by Judge Arthur Tompkins

In 1897 Camille Pissarro painted Rue Saint-Honore in the Afternoon, Effect of Rain.  Forty years later, in 1939, Lilly Cassirer Neubauer, a member of the prominent Jewish publishing family that had owned the painting since it was created, was faced with a stark choice: hand the painting over to a Nazi art dealer and be given, in return, an exit visa to leave Germany with her husband and young grandchild, or remain in Germany amid the swirling and deadly storm engulfing Germany’s Jews. 

She chose the former:  Lilly, her husband Otto, and grandson Claude fled Germany; the painting disappeared; and the ridiculously low sum that Lilly had been promised as the “price” of the painting was locked in an inaccessible German bank account.

After the war, Lilly sought and was granted partial financial compensation, but without foregoing her claim to the painting. In 1958 she was recognised as the rightful and legal owner of the painting.  But the Pissarro was lost.

Or so she thought. In fact, in 1951 it had been sold to a collector in Los Angeles, with the Frank Perls Gallery earning a commission on the sale.  Less than 12 months later, it was sold again, this time through the New York dealers M Knoedler & Co, to a St Louis, Missouri, collector.

Two decades later, in late 1976, the Baron Thyssen-Bornemisza, of Switzerland, purchased it through another New York dealer, Stephen Hahn. In 1998 the Baron lent his entire collection of over 700 paintings to Spain, who established a non-profit state-owned Foundation to own, house and display the collection, and redesigned and rebuilt the Villahermosa Palace in Madrid for the purpose.

Then in 1993 the Spanish Government purchased the Baron’s collection, for over $300 million. Apart from two short periods when it was on loan elsewhere, the Pissaro has been on public display at the Foundation’s museum, the Museo Thyssen-Bornemisza (http://www.museothyssen.org/en/thyssen/home), in Madrid ever since.

Lilly Cassirer died in 1962. Her heir, her grandson Claude, discovered that the painting was on display in Madrid in 2000. Since then he, and after his death in 2010 his heirs, have been trying to recover the painting, through an extended and complicated series of court cases in both Spain and California.

The most recent twist in this ongoing saga happened on 4 June 2015.  A California Court ruled (available at http://www.artlawreport.com/files/2015/06/Cassirer-District-Court-Summary-Judgment-June-4-2015.pdf) that Spanish law, and not Californian law, was the governing law of the merits of the dispute, and that under Spanish law the Foundation is the owner of the painting, despite the acknowledged theft from Lilly.

Many aspects of this case, and its still-distant final outcome, are noteworthy (some are discussed by Nic O’Donnell at http://www.artlawreport.com/2015/06/11/cassirer-and-the-state-of-restitution-takeaways-and-next-steps/), but two stand out. 

First, this result highlights the irreconcilable and unbridgeable gulf between, in very general terms, common law and civil law systems when it comes to dealing with the later ownership of property that has been stolen.  In very broad terms in common law countries (those who derive their legal systems from the English common law, including the USA, Canada, Australia, New Zealand and others), a thief can give no better title down the chain of ownership than the thief had. Which is none. So, if and when the original dispossessed owner or their heir, turns up and claims the property back, then that claim will prevail.

This principle can be traced back to the Byzantine Emperor Justinian’s mid-6^th century Digest:

“"Nemo plus juris ad alium transferre potest quam ipse haberet."[1]

Which translates to: "No-one can transfer to another greater right than he himself has." The principle is known in the common law, from this rule, as the Nemo dat rule.

In stark contrast, in civil law countries, predominantly but not exclusively those who derive their legal systems from the 1804 Napoleonic Civil Code and in particular Article 2262 of the Code,[2] a bona fide purchaser (and in some cases, it turns out Spain is one, even the successor in possession of a purchaser who purchased knowing of the theft) can acquire good title to even originally stolen property, after the expiration of a specified period of time. 

The great English jurist Lord Denning put the conflict this way:

“In the development of our law, two principles have striven for mastery. The first is for the protection of property: no one can give a better title than he himself possesses. The second is for the protection of commercial transactions: the person who takes in good faith and for value without notice should get a good title.”[3]

In the ruling on the Pissarro, the judge explicitly recognised the competing policy decisions underlying the legislative choice between the two approaches:

“Generally, [the civil law approach] serves the important interests of certainty of title, protecting defendants from stale claims, and encouraging plaintiffs not to sleep on their rights. 

…

[The common law approach] recognizes the difficulties faced by owners in discovering the whereabouts of personal property even when held openly and notoriously, and serves to protect the interests of “the rightful owner” over subsequent possessors. It also serves to encourage subsequent purchasers to determine the true owner of property before purchasing that property.”[4]

An ultimately unsuccessful attempt was made by UNIDROIT in the 1960s through to 1989 to secure a convention which would have seen the adoption of a Uniform Law on the Acquisition in Good Faith of Corporeal Movables,[5] but the tension remains, at least in the international context, presently irreconcilable.

One attempt has been made to, as it were, agree to disagree on this fundamental issue, and to reach a pragmatic solution. That effort is encapsulated in The UNIDROIT Convention on Stolen or illegally Exported Cultural Objects 1995[6].  This was negotiated as a compatible and complementary agreement to the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property, which deals primarily with cultural property stolen in peacetime.  

