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THE

AMERICAN LAW REGISTER.

JANUARY 1883.

AUCTION SALES.

The auction-sale—from augeo, to gradually increase-is, as its name imports, of Latin origin, having been introduced by the Romans, to dispose of spoils or captives taken in war. Such sales took place on the open field, or before the victor's tent; a spear being erected in the ground to which was attached a red streamer to attract purchasers; whe e perhaps comes our present custom of the red flag at every auction door. To be sold under the spear, ' sub hasta, was therefore to be sold to the highest bidder at or by public auction.

The usual method of the auction sale is, of course, to commence with the lowest bidder and gradually advance to the highest, but in Holland the mode of sale, called Dutch Auctions, is in the reverse order; the article being offered at the highest price stated, and a purchaser called for at that sum, the price being gradually lowered until a purchaser is found. These are called auctions, although “ Sales by Decretion” would more exactly describe them. Dutch auctions are sometimes resorted to in this country, an instance of which may be found in Village of Deposit v. Pitts, 18 Ilun 475.

Some difference of opinion exists whether such sales should be called "sales at auction or “sales by auction;" but whichever be the more correct, the phrase “auction sales” would apparently suffice. Let us trace the progress of this sale and see when and

VOL. XXXI.-1

how various liabilities arise under it, and the nature and conse

quences thereof.

The owner of goods sends his property to an auction store. This act alone prima facie gives the auctioneer authority to sell them by auction. As selling is his business and his only business, he has a right to infer, in the absence of other instructions, that the owner sends them to him for this purpose.

And by the English law goods sent to a public auction room for sale, are, while there, exempt for distress for rent due from the auctioneer: Adams v. Grane, 1 Cr. & M. 380, 3 Tyrw. 326 ; Brown v. Arundell, 10 C. B. 54; Williams v. Holmes, 8 Exch. 861.

The owner may when sending his goods to an auctioneer stipulate that they shall not be sold below a certain sum, and if the auctioneer disregards these instructions and sells for a less price, he is liable to the owner, like any other agent, for disobeying his principal's directions : Steele v. Ellmaker, 11 S. & R. 86; Wolfe v. Luyster, 1 Hall 146 : Hazul v. Dunham, Id. 655; Wilkinson v. Campbell, 1 Bay 169.

And in such case the only safe way would seem to be, for the auctioneer not to start the sale unless the minimum price is first offered; for according to Lord MANSFIELD's opinion in the leading case of Bexwell v. Christie, Cowper 395 (1776), if the goods are once set up the auctioneer is bound to sell to the highest bidder, whether the required price is reached or not; and therefore he is not liable to the owner for selling at a less amount.

It has been said that the auctioneer's authority to sell may be revoked at any time before sale, even after the bidding has commenced; and that subsequent purchasers are bound by such revo cation: Manser v. Back, 6 Hare 443; and in Corryolles v. Mossy, 2 La. 504, it was held that the owner may withdraw the property, even after the sale has commenced, if the bid had not been accepted, and the article struck off, though the Louisiana Code may have influenced the decision. On the other hand if the owner of goods leaves them in the possession of the auctioneer and gives no notice of the revocation of his authority, a subsequent sale to a bona fide bidder would be valid. See Gunn v. Gillespie, 2 U. C. Q. B. 124. And there are still stronger reasons, as we shall see, why after the auction has once commenced the owner has no right to countermand the sale, and forbid the auctioneer to strike off the goods, or withdraw them from the sale.

But however that may be, it is clear that in other respects the auctioneer is bound to obey his instructions, and if directed to sell at auction he has no right to sell at private sale; and whether the buyer in such case could or could not lawfully claim the goods, the auctioneer is liable to his principal for this breach of duty : Marsh v. Jelf, 3 F. & F. 234; and see Me Mechen v. Mayor, fc., 3 llar. & J. 534.

And conversely if authorized only to sell at private sale, he has no right to sell by auction; and if he does so, the purchaser cannot hold the property, if the circumstances are such as to “put him on inquiry": Towle v. Leavitt, 23 N. H. 361.

But to proceed. The auctioneer duly advertises the goods for sale at a day named. Persons attend at the time and place. The goods are then withdrawn, and no sale takes place. Have the would-be buyers any claim on the auctioneer for their loss of time and expenses in attending, relying upon the unconditional announcement that the sale would actually take place? Is there any contract or implied warranty on the part of the auctioneer that the goods shall be put up? It seems not.

