Legal Question in Business Law in California

Refusing to return a loaned item of personal property at the end of the agreed period is a crime called "conversion". Yes, I would file a police report.

Conversion isn't a crime; it's a civil matter, a tort. Possibly there is a crime of some kind here, but getting the cops and/or the D.A. interested would be tough; they'd probably refer you to your civil remedies.

In general, a suit for conversion would be the way to go if you wanted money damages. If you wanted return of the specific personal property rather than money representing its value, the approach would be with a civil action for what is variously called "claim and delivery" or "writ of possession" or "replevin."

I think small claims cannot handle the latter, because issuing writs of possession is beyond their jurisdiction. I could be wrong; ask the court's small-claims advisor. However, an action for conversion could be brought in small claims. Therefore, one possibility is to bring a small claims action for conversion, asking for the money (up to $7,500) and then tell the buyer you'll drop the suit if he returns the artwork.

Have you been paid in full for the business, otherwise? I'd be a bit careful about suing the buyer before all the payments for the sale of the business have been made!