By Kurt Mattson
A federal judge in San Diego recently ruled in favor of a Spanish Foundation that currently holds Danish-French Impressionist Camille Pissarro’s “Rue Saint-Honoré in the Afternoon. Effect of Rain, 1897.” The Foundation was found to be the rightful owner. After 15 years in litigation, the decision is a disappointment for the heirs of the woman who had it taken from her in Nazi Germany. One of the attorneys for the heirs argued that, “The principle involved here—that no person should ever be able to hold good title for a property that has been looted—is a critical principle in today’s world.”
The Madrid-based Thyssen-Bornemisza Collection Foundation argued that under Spanish law, it’s presumed to have acquired the painting in good faith.
The parties agreed that Neubauer, the great-grandmother of the plaintiffs, sold the painting.
After numerous appeals and court wrangling, Judge John Walter of the U.S. District Court for the Central District of California wrote in his opinion that the trial was limited to two main questions:
- Did the Foundation have actual knowledge that the painting was stolen property under Spanish law?
- Did the Baron Hans Heinrich Thyssen-Bornemisza (the “Baron”) possess the painting in good faith under Swiss law?
In 1939, Lilly Cassirer Neubauer claimed she lost the painting when a Nazi-appointed art dealer took it from her to conduct an appraisal. He valued it at the modern equivalent of $360. However, today, the masterpiece has been appraised at more than $30 million.
But there was more to this story: when Lilly and her husband decided to flee Nazi Germany, the Nazi’s agreed with one condition: if they wanted to leave the country, they had to give them the Pissarro for the appraisal price of $360. In effect, they swapped the painting for freedom. And Lilly was never able to access the money, which was in a blocked account. She spent years trying to find the painting before she passed away in the early 1960s.
In 1975 or 1976, the painting was sent to a gallery in New York City on consignment, and in the fall of 1976, the painting was publicly exhibited at the gallery. The Baron saw the painting and wanted to buy it.
The Baron knew that there had been massive looting of art by the Nazis, and it was “generally known” that his family (although not the Baron specifically) had a history of purchasing art and other property that had been stolen by the Nazis. The Baron bought the painting from the gallery for $300,000. He purchased three other artworks from the Stephen Hahn Gallery at the same time—paintings by Jean-Baptiste-Camille Corot, Paul Cézanne, and Fernando Léger.
...if they wanted to leave the country, they had to give them the Pissarro for the appraisal price of $360. In effect, they swapped the painting for freedom.
Fair Market Value
At trial, Judge John Walter of the U.S. District Court for the Central District of California found that the Baron paid fair market value for the Painting in 1976, and that the commission paid to the gallery (of just under 10% of the purchase price) was consistent with market norms.
After the Baron’s purchase, the Pissarro was maintained as part of the Thyssen-Bornemisza Collection at his Switzerland estate until 1992, except when it was on public display in exhibitions outside of the country.
In 1988, the Baron created a trust and loaned the painting to the Kingdom of Spain for $5 million dollars a year. The Kingdom of Spain later purchased the Baron’s collection containing the Pissarro. The Foundation manages that collection.
What is the Provenance of the Painting?
Some of the key evidence in the case was located on the back of the painting. The heirs’ attorneys argued the Pissarro didn’t have the markings from Nazi agencies and suspicious customs stamps that are often “red flags” for looted art. But the Foundation’s attorneys responded that the back of the painting had evidence of numerous removed labels.
“There is no legitimate reason to tear off these labels as they serve the dual purpose of fortifying an artwork’s authenticity and increasing its value,” the Foundation’s attorney wrote in a court filing. “The removal of such labels is like filing the serial number off a stolen gun or the VIN number on a motor vehicle—clear causes for concern.”
Who Owns the Painting?
Judge Walter held that the Foundation didn’t have “actual knowledge” that the painting was stolen despite “red flags” that might have raised suspicions about the painting’s record of ownership.
He found that there were sufficient suspicious circumstances or “red flags” that should have motivated the Baron to conduct further due diligence about the seller’s title. Walter said that “the presence of intentionally-removed labels should have been suspicious to the Baron.”
However, the heirs failed to prove that the Baron had actual knowledge that the painting was stolen.
“Although failing to investigate the provenance of the painting may have been irresponsible under these circumstances,” Judge Walter opined, “the Court concludes that it certainly was not criminal.”
The judge said the Baron bought the Pissarro in good faith.
Further, Judge Walter wrote that he found the Foundation’s refusal to return the painting “inconsistent” with Spain’s commitment to agreements sign by more than 40 countries pledging to return art found to have been taken by the Nazis before and during the Holocaust. Nonetheless, the judge said he had “no alternative but to apply Spanish law,” and that he could not “force the Kingdom of Spain or TBC to comply with its moral commitments.”
Judge Walter wrote that he found the Foundation’s refusal to return the painting 'inconsistent' with Spain’s commitment to agreements sign by more than 40 countries pledging to return art found to have been taken by the Nazis before and during the Holocaust.
The Nazis looted roughly 600,000 paintings from Jews during WWII—100,000 of which are still missing.
Title to a valuable work of art is critical, and proof of ownership can be essential.
In this case, the Baron usually conducted detailed investigations into the prior ownership or the background of the artwork he acquired. In this case, he didn’t. And the Foundation may have lost the painting but for the laws of Spain. Even so, the judge concluded that the Foundation acquired lawful ownership of the painting under Spain’s laws of acquisitive prescription.