After the death of his father Adolf Duschnitz in 1909, Willibald Duschnitz, who married Jenka, née Löff, in 1907, inherited his painting collection, a villa in the Cottageviertel in Vienna's 19th district, and the Erste Österreichisch-Ungarische Filzfabrik in Achau south of Vienna, which specialized in the manufacture of technical felt supplied mainly to the military. Duschnitz added paintings, sculptures and Renaissance furniture to the art collection and had the villa remodelled in 1915/16 by Adolf Loos. A music room with organ was added at that time. In 1926 the couple divorced. While Jenka Duschnitz and their daughter Eva acquired the right to live in the villa, Willibald Duschnitz moved to an apartment on Getreidemarkt in the 1st district and left the Jewish community. In the 1930s he started collecting objects from antiquity and the Far East. After the annexation, fearing persecution by the Nazi regime on account of his Jewish origins, he sold his company on 6 April 1938 to a male and a female employee. He loaned some his artworks to the Kunsthistorisches Museum in Vienna, the Österreichisches Museum für Kunst und Industrie (Austrian Museum of Art and Industry), renamed Staatliches Kunstgewerbemuseum in Wien (State Arts and Crafts Museum in Vienna) in 1938, and to Kunsthandlung Auguste Kallai. He was given export authorization for the remainder of the collection. Thirteen crates with artworks remained initially in Vienna, while Duschnitz emigrated in September 1938 to Britain and from there to France. He had one of the crates shipped there but its contents were looted. After France was defeated by Germany in 1940, Duschnitz fled via Madrid and Lisbon to Brazil. He was quickly able to re-establish himself there as an entrepreneur. He did not return to Vienna again until 1948 and the following year achieved the restitution of most of his assets. According to Metropol-Spedition (transporter) Alexander Pötsch, which was looking after them, the twelve crates that had remained in Vienna were lost in a warehouse fire in April 1945. The loaned objects were returned but Duschnitz was not allowed to export some of them. He rejected the offer to take over the company in Achau and decided to continue living in Brazil. He pursued his collecting activities there and in 1963 donated a Balinese calendar to the Museum für Völkerkunde (Museum of Ethnology) in Vienna. He ultimately sold his artworks to Eva Klabin, the daughter of an industrialist's family from Lithuania, whom he had already advised on her collection.

In 1995 the Museum Fundação Eva Klabin opened in Rio de Janeiro and displayed many items from the former Duschnitz collection. In 2013, the Art Restitution Advisory Board recommended the restitution of three glasses from the MAK, for which the Bundesdenkmalamt (Federal Monuments Authority) had refused export authorization after 1945, to Willibald Duschnitz's legal successors. In 2015, it was discovered that the organ in the banquet room of the Technisches Museum Wien was from Villa Duschnitz and had been sold to Leopoldsdorf parish in 1955 after restitution of the villa.