“ ‘Finders, keepers’ is a playground chant, not a legal doctrine,” 4th District Judge Deborah Bail said in ruling that Idaho folk artist James Castle’s family is the rightful owner of any art found in Castle’s former house.

“In Idaho, the person entitled to identifiable mislaid property is the owner and his or her heirs, not the finder,” Bail said in a ruling Friday.

Bail’s judgment is a legal and financial blow for Jeannie Schmidt, the woman who co-owns the former Castle house in Northwest Boise.

Schmidt bought the house in 1997. She found three bundles of Castle’s work hidden in the attic in 2010 — about 150 works of art and 30 books Castle worked in and hid as early as the 1930s. The art is worth thousands of dollars, and Schmidt argued that it was hers to sell, keep or give away.

Castle was born in 1899 in Garden Valley but lived in Northwest Boise for much of his life. He was considered illiterate but was a brilliant, prolific, self-taught artist who made thousands of pieces before he died in 1977. His work is known and collected worldwide, and can be found in the Museum of Modern of Art in New York.

Castle’s descendants, a group of nieces and nephews who created a partnership in 1996 to manage and sell his artwork, argued that they are the rightful owners of the works through “gift, inheritance and conveyance.” They have sold Castle’s art for millions of dollars.

Bail heard testimony in the case in April — both parties agreed to have a judge, not a jury, make the final decision.

In her ruling Friday, Bail found that:

• The statute of limitations does not bar the family partnership’s actions to recover the mislaid art.

• When Schmidt discovered the art in the attic in 2010, she “had a duty to return it to the true owners.”

• Castle did not “abandon the art.” He intended to give all his art to his sister Agnes “Peggy” Wade in 1977. So, she said, if it was left in the house, it was mislaid — and the rightful property of the owner.

• The Castle family didn’t delay in asserting its rights to ownership once finding out about it.

• No members of Castle’s family ever gave Schmidt a formal waiver to allow her to keep art found at the house.

Castle drew with a sharpened stick dipped in soot and saliva. He drew on anything he could find — milk cartons or matchbooks — and he filled books with pictures. He constructed figures from cardboard and string, and made assemblages of bits of paper and other found objects.

Castle’s art is staggeringly popular with collectors, with pieces selling for anywhere from $500 to $50,000. In 2008, the Castle family entertained an offer of at least $8 million for the art they still had, Schmidt’s attorney, James Huegli, said during the trial in April.

Huegli also told Bail in April that when Schmidt and her sister bought Castle’s old house, they were told by Castle’s niece, Geraldine Garrow: “If you find anything James Castle created in that house, it’s yours.”

Garrow was the official representative of his estate. She died in 2007.

Other times, Huegli said, family members did not ask for works Schmidt found, or wanted pieces for sentimental reasons.

So when Schmidt found the bundles in 2010, she had no doubt that they were hers, Huegli said.

The family partnership argued otherwise.

Attorney Dave Lombardi told Bail that the items Schmidt found after she bought the house were not art but “ephemera” — odds and ends used by Castle to create art about which the family did not care.

Lombardi said Castle himself spent a day on the Eugene Street property, right before he died, showing sister Peggy Wade places where he hid his art. He said Castle communicated with Wade that she was “to have everything he created.” So, Lombardi argued, any art found there was intended to go to Wade.

Bail said Garrow’s remarks were vague and noted that Schmidt, in an email to an art dealer, acknowledged that she was “uncertain of her rights.”

Bail also pointed out that Schmidt’s claims were weakened by “misrepresentations” she made under oath, including that she told the family partnership that she’d turned over all the art she found while this case was in dispute.

Schmidt admitted during the trial this spring that was not true — she had removed three pieces from that stash. Unbeknownst to her own lawyer, Schmidt sold those pieces and had the money sent to her or other family members.

Patrick Orr: 377-6219, Twitter: @IDS_Orr