2009 California Civil Code - Section 1899-1899.11 :: Chapter 1.5. Loans To Museums For Indefinite Or Long Terms

CIVIL CODE
SECTION 1899-1899.11

1899.  The Legislature finds and declares as follows:
   (a) Many museums have benefited greatly from having property
loaned to them for study or display. Problems have arisen, however,
in connection with loans for indefinite or long terms, when museums
and lenders have failed to maintain contact. Many of these problems
could be avoided by a clarification and regularization of the rights
and obligations of the parties to loans for indefinite or long terms.
   (b) An existing law, the Unclaimed Property Law (commencing with
Section 1500 of the Code of Civil Procedure), is technically
applicable to property on loan to a museum which has been left
unclaimed by its owner for at least seven years.
   (c) While the Unclaimed Property Law addresses problems similar to
those which arise in the museum context when the parties to loans
fail to maintain contact, there is need for an alternative method of
dealing with unclaimed property in the hands of museums, one tailored
to the unique circumstances of unclaimed loans to museums. These
circumstances include the likelihood that the unclaimed property has
significant scientific, historical, aesthetic, or cultural value but
does not have great monetary value; that the public's interest in the
intangible values of unclaimed property loaned to museums can best
be realized if title is transferred to the museums holding the
property; that often lenders intend eventually to donate property but
place it on indefinite or long term loan initially for tax and other
reasons; and that many museums have incurred unreimbursed expenses
in caring for and storing unclaimed loaned property.
   (d) There is an inherent tendency for the condition of tangible
property to change over time. Loaned property often requires
conservation work and conservation measures may be expensive or
potentially detrimental to the property. Organic materials and
specimens may serve as breeding grounds for insects, fungi, or
diseases which threaten other more valuable property.
   (e) Museums cannot reasonably be expected to make decisions
regarding conservation or disposition of loaned property at their own
risk and expense. Over time, however, lenders die or move, and
museums and lenders lose contact. If a lender has failed to maintain
contact with a museum, it is often impossible to locate the lender so
that the lender can make decisions regarding conservation or
disposition of loaned property.
   (f) Since museums rarely relocate, it is easier for lenders, and
those who claim through them, to notify museums of address or
ownership changes so that museums can readily contact lenders when
decisions must be made regarding conservation or disposition of
loaned property.
   (g) The best evidence of ownership of property on loan to a museum
is generally the original loan receipt. The longer property remains
on loan, the less likely it is that the original lender will claim
it, and the more likely it is that any claim which is made will be
made by someone who does not have the original loan receipt or other
clear evidence of ownership. The state has a substantial interest in
cutting off stale and uncertain claims to tangible personal property
loaned to nonprofit and public museums.
   (h) Most of the tangible personal property which escheats to the
state under the Unclaimed Property Law is found in safe deposit
boxes. Although 40-50 percent of the intangible property which
escheats to the state is subsequently claimed, less than 1 percent of
escheated tangible personal property is claimed. Of the few claims
which are presented to the Controller for tangible personal property,
most are presented within two years of the date the Controller gives
notice of the escheat.
   (i) The public interest is served by requiring lenders to notify
museums of changes in address or ownership of loaned property, by
establishing a uniform procedure for lenders to preserve their
interests in property loaned to museums for indefinite or long terms,
and by vesting title to unclaimed property on loan to museums in the
museums which have custody of the property.

1899.1.  For the purposes of this chapter:
   (a) A "museum" is an institution located in California and
operated by a nonprofit corporation or public agency, primarily
educational, scientific, or aesthetic in purpose, which owns,
borrows, or cares for, and studies, archives, or exhibits property.
   (b) A "lender's address" is the most recent address as shown on
the museum's records pertaining to the property on loan from the
lender.
   (c) The terms "loan," "loaned," and "on loan" include all deposits
of property with a museum which are not accompanied by a transfer of
title to the property.
   (d) "Property" includes all tangible objects, animate and
inanimate, under a museum's care which have intrinsic value to
science, history, art, or culture, except that it does not include
botanical or zoological specimens loaned to a museum for scientific
research purposes.

