Source: https://law.justia.com/cases/federal/appellate-courts/F2/693/259/230462/
Timestamp: 2019-09-21 00:25:34
Document Index: 728105367

Matched Legal Cases: ['§ 1332', 'Art. 3', 'Art. 61', 'Art. 66', 'Art, 34', 'Art. 64', '§ 2091']

Marie Louise Jeanneret, Plaintiff-appellee, v. Anna Vichey and Luben Vichey, Defendants-appellants,andconstantine Vichey, Enrico Magenta, Giuseppi Frua Deangeli,alberta Ulrich Deangeli, Bank Gut Streiff, Mr. Diner,lorbeer Holding A.g., Estate of Carlo Frua Deangeli, Mr.gomrasca and Mr. Borella, As Executors or Administrators Ofthe Estate of Carlo Frua Deangeli, Estate of Ernesto Fruadeangeli, Defendants, 693 F.2d 259 (2d Cir. 1982) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1982 › Marie Louise Jeanneret, Plaintiff-appellee, v. Anna Vichey and Luben Vichey, Defendants-appellants,a...
Marie Louise Jeanneret, Plaintiff-appellee, v. Anna Vichey and Luben Vichey, Defendants-appellants,andconstantine Vichey, Enrico Magenta, Giuseppi Frua Deangeli,alberta Ulrich Deangeli, Bank Gut Streiff, Mr. Diner,lorbeer Holding A.g., Estate of Carlo Frua Deangeli, Mr.gomrasca and Mr. Borella, As Executors or Administrators Ofthe Estate of Carlo Frua Deangeli, Estate of Ernesto Fruadeangeli, Defendants, 693 F.2d 259 (2d Cir. 1982)
U.S. Court of Appeals for the Second Circuit - 693 F.2d 259 (2d Cir. 1982) Argued Sept. 16, 1982. Decided Nov. 12, 1982
This appeal by defendants in an action in the District Court for the Southern District of New York, wherein federal jurisdiction was predicated on diverse citizenship, 28 U.S.C. § 1332, involves novel issues concerning the application of foreign laws requiring the obtaining of licenses or permits for exports of works of art.
The plaintiff introduced other evidence at trial. Mme. Jeanneret gave some figures as to her declining income as an art dealer; apart from the lack of any showing of causal connection with the difficulty here at issue, this line of proof largely collapsed when the witness admitted on cross-examination that she had misread certain figures in her income tax returns. John Tancock, a vice-president of Sotheby Parke Bernet auction house and head of its Department of Impressionist and Modern Painting and Sculpture, testified that, but for the question of illegal exportation, he would appraise the painting at $750,000. On the other hand, if the painting lacked "the necessary export documents from any country where it had been located", his opinion was that it would be impossible to sell the painting since " [n]o reputable auction house or dealer would be prepared to handle it". Hence "on the legitimate market its value is zero." He would date the painting "early 1920's, 1919, 1922, something like that." Nancy Schwartz, an art dealer associated with the Spencer Samuels & Company gallery in New York, testified that the gallery having received a number of requests for paintings by Matisse, she communicated with Mme. Jeanneret as to sending the painting to New York. Before any arrangements could be made, Ms. Schwartz wrote Mme. Jeanneret on May 1, 1975 that she would not be able to sell the painting as plaintiff had proposed to her in Geneva in February; "I had a client who was ready to buy it, but as you said that the painting left Italy clandestinely I realized that this painting cannot be sold." Graham Leader, an independent art dealer, identified letters he had written to Mme. Jeanneret from London in June and November 1974. In the former he stated that he expected a client in the next few days to whom he had indicated a price of 1,100,000 Swiss francs for the painting; in the latter he confirmed a telephone conversation announcing his refusal to consider handling the painting or advising one of his best clients to buy it "from the moment that I learned that the painting had been clandestinely exported from Italy by its former owner, Mme. Vichey-Frua DeAngeli and that it could thus be subject to suit by any authority." Finally, Dr. Bertelli, whose position we have already described, testified that Dr. Enrico Vitali, Mme. Jeanneret's lawyer, had called him to ask whether there was any record that the Matisse painting had been issued export documents after 1969 and that Dr. Bertelli had found no evidence that it had. On March 28, 1979, the Assistant Minister of Culture issued a notification pursuant to Art. 3 of the law of June 1, 1939, declaring the painting, "an important work by the French painter Henri Matisse, datable between 1920 and 1923", to be of "particular artistic and historical interest" within the meaning of the 1939 law and "therefore subject to all the regulations regarding custody included therein."6 The decree was to "be notified through administrative channels to the present owner, possessor or holder of this painting", to wit, Mrs. Vichey, in care of Dr. Magenta in Milan. Dr. Bertelli also testified that on September 17, 1981, just before he had left Milan to attend the trial, the Attorney General of Italy had shown him a memorandum indicating that a penal proceeding had been instituted against Anna Frua DeAngeli, that Interpol had been requested to recover the painting, and that the Chief of the Italian Delegation for Retrieving Works of Art had been asked to present the request of the Italian Government to the United States authorities.
