Facts: P, a famous artist, sued in replevin for three paintings. P alleged she was the
owner of the paintings that were stolen from a NY art gallery in 1946. When the
paintings were stolen, she did not report them missing to the police, insurance company,
newspapers or any publication. She did discuss the theft with her associates. In 1975, P
learned that the paintings were in a NY gallery. One Frank had sold the paintings to D,
and D refused to give up the paintings. Frank traced the possession of the paintings to his
father who died in 1968. He claims that the paintings had been in his father’s possession
since 1943. Frank’s father had occasionally lent the paintings to others on numerous
occasions, all prior to P reporting the paintings stolen in 1972. D claimed adverse
possession, and P’s action was barred by the expiration of 6 year statute of limitations.
Issue: Has P’s action for replevin accrued within the statute of limitations?
Holding: Reversed.
Rationale:
– A statute of limitations is meant to stimulate to activity and punish negligence and
promote repose by giving security and stability to human affairs. To avoid
potential harsh results a courts have adopted a discovery rule, which allows that
the cause of action will not accrue until the injured party discovers, or by the
exercise of reasonable diligence and intelligence should have discovered facts
which form the basis of a cause of action.
– To determine eligibility under the discovery rule a court should consider 1.
whether P used due diligence to recover the paintings at the time of the alleged
theft and thereafter; 2.whether at the time of the alleged theft there was an
effective method, other than talking to her colleagues, for P to alert the art world
and 3.whether registering paintings with the ADAA or any other organization
would put a reasonably prudent purchaser of art on constructive notice that
someone other than the possessor is the true owner. The discovery rule places the
burden on the conduct of the owner, rather than on the conduct of the possessor
– To establish adverse possession, possession must be hostile, actual, visible,
exclusive, and continuous
– Under the discovery rule, the SOL begins when the owner knows or should know
of his cause of action and the identity of the possessor of the chattel. Subsequent
transfers are not a part of the continuous dispossession by the owner