## Facts

- In 1932, Erna Menzel and her husband purchased a Marc Chagall painting known as *Jacob’s Ladder* (also titled *The Peasant and the Ladder*).
- In 1941, fleeing Nazi-occupied Belgium, the Menzels left the painting in their Brussels apartment.
- A Nazi looting unit seized the painting; the seizure was treated as theft rather than a lawful requisition.
- After the war, the Menzels searched for the painting for years; after her husband’s death, Mrs. Menzel continued the search.
- In 1962, Mrs. Menzel located the painting in the possession of Albert A. List, a New York collector, and demanded its return; List refused.
- List had purchased the painting in 1955 from Perls Galleries (Klaus and Amelia Perls), who had obtained it from a Paris gallery and did not investigate provenance or title.

## Issues

1. Whether the original owner of a painting stolen during World War II could recover it (or its value) from a subsequent good-faith purchaser.
2. What measure of damages applies to a buyer’s third-party claim against an art dealer for breach of implied warranty of title when the buyer is dispossessed of the artwork.
3. From what date interest should run on the buyer’s warranty-of-title recovery.

## Decision

- A jury found Mrs. Menzel the unqualified owner; found the painting had been looted and stolen; and awarded return of the painting or its value, fixed at $22,500.
- The jury also awarded List $22,500 against Perls Galleries on List’s third-party warranty-of-title claim.
- The Appellate Division reduced List’s recovery against Perls to $4,000 (the purchase price) plus interest, while leaving intact Mrs. Menzel’s judgment.
- The New York Court of Appeals reversed the reduction and held List’s damages for breach of implied warranty of title were the painting’s value at dispossession ($22,500), not merely the purchase price plus interest.
- The Court of Appeals held interest runs from the date of dispossession (when List actually lost the painting), not from an earlier date.

## Legal Principles

- A thief cannot convey good title; subsequent transferees, including good-faith purchasers, may be required to return stolen property to the true owner.
- Nazi-era looting does not confer valid title on later possessors through subsequent transactions.
- For breach of an implied warranty of title, damages are measured by the value of the property at the time the buyer is dispossessed, particularly for unique property whose value may appreciate.
- Warranty-of-title remedies aim to compensate the buyer for the loss caused by defective title by placing the buyer in the position he would have been in if title had been good.
- Interest on the buyer’s recovery for defective title runs from dispossession, reflecting when the economic loss is realized.

## Conclusion

The courts permitted the original owner of a Nazi-looted Chagall to recover the painting (or its full value) from a good-faith purchaser, and the Court of Appeals held that the purchaser’s warranty-of-title damages against the dealer equaled the artwork’s market value at the time the purchaser was dispossessed, with interest from dispossession.


Menzel v. List, 24 N.Y.2d 91, 246 N.E.2d 742 (N.Y. 1969)