I’m specifically thinking of the essay “Justice and Property Rights”, which is available in a collection of Rothbard essays titled “Egalitarianism as a Revolt against Nature”.
Here’s an extended excerpt from “Justice and Property Rights” that I believe addresses your specific question:
“…in the case of an identifiable unjust owner and the identifiable victim or just owner, the case is clear: a restoration to the victim of his rightful property…
“Suppose now a fourth case, and one generally more relevant to problems of land title in the modern world. Smith is not a thief, nor has he directly received the land by government grant; but his title is derived from his ancestor who did so unjustly appropriate title to the property; the ancestor, Smith I, let us say, stole the property from Jones I, the rightful owner. What should be the disposition of the property now? The answer, in our view, completely depends on whether or not Jones’s heirs, the surrogates of the identifiable victims, still exist. Suppose, for example, that Smith VI legally “owns” the land, but that Jones VI is still extant and identifiable. Then we would have to say that, while Smith VI himself is not a thief and not punishable as such, his title to the land, being solely derived from inheritance passed down from Smith I, does not give him true ownership, and that he, too, must disgorge the land—without compensation—and yield it into the hands of Jones VI…
“But what if Smith I did indeed steal the land from Jones I, but that all of Jones’s descendants or heirs are lost in antiquity and cannot be found? What should be the status of the land then? In that case, since Smith VI is not himself a thief, he becomes the legitimate owner of the land on the basis of our homestead principle. For if the land is “unowned” and up for grabs, then Smith VI himself has been occupying and using it, and, therefore, he becomes the just and rightful owner on the homestead basis. Furthermore, all of his descendants have clear and proper title on the basis of being his heirs.
“It is clear, then, that even if we can show that the origin of most existing land titles are in coercion and theft, the existing owners are still just and legitimate owners if (a) they themselves did not engage in aggression, and (b) if no identifiable heirs of the original victims can be found.”