1899.2.  (a) When a museum is required to give a lender notice
pursuant to the provisions of this chapter, the museum shall be
deemed to have given a lender notice if the museum mails the notice
to the lender at the lender's address and proof of receipt is
received by the museum within 30 days from the date the notice was
mailed. If the museum does not have an address for the lender, or if
proof of receipt is not received by the museum, notice shall be
deemed given if the museum publishes notice at least once a week for
three successive weeks in a newspaper of general circulation in both
the county in which the museum is located and the county of the
lender's address, if any.
   (b) In addition to any other information prescribed in this
chapter, notices given pursuant to it shall contain the lender's
name, the lender's address, if known, the date of the loan and, if
the notice is being given by the museum, the name, address, and
telephone number of the appropriate office or official to be
contacted at the museum for information regarding the loan.
   (c) For the purposes of this section, a museum is "located" in the
county of a branch of the museum to which a loan is made. In all
other instances, a museum is located in the county in which it has
its principal place of business.

1899.3.  (a) If, on or after January 1, 1984, a museum accepts a
loan of property for an indefinite term, or for a term in excess of
seven years, the museum shall inform the lender in writing at the
time of the loan of the provisions of this chapter. A copy of the
form notice prescribed in Section 1899.5, or a citation to this
chapter, is adequate for this purpose.
   (b) Unless the loaned property is returned to the claimant, the
museum shall retain for a period of not less than 25 years the
original or an accurate copy of each notice filed by a claimant
pursuant to Section 1899.4.
   (c) The museum shall furnish anyone who files a notice of intent
to preserve an interest in property on loan proof of receipt of the
notice by mailing an original receipt or a copy of the receipt
portion of the form notice prescribed in Section 1899.5 to the lender
or other claimant at the address given on the notice within 30 days
of receiving the notice.
   (d) A museum shall give a lender prompt notice of any known injury
to or loss of property on loan.

1899.4.  (a) It is the responsibility of the owner of property on
loan to a museum to notify the museum promptly in writing of any
change of address or change in ownership of the property. Failure to
notify the museum of these changes may result in the owner's loss of
rights in the property.
   (b) The owner of property on loan to a museum may file with the
museum a notice of intent to preserve an interest in the property as
provided for in Section 1899.5. The filing of a notice of intent to
preserve an interest in property on loan to a museum does not
validate or make enforceable any claim which would be extinguished
under the terms of a written loan agreement, or which would otherwise
be invalid or unenforceable.

1899.5.  (a) A notice of intent to preserve an interest in property
on loan to a museum filed pursuant to this chapter shall be in
writing, shall contain a description of the property adequate to
enable the museum to identify the property, shall be accompanied by
documentation sufficient to establish the claimant as owner of the
property, and shall be signed under penalty of perjury by the
claimant or by a person authorized to act on behalf of the claimant.
   (b) The museum need not retain a notice which does not meet the
requirements set forth in subdivision (a). If, however, the museum
does not intend to retain a notice for this reason, the museum shall
promptly notify the claimant at the address given on the notice that
it believes the notice is ineffective to preserve an interest, and
the reasons therefor. The fact that the museum retains a notice shall
not be construed to mean that the museum accepts the sufficiency or
accuracy of the notice or that the notice is effective to preserve an
interest in property on loan to the museum.
   (c) A notice of intent to preserve an interest in property on loan
to a museum which is in substantially the following form, and
contains the information and attachments described, satisfies the
requirements of subdivision (a):

     NOTICE OF INTENT TO PRESERVE AN INTEREST IN PROPERTY ON LOAN TO
A MUSEUM

   TO THE LENDER:  Section 1899.4 of the California Civil Code
requires that you notify the museum promptly in writing of any change
of address or ownership of the property. If the museum is unable to
contact you regarding your loan, you may lose rights in the loaned
property. If you choose to file this form with the museum to preserve
your interest in the property, the museum is required to maintain
it, or a copy of it, for 25 years. For full details, see Section
1899, et seq. of the California Civil Code.
   TO THE MUSEUM:  You are hereby notified that the undersigned
claims an interest in the property described herein.

