California Codes, Civil Code - CIV, Division 3 — Obligations, Part 4 — Obligations Arising from Particular Transactions, Title 1 — Consignment of Fine Art, Chapter 2 — General Provisions, Section 1738.7
A work of fine art received as a consignment shall remain trust property, notwithstanding the subsequent purchase thereof by the consignee directly or indirectly for the consignee’s own account until the price is paid in full to the consignor. If such work is thereafter resold to a bona fide purchaser before the consignor has been paid in full, the proceeds of the resale received by the consignee shall constitute funds held in trust 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.
Notes
Establishes that consigned fine art remains trust property even if the consignee buys it directly or indirectly for the consignee’s own account until the purchase price is fully paid. If the consignee resells it to a bona fide purchaser first, resale proceeds remain trust property for the unpaid amount until the fiduciary obligation is fully discharged.
Use as reference
Lexinter.net | California Code, Civil Code - CIV § 1738.7 | https://laws.lexinter.net/codes/california/civil-code/division-3/part-4/title-1/chapter-2/section-1738-7