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[Rastermon]

situation:
A photographer grants a graphic artist limited use of background buildings and foreground photos of people.
Graphic artist composes foreground into background, the new image is a sepia tone looking like it was taken 100 years ago.
Who would own the rights to the composite?

[Isaac]

What were the limited rights granted to the graphic artist?

Without knowing that, the question is unanswerable.

[Rastermon]

The photographer granted the graphic designer the rights to print one copy of the composite. After that, people who wanted more prints were told to see the photographer.. not the designer. IMHO, the designer owns "more" of the composite than the photographer. But then again IMHO isn't in the law.

[Isaac]

My guess based on the proposed hypothetical is that no one owns the composite.

The artist does not own a copyright in the derivative work
because he created it without permission.  You own only the
copyright in the portion of the work you created which is
enough to allow you to prevent distribution of the composite. However
since the elements of composite are inseparable, you cannot
distribute the work because you don't have permission to
distribute the artists work.

Kinda funky, but that's how the law works.