Claimant
  Name: ___________________
  Address: ________________
      ________________
      ________________
  Telephone: ____________
  Social Security Number (optional): _______
Museum Name: ________________
Date Property Loaned: __________
Interest in Property:

   If you are not the original lender, describe the origin of your
interest in the property and attach a copy of any document creating
your interest:
      ________________
      ________________
      ________________
      ________________
Description of Property:
   Unless an accurate, legible copy of the original loan receipt is
attached, give a detailed description of the claimed property,
including its nature and general characteristics and the museum
registration number assigned to the property, if known, and attach
any documentary evidence you have establishing the loan:
  Registration # __________
  Description: ____________
      ________________
      ________________
      ________________
      ________________
      ________________
      (Attach additional sheets if necessary.)
   I understand that I must promptly notify the museum in writing of
any change of address or change in ownership of the loaned property.

   I declare under penalty of perjury that to the best of my
knowledge the information contained in this notice is true.
Signed: ____________
     (claimant)
Date: __________
OR
   I declare under penalty of perjury that I am authorized to act on
behalf of the claimant and am informed and believe that the
information contained in this notice is true.
Signed: __________ (claimant's representative)
Date: __________

         RECEIPT FOR NOTICE OF INTENT TO PRESERVE AN INTEREST IN
PROPERTY

                             (For use by the museum.)

Notice received by: ________________
Date of receipt: ___________________
Copy of receipt returned to claimant:
By ________________
Date: __________

   (d) Notices of intent to preserve an interest in property on loan
to a museum filed pursuant to this chapter are exempt from the
disclosure requirements of the California Public Records Act
(commencing with Section 6250 of the Government Code).

1899.6.  (a) Unless there is a written loan agreement to the
contrary, a museum may apply conservation measures to or dispose of
property on loan to the museum without a lender's permission if:
   (1) Immediate action is required to protect the property on loan
or to protect other property in the custody of the museum, or because
the property on loan has become a hazard to the health and safety of
the public or of the museum's staff, and:
   (A) The museum is unable to reach the lender at the lender's last
address of record so that the museum and the lender can promptly
agree upon a solution; or
   (B) The lender will not agree to the protective measures the
museum recommends, yet is unwilling or unable to terminate the loan
and retrieve the property.
   (2) In the case of a lender who cannot be contacted in person, the
museum publishes a notice containing the information described in
subdivision (a) of Section 1899.7 and there is no response for 120
days.
   (b) If a museum applies conservation measures to or disposes of
property pursuant to subdivision (a):
   (1) The museum shall have a lien on the property and on the
proceeds from any disposition thereof for the costs incurred by the
museum; and
   (2) The museum shall not be liable for injury to or loss of the
property:
   (A) If the museum had a reasonable belief at the time the action
was taken that the action was necessary to protect the property on
loan or other property in the custody of the museum, or that the
property on loan constituted a hazard to the health and safety of the
public or the museum's staff; and
   (B) If the museum applied conservation measures, the museum
exercised reasonable care in the choice and application of the
conservation measures.

1899.7.  (a) Except as provided in subdivision (b), if a museum is
unable to give the lender the notice required by subdivision (d) of
Section 1899.3 of injury to or loss of property on loan by mail, the
museum shall be deemed to have given the lender notice of any injury
or loss if in addition to the information required by subdivision (b)
of Section 1899.2 the published notice includes a statement
containing substantially the following information:
"The records of ________________
         (name of museum)
indicate that you have property on loan to it. Your failure to
notify it in writing of a change of address or ownership of property
on loan or to contact it in writing regarding the loan may result in
the loss of rights in the loaned property. See California Civil Code
Sections 1899, et seq."

