴ See, e.g., Gillet v. Roberts, 57 N. Y. 28 (1874). Note that demand-and-refusal cases come primarily from New York courts.

⁴⁵ See. e.g., O'Connell v. Chicago Park Dist., 34 N. E.2d 836, 840 (Ill. 1941) (holding that, where possession was tortious at outset, limitation period began running at once and later demand did not start it running again); Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 429 (N. Y. 1991); Gerstenblith, supra note 5, at 139 n.61.

⁴⁶ Gerstenblith, supra note 5, at 132–33.

⁴⁷ Id. at 133–34.

⁴⁸ E.g., Kunstsammlungen zu Weimar v. Elicofon, 678 F.2d 1150, 1161 (2d Cir. 1982) (dealing with art stolen in World War II); Goodbody & Co. v. McDowell, 530 F.2d 1149, 1151 (5th Cir. 1976) (shares of stock); Republic of Turkey v. Metropolitan Museum of Art, 762 F. Supp. 44, 45 (S. D. N Y. 1990) (artifacts stolen from Turkish burial mounds); Interstate Mfg. Co. v. Interstate Prods. Co., 408 P.2d 478, 481 (Mont. 1965) (machinery and power wagon); Guggenheim. 569 N. E.2d at 429 (stolen Chagall watercolor); Menzel v. List, 267 N. Y. S. 2d 804, 809 (Sup. Ct. 1966) (Chagall paintings plundered by Nazis), modified on other grounds, 279 N. Y. S. 2d 608 (App. Div. 1967), modification rev'd, 246 N. E.2d 742 (N. Y. 1969); see also Duryea v. Andrews, 12 N. Y. S. 42, 43 (Sup. Ct. 1890) (holding that statute of limitations began to run upon demand for return of stolen horse, but not mentioning refusal).

⁴⁹ See, e.g., cases cited supra note 48. Many of the cases cited in that footnote are from New York. Because New York is an art mecca and many museum plaintiffs are there, many stolen art cases fall within the demand-and-refusal rule.

⁵⁰ Menzel, 267 N. Y. S. 2d at 820; see also Kunstsammlungen zu Weimar, 678 F.2d at 1156 (ruling on suit by plaintiff who made demand twenty-one years after theft).

⁵¹ See supra note 45 and accompanying text.

⁵² See. e.g., Al-Roc Prods. Corp. v. Union Dime Sav. Bank, 425 N. Y. S. 2d 525, 526 (App. Div. 1980); Federal Ins. Co. v. Fries, 355 N. Y. S. 2d 741, 747 (Civ. Ct. 1974); see also Stroganoff-Scherbatoff v. Weldon, 420 F. Supp. 18, 22 n.5 (S. D. N Y. 1976) (dictum).

⁵³ See. e.g., Republic of Turkey v. Metropolitan Museum of Art, 762 F. Supp. 44, 46–47 (S. D. N Y. 1990); Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 431 (N. Y. 1991). Two commentators advocate this approach. See Drum, supra note 7, at 942–43; Hayworth, supra note 7, at 373.

⁵⁴ See. e.g., Guggenheim, 569 N. E.2d at 431.

⁵⁵ See id. at 431.

⁵⁶ 836 F.2d 103, 108–09 (2d Cir. 1987), cert, denied, 486 U. S. 1056 (1988). Several commentators endorse this approach. See Eisen, supra note 7, at 1100; Foutty, supra note 7, at 1860; Webb, supra note 7, at 895.

⁵⁷ DeWeerth, 836 F.2d at 110; see also Foutty, supra note 7, at 1860 (“[D]etermination of due diligence is fact sensitive and must be made on a case-bycase basis …”).

⁵⁸ DeWeerth, 836 F.2d at 109–12.

⁵⁹ Id. at 106, 108.

⁶⁰ Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 429–30 (N. Y. 1991).

⁶¹ Id. at 430–31.

⁶² Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278, 288–89 (7th Cir. 1990) (applying discovery rule to stolen mosaics), cert, denied, 112 S. Ct. 377 (1991); Senfeld v. Bank of Nova Scotia Trust Co. (Cayman) Ltd., 450 So. 2d 1157, 1162 (Fla. Dist. Ct. App. 1984) (applying discovery rule to stolen money); O'Keeffe v. Snyder, 416 A.2d 862, 870 (N. J. 1980) (applying discovery rule to action for replevin of stolen paintings); see also Mucha v. King, 792 F.2d 602, 611–12 (7th Cir. 1986) (“Although the tide in Illinois is running strongly in favor of the discovery rule … it must remain a matter of speculation whether an Illinois court would apply it in a case such as this …”); Cal. Civ. Proc. Code § 338(c) (West Supp. 1993) (adopting discovery rule for stolen artworks and scientific and historical artifacts); Preliminary Draft Unidroit Convention on Stolen or Illegally Exported Cultural Objects art. 3(3) (Int'l Inst. for the Unification of Private Law 1993) (Unidroit Study LXX–Doc. 40) (proposing harmonization of countries' laws, under which statute of limitations for cultural objects would run from when owner knew (or, alternatively, should have known) of object's whereabouts).

⁶³ This rule's vagueness is the fault of the courts, which have never enumerated lists of what factors matter in this inquiry or how heavily to weight each one. They merely tell the finder of fact to determine what would be fair in all the circumstances, including the circumstance of when a reasonably diligent owner would have found her art.

