Porter v. Wertz

Rule of Law:

An owner who entrusts possession of goods to a fraudulent individual, but provides no other indicia of ownership, is not estopped from recovering the goods from a merchant who purchased them without observing reasonable commercial standards of fair dealing, such as verifying the seller's authority.

Facts:

• Samuel Porter, an art collector, purchased a Maurice Utrillo painting in 1969.
• In the spring of 1973, Porter had dealings with Harold Von Maker, a con man using the alias Peter Wertz.
• Porter allowed Von Maker to take possession of the Utrillo painting to hang in his home temporarily, pending Von Maker's decision to purchase it.
• While in possession of the painting, Von Maker used the real Peter Wertz, a delicatessen employee, to sell the painting to the Feigen art gallery.
• The Feigen gallery purchased the painting from Wertz for $20,000 without investigating Wertz's background or his authority to sell the artwork.
• Feigen subsequently sold the painting, which was eventually shipped to Venezuela.
• After a promissory note from a separate transaction with Von Maker was dishonored, Porter discovered Von Maker's fraud but was unaware the Utrillo had been sold.
• On August 13, 1973, Porter and Von Maker executed an agreement where Von Maker falsely assured Porter he still had the painting and would either return it or pay for it within 90 days.

Procedural Posture:

• Samuel Porter and Express Packaging, Inc. sued Richard Feigen Gallery, Inc. and others in the Supreme Court, New York County (a trial court), to recover a painting or its value.
• Feigen asserted affirmative defenses of statutory estoppel and equitable estoppel.
• Following a bench trial, the trial court rejected the statutory estoppel defense but accepted the equitable estoppel defense.
• The trial court dismissed the complaint.
• Porter (as appellant) appealed the dismissal to the Appellate Division of the Supreme Court.