   (b) If, within three years of giving notice of injury to or loss
of loaned property by publishing the notice set forth in subdivision
(a), the museum receives a notice from a claimant pursuant to Section
1899.4, the museum shall promptly advise the claimant in writing of
the nature of the injury to or the fact of the loss of property on
loan and the approximate date thereof. For the purposes of the
limitation period in Section 1899.8, if the museum mails the
information to the claimant within 30 days of the date the museum
receives the notice from the claimant, the museum shall be deemed to
have given the claimant notice of the injury to or loss of property
on loan on the date notice by publication pursuant to subdivision (a)
was completed.

1899.8.  Effective January 1, 1985, no action shall be brought
against a museum for damages because of injury to or loss of property
loaned to the museum more than (1) three years from the date the
museum gives the lender notice of the injury or loss, or (2) ten
years from the date of the injury or loss, whichever occurs earlier.

1899.9.  (a) A museum may give the lender notice of the museum's
intent to terminate a loan which was made for an indefinite term, or
which was made on or after January 1, 1984, for a term in excess of
seven years.
   A notice of intent to terminate a loan given pursuant to this
section shall include a statement containing substantially the
following information:
"The records of ________________
         (name of museum)
indicate that you have property on loan to it. The institution
wishes to terminate the loan. You must contact the institution,
establish your ownership of the property, and make arrangements to
collect the property. If you fail to do so promptly, you will be
deemed to have donated the property to the institution. See
California Civil Code Sections 1899, et seq."

   (b) For the purposes of this chapter, a loan for a specified term
becomes a loan for an indefinite term if the property remains in the
custody of the museum when the specified term expires.

1899.10.  (a) The three-year limitation on actions to recover
personal property prescribed in Code of Civil Procedure Section 338.3
shall run from the date the museum gives the lender notice of its
intent to terminate the loan pursuant to Section 1899.9.
   (b) Except as provided in subdivision (e), effective January 1,
1985, no action shall be brought against a museum to recover property
on loan when more than 25 years have passed from the date of the
last written contact between the lender and the museum, as evidenced
in the museum's records.
   (c) A lender shall be deemed to have donated loaned property to a
museum if the lender fails to file an action to recover the property
on loan to the museum within the periods specified in subdivisions
(a) and (b).
   (d) One who purchases property from a museum acquires good title
to the property if the museum represents that it has acquired title
to the property pursuant to subdivision (c).
   (e) Notwithstanding subdivisions (b) and (c), a lender who was not
given notice that the museum intended to terminate a loan and who
proves that the museum received a notice of intent to preserve an
interest in loaned property within the 25 years immediately preceding
the date on which the lender's right to recover the property
otherwise expired under subdivision (b) may recover the property or,
if the property has been disposed of, the reasonable value of the
property at the time the property was disposed of with interest at
the rate on judgments set by the Legislature pursuant to Section 1 of
Article XV of the California Constitution.

1899.11.  (a) The provisions of this chapter supersede the
provisions of the Unclaimed Property Law (commencing with Section
1500 of the Code of Civil Procedure) except that at its option, a
museum may report property which has been on loan unclaimed by its
owner for more than seven years to the Controller pursuant to Section
1530 of the Code of Civil Procedure for disposition in accordance
with the provisions of the Unclaimed Property Law.
   (b) Not less than six months or more than 12 months before
reporting any loaned property to the Controller, a museum shall mail
to the lender at the lender's address, if known, a notice of intent
to report the property to the Controller. The notice shall include a
statement containing substantially the following information:

  "The records of
  _________________________________________________
  (name of
  museum)
  indicate that you have property on loan to the
  institution.
  The
  institution wishes to terminate the loan.  You
  must contact the
  institution, establish your ownership of the
  property and make
  arrangements to collect the property before ____
  (fill in
  date)
  or the property will be disposed of in
  accordance with the
  provisions of the Unclaimed Property Law
  (commencing with
  Section 1500 of the Code of Civil Procedure)."


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