Youssoupoff v. Widener

Prince Youssoupoff (plaintiff) entered into an agreement with Mr. Widener (defendant) in 1921 to sell Widener two Rembrandt portraits. The agreement was finalized in England, which was also where the portraits were delivered before they were moved to Widener’s residence in Pennsylvania. According to the terms of the agreement, Youssoupoff had an option to repurchase the portraits from Widener for the original purchase price plus interest if he did so before January 1, 1924, and if Youssoupoff was able to keep and personally enjoy the portraits. In 1923, Youssoupoff attempted to exercise his option by tendering borrowed funds to Widener. Widener refused the resale because Youssoupoff used the portraits as collateral for the borrowed funds. Widener argued that this was contrary to the repurchase option in the agreement, which could not be exercised to transfer the portraits to anyone other than Youssoupoff. Youssoupoff then sued Widener to compel Widener to accept the funds and transfer the portraits to Youssoupoff. Youssoupoff argued that Pennsylvania law—which would treat the transaction as a mortgage—should govern his option to repurchase because Pennsylvania was where the portraits were located and where the option would be exercised. The lower court held that English law governed the agreement. Youssoupoff appealed.