⁶⁴ 416 A.2d at 864–65.

⁶⁵ O'Keeffe v. Snyder, 405 A.2d 840, 845–46 (N. J. Super. Ct. App. Div. 1979), rev'd and remanded, 416 A.2d 862, 863 (N. J. 1980).

⁶⁶ 416 A.2d at 871–72.

⁶⁷ Id. at 872.

⁶⁸ Id. at 873.

⁶⁹ See id.

⁷⁰ See Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278, 289 (7th Cir. 1990) (“[T]he due diligence determination is … highly ‘fact-sensitive and must be decided on a case-bycase basis.”’) (quoting Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc., 717 F. Supp. 1374, 1389 (S. D. Ind. 1989)), cert, denied, 112 S. Ct. 377 (1991); Mucha v. King, 792 F.2d 602, 611 (7th Cir. 1986) (noting that courts will not apply discovery rule “if problems of proof created by the passage of time outweigh the hardship to a plaintiff who could not as a practical matter have sued any earlier than he did”).

⁷¹ See Webb, supra note 7, at 896–98; Eisen, supra note 7, at 1092.

⁷² See Webb, supra note 7, at 897 (“[N]o exhaustive standards for what constitutes due diligence could be set out to cover every situation….”); Eisen, supra note 7, at 1092.

⁷³ Webb, supra note 7, at 897.

⁷⁴ Id.; Eisen, supra note 7, at 1092.

⁷⁵ See Petrovich, supra note 6, at 1156–57; see also Franzese, supra note 5, at 22 (obliquely praising discovery rule); Ward, supra note 5, at 541 (endorsing discovery rule in passing). Because the discovery rule sometimes subordinates a possessor's repose to a diligent owner's rights, the leading proponent of adverse possession for chattels criticizes this rule. In Gerstenblith's view, O'Keeffe “significantly undermines the policy of the statute of limitations” favoring repose and unfairly assimilates an innocent possessor to a wrongdoer. Gerstenblith, supra note 5, at 144. She prefers adverse possession because it focuses on the possessor's acts and good faith rather than the owner's diligence. Id. at 145.

⁷⁶ DeWeerth v. Baldinger, 836 F.2d 103, 111–12 (2d Cir. 1987), cert, denied, 486 U. S. 1056 (1988); Desiderio v. D'Ambrosio, 463 A.2d 986, 988–89 (N.J. Super. Ct. Ch. Div. 1983).

⁷⁷ Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278 (7th Cir. 1990), cert, denied, 112 S.Ct. 377 (1991); Mucha v. King, 792 F.2d 602 (7th Cir. 1986); Kunstsammlungen zu Weimar v. Elicofon, 678 F.2d 1150 (2d Cir. 1982); Redmond v. New Jersey Historical Soc'y, 28 A.2d 189 (N. J. 1942); Menzel v. List, 267 N. Y. S. 2d 804 (Sup. Ct. 1966), modified on other grounds, 279 N. Y. S. 2d 608 (App. Div. 1967), modification rev'd, 246 N. E.2d 742 (N. Y. 1969).

⁷⁸ Republic of Turkey v. Metropolitan Museum of Art, 762 F. Supp. 44 (S. D. N. Y. 1990); O'Keeffe v. Snyder, 416 A.2d 862 (N. J. 1980) (noting evidence of owner's lack of diligence); Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426 (N. Y. 1991) (same).

⁷⁹ See Kunstsammlungen zu Weimar, 678 F.2d at 1155–56.

⁸⁰ See Stanley Meisler, Art & Avarice, L. A. Times, NOV. 12, 1989, Magazine, at 8, 10–11. The facts described in the text gave rise to the Autocephalous Greek-Orthodox Church case. 917 F.2d at 279–84.

Even Pablo Picasso was guilty of ignoring hints of theft. When a friend sold him stolen Iberian sculptures that Picasso had seen in the Louvre, “deny it though he might, Picasso must have realized exactly what he was being offered.” John Richardson, Picasso Among Thieves, Vanity Fair, Dec. 1993, at 198, 204. Nevertheless, because “he had to possess these objects,” Picasso “delud[ed] himself” into accepting the thief's story. Id. at 204, 224.

⁸¹ E.g., Porter v. Wertz, 416 N. Y. S. 2d 254, 257, 259 (App. Div. 1979) (noting that buyer did not inquire about seller's reputability nor his title to painting, in keeping with custom among buyers that “it is deemed poor practice to probe” into title).

⁸² O'Keeffe v. Snyder, 416 A.2d 862, 866 (N. J. 1980).

⁸³ Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 428 (N. Y. 1991).

⁸⁴ Solomon R. Guggenheim Found, v. Lubell, 550 N. Y. S. 2d 618, 623 (App. Div. 1990), certified question answered and aff'd, 569 N. E.2d 426 (N. Y. 1991).

⁸⁵ Guggenheim, 569 N. E.2d at 431.

⁸⁶ Id. at 430.

⁸⁷ Id. at 431.

⁸⁸ See id. at 428; Pérez-Peña, supra note 1.

⁸⁹ See, e.g., Menzel v. List, 267 N. Y. S. 2d 804, 808 (Sup. Ct. 1966) (noting that buyer who had to return painting to owner recouped its market value from gallery that sold painting to buyer), modified, 279 N. Y. S. 2d 608 (App. Div. 1967), modification rev'd, 246 N. E.2d 742 (N. Y. 1969).