The final defense witness was Kenneth Silver, an associate professor in the art history department at Columbia University. An effort was made to show that the painting was included in a catalogue of the Gallery of Bernheim Jeune, Matisse's Paris dealer, in a show held in 1922-23, but the ineptness of defendants' counsel resulted in this not getting to the jury.7 He thought the painting was almost certainly "a '20s Matisse ... anywhere from early '20s, '22, '23, '24, maybe as late as '28. I don't think later than 1928." He would not date it as early as 1920 without doing research. Later he dated the picture as at the earliest " [a]bout 1921; I am not saying it is impossible to be '20 but I think it is more likely to be at the earliest '21."8 IV.
The district judge charged the jury, over objection by the defendants, that " [t]he mere casting of a substantial shadow over the title, regardless of the ultimate outcome of that dispute, is sufficient to violate a warranty of good title." Refusing defendants' requests to instruct the jury in detail on Italian law, partly on the ground, with which we sympathize, that he was "unable to determine what the Italian law is", and partly because in his view, the precise state of Italian law was "almost irrelevant" since plaintiff "didn't buy litigation", he charged in the manner set forth in the margin.9
Defendants moved for judgment notwithstanding the verdict or for a new trial. By a memorandum and order, 541 F. Supp. 80, Judge Cannella denied the motion for judgment n.o.v. but granted the motion for a new trial unless plaintiff consented to a reduction of the amount awarded from $1,688,000 to $938,000.10 Plaintiff accepted the remittitur. Judgment was entered dismissing the causes of action based on breach of express warranty, fraudulent misrepresentation and tax evasion and adjudging that, subject to her obligation to return the painting and execute such documents as might be necessary to transfer title, plaintiff should recover $938,000 from Anna and Luben Vichey. This appeal followed.
We begin by expressing surprise that defendants' counsel did not move to set aside the verdict as reflecting passion and prejudice. See Minneapolis, St. Paul & Sault Ste. Marie Ry. Co. v. Moquin, 283 U.S. 520, 521, 51 S. Ct. 501, 502, 75 L. Ed. 1243 (1931); Taylor v. Canadian National Ry. Co., 301 F.2d 1, 2 (2 Cir.), cert. denied, 370 U.S. 938, 82 S. Ct. 1585, 8 L. Ed. 2d 807 (1962); In re Japanese Electronic Products Antitrust Litigation, 631 F.2d 1069, 1090-91 (3 Cir. 1980). When we inquired of appellee's counsel what rational basis there could have been for a verdict of $1,688,000, the only answer was that the excess over the figure allowed by the judge might represent compensation for loss of business or of reputation. As to the former, the judge's $4,000 figure seems to be liberal; as to the latter there was no evidence. Seemingly the jury doubled Tancock's $750,000 appraisal to $1,500,000 and added $184,000 for interest and $4,000 for other damages. The jury could well have been inflamed by some of Mme. Jeanneret's letters and the testimony that a penal proceeding had been instituted against defendant Anna Vichey and that Interpol had become involved. However, defendants' counsel did not raise this point either below or here,11 and we therefore cannot consider it.
There is nothing to show that defendants breached the warranty described in Sec. 2-312(1) (a). No one denies that Carlo Frua DeAngeli was the lawful owner of the painting and that it passed by rightful succession to Anna Vichey. While Art. 61 of the 1939 Law provides that any transfers, agreements and legal acts in general carried out contrary to the law are null and void, no transfer, agreement, or comparable legal act occurred by virtue of the exportation to Switzerland; the heirs of Carlo Frua DeAngeli were exporting to themselves. The rights of the Italian Government were neither a "security interest" nor, in the normal meaning of language, an "other lien or encumbrance", especially if any weight is to be given here to the maxim ejusdem generis.
