Michigan Laws 442.312 – Consignment; trust property; trust funds; claims, liens, or security interest
Current as of: 2024 | Check for updates
|
Other versions
Any custom, practice, or usage of the trade to the contrary notwithstanding:
(a) When an artist or other person delivers or causes to be delivered a work of fine art to an art dealer for the purpose of sale on a commission, the delivery to and acceptance of the work of fine art by the art dealer is considered to be on consignment and the art dealer shall thereafter, with respect to the work of fine art, be considered to be the consignee of the work of fine art.
Terms Used In Michigan Laws 442.312
- Art dealer: means a person engaged in the business of selling works of fine art, other than a person exclusively engaged in the business of selling goods at public auction. See Michigan Laws 442.311
- Artist: means the creator of a work of fine art or, if the creator is deceased, the creator's heirs or personal representatives. See Michigan Laws 442.311
- Bona fide purchaser: means a person who in good faith makes a purchase without notice of any outstanding rights of others. See Michigan Laws 442.311
- Commission: means the fee, compensation, or percentage of actual selling price of a work of fine art, agreed upon by the artist and art dealer, which the art dealer may retain after sale of the artist's work of fine art to a third party. See Michigan Laws 442.311
- Consignor: means a person who delivers or causes to be delivered a work of fine art to an art dealer on consignment. See Michigan Laws 442.311
- Fiduciary: A trustee, executor, or administrator.
- Fine art: means an original art or craft work which is:
(i) A visual rendition including, but not limited to, a painting, drawing, sculpture, mosaic, video tape, or photograph. See Michigan Laws 442.311Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period. On consignment: means that no title to or estate in the fine art or right to possession of the fine art superior to that of the consignor vests in the consignee, except that the consignee has the power or authority to transfer and convey, to a third person, all of the right, title, and interest of the consignor, in and to the fine art. See Michigan Laws 442.311 Person: means an individual, partnership, corporation, association, or other group, however organized. See Michigan Laws 442.311
(b) The work of fine art is trust property in the hands of the consignee for the benefit of the consignor.
(c) Any proceeds due the artist or other consignor from the sale of the work of fine art are trust funds in the hands of the consignee for the benefit of the consignor.
(d) A work of fine art initially received on consignment shall be considered to remain trust property notwithstanding the subsequent purchase of the work of fine art by the consignee directly or indirectly for the consignee’s own account until the terms of purchase are completed. If the work is thereafter resold to a third party who is a bona fide purchaser before the consignor has been paid in full, the work of fine art ceases to be trust property and the proceeds of the resale 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. The trusteeship relating to proceeds of the resale shall continue until the fiduciary obligation of the consignee with respect to a transaction is discharged in full.
(e) Property or funds which are trust property or trust funds pursuant to this section are not subject to the claims, liens, or security interest of the creditors of the art dealer, notwithstanding any other section of this act.