⁹⁰ See, e.g., Gerstenblith, supra note 5, at 160–61, 163; Helmholz, supra note 5, at 1235–36; Comment, supra note 5, at 444–45.

⁹¹ Courts should not, however, employ vague, case-by-case balancing tests to weigh these costs and benefits. See infra Part 2.4. A bright-line rule placing liability on buyers would make buyers internalize the costs of searching and the costs of not searching, producing an optimal amount of investigation. See infra text accompanying note 153.

⁹² See supra notes 79–80 and accompanying text. The inquiry into a possessor's good faith necessarily relies on his testimony and version of the events. As Part 2.4 argues, this makes it difficult in many cases for courts to discern ex post when a possessor could and should have done more to investigate. Therefore, it is better to create incentives by placing the risk of loss on possessors ex ante.

⁹³ See. e.g., Menzel v. List, 246 N. E.2d 742, 743 (N. Y. 1969) (“The [defendants] knew nothing of the painting's previous history and made no inquiry concerning it, being content to rely on the reputability of the Paris gallery as to authenticity and title.”).

⁹⁴ Porter v. Wertz, 416 N. Y. S. 2d 254, 259 (App. Div. 1979) (quoting district court opinion) (noting that buyer did not investigate seller's reputability or verify claim of ownership); see also O'Keeffe v. Snyder, 416 A.2d 862, 872 (N. J. 1980) (“[P]aintings worth vast sums of money sometimes are bought without inquiry about their provenance.”); James Walsh, It's a Steal, Time, Nov. 25, 1991, at 86, 87 (stating that, according to New York Police art detective Richard Volpe, art thieves succeed only through negligence or complicity of galleries and collectors).

⁹⁵ See Grace Glueck, Who Owns Stolen Artifact? College Confronts a Museum, N. Y. Times, Apr. 30, 1991, at A1, B3 (implying that, though Sotheby's sold artifact and checked for possible illegal exportation, it did not investigate possibility of theft); Carol Vogel, Museum Keeps Stolen Artifact, College Gets Cash, N. Y. Times, Apr. 11, 1992, at A14 (same); see also Menzel v. List, 267 N. Y. S. 2d 804, 808 (Sup. Ct. 1966) (“Art galleries of such standing assume, without the necessity of inquiry, that an offer of sale constitutes a representation of authenticity and good title.”), modified on other grounds, 279 N. Y. S. 2d 608 (App. Div. 1967), modification rev'd, 246 N. E.2d 742 (N. Y. 1969).

⁹⁶ A catalogue raisonné is a definitive listing (usually by a prominent art expert) of every known artwork by a particular artist. For each work, the catalogue usually contains a physical description (including an illustration), a history of exhibitions of the work, the work's provenance, and published references to the work. Usually, one catalogue becomes the definitive reference work on which scholars and merchants rely when discussing an artist's works. See DeWeerth v. Baldinger, 836 F.2d 103, 112 (2d Cir. 1987); Mary McKenna, Comment, Problematic Provenance: Toward a Coherent United States Policy on the International Trade in Cultural Property, 12 U. PA. J. Int'l Bus. L. 83, 104 n.89 (1991).

⁹⁷ International Art Loss Register Opens for Business, ARTnewsletter (Int'l Found, for Art Research, New York, N. Y.), Feb. 5, 1991, at I; see also infra Part 3 (advocating solution based on international databases).

⁹⁸ Don L. Boroughs et al., The Hidden Art of Theft, U. S. News & World Rep., Apr. 2, 1990, at 13.

⁹⁹ Walsh, supra note 94, at 86–87.

¹⁰⁰ Maria Puente, Art Thefts: Bold Strokes Turn a Profit: FBI Cracks Down as Crimes Rise, USA Today, June 29, 1993, at 8A.

¹⁰¹ Id. (“[B]ecause art still fetches good money,… ‘[t]heft is increasing for one reason: greed’”) (quoting Donald Mason, ex-FBI art theft investigator); Picassos and Braques Stolen from Museum, N. Y. Times, Nov. 9, 1993, at C20 (“[A]s the price of masterpieces has soared, the black-market demand has kept pace, inspiring thefts …”); Walsh, supra note 94, at 86 (“[Insatiable demand for artworks and antiquities” has raised prices and so encouraged theft); see Meisler, supra note 80, at 37 (“‘If someone wants to own [pre-Columbian art] in the United States, people will bring [the art] to the United States.’”) (quoting Mexican official Marentes).