None of the cases from New York or other states cited by the district court deals with a situation such as is presented here.12 The cases holding that the buyer can recover simply by showing " [t]he mere casting of a substantial shadow over his title, regardless of the ultimate outcome", American Container Corp. v. Hanley Trucking Corp., 111 N.J.Super. 322, 331, 268 A.2d 313, 318 (Ch.1970); Ricklefs v. Clemens, 216 Kan. 128, 133, 531 P.2d 94, 100 (1975); and Catlin Aviation Co. v. Equilease Corp., 626 P.2d 857, 860 (Okla.1981), deal with what would be deemed defects in title or with liens or encumbrances in the ordinary meanings of those terms. Professor Nordstrom's seemingly apposite remarks anent a hypothetical sale of a painting in his Handbook of the Law of Sales 186 (1970) ("The buyer did not purchase a lawsuit. He purchased a painting."), lose force with respect to this case when it is realized that the author was discussing a true claim of lack of title.
The argument that there was no breach of the implied warranty created by Sec. 2-312(1) (b) is strengthened by the terms of the Italian law and customary international law. Although Art. 66 of the 1939 Law says that the item may be confiscated, it goes on to say that confiscation is carried out in accordance with the Customs laws and regulations pertaining to smuggled goods, which can be done only in Italy. Professor Bator, in an important article, An Essay on the International Trade in Art, 34 Stan. L. Rev. 275, 287 (1982), has declared the "fundamental general rule" to be that "illegal export does not itself render the importer (or one who took from him) in any way actionable in a U.S. court; the possession of an art object cannot be lawfully disturbed in the United States solely because it was illegally exported from another country."13 He adds that " [t]his general rule apparently obtains in all other major art-importing countries, including England, France, Germany, and Switzerland." Art. 64 of the 1939 Italian law makes clear that even when an item more than fifty years old has been exported from Italy, liability to pay the State the value of the exported item and any fine rests on the exporter, not on a purchaser. It is thus reasonably plain that so long as Mme. Jeanneret or any purchaser from her did not bring the painting back into Italy, it could not be confiscated and neither she nor a purchaser from her would be subject to monetary liability to Italy. There would seem no reasonable prospect that the United States or any other government would act on Italy's request for help in securing the return of the painting. This is especially true in light of the tenuous nature of the claim that a not especially notable painting by a French twentieth-century master who was testified to have left a thousand paintings constituted an important part of Italy's artistic patrimony, see note 6, supra. Matisse's Portrait sur Fond Jaune bore no such relation to Italy as a Raphael or a Bellini Madonna.
and Sec. 1-102(2) (b) providing that one of the Code's underlying purposes and policies is "to permit the continued expansion of commercial practices through customs, usage and agreement of the parties" (emphasis supplied),15 we find it somewhat hard to reject the commonsensical view of the district judge that an art dealer who has bought a painting which, according to the usages of her trade, she cannot sell through ordinary channels is under a heavy cloud, indeed.16
We say this because in our view the court's instruction quoted in note 9 was erroneous in several respects. One was in saying that if the painting were returned to Italy, the "owner, even if he purchased the painting in good faith, could be required to pay customs duties and/or fines." We see nothing in the Italian law that imposes any such liability on a purchaser as distinguished from the exporter.17 Much more important, the charge failed to focus the jury's attention adequately on the age of the painting when it was exported from Italy. The judge said only that if "the painting was more than 50 years old at the time of export, then the probability that the painting will be subject to administrative or judicial proceeding is greatly enhanced." For all we know the jury could have found that the painting was less than 50 years old when exported in the spring of 1970, yet nevertheless have rendered judgment for plaintiff because of violation of the 1913 regulations. As indicated at the beginning of this section, this jury apparently was strongly predisposed to allow the plaintiff to prevail. Even if the 1913 regulations are still in effect for paintings less than 50 years old, which we are inclined to doubt, violation of that law alone would not constitute a sufficient cloud to breach the warranty imposed by Sec. 2-312(1) (b) and we decline to accept the argument that plaintiff could bring herself within that section merely by showing there was enough uncertainty about the painting's age that an export violation under the 1939 law should be treated as colorable. Even if we should ultimately agree with plaintiff that actual violation of the 1939 law would create an encumbrance sufficient to invoke Sec. 2-312(1) (b), we would refuse, in the absence of instruction from the New York courts or a body of authority from courts of other states, to take the further step of holding that a claim of possible violation would suffice. If Mrs. Vichey was not in fact obliged to comply with the 1939 law with respect to the Matisse painting, it would be altogether too drastic to hold her liable to Mme. Jeanneret simply because the Italian Government now asserts that she was. In short, plaintiff had the burden of proving that Matisse painted the Portrait sur Fond Jaune before the spring or early summer of 1920.
