New York Law Review

Bulova v. Manufacturers Hanover Trust Co., 301 N.Y.S.2d 359 (1969): Determining Ownership of Personal Property After Purchase

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Bulova v. Manufacturers Hanover Trust Co., 301 N.Y.S.2d 359 (1969)

When a person independently contracts to purchase property, their subsequent payment by another party does not automatically transfer ownership to the payor, but can be construed as a gift or loan.

Summary

Mrs. Bulova purchased a sculpture at auction. Mr. Bulova, her husband, paid for it. After their separation, Mr. Bulova gifted the sculpture to the Guggenheim Museum. Mrs. Bulova sued the estate and the museum, claiming ownership. The court held that Mrs. Bulova owned the sculpture because she initially contracted to buy it. Mr. Bulova’s payment was considered either a gift or a loan, neither of which transferred title to him. This case clarifies that the act of initially contracting for a purchase is a key factor in determining ownership, even if another party provides the funds.

Facts

  • December 7, 1955: Mrs. Bulova bid on and won a Brancusi sculpture at an auction.
  • Mrs. Bulova was listed as the purchaser in the auction records, and the invoice was sent to her.
  • Mr. Bulova, upon learning of the purchase, expressed surprise at the cost but paid the invoice two weeks later.
  • The sculpture was delivered to their apartment.
  • October 1957: The couple separated, and Mrs. Bulova demanded the return of the sculpture.
  • March 18, 1958: Mr. Bulova died, leaving his estate to his sisters.
  • March 28, 1958: One of Mr. Bulova’s sisters, acting as executrix, donated the sculpture to the Guggenheim Museum.

Procedural History

  • Mrs. Bulova filed a claim against Mr. Bulova’s estate for the sculpture.
  • The claim was rejected, and Mrs. Bulova sued the estate and the Guggenheim Museum.
  • The trial court found for the defendants, stating title resided in the party supplying consideration.
  • The Appellate Division affirmed the judgment in favor of the Guggenheim Foundation.
  • The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether a husband’s payment for an item purchased by his wife at auction, without any prior agreement, is sufficient to vest title in the husband.

Holding

No, because Mrs. Bulova contracted to purchase the sculpture before Mr. Bulova’s payment, establishing her ownership regardless of the source of funds.

Court’s Reasoning

The court reasoned that Mrs. Bulova initiated and completed the purchase contract when her bid was accepted. The auctioneer’s memorandum satisfied the Statute of Frauds, obligating the gallery to deliver the sculpture to Mrs. Bulova, making her solely liable for the price. Mr. Bulova’s payment was construed either as a gift or a loan to his wife. The court emphasized that Mrs. Bulova acted on her own initiative and had a personal connection to the artwork, differentiating her position from one of agency. The court cited Personal Property Law § 31, subd. 6 (now General Obligations Law, § 5.701, subd. 6) regarding the Statute of Frauds. The court also noted the inadmissibility of Mr. Bulova’s self-serving hearsay statements about owning the sculpture, quoting Matter of Berardini, 238 App. Div. 433, 435, stating “'[D]eclarations of a deceased person in his own favor are no more competent than those of a living person, particularly when they relate to a past event such as making a gift; and they are unavailing to divest a title.’” The court concluded that the lower courts erred in presuming title vested in the payor, especially where a prior contract existed. The court further suggested that even if the husband had contracted for the purchase in the wife’s name, the presumption would be a gift to her, absent evidence to the contrary.

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