@YARNLADY, if it is an old painting, that makes a difference, but she is still asking for something, as I think you perceived in the first place when you felt the urge to advocate for her. I’m guessing that the old lady doesn’t own much of anything else that she might think others would see value in, so she’s trying to play one of her last cards.
However, your son is related to her only by marriage. The issue is really with her granddaughter. It should be worked out between them.
(Is this the good DIL or the bad DIL? Either way, I hope she remembers this 40 or 50 years from now.)
The dynamic of this whole thing—Grandma, granddaughter, daughter’s husband/your son, and you, with the middle-generation mother being a silent player somewhere in there—still has much more going on in it than the matter of what to do with a decorative object. So I stand by my first answer.
Here’s what you can do: you can tell them they can’t store it (or anything else, for that matter) in your garage. Tell them that your husband, the head of your household, who is in charge, says let them put it in the house he bought them.