Defendants argue in effect that plaintiff failed to present sufficient evidence on this subject to warrant submission to the jury. Certainly the weight of the evidence pointed to a later date. In the receipt which she gave Luben Vichey for the painting, Mme. Jeanneret dated it as 1924; however, she claims she did this at Vichey's instruction and had no independent knowledge. Her initial file card for the painting also gave a date of 1924. A revised file card bore a typewritten date which appears to be 1924; later the final 4 seems to have been changed in ink to 0. The card also bore a handwritten date of 1922 and of a sale in 1923, attributed to four important sources of information and followed by question marks. The catalogue for her exhibition gave a 1924 date. The sole evidence for a date as early as 1920 was Tancock's statement dating the painting as "early 1920's, 1919, 1922, something like that" and, if it can be so called, Silver's unwillingness to say it was impossible that the painting was done as early as 1920 although thinking it more likely that the date was at earliest 1921. Assuming, perhaps somewhat charitably to plaintiff, that this evidence sufficed to meet her burden of overcoming defendants' contention that, as said in Armstrong v. Commerce Tankers Corp., 423 F.2d 957, 959 (2 Cir.), cert. denied, 400 U.S. 833, 91 S. Ct. 67, 27 L. Ed. 2d 65 (1970), judgment n.o.v. should be granted when "(1) there is a complete absence of probative evidence to support a verdict for the non-movant or (2) the evidence is so strongly and overwhelmingly in favor of the movant that reasonable and fair-minded men in the exercise of impartial judgment could not arrive at a verdict against him", the difficulty remains that the jury's attention was not sufficiently focused on the importance of the date of painting. There must therefore be a new trial at which, one would hope, more definitive evidence of the date of the painting can be provided18 --unless, of course, the Italian Government should see fit to withdraw its notification or the parties should adjust their differences.
The goods purchased had been seized by the police as stolen property and turned over to a third party claimant in John St. Auto Wrecking v. Motors Ins. Corp., 56 Misc.2d 232, 288 N.Y.S.2d 281 (Dist.Ct.1968); Spillane v. Liberty Mut. Ins. Co., 65 Misc.2d 290, 317 N.Y.S.2d 203 (Civ.Ct.1970), aff'd, 68 Misc.2d 783, 327 N.Y.S.2d 701, 702 (Sup.Ct.1971); City Car Sales, Inc. v. McAlpin, 380 So. 2d 865 (Ala.Civ.App.1979), cert. denied, 380 So. 2d 869 (Ala.1980); and American Container Corp. v. Hanley Trucking Corp., 111 N.J.Super. 322, 268 A.2d 313 (Ch.1970). Goods were seized by police as stolen property and the purchaser recovered expenses incurred in successfully suing for their return in Jefferson v. Jones, 286 Md. 544, 408 A.2d 1036 (App.1979). Authorities notified a purchaser that goods were stolen, as a special master later determined them to have been, in Ricklefs v. Clemens, 216 Kan. 128, 531 P.2d 94 (1975). Goods purchased were found to be subject to chattel mortgages, liens, and security interests on file or asserted by third party claimants in Marine Midland Trust Co. v. Halik, 28 A.D.2d 1077, 285 N.Y.S.2d 136 (4th Dep't 1967), aff'd, 23 N.Y.2d 789, 297 N.Y.S.2d 297, 244 N.E.2d 868 (1968); Kruger v. Bibi, 3 U.C.C.Rep.Serv. (Callaghan) 1132 (N.Y.Sup.Ct.1967), and in Wright v. Vickaryous, 611 P.2d 20 (Alaska 1980); Catlin Aviation Co. v. Equilease Corp., 626 P.2d 857 (Okla.1981). In Skates v. Lippert, 595 S.W.2d 22 (Mo.App.1979), the goods purchased required a certificate of title and this had been invalidly assigned to the seller
Professor Bator finds the only exception to this rule to be a 1972 statute forbidding the import of any "pre-Columbian monumental or architectural sculpture or mural," codified at 19 U.S.C. §§ 2091-2095 (1976)