Budget Crunch Forces Museum to Sell Bierstadt Landscape : Art: The struggling Southwest Museum hopes to raise $1.5 million to boost its endowment fund.

The Southwest Museum has quietly consigned to auction an important 1864 landscape by the American painter Albert Bierstadt in hopes of raising at least $1.5 million to boost the struggling museum’s endowment fund.

The Bierstadt in question, “Mount Hood in Oregon,” is one of fewer than a dozen very large paintings completed by the artist early in his career that portray American landscape scenes.

Museum officials and lawyers familiar with the situation said the Bierstadt’s status had been clouded by litigation filed by the museum against a descendant of the woman who donated the work to the museum in 1926. Los Angeles County Superior Court records indicate that an out-of-court settlement was reached in the suit, which involved questions of title to the painting, only days before the museum shipped the painting off to Christie’s in New York, where it is to be sold on May 23.

Preliminary estimates of the selling price were listed by Christie’s as between $1.5 million and $2 million, but some experts in American landscape art of the period have said the painting might bring as much as $4 million, depending on market conditions.

The work, which is 6x10 feet, had not been on public view at the Southwest Museum in nearly 10 years. The museum board first held discussions about deaccession of the Bierstadt at least two years ago after museum officials concluded that they would be unable to follow through on plans to increase the Southwest’s American art holdings, establishing a collection-within-the-collection of which the Bierstadt would have been a nucleus.

“Mount Hood in Oregon” is significant, experts said, because it is one of perhaps only a half dozen large examples of Bierstadt’s work in which the subject is a faithfully portrayed, strictly American scene. The painting was one of six or seven Bierstadt works exhibited at the 1876 Philadelphia Centennial celebration.

The work is from the early period of Bierstadt’s career when he was establishing himself as one of the most commercially successful painters of his time. Bierstadt first saw the Rocky Mountains in 1858 when he served as a member of a government survey party. He went on to create a body of Western landscape scenes that became immensely popular in the 1860s and 1870s.

As Bierstadt matured, however, he began to mix details of European scenes into his work. His taste for grandiose landscape portrayals subsided and Bierstadt’s reputation went into eclipse. A native of Germany, Bierstadt came to the United States in 1832 and died in New York in 1902 at the age of 72.

Court records indicate the litigation, between the Southwest Museum and John Farquhar, apparently an heir to the estate of Georgina Jones, who originally gave the painting to the museum, was settled on Feb. 22. But the records also show the existence of a confidentiality agreement between the museum and Farquhar under which both parties agreed to keep all details of the court proceeding secret.

File records and other information about the case obtained by The Times, however, indicate that the suit over title to the painting led to negotiations last year that apparently centered on Farquhar’s assertion that he was entitled to share in proceeds from the sale. At one point, the museum agreed to abide by a requirement that the painting be sold by the end of 1991 as a condition for terminating the suit.

The court file also showed that discussions were held about setting up an interest-bearing account for money generated by the auction, pending resolution of the suit. Sources familiar with the litigation said the judge hearing the case strongly urged both sides to reach an out-of-court resolution late last year.

Jerome Selmer, the museum’s director, declined to discuss the case. Timothy J. Harris, a lawyer representing Farquhar, refused to provide details, as well. Harris specifically declined even to say where Farquhar resides.

“The board decided they would (sell the painting off). It has been discussed over the years,” said Selmer. “The decision (about what to do with the money) hasn’t really been made yet. There have been some informal discussions, but no action has been taken on that yet.”

In recent years, the Southwest Museum has struggled to cope with budget problems that at one point led the museum to enter into merger negotiations with the Los Angeles County Museum of Natural History. At the height of the budget crunch, the museum temporarily closed its library--reopening the facility only after receipt of a large cash donation from television preacher Gene Scott.