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Monday, April 24, 2017

First Department Holds That Invoices Standing Alone May Not Be Regarded as Evidence of Title or Ownership of Property.

  In Anonymous v. Anonymous,--- N.Y.S.3d ----, 2017 WL 1234201, 2017 N.Y. Slip Op. 02613 (1st Dept., 2017)  the parties prenuptial agreement did not specifically address how the parties should divide their art collection upon dissolution of the marriage. It provided that any property owned on the date of execution of the prenuptial agreement, April 21, 1992, or "hereafter…acquired" by one party remains that party's separate property. It provided that "[n]o contribution of either party to the care, maintenance, improvement, custody or repair of… [the other's party]…shall in any way alter or convert any of such property…to marital property. The prenuptial agreement further provided that "any property acquired after the date of the marriage that is jointly held in the names of both parties" shall, upon dissolution of the marriage — which occurred on March 25, 2014 — be divided equally between the parties. Under the heading, Non-Marital Property, the agreement provided: "No property hereafter acquired by the parties or by either of them…shall constitute marital property…unless (a) pursuant to a subscribed and acknowledged written agreement, the parties expressly designate said property as marital property…or (b) title to said property is jointly held in the names of both parties." During the marriage, the parties agreed to acquire certain art as a joint collection, including pieces acquired through Art Advisory Services, Luhring Augustine, and The Kitchen. The husband moved, inter alia, for a declaratory judgment that, "consistent with the Prenuptial Agreement, the title to the art purchased during the marriage determines whether it is marital or separate property, regardless of the source of funds used to acquire it or the alleged intent behind the purchase." He argued that title should be determined based solely on the invoice or bill of sale. The motion court relied on the invoices as proof of whether the art was jointly or individually held in granting his motion. 
          The Appellate Division held to the contrary, that invoices, standing alone, may not be regarded as evidence of title or ownership of the art. An invoice is defined as "[a] list of goods sent or services provided, with a statement of the sum due for these" (Oxford Living Dictionaries []). "An invoice…is not a bill of sale, nor is it evidence of a sale. It is a mere detailed statement of the nature, quantity, or cost of the goods, or price of the things invoiced, and it is as appropriate to a bailment as a sale. Hence, standing alone, it is never regarded as “evidence of title" (Sturm v. Boker, 150 US 312, 328 [1893].  An invoice cannot be said to be dispositive of ownership. The purpose of the invoice is not to identify the titled owner. The unreliability of an invoice as sole proof of title was evidenced by various invoices in the record. The Appellate Division concluded that title to personalty cannot be determined by relying solely upon an invoice. In determining title to the artwork in question, all the facts and circumstances of the acquisition and indicia of ownership must also be considered. Accordingly, the order was reversed, on the law, the declaration vacated, and the matter remanded for further proceedings, including discovery and an evidentiary hearing to determine the ownership of the disputed art.

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