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SOTHEBY'S INC. v. GARCIA

September 30, 1992

SOTHEBY'S INC., Plaintiff, against SANDRA H. GARCIA and THE REPUBLIC OF THE PHILIPPINES, Defendants.

CONNER


The opinion of the court was delivered by: WILLIAM C. CONNER

OPINION AND ORDER

CONNER, D.J.:

 Plaintiff Sotheby's, Inc. ("Sotheby's") commenced this interpleader action against the Republic of the Philippines (the "Philippines") and Sandra H. Garcia ("Garcia") on June 27, 1992 as a neutral stakeholder. Presently before the Court is defendant Garcia's motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), Fed. R. Civ. P. or, in the alternative, to stay the present interpleader action pending resolution of an action instituted in the United States District Court for the Eastern District of Virginia (the "Virginia Action"). Also before the Court are the motions of Sotheby's and the Philippines for an injunction pursuant to 28 U.S.C. ยง 2361 against Garcia's continued prosecution of the Virginia Action or any other actions which would interfere with the disposition of the paintings that are the subject of this action.

 BACKGROUND

 In July of 1991, Garcia claims to have lent Imelda Marcos, wife of former President of the Philippines, Ferdinand E. Marcos, the sum of $ 1 million at an interest rate of ten percent per annum. The collateral for the loan consisted of artwork given by Mrs. Marcos to Garcia to secure the repayment. See Garcia Aff. at PP 4-5; Garcia Exh. B. According to the Complaint, on March 31 and April 6, 1992, Garcia personally delivered to Sotheby's premises in New York the following six oil paintings (collectively "the Paintings"):

 1. Interior With Musicians and Backgammon Players by Dirk Hals;

 2. Adoration of the Magi by Pieter Brueghel, the Younger;

 3. Elegant Company on a Loggia by Jan Steen;

 4. Portrait of a Lady with a Straw Hat by William Hogarth;

 5. Male Portrait a circle of Antonio Moro; and

 6. Three Children by Robert Street.

 Cmplt. at P 6; Aff. of George Wachter, Vice-President of Sotheby's Old Master Paintings Department at P 2.

 On April 7, 1992, counsel for the Philippines advised Sotheby's by telephone and by confirming letter that the Philippines claimed to be the owner of at least two of the six Paintings. Aff. of Marjorie E. Stone, Esq., Sotheby's General Counsel at PP 1-3; Sotheby's Exh. C. At that time, counsel for the Philippines advised Sotheby's that it was possible that other items which that client had delivered to it were also the property of the Philippines. Id. at P 3. On April 14, 1992, Garcia allegedly appeared in New York at Sotheby's offices, demanding the return of all six Paintings. Wachter Aff. at P 2. On April 24, 1992, Sotheby's received in New York a second letter from the attorneys for the Philippines which stated in pertinent part:

 Please be advised that the Republic of the Philippines claims to be the owner of each of [the six Paintings] and all property tendered for consignment by Ms. Garcia. We believe this property was purchased by or on behalf of Ferdinand Marcos and Imelda Marcos with funds they illegally obtained through bribery, extortion, embezzlement of public property and funds, ...


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