Brief Fact Summary. Plaintiff seeks replevin of paintings thirty years after their alleged theft.
Synopsis of Rule of Law. In an action for replevin, the plaintiff’s cause of action accrues only after the cause of action is discovered by due diligence in the pursuit of the wrongfully detained property.
Facts. In 1946 Plaintiff O’Keefe, an artist, had three paintings stolen from an art gallery owned by her husband. Plaintiff did not report the paintings as stolen to the police, but did tell friends and eventually, in 1972, placed the paintings on the Art Dealers Association of America’s listing of lost/s stolen paintings. In 1976, Plaintiff discovered that a man named Ulrich Frank had sold the paintings to Defendant Synder, d/b/a Princeton Gallery of Fine Art, for $35,000. Frank traces his possession of the paintings to his father, Dr. Frank, and stated that, contrary to Plaintiff O’Keefe’s version of the facts, the paintings were on display in Dr. Frank’s apartment as early as 1941. In 1965, Dr. Frank and wife formally gave the paintings to Ulrich Frank. Frank claims continuous possession, through his father, for thirty years and admits selling the paintings to Defendant Synder. The possession is not, however, traced back to the artist, Plaintiff. Plaintiff sued Defendant Synder fo
r replevin of the paintings. Synder interplead Ulrich Frank as a third party Defendant. Defendant Synder moved for summary judgment in the trial court on the grounds that the paintings had been stolen, but that the paintings had been adversely possessed by the Franks such that title to the paintings had vested with Frank. Plaintiff O’Keefe argued that the statute of limitations for replevin (six years) had not run. The trial court granted the summary judgment motion in favor of Defendant. The intermediate appellate court reversed the trial court and found for Plaintiff, stating that the defenses of expiration of statute of limitations and title by adverse possession were identical, and that the Defendant had not proven the elements of his affirmative defense. The Defendant appealed.
Issue. May Plaintiff maintain this action for replevin even though thirty years has passed since the paintings were in her possession?
Held. Yes. Judgment of appellate division in favor of Plaintiff reversed and remanded for trial.
The Court notes that, on the record, it cannot be determined who has title to the paintings and that a trial is necessary. The Court then turns to a discussion of the law to be applied at trial. The Court notes the general principle that a thief has only void title. Also, the Court noted the U.C.C. provisions on voidable title, but insofar as those issues were not before the Court, it declined to rule on such theories. The Court found the critical question to be that of the statute of limitations for replevin of six years from the time the cause of action accrues.
The Court applies the “discovery rule” which is that a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action. In this case Plaintiff had been reasonably diligent in attempting to discover the location of the paintings, and when it was discovered that the paintings were owned by Defendant, Plaintiff did commence the present action for replevin within the six years of such discovery.
The Court notes that the acquisition of property by adverse possession is based on the expiration of a statute of limitations and that the adverse possession must be hostile, actual, visible, exclusive, and continuous. The Court found only two prior New Jersey cases applying the defense of adverse possession to suits involving chattels (personal property). The Court found the reasoning in those cases to be unpersuasive and, through this decision, announced a new rule. The Court is going to apply the discovery rule to these cases. In the adverse possession defense the burden of proof is on the defendant to establish the elements of the defense; in the discovery rule of limitations the burden of proof is on the plaintiff (one seeking replevin as rightful owner) to establish the right of ownership and the timely filing of the suit. The Court finds this approach to be more equitable.
The Court notes that the practical effect of limitation of title, whether by adverse possession (now applicable to real estate only) or by the expiration of the statute of limitations, is to vest title with the possessor. The Court notes that this is proper insofar as the goal of the statues of limitation is to promote speedy resolution of claims and to provide repose in the possession and enjoyment of property. The Court applies this rule of vesting to avoid the cases where the possessor transfers a chattel to another and the statute of limitations is tolled. The Court finds the discovery rule to be the proper rule to avoid conflicts and uncertainty.
Discussion. This case is an excellent discussion of the elements of title by adverse possession, even though the Court declines to apply adverse possession to these facts. Also, it is critically important to understand the language and the operation of the statutes of limita