The opinion of the court was delivered by: SWEET
The plaintiff, Edward A. Cantor ("Cantor"), brought this action against Dennis R. Anderson ("Anderson"), Mark Umbach ("Umbach") and Anderson Fine Arts, Inc. ("AFA") in which Wildenstein & Co., Inc. ("Wildenstein") intervened to seek the return of a Renoir drawing entitled "Gabrielle Couchee a la Rose" (the "Renoir" or its stated price $160,000.
The acumen and integrity of art dealers are the foundation stones of the market for fine art. Without these pillars the market could not function, and transactions based on trust and taste could not be accomplished. However, sometimes in the interests of all concerned a cracked stone is cemented over, but in this instance Anderson and his company AFA crumbled under financial pressure, leaving the Renoir in the hands of Cantor but subject to the claim of the Wilderstein Gallery that had consigned it to Anderson. Based on the facts and conclusions set forth below, judgment will be granted to Wildenstein.
Cantor, a New Jersey resident, businessman and art collector, commenced this diversity action against Anderson, Umbach and AFA on February 9, 1984, alleging damages of $129,000. Umbach was never served and is not subject to the jurisdiction of this court.
On October 3, 1984, Wildenstein intervened, counterclaiming against Cantor for conversion of the Renoir. By March, 1985, Anderson and AFA each filed separate, voluntary petitions seeking relief and protection under the Bankruptcy Act. Cantor and Anderson and AFA reached a settlement and consented to the entry of judgment in the amount of $99,000, which was approved on February 24, 1986, on consent of all parties. The bench trial of Wildenstein's counterclaims was held by the court on February 24, 1986 and it was finally submitted on April 11, 1986.
Anderson is likeable, intelligent, graduate of the Greensboro College who attended the University of Virginia in 1972, and received a degree of Master of Fine Arts from the University of North Carolina. He served as curator for a recognized museum for three years, and as an assistant director of an established gallery for four years during which time he authored several publications on the subject of his specialties. In 1980 he established AFA as a private art dealer and consultant, doing appraisals, research and advising collectors and auction houses. He did not maintain a gallery or an ownership interest in works of substantial value. In February, 1984 he was arrested, and later convicted, for his fraudulent conduct of the business of AFA and is currently serving a term of imprisonment in the state system.
Cantor, who for thirty-five years has been a successful contractor, owner and operator of real estate, met Anderson at a dinner party in New Jersey in late 1981, where the two engaged in conversation which revealed a mutual interest in art and collecting. Anderson viewed the Cantor's collection and left them with his book "American Flower Paintings." It was agreed that Anderson would assist the Cantors to upgrade their collection, and to that end a course of dealing ensued. Anderson would sell works to Cantor, and Cantor would consign works to Anderson for sale. Both parties were familiar with the consignment procedure and approximately fifty to sixty transactions were accomplished between them until at the end of their relationship Cantor had acquired, not solely through Anderson, a collection insured for over $1,900,000.
By the fall of 1983, Anderson had taken possession of a bronze statute by Jacques Lipshitz entitled "Half Standing Figure" and agreed to pay Cantor $45,000 net or return the statute to Cantor on five days notice. By November 27, Cantor obtained a written confirmation from Anderson that the balance owed on their open account was $19,000 to be made good by December 2, 1983, which it was not. In December, 1983 Anderson took possession of a painting by Maurice Prendergast entitled "Seascape" and again agreed to pay Cantor $45,000 net or return the painting to Cantor on five days notice. Additionally, Anderson took possessing, of a painting by Maurice Vlaminck entitled "Street in Montmarte" and agreed to pay Cantor $20,000 net or return the painting on five days notice.
On December 8, 1983, Anderson delivered Cantor's Prendergast painting entitled "Seascape" to Gallery Bellman as security for a debt owed by Anderson to Gallery Bellman in the amount of $36,000. Anderson sold the Vlaminck to a Mr. Avram Lebor and sold the Lipshitz statue between December 4, 1983 and January 1, 1984 and never disclosed the sale to Cantor.
Confronted with consistent past slow payments and doubts about the story being told to him about the Lipshitz, and his inability to verify the situation with respect to the articles consigned, Cantor became increasingly apprehensive, despite his knowledge that Anderson's co-worker, Umbach, came from a well-to-do family.
In December Anderson showed Cantor a transparency of the Renoir which he had obtained on written consignment from Wildenstein. The provenance of the work did not include a bill of sale since it had been acquired in Europe ten or fifteen years ago and had been held in inventory since that time and was covered by Wildenstein's floater insurance. Anderson was quoted a sale price of $160,000 by Wildenstein. According to Cantor, he did not like the work and would not take it "on a bet."
By January 4, 1983 Cantor had consulted with attorneys and demanded the return of the consigned works and on January 6 demanded either cash or security from Anderson to forebear any longer. Anderson sent the Renoir and a Dubuffet to Cantor's home on January 6. Cantor refused to sign a receipt for the Renoir, and Anderson directed that it be left by the delivery service. No contemporaneous written ...