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New York Arts and Cultural Affairs – Article 12

Section 12.01–Artist-Art Merchant Relationships; and Section 12.03 – Exemption from Seizure

§ 12.01. Artist-art merchant relationships.
1.
Notwithstanding any custom, practice or usage of the trade, any provision of the uniform commercial code or any other law, statute, requirement or rule, or any agreement, note, memorandum or writing to the contrary:
(a) Whenever an artist or craftsperson, his heirs or personal representatives, delivers or causes to be delivered a work of fine art, craft or a print of his own creation to an art merchant for the purpose of exhibition and/or sale on a commission, fee or other basis of compensation, the delivery to and acceptance thereof by the art merchant establishes a consignor/consignee relationship as between such artist or craftsperson and such art merchant with respect to the said work, and:









(i)such consignee shall thereafter be deemed to be the agent of such consignor with respect to the said work;

(ii) such work is trust property in the hands of the consignee for the benefit of the consignor;

(iii) any proceeds from the sale of such work are trust funds in the hands of the consignee for the benefit of the consignor;

(iv) such work shall remain trust property notwithstanding its purchase by the consignee for his own account until the price is paid in full to the consignor; provided that, if such work is resold to a bonafide third party before the consignor has been paid in full, the resale proceeds are trust funds in the hands of the consignee for the benefit of the consignor to the extent necessary to pay any balance still due to the consignor and such trusteeship shall continue until the fiduciary obligation of the consignee with respect to such transaction is discharged in full; and

(v) no such trust property or trust funds shall be subject or subordinate to any claims, liens or security interest of any kind or nature whatsoever.
(b) Waiver of any provision of this section is absolutely void except that a consignor may lawfully waive the provisions of clause (iii) of paragraph (a) of this subdivision, if such waiver is clear, conspicuous, in writing and subscribed by the consignor, provided:
(i) no such waiver shall be valid with respect to the first two thousand five hundred dollars of gross proceeds of sales received in any twelve-month period commencing with the date of the execution of such waiver;

(ii) no such waiver shall be valid with respect to the proceeds of a work initially received on consignment but subsequently purchased by the consignee directly or indirectly for his own account; and

(iii) no such waiver shall inure to the benefit of the consignee's creditors in any manner which might be inconsistent with the consignor's rights under this subdivision.
(c) proceeds from the sale of consigned works covered by this section shall be deemed to be revenue from the sale of tangible goods and not revenue from the provision of services to the consignor or others, except that the provisions of this paragraph shall not apply to proceeds from the sale of consigned works sold at public auction.
2.
Nothing in this section shall be construed to have any effect upon any written or oral contract or arrangement in existence prior to September first, nineteen hundred sixty-nine or to any extensions or renewals thereof except by the mutual written consent of the parties thereto.
§ 12.03 Exemption from seizure.
No process of attachment, execution, sequestration, replevin, distress or any kind of seizure shall be served or levied upon any work of fine art while the same is enroute to or from, or while on exhibition or deposited by a nonresident exhibitor at any exhibition held under the auspices or supervision of any museum, college, university or other nonprofit art gallery, institution or organization within any city or county of this state for any cultural, educational, charitable or other purpose not conducted for profit to the exhibitor, nor shall such work of fine art be subject to attachment, seizure, levy or sale, for any cause whatever in the hands of the authorities of such exhibition or otherwise.

References & Resources:

Confirm currentness of these provisions: New York public legislation (select Art & Cultural Affairs, Title 12).



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Summaries / Noted Provisions:

12.01-1 Responsibilities & rights contained herein superior to UCC, other laws, agreements, etc.

(a) Consignment is established when artist (heirs, reps) deliver artwork to art merchant for exhibit or sale. Arises upon art merchant acceptance of delivery. (i) art merchant is agent of artist/heirs/rep; (ii) artwork is trust property for artist/heirs/rep's benefit; (iii) proceeds of sale are held in trust; (iv) artwork remains in trust even if merchant purchases, until paid in full; if sold to 3rd party, resale proceeds are held in trust; trustee relationship; (v) no subordination to other claims, etc.

(b) No waiver of these rights by the artist/heirs/rep except re (a)(iii) in writing, and: (i) no waiver on first $2500 within one year; (ii) no waiver on consigned artwork later purchased by merchant, (iii) no waiver to benefit merchant's creditors.

(c) proceeds are deemed as sales from tangible goods; does not apply to consigned works sold at auction.
12.01-2 agreements prior to 9/1/1969.


12.03: Artwork may not be seized while being, or in the process of exhibition, certain institutions and purposes, nonresident exhibitor.