¹⁰² For instance, Switzerland harbors “notorious auctions … whose main purpose is to establish credentials for a dubious work” of art. Bonnie Burnham, The Art Crisis 45 (1975). In the case of the stolen Cypriot Byzantine mosaics discussed above, the sale took place in a Geneva airport, presumably because of Switzerland's lax laws. Meisler, supra note 80, at 11. Britain's anachronistic protection of those who buy stolen goods from a few statutorily designated “marchés ouverts” has made those markets “clearing houses for stolen goods. So blatant is this abuse that a Danish tour company advertises coach trips to Bermondsey [in London] in the early hours, to buy stolen goods.” Harriet Crawley, Forget the Video, It's Your Paintings They're After, Daily Telegraph (London), June 16, 1992, at 16. Many other countries have lax laws that protect buyers and so encourage art laundering. See Boroughs et al., supra note 98, at 13 (decrying Japan's lax laws); Constance Lowenthal, The Japanese Connection, Wall St. J., Mar. 23, 1990, at A13 (same); Walsh, supra note 94, at 87 (noting laxity of laws in Switzerland, Liechtenstein, and Cayman Islands); cf. Irvin Molotsky, 3 U. S. Agencies Urge Veto of Art-Claim Bill, N. Y. Times, July 23, 1986, at C15 (reporting that State Department, Justice Department, and United States Information Agency urged Gov. Mario Cuomo to veto short statute of limitations for recovering art for fear of making New York a haven for stolen art and encouraging theft).

¹⁰³ The law should also increase incentives for owners to report thefts so that buyers can find out about stolen artworks. See infra Part 3.1–2.

¹⁰⁴ See Dawson, supra note 5, at 897 & n.63; Gerstenblith, supra note 5, at 160–61, 163; Ward, supra note 5, at 554, 558; see also Helmholz, supra note 5, at 1236–37 (endorsing security of possessor's title).

¹⁰⁵ See U.C.C. § 2–312(1)(a) (1988) (stating that every salecontract includes warranty of title); Hoover, Deborah D., Note, Title Disputes in the Art Market: An Emerging Duty of Care for Art Merchants, 51 Geo. Wash. L. Rev. 443, 449–50 (1983).Google Scholar

¹⁰⁶ One might ask why the law should place losses on buyers if the law's ultimate aim is to make losses rest on merchants. There are good reasons to place liability on buyers even though they will usually recover indemnities from merchants. If only merchants were held liable, buyers would have an incentive to bypass art dealers, because dealers would have to increase purchase prices to reflect the risk of being held liable. In contrast, placing liability on buyers would encourage them to deal with reputable, solvent merchants who investigate. Buyers would have strong incentives not to buy from fly-by-night or insolvent merchants because, if they did so, they might be unable to recover indemnities. By serving as self-insurers or taking out title insurance on behalf of all their customers, merchants would perform a risk-spreading function. To protect themselves from liability and disrepute, these merchants would investigate artworks' provenance. In short, placing liability on merchants to the exclusion of buyers would drive buyers into shady back-alley transactions; placing liability on buyers but providing for indemnities from merchants would bring art sales aboveground, facilitating the kind of scrutiny that would make the sale of stolen art difficult and unprofitable.

¹⁰⁷ Title insurance may not have arisen yet because international art-theft databases are a very recent phenomenon. See Gregory Jensen, Worldwide Registers Battle Art Theft Epidemic, Wash. Times, June 14, 1990, at E3. Now that they exist, it should be possible to use these databases to estimate risk and set a premium.

¹⁰⁸ See infra Part 2.4.

¹⁰⁹ Callahan, supra note 14, at 75.

¹¹⁰ See Judd Tully, Hot Art, Cold Cash, J. Art, Nov. 1990, at 1, 4 (suggesting that art theft victims, to avoid scrutiny by tax collectors, do not report thefts).

¹¹¹ See Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426,431 (N. Y. 1991).

¹¹² See supra note 15, sources cited therein, and accompanying text.

¹¹³ See. e.g., Femandi v. Strully, 173 A.2d 277 (N. J. 1961) (extending limitation period out of fairness to patient who did not immediately discover wing nut that surgeon had left in her abdomen).

¹¹⁴ See supra text accompanying note 109.

¹¹⁵ For example, the values of justice and international comity should outweigh the problems of stale claims in suits by foreign nations to recover their national treasures. Many plaintiffs in U. S. art cases have been nations seeking to recover treasures plundered from their museums, graves, and churches. See. e.g., Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg & Feldman Fine Arts, Inc., 917 F.2d 278 (7th Cir. 1990) (allowing Republic of Cyprus and church to recover mosaics stolen from church), cert, denied, 112 S. Ct. 377 (1991); Kunstsammlungen zu Weimar v. Elicofon, 678 F.2d 1150 (2d Cir. 1982) (allowing Federal Republic of Germany to recover paintings apparently stolen by American GI from museum during World War II); Republic of Turkey v. Metropolitan Museum of Art, 762 F. Supp. 44 (S. D. N Y. 1990) (allowing Turkey to sue to recover artifacts excavated from burial mounds); William H. Honan, It's Finally Agreed: Germany To Regain a Stolen Trove, N. Y. Times, Feb. 26, 1992, at C15; Mark Rose, Greece Sues for Mycenaean Gold, Archaeology, Sept.-Oct. 1993, at 26; see also DeWeerth v. Baldinger, 836 F.2d 103 (2d Cir. 1987) (holding untimely suit by West German national to recover painting stolen from home by American Gl during World War II), cert, denied, 486 U. S. 1056 (1988); John Darnton, Repatriating the Inventory of History, N. Y. Times, Sept. 19, 1993, § 4 (Week in Review), at 1.

