It is an axiom of the law that nobody can pass good title to stolen goods. The true owner of an item may recover it from its current holder, no matter how many times the item changed hands in between. While people who buy stolen coins in good faith (having no reason to think they were stolen) can almost always claim their money back from the dealer who sold them the coins, they never acquire good title and they must surrender the coins to the true owner if a timely claim is made. Without such a rule, victims of theft could not be adequately protected, because thieves could thwart recovery of the coins simply by selling them to good faith purchasers.

I deliberately used the words "timely claim" in the preceding paragraph. Most states have statutes of limitations governing claims for replevin, i.e., recovery of stolen property, such as the three-year statute in New York. These statutes of limitations can create problems when applied to the recovery of stolen art and collectibles. Oftentimes, stolen art and collectible items end up out of public view for considerable periods of time, such as when a Chagall gouache that disappeared from the Guggenheim Museum in New York in 1965 reappeared in a private art collection only 20 years later. Rumors abound of mysterious "Dr. No"-types who assemble collections of priceless stolen art and collectibles for their own enjoyment knowing that they can never admit to having them. If the item is valuable enough, a thief might well wait out the limitations period before selling his loot. This has resulted in injustices over the years.

The solution in some states has been enactment of a "discovery rule", suspending running of the limitations period until the victim locates the stolen item. With a discovery rule, for example, a New York collector whose collection had been stolen in 1986 could still recover the coins from their current holder if he or she learned of the coins' whereabouts only recently. Discovery rules make sense. Statutes of limitations are intended to penalize parties who wait too long to pursue their legal rights, in order to provide closure to the other party and avoid cases being determined on the basis of incomplete documents and hazy memories. It is hard to see why such statutes should run against an injured party who wants to pursue his or her rights but has no idea who to sue or where.

Nevertheless, several state legislatures around the country decided that a discovery rule was too open-ended, potentially allowing claims to be brought decades after a theft -- and after the items had changed hands numerous times -- by people who never made any effort to find their property. Discovery rules were modified to require anyone suing after the normal limitations period had expired to prove that they exercised due diligence in looking for his or her property. One of the most famous stolen art cases, Greek Orthodox Church v. Goldberg, was decided in the state of Indiana, which has just such a "modified" discovery rule.

In major art market states such as New York and California, the courts feared that placing the burden of proof of due diligence on the original owner would encourage thefts, by making it easier for thieves to "cleanse" their crime by keeping stolen art away from the market for several years and creating difficult burdens of proof for the true owners. In New York, the law is that an innocent purchaser of stolen art or collectibles will prevail over the true owner only if he can prove that the true owner knew where the items were and unreasonably delayed in bringing suit. California requires that the true owner have known the "exact whereabouts" of the stolen item for at least three years prior to bringing suit.

It seems logical that where the victim of a theft knows just where to go to recover his or her property, unreasonable delay should bar a lawsuit. But the moral for most victims is -- never give up searching!