The advertisement of an auction sale is not exactly an offer of the goods to the highest bidder, but rather a declaration of an intention to offer them—an offer to offer--and consequently it was recently held there is no liability on the part of the auctioneer to those who attend the expected sale, for their time and expenses, the advertisement having been made in good faith : Harris v. Nickerson, L. R., 8 Q. B. 286 (1873); and Spencer v. Harding, L. R., 5 C. P. 561, so far as goes, is in the same direction. It might be different if false and

representations had been made; for in the very same year, the same court decided that if a person knowing he did not own certain property, and therefore could not sell or lease it, should fraudulently advertise it for sale or lease, and others were thereby induced to expend time and money in examining the property, procuring appraisements, &c., for the purpose of buying or leasing, such pretended owner would be liable in tort for the deceit, for the expenses so incurred: Richardson v. Silvester, L. R., 9 Q. B. 34. And see Blackburn, J., in Mainprice v. Westley, 6 Best

But if the property be once actually put up, and bids are given and received, under an advertisement or statement that the sale is to be “ without reserve," or that it will be sold to the highest bid

it fraudulent

& Sm. 427.

der," it seems that the highest bona fide responsible bidder is entitled to it; and that either the owner or the auctioneer is liable in some form of action, if he refuses to strike it off to such bidder. Doubtless the auctioneer may, for the purpose of securing sufficient bids, and preventing a sacrifice, reasonably adjourn the sale to some other day, and await future offers. This power is reasonable for the protection of the owner, and is a well settled right in auction sales : Richards v. Holmes, 18 How. 143; Hosmer v. Sargent, 8 Allen 97; Dexter v. Shepard, 117 Mass. 480; Russell v. Richards, 11 Me. 371; Tinkom v. Purdy, 5 Johns. 345.

But if after waiting a reasonable time no higher bidder appears, the last and highest bidder certainly seems to have a just claim to the property. It is sometimes said-nay, very often said that the auctioneer is not bound unless he actually strikes off the property; and that as the buyer may retract his bid at any time before the hammer comes down, so, until that event the auctioneer may retract his cffer, and refuse to strike it off ; for the alleged reason that one party is never bound unless the other is; and Payne v. Cave, 3 T. R. 148, is relied upon for this principle; re-asserted in Blossom v. Railroad Co, 3 Wall. 206, and many other places.

But if that is ever true, can it be so when the sale is expressly advertised to be “without reserve, or that the property “will be sold to the highest bidder ?” It seems that such a proposal is a standing offer to sell to whoever shall finally become the highest bidder; and therefore that the auctioneer becomes bound by such offer the moment a person so far accepts it as to bid, and proves to be in fact the highest bidder. Such an advertisement excludes any interference by the vendor or auctioneer, direct or indirect, which can under any possible circumstances affect the right of the highest bidder to be declared the purchaser.

It may be the sale is not an entirely complete sale, so as to vest the present title in the thing sold, until the hammer comes down. But if that be so, and if the bidder could not maintain replevin for the identical chattel, does it follow he might not have some form of action for breach of the auctioneer's implied agreement and obligation to strike off the property to the highest bidder as he had advertised and promised to do; a breach of an executory contract to sell if not a contract of sale. This is a familiar distinction in private sales. A private purchaser has an action against a private seller who refuses to deliver and complete his

may

executory contract to sell, although he has no complete title to the specific thing, but only damages for not having it. Why not in the auction or public sale? If not, an auction sale is but a farce ?

But it may be asked what binds the auctioneer to let the highest bidder have the goods ? What is the consideration for such a contract or promise on his part ? Evidently the promise of the bidder to take the goods and pay for them the sum. A promise to buy is always a good consideration for a promise to sell. But it be said the promise of the buyer is voidable, that he may retract his bid at any moment before the hammer comes down, and Payne v. Cave certainly so holds. So does Fisher v. Seltzer, 23 Penn. St. 308. Be it so. Still a voidable promise is always sufficient to support one on the other side not voidable. An infant's promise to buy things not necessaries, though voidable, will support an adult's promise to sell them to him. One is bound, the other may retract. So of a promise voidable for duress, fraud, or because only oral under the Statute of Frauds. It is not universally true, as so often asserted, that neither party is bound unless both are. In all cases of unilateral contracts the reverse is true. tion sale is quite analogous to other public offers, as for rewards, &c. Why is the person offering a reward for lost property or information bound to pay the moment the thing is done by any one ? A. says, "I will

pay $100 to any one who will return my lost dog." B. returns him. That closes the contract. A. might have retracted before, and if in an equal public manner as his offer, he might not be liable for a subsequent return.

So the auctioneer promises to sell and deliver the goods to whoever will bid the most for them. A. bids the most, he does exactly what the auctioneer asked for, and fulfils the exact condition of his offer. Why should not the promise to sell and deliver from that moment become binding? The auctioneer may retract his offer to sell and withdraw the goods before any body has bid, for up to that moment no one has become the highest bidder. Up to that moment no one bas brought back

The auc

the lost dog.

But after such bid is made, it is too late; the dog is returned. The only difference between the two cases is that it may not be known at the moment of a bid by Mr. A., that he is the highest bidder, as Mr. B.

may bid more; but if in due time no one does bid more

, then it is proved that Mr. A. is the highest bidder, and, if he has not retracted in the meantime, he is in law still repeating and

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