Limits on plundered nations' rights to recover might harm relations with these countries. For example, New York considered enacting a short statute of limitations for art in museums to replace its demand-and-refusal rule. Molotsky, supra note 102, at C15. But the U. S. State Department, Justice Department, and United States Information Agency all strongly urged Governor Mario Cuomo to veto the bill. Id. He did veto the measure, citing inadequate notice to other countries and the State Department's fears that New York would become a haven for looted art. The strenuous objections of the three federal agencies suggests that restricting foreign countries' rights to recover stolen art would strain diplomatic relations. Cf. Leonard D. Duboff, The Deskbook of Art Law 120 (1977) (notify that nations “feel obligated to aid a friendly nation in recovering one of its displaced national treasures”).

For similar reasons, Congress refused to pass the Cultural Property Repose Act, which would have established a five-year statute of limitations for foreign governments. S. 1523, 99th Cong., 1st Sess. (1985); 131 Cong. Rec. E2249 (daily ed. May 16, 1985) (statement of Rep. Gephardt, discussing H. R. 2389); see Drum, supra note 7, at 919. The Cultural Property Implementation Act already protects other nations' rights to recover stolen cultural, archaeological, and ethnological property. See supra note 8. Protecting nations' right to recover stolen art would further the comity concerns that the Act partially addresses.

While a longer statute of limitations would ameliorate these problems, it would not completely solve them. Any artificial limitation period would cut off a nation's right to recover after an arbitrary number of years (except for a balancing test, which would be subject to the objections in Part 2.4). As the cases cited above show, decades often elapse before nations locate stolen artworks. Thus, limitation periods would unfairly penalize nations that diligently attempt to recover their art, resulting in diplomatic friction. Compared to the twin values of fairness and comity, stateness is a minor concern.

¹¹⁶ Granted, old suits would still have some nuisance value; plaintiffs might therefore seek lucrative settlements by bringing meritless strike suits. Courts could alleviate this problem by using summary judgment aggressively to weed out suits lacking evidentiary support.

¹¹⁷ One could argue that a fraudulent claimant (“pseudo-owner”) might wait many years and then come forward after a purchaser's evidence of ownership had decayed. But there is little reason to think that many pseudoowners would come forward. Even if pseudo-owners did make claims, they would face multiple legal obstacles under the rule advocated in this Note. Most importantly, a theft victim's recovery of property from a BFP would be barred if the victim had not immediately reported the loss to registries and to the police, who could investigate claimed losses. Second, pseudoowners would need to adduce other evidence of ownership, such as a receipt, testimony of others, or an insurance company listing. These pieces of evidence would be subject to adversarial testing, which should weed out perjury and forgery. Third, art changes hands periodically, and at each sale buyers would check theft registries under this Note's plan. See infra Part 3.1. Thus, the issue of theft is likely to be resolved within a decade or two of a theft listing. The one exception is for art held by museums, but museums keep good records and should therefore be able to refute spurious allegations. Fourth, the law could impose civil and criminal penalties for fraudulent claims.

¹¹⁸ The Art Loss Register, a computerized art-theft database, keeps a record of all searches. See infra note 146. This record would allow a BFP to verify that he had used the database to investigate title.

¹¹⁹ See supra text accompanying notes 62–70.

¹²⁰ See supra text accompanying notes 53–54.

¹²¹ See supra note 75 and accompanying text.

¹²² DeWeerth v. Baldinger, 836 F.2d 103, 110 (2d Cir. 1987) (“The question of what constitutes unreasonable delay in making a demand … depends upon the circumstances of the case.”), cert, denied, 486 U. S. 1056 (1988).

¹²³ Webb, supra note 7, at 897; see also Eisen, supra note 7, at 1092.

¹²⁴ See Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426,431 (N. Y. 1991) (holding that during further proceedings, trial court would have to balance all equities and circumstances, but refusing to lay out guidelines as to how diligent owner must be).

¹²⁵ See id.

¹²⁶ Webb, supra note 7, at 897; see also Eisen, supra note 7, at 1092.

¹²⁷ Webb, supra note 7, at 897. A charitable reading of Webb's argument might stress that because information technology will evolve, judges should be able periodically to update the steps owners and buyers should take. Even so, this Note's approach would work better. First, updating of reporting duties should occur through clear legislation rather than ad hoc cases so that owners and buyers have adequate notice. Consider an analogy to land registration: if the law told buyers to register in “the best systems available” rather than in the county clerk's office, the unclearness would breed confusion–even if courts had the power to make ad hoc determinations of which system would be best. Second, even if registries improve technologically, an owner's duty to report specified information will remain the same. Data from old registries could presumably be imported into new ones. Even if better methods come along, the basic databases will remain serviceable and solve the problems of information exchange.

¹²⁸ A note by Deborah Hoover suggests that, to qualify as good faith purchasers, art merchants should be required to investigate title “whenever the circumstances of a transaction call for further inquiry.” Hoover, supra note 105, at 464. This remedy suffers from three flaws. First, it places no explicit obligation on theft victims to report losses. If reporting is not required or strongly encouraged, a buyer's inquiry may be useless. Second, the remedy apparently applies only to merchants. See id. at 463. This proposal could create a perverse incentive that would drive art sales out of the hands of reputable dealers and into back-alley transactions. Instead of being lax about private transactions, the law should encourage scrutiny by reputable dealers. Third, this unclear proposal would require investigation “whenever the circumstances of a transaction call for further inquiry.” As argued, the law needs bright-line standards to deter theft, reduce litigation, and create clear incentives for both victims and buyers. This vague formula is subject to all the objections to unclear doctrines made above.

