A. Benjamini, Inc. v. Dickson (Tex.App. 1999) 2 S.W.3d 611, involved William Dickson, a consignor, his consignee Houston Gems & Appraising (HGA), and Kenneth Rosenbaum, an employee of HGA.
Rosenbaum, who had unfettered access to the contents of the consignee's safe, took gems belonging to Dickson from that safe and sold them to a third party, Jonathan's Fine Jewelers, who in turn sold them to another person, A. Benjamini, Inc.
The reviewing court acknowledged the rule that "where the real owner, by some act or conduct vests the possession and right to personal property apparently in the seller, he thereby estops himself from setting up a claim to the property as against the purchaser for value without notice. " ( Id. at p. 613.)
"Therefore," said the court, "the question on appeal is whether Dickson's act of consigning the diamonds to HGA clothed Rosenbaum with an indicia of ownership, such that Dickson is estopped from claiming superior right to the diamonds against Benjamini and Jonathan's, good faith purchasers." (Ibid.)
The appellate record in that case demonstrated that Rosenbaum had business cards that were imprinted with his and HGA's names, and he had conducted transactions with Jonathan's Fine Jewelers in the past by stating he was acting on behalf of HGA and presenting his business card. When he presented the stolen gems to Jonathan's, he was accompanied by a woman whom he represented to be the true owner of the gems.
Rosenbaum and the woman represented to Jonathan's that she had inherited the gems and wished to sell them. He did not state he was acting on behalf of HGA, although Jonathan's mistakenly made the assumption that he was. Jonathan's did not verify with HGA that Rosenbaum had authority to broker the gems, nor did it ask the woman for testamentary letters showing ownership.
Moreover, Jonathan's issued checks to Rosenbaum as an individual for the gems. Further, there was no evidence that Dickson vested Rosenbaum with possession of the gems for the purpose of selling them. Based on this state of the record, the court concluded Dickson was not estopped from claiming a superior right to the diamonds over Jonathan's and Benjamini. ( Id. at pp. 613-614.)
In A. Benjamini, the consignee's employee had an established business relationship with the initial buyer of the stolen gems such that when the employee acted in a manner that was different from his past transactions with the buyer (the employee did not present the consignee's business card, he did not state he was acting on behalf of the consignee, and he had the payment checks issued to himself), the buyer was no longer entitled to presume (as he mistakenly did) that the employee was acting on behalf of the consignee when he sold the gems.
Thus, the buyer could not reasonably claim that he believed the employee had authority from his employer to sell the gems.
And since the consignor of the gems had never voluntarily conferred upon the consignee's employee the apparent right to possess the gems as an owner or an agent with authority to sell them, the court rightfully declared the consignor was entitled to have them returned to him.