Article 3 of the UNIDROIT Convention states, simply:

“The possessor of a cultural item that has been stolen shall return it.”

That somewhat stark requirement is modified to an extent by the Convention’s provision to the effect that, if a State provides to this effect, compensation to the final owner can be paid if the final possessor has made appropriate enquiries. Article 4 of the Convention states:

“(1) The possessor of a stolen cultural object required to return it shall be entitled, at the time of its restitution, to payment of fair and reasonable compensation provided that the possessor neither knew nor ought reasonably to have known that the object was stolen and can prove that it exercised due diligence when acquiring the object.”

But note the immediately following clause:

“(2) Without prejudice to the right of the possessor to compensation referred to in the preceding paragraph, reasonable efforts shall be made to have the person who transferred the cultural object to the possessor, or any prior transferor, pay the compensation where to do so would be consistent with the law of the State in which the claim is brought.”

This is a clear attempted compromise between two conflicting stances, which were both apparent and conflicting during the 6 or so years of negotiations that lead up to the signing of the Convention in Rome in 1995.

So, if the Baron had chosen a common law country as the final resting place of his collection, the outcome would most likely have been quite different. But he did not.

The second aspect worthy of note in the Pissarro ruling is the Judge’s closing exhortation to the parties:

“Although the Foundation has not prevailed in this prolonged and bitterly contested litigation, the Court recommends that, before the next phase of litigation commences in the Ninth Circuit, the Foundation pause, reflect, and consider whether it would be appropriate to work towards a mutually-agreeable resolution of this action, in light of Span’s acceptance of the Washington principles and the Terezin Declaration, and, specifically, its commitment to achieve “just and fair solutions” for victims of Nazi persecution.”

The reference to the Washington Conference is a reference to The Washington Conference on Holocaust-Era Assets, hosted by the U.S.’s Department of State and the U.S. Holocaust Memorial Museum, held in over four days from 30 November to 3 December, 1998[7]. The Terezin Declaration came out of the European-Union sponsored Holocaust Era Assets Conference in Prague and Terezin, held on 26-30 June, 2009[8].

These are some of the Washington Principles[9]:

“In developing a consensus on non-binding principles to assist in resolving issues relating to Nazi-confiscated art, the Conference recognizes that among participating nations there are differing legal systems and that countries act within the context of their own laws.

4. In establishing that a work of art had been confiscated by the Nazis and not subsequently restituted, consideration should be given to unavoidable gaps or ambiguities in the provenance in light of the passage of time and the circumstances of the Holocaust era.

5. Every effort should be made to publicize art that is found to have been confiscated by the Nazis and not subsequently restituted in order to locate its pre-War owners or their heirs.

8. If the pre-War owners of art that is found to have been confiscated by the Nazis and not subsequently restituted, or their heirs, can be identified, steps should be taken expeditiously to achieve a just and fair solution, recognizing this may vary according to the facts and circumstances surrounding a specific case.

11. Nations are encouraged to develop national processes to implement these principles, particularly as they relate to alternative dispute resolution mechanisms for resolving ownership issues.”

The Terezin declaration[10] from 30 June 2009 is to like effect.  Both encourage the resolution of claims not on the basis of legal technicalities, but rather “on the facts and the merits”[11].

It seems clear from his closing remark that the Judge in the Pissarro case was frustrated by his inability to decide the aspect of the case by reference to “the facts and the merits”. 

In this respect, the hybrid jurisdiction granted by statute to the United Kingdom’s Spoliation Panel has much to recommend it.  

The Spoliation Advisory Panel was established in 2000 as a direct result of the Washington Conference in December 1998[12]. It is chaired by a senior UK Judge, a retired Lord Justice of Appeal.  The Panel is a group of expert advisers who can be asked to consider claims for the return of an object plundered or lost during “the Nazi era” – 1933 to 1945. Once it has heard a case, the Panel makes a recommendation to the Secretary of State, who (to date) has always followed the Panel’s recommendations as to how a “fair and just” solution might be achieved.

The governing instrument which directs the Panel’s function is its Constitution and Terms of Reference.  This permits the Panel to consider claims “from anyone (or from any one or more of their heirs) who lost possession of a cultural object during the Nazi era, where the object is now in the national collection or in a museum or institution established for the public benefit.”[13]  

Whilst the Panel can consider legal issues, it does not decide as to legal rights, including title. The Panel’s process is explicitly an alternative to litigation. It must give “due weight to the “moral strength of the claimant’s case”, and consider whether any moral obligation rests on the institution. It is required to seek a “fair and just solution”.

Thus, if the baron had chosen the United Kingdom as the final resting place for his collection, it seems likely that a claim to the Spoliation Panel would have resulted.  This would have seen the Panel encourage the parties to try to find a win-win solution themselves, or, failing that, could have (assuming that the collection had ended up, as it did in Spain, as part of the UK’s “national collection or in a museum or institution established for the public benefit,”) recommended the return of the painting, given the reasonably clear moral claim stemming from its original theft, in appalling circumstances, from Lilly Cassirer.

Such are the accidents of history.