¹²⁹ Solomon R.Guggenheim Found, v. Lubell, 569 N. E.2d 426, 428, 431 (N. Y. 1991).

¹³⁰ Grover, Steven F., Note, The Need for Civil-Law Nations To Adopt Discovery Rules in Art Replevin Actions: A Comparative Study, 70 Tex. L. Rev. 1431, 1436 (1992)Google Scholar (“[M]ost owners fear that by reporting the thefts they would eliminate the thief's market for the stolen art and thereby force their art underground.”).

¹³¹ See Guggenheim, 569 N. E.2d at 431.

¹³² See Franklin Feldman & Bonnie Bumham, An Art Theft Archive: Principles and Realization, 10 Conn. L. Rev. 702, 723 (1978) (arguing that, once word gets out that a large computerized database exists and that victims are using it, the database's existence will deter art theft); see also Grover, supra note 130, at 1439 (noting that one major reason that theft databases might not deter art theft is that many victims do not report thefts).

Art dealers face an analogous collective action problem under a regime that does not penalize sellers of stolen art. If an individual art dealer inquires about the provenance of an artwork that he wants to buy, he must bear the cost of investigation. If he discovers that the artwork was stolen and refuses to buy it, the seller may just sell it to another, less scrupulous dealer. Thus, investigation is unprofitable and honest merchants labor under a competitive disadvantage. To overcome this disincentive, the law should impose liability on sellers of stolen art. See supra text accompanying notes 105–07.

¹³³ See 3 Lyndel V. Prott & P. J. O'Keefe, Law and the Cultural Heritage Movement 382 (1989).

¹³⁴ See supra Part 2.4 for an explanation of the need for clear rules.

¹³⁵ Legislative action is preferable to judicial action because of the need to modify federal and state statutes of limitations. Also, a legislature is better able to hold hearings for all interested parties and to announce a detailed prospective rule applicable to all cases, rather than just a retrospective rule for the case at hand. Federal action is preferable to state action because trafficking in stolen art is interstate and international. Without a federal law, disparate state laws might induce forum shopping and might encourage art buyers to flock to the state with the most lax laws. Furthermore, divergent state laws might affect diplomatic relations with plundered nations seeking to recover their national treasures from American buyers.

¹³⁶ An owner, however, would still be subject to the statute of limitations after she discovered the artwork's possessor and its whereabouts. This proposal does not license delay in bringing suit once an owner actually has all the facts needed to sue.

¹³⁷ Compare this proposal to the current cloudiness of the law, under which many adverse possession cases have been litigated for years. See. e.g., Kunstsammlungen zu Weimar v. Elicofon, 678 F.2d 1150. 1153 (2d Cir. 1982) (deciding in favor of owner in 1982 in suit filed in 1969); DeWeerth v. Baldinger, 836 F.2d 103, 106, 112 (2d Cir. 1987) (ruling in favor of possessor in 1987 in suit filed in 1983), cert, denied, 486 U. S. 1056 (1988); O'Keeffe v. Snyder, 416 A.2d 862, 864, 867 (N. J. 1980) (remanding suit filed in 1976 for additional fact-finding in 1980); Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 428–29 (N. Y. 1991) (remanding suit filed in 1987 for additional fact-finding in 1991); Pérez-Peña, supra note 1 (noting that Guggenheim case went back for trial and was settled in December 1993).

¹³⁸ See McDougal, Myres S. & Brabner-Smith, John W., Land Title Transfer: A Regression, 48 Yale L. J. 1125, 1130 (1939)CrossRefGoogle Scholar. Under the Torrens system, a proceeding analogous to a quiet title action is used to require all who may have claims to a piece of land to assert their claims. After this proceeding, the registry issues a conclusive certificate of title listing all interests in the parcel of land. All later claims must be registered, whereupon the registry issues an updated certificate. The law does not recognize unregistered interests, such as adverse possession that begins after the quiet title action. To sell a registered piece of land, the seller must surrender the old certificate of title, and a new one is then issued to the buyer. See id. at 1129–31.

¹³⁹ See Hoover, supra note 105, at 458–59.

¹⁴⁰ See id. In contrast, states without limitation period statutes could adopt this Note's proposal via common law development, because theft registries are already in place.

¹⁴¹ Many art owners try to hide their assets to avoid estate taxes, for example. Thus, a title registry would be incomplete and would fail. Telephone Interview with Dr. Constance Lowenthal, Executive Director, Int'l Found, for Art Research (Jan. 24, 1994) [hereinafter Lowenthal Interview]. Museums and governments, however, are tax-exempt and usually do not try to hide their assets, so a title registry might work for those entities.

¹⁴² See Dukeminier & Krier, supra note 14, at 769. For an explanation of the Torrens system, see supra note 138.

¹⁴³ See Telephone Interview with Rayburn B. Dobson, Chief Executive Officer, Int'l Registry of Antiques & Fine Arts (Jan. 26, 1994) [hereinafter Dobson Interview] (explaining that registries were not feasible until recent advent of optical storage systems on computers).

