News:

In a judgment of November 2019, which was reported in the press only recently, the Magdeburg District Court (Landgericht) had to decide a dispute between the current owner of a painting and the heirs of a former owner who had the painting registered in the Lost Art Database. The judgment has, in true German tradition, been published in an anonymised version. Read in conjunction with the press coverage of the dispute in The Art Newspaper, Süddeutsche or Handelsblatt, it is however easy to fill in the blanks. 

Facts of the Case

The plaintiff is art collector and Achenbach expert Wolfgang Peiffer. In 1999, he acquired “Calabrian coast – Scilla” (Kalabrische Küste – Scilla) at an auction in London, a landscape painted in 1861 by Andreas Achenbach. From 1931 to 1937, Jewish art dealer Max Stern owned the painting and showed it in his Dusseldorf Gallery. Max Stern sold it in March 1937; in September 1937 the Nazi regime forced Max Stern to shut down his gallery. After having liquidated his business, Max Stern emigrated to Canada in December 1937, where he established a gallery and lived until his death in 1987. The Max Stern Art Restitution Project is engaged in tracing the art stolen from Max Stern’s gallery. The Max and Iris Stern Foundation is, at least partially, the heir to Max Stern and the defendant in this matter. In the application to the Lost Art Foundation, it was alleged that Max Stern was forced to sell the painting in March 1937 as a result of Nazi persecution.

In summer 2016, Wolfgang Peiffer showed “Calabrian Coast“ at an Andreas Achenbach exhibition in Baden-Baden”. Around the same time, the Max Stern Art Restitution Project became aware of the fact that the painting was in Peiffer’s possession and caused the Lost Art Database, operated by the German Lost Art Foundation in Magdeburg, to register the painting. The database entry shows the painting in the category “search requests”. It states its provenance as summarised above, listing Dr Max Stern as the previous owner.

Background

Regular readers of this blog may recall that in 2014 and 2015, we covered a similar matter. The heirs of a Jewish art dealer were seeking to have a search entry in the Lost Art Database for the Portrait of an Old Man in a Traditional Oriental Costume (Bildnis eines Mannes in orientalischer Tracht) by Isaac de Jouderville deleted. The search entry was registered in the database in 2005. In 2009, the painting had been found in South Africa, but the dispute as to its ownership continued.

Both the Administrative Court (Verwaltungsgericht) and the Administrative Court of Appeal (Oberverwaltungsgericht) Magdeburg had held in favour of the application. They argued that once the painting had been found, the purpose of the Lost Art Database had been fulfilled and the search entry had to be deleted. Otherwise, the continued registration of the artwork would „taint“ it and make it unmarketable. The Federal Administrative Court in February 2015 overruled the lower courts and let the search entry stand. In the Federal Administrative Court’s opinion, the database had not yet served its purpose when the artwork has been found, as long as there is no clarity about the final destiny of the artwork. I was not convinced by this argument and thought the lower courts got it right. In a guest post, Henning Kahmann defended the Federal Administrative Court.

The Madgeburg Decision

The Magdeburg case was different from the de Jouderville case decided by the administrative courts: Here, the claimant was not seeking a court ruling against the Lost Art Database itself. The claimant brought an action against the Max and Iris Stern Foundation, required in it to cease and desist from holding itself out as the owner of the painting (“die Beklagten zu verurteilen, es zu unterlassen, sich als Eigentümer des Gemäldes Kalabrische Küste-Sizilien von Andreas Achenbach (signiert, Höhe 108 cm, Breite 172,50 cm, Herstellungsjahr 1861) zu berühmen”).

Interestingly enough, the registration in the Lost Art Database itself and a corresponding obligation to withdraw the filing is not mentioned in the application. Hence, whether the painting’s registration was to be deleted was not directly at issue, even though it was very much at the centre of plaintiff’s argument. The plaintiff was of the opinion that by applying for the registration of the painting in the database, defendants were against their own better knowledge holding themselves out as the owners of the painting. In addition, the allegation that the painting was lost as a result of Nazi persecution implied that they were still holding themselves out as the owners. („Mit der Behauptung eines verfolgungsbedingten Verlustes des gesuchten Kulturguts gehe die Behauptung einher, noch Eigentümer des fraglichen Gegenstands zu sein.“) The registration made the painting unmarketable.

The Magdeburg District Court dismissed the application and hence, indirectly, let the database entry stand. The court finds that the action was admissible, and that the German courts had jurisdiction – which the defendant domiciled in Montreal had disputed. That the defendant had caused the entry in the database in Magdeburg was sufficient to establish jurisdiction under Section 32 German Code of Civil Procedure (ZPO).

However, the court did not find that the plaintiff had a claim under Section 1004 German Civil Code (BGB). Under that provision, someone who interferes with (Störer) the property rights of someone else is obliged to cease and desist from perpetuating this interference.

In particular, the court held that the defendant did not allege that it was the true owner of the painting. All that the defendant did was cause the database to record an entry according to which Max Stern was the previous owner. In its reasons, the court attaches some weight to the fact that the Lost Art Database served to implemented the Washington Principles. Hence, it was not about the purely legal allocation of property rights, but about achieving a “fair and just solution”. The database was registering works of art where there was reason to believe that they were unlawfully expropriated, without taking any position as to the legal ownership. The listing does not require the applicant to be the current owner of the work of art. Even if the defendant stated that that they were the successor in law to Max Stern, this does not imply that they held themselves out as the owner of the painting in question.

On the facts as recorded in the judgment and evidenced by the entry in the database, it appears that the Magdeburg court has reached the correct conclusion, namely that the Max and Iris Stern Foundation does not hold itself as the owner. On the other hand, in my opinion it is unfortunate to list the “Calabrian Coast” in the “search request” category of the database, even if it is known where the painting is.

The entire litigation leaves me a bit bewildered: On the plaintiff’s side, I fail to grasp why Peiffer commenced an action of such limited scope, rather than seeking a declaratory judgment that he is the rightful owner of the painting, having acquired it in good faith. According to the judgment, Peiffer argues that the March 1937 sale by Max Stern was not a forced sale, unlike others later the same year (in particular an auction in September 1937), but a voluntary sale that Max Stern conducted through his gallery. (While there is no good faith acquisition of title, under German law, if an object is stolen, there would have been acquisition of clean title if the original sale by Max Stern was voluntary. Also, in an analysis of good faith acquisition of title, the fact that the sale occurred at an auction in London might come into play via the lex rei sitae.)

Vice versa, on the defendant’s side I do not quite understand why the Max and Iris Stern Foundation insist on the painting being listed in the search category, rather than bringing an outright claim for restitution. Legally, both parties do not appear to get a lot, if anything, out of this litigation. Wolfgang Peiffer’s lawyer went on the record that he is going to appeal the judgment, and perhaps the second instance will shed more light on this intriguing case.

From a policy perspective, the judgment confirms the position that the Lost Art Database itself is neutral, and does not take a position, nor does its decision to list an object have any impact on the question who the legal owner of a listed work of art is.

District Court (Landgericht) Magdeburg, jugdment (Urteil) dated 27 November 2019, file no. 2 O 599/18.

The photo of the painting in dispute was copied from the Handelsblatt article on the matter.