¹⁴⁴ See ARTnewsletter, supra note 97, at 1. In addition, certain law enforcement agencies keep databases of stolen art. The FBI maintains a National Stolen Arts File, Interpol keeps a database called Art Program, Italy's Carabinieri (the equivalent of the FBI) has a large database, Canada runs the Canadian Heritage Information Network (CHIN) for art in Canadian museums, and the German Bundeskriminalamt police unit at Wiesbaden keeps a database. Grover, supra note 130, at 1440 (discussing FBI); Telephone Interview with Caroline Wakeford, The Art Loss Register (Feb. 4, 1994) [hereinafter Wakeford Interview] (discussing Bundeskriminalamt); Lowenthal Interview, supra note 141 (discussing FBI, Interpol, and Carabinieri). None of these law enforcement databases is accessible to the public. Id. Another private art-theft database called Lasernet Theftline began operation in 1990, Jensen, supra note 107, but went out of business in August, 1992, Wakeford Interview, supra.

The Art Loss Register is a for-profit enterprise run by the International Foundation for Art Research, Lloyd's of London, and the British Institute for the Protection of Cultural Property. ARTnewsletter, supra note 97. Other backers of the database include Christie's, Sotheby's, the British Antique Dealers Association, and the venture capital company 3i. Id. There is no reason to supplant this private database with a public one, given fiscal constraints and the responsiveness of private enterprises to their clients' needs. Cf. Dobson Interview, supra note 143 (advocating private registries as way of heading off government regulation of the art market, which could be cumbersome and costly and might even open door for government real location of art).

Because the law would require victims to use the registries, one might worry about controlling excessive fees. One approach would be to have a public board regulate fees, much as commissions regulate utilities' fees. This approach, however, is only necessary when there is no competition to regulate prices. Even competition between two databases is sufficient to regulate prices and terms of service. Lexis and Westlaw, for instance, hold a duopoly over on-line databases for legal research and yet have strong incentives to compete for market share by innovating and offering free use to students. Another approach would require The Art Loss Register to accept theft listings for a modest set fee, but would allow it to set its own prices and terms of service for searches by buyers. To generate competition, the FBI would expand its network into a full-service database accessible to the public. Because theft victims would have to report their losses to both databases, the price of reporting thefts would require regulation. But since thefts would be listed with both registries, buyers would need to check only one registry, and thus competition would regulate the price of buyer searches.

¹⁴⁵ Lowenthal Interview, supra note 141 (stating that The Art Loss Register has 50,000 records, including many color images; each record contains victim's name and address, insurer, police report number, date of theft, location of theft, value (which must be greater than $1000), artist, date of creation, medium of the artwork, measurements, and any inscriptions). If, as this Note urges, the law required registration of thefts and encouraged buyers to consult the registries, insurers would have a strong incentive to require the insured owner to file photographs and descriptions with the insurer. Cf. Russ Banham, Here Today, Gone Tomorrow: Fine Art Losses Can Be Mitigated by Upgrading Security and Recording the Identity of Each Piece, Ins. Rev., Oct. 1990, at 53, 58 (citing Dr. Constance Lowenthal, who argues that good recordkeeping ‘“would so improve the chances of recovery that insurance companies could consider giving discounts to those who do it’”). Indeed, insurance companies could go further and demand color photographs of all insured items.

¹⁴⁶ ARTnewsletter, supra note 97, at 1. Individual theft victims can register thefts in The Art Loss Register for $40 per item. Prospective buyers can request searches for $50 per item. Insurance companies negotiate contracts providing for unlimited use of the database for $4000 to $40,000 per year. The auction houses of Sotheby's, Christie's, and Phillips pay an undisclosed fee for automatic searching of their auction catalogues for paintings and drawings. Lowenthal Interview, supra note 141. Note that the registry keeps track of “when, why, and by whom any inquiry is made. Tracking a stolen artwork even through people who refuse to handle it for sale is key to its recovery….” ARTnewsletter, supra note 97, at 1.

¹⁴⁷ Lowenthal Interview, supra note 141.

¹⁴⁸ U. C. C. § 2–312(1)(a) (1988); see Hoover, supra note 105, at 449–50.

¹⁴⁹ E.g., Menzel v. List, 267 N. Y. S. 2d 804, 807–08, 820 (Sup. Ct. 1966) (announcing jury verdict awarding possessor $22,500 market value, not $4000 purchase price, from gallery that sold painting to him), modified, 279 N. Y. S. 2d 608 (App. Div. 1967), modification rev'd, 246 N. E.2d 742 (N. Y. 1969). Statutes of limitations should not impede such claims, as long as the limitation period does not begin running until discovery of the defect in title. Currently, Section 2–725 of the Uniform Commercial Code imposes a four-year Statute of limitations on actions for breach of warranty of title. To implement this Note's proposal, it would be necessary to modify this provision so that the Statute of limitations would not begin to run until the buyer discovered the defect in his title. Cf. Dukeminier & Krier, supra note 14, at 649 (noting that, in contract for sale of land, statute of limitations for covenants of general warranty and quiet enjoyment does not begin to run until some future act, such as assertion of superior title, disturbs buyer's ownership).

¹⁵⁰ See generally Hoover, supra note 105.

¹⁵¹ See supra text accompanying notes 105–07. One might argue that placing liability on buyers who will get indemnities from merchants would drive a wedge between the two, souring their relationship. This fear is unfounded. Both buyers and merchants would want to insure that art has not been stolen. Merchants, by making title searches a routine part of closing sales, would safeguard both themselves and their customers. It would be in merchants' economic interests to keep their customers happy and to avoid the liability that would attach to selling stolen art.

¹⁵² See supra notes 105–07 and accompanying text.

¹⁵³ In practice, as the rest of the paragraph in the main text argues, the distinction would not be terribly important. My point is that buyers would be free to undertake an economically efficient level of investigation, which in practice would generally amount to routine investigation. Note also that the liability is not perfectly strict; as Part 3.2 argues, buyers who do not investigate should prevail over victims who do not report their losses.

¹⁵⁴ See Webb, supra note 7, at 897.

¹⁵⁵ Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426 (N. Y. 1991).

¹⁵⁶ See id. at 428. While the theft must have occurred between 1965 and 1967, the museum claimed that it did not know of the theft until it completed its decennial inventory in 1970. Id.

¹⁵⁷ Telephone Interview with Elizabeth Reynolds, Chief Registrar, Brooklyn Museum (Jan. 20, 1994) [hereinafter Reynolds Interview]. It is, however, reasonable to expect individual theft victims to report thefts within a few weeks. Likewise, once a victim has learned that a theft has occurred, that victim needs only a very short time, perhaps one or two weeks, to report the theft. The only problem is guaranteeing that institutional victims have enough time to discover their losses before the limitation period expires.

¹⁵⁸ Large museums currently inventory their collections at most once every five to ten years. Lowenthal Interview, supra note 14. However, technology exists that would permit inventories far more frequently. Computerized bar code inventory systems are widely available that make it possible for even the largest museums to inventory their collections once every six months. The systems are simple enough that night guards could inventory objects each night as they made their rounds. One system on the market uses tamper-proof, forgery-proof bar codes that frustrate attempts to remove a bar code and place it on another object. Bar code tape that contains a hologram of the picture being coded will soon be available. Dobson Interview, supra note 143. Only a minority of museums currently use bar code inventory systems. Reynolds Interview, supra note 157. Because such systems are available and could solve the problem of delayed notification of buyers, the law should encourage their use by imposing a grace period as short as is feasible, namely six months to one year for museums. Alternatively, museums could set up their own title registries and link them to the databases, obviating the need for constant inventories.

¹⁵⁹ Dobson Interview, supra note 143 (stating that International Registry of Antiques & Fine Arts is setting up catalogues for the Clark Art Museum, the Museum of American Indian Art, and the Brandywine Museum and is negotiating with other museums; however, that company's focus is on Europe, where European Union law will soon require national registration of art).

¹⁶⁰ See supra note 141 and accompanying text (noting problems that title registries face but also noting that tax-exempt museums may have fewer disincentives to register than tax-dodging private individuals have).

¹⁶¹ Note that merchants are only the least cost avoiders when an owner has already reported a theft or the merchant buys under suspicious circumstances. When an owner has reported a theft, it becomes relatively simple for a merchant or buyer to investigate and avoid buying that stolen artwork; hence merchants (or buyers in sales without merchants) are the least cost avoiders. When a merchant buys in good faith, an owner's failure to report a theft is just as much a factor in promoting stolen art as a buyer's or merchant's failure to investigate.

¹⁶² U. C. C. § 9–301 cmt. 9 (1988) (noting that U. C. C.'s subordination of unperfected security interests has “a purpose–in common with similar rules in all filing and recording systems-to impose sanctions for not adhering to filing or recording requirements,” for otherwise registry systems would be ineffective).

¹⁶³ See supra Part 1.1 (discussing common law rule that thieves do not take good title). For these purposes, bad faith must mean more than a mere failure to check theft databases or other acts of simple negligence. Bad faith must embrace reckless and willfully blind acts, for otherwise the law would protect collusive transactions designed to fence stolen goods. To determine bad faith, then, courts should look at a series of objective factors that suggest affirmative blindness to suspicious circumstances, such as: whether a painting has been cut out of its frame; whether the buyer bought at a price so far below market value as to be suspicious; whether the buyer took no steps whatsoever to investigate title; whether the seller's story about title was implausible; whether the seller was an established art merchant; and whether the sale was hurried or took place in a suspicious location (such as the Geneva airport, which was used to gain the protection of lax Swiss laws in a sale of Byzantine mosaics, supra text accompanying note 80).

¹⁶⁴ See Webb, supra note 7, at 896 (arguing that persons lacking good faith deserve no protection, and stipulatively defining buyers who fail to investigate title as persons lacking good faith).

¹⁶⁵ See supra text accompanying notes 129–33.

¹⁶⁶ One year is an arbitrary period. Any short time period would suffice, provided it gave victims enough notice yet was not so long as to leave future buyers needlessly uninformed.

¹⁶⁷ As argued, bad faith holders should never win. See supra text accompanying note 163.

¹⁶⁸ See supra notes 92–97 and accompanying text.

¹⁶⁹ See Eisen, supra note 7, at 1098–99; Hayworth, supra note 7, at 375–76.

¹⁷⁰ See supra text accompanying note 105 (discussing merchant's liability for breach of warranty of title).

¹⁷¹ In theory, this person could recover from the thief, but in practice the thief is nowhere to be found.

¹⁷² See supra note 115.

¹⁷³ See supra Part 1.4 (describing current doctrine of laches).

¹⁷⁴ See Solomon R. Guggenheim Found, v. Lubell, 569 N. E.2d 426, 431 (N. Y. 1991) (declining to set forth clear due diligence reporting requirement for art theft victims).