110 Ga. 72 | Ga. | 1900
Stoyell C. Parsons' and Elizabeth Catherine Mass, by her father as next friend and guardian, brought suit in the superior court of Chatham county against the executors of the last will and testament of Sarah M. Parsons, and others, alleging in their petition that they were joint owners of certain described realty in the city of Savannah, and praying that a certain deed alleged to be a cloud upon the title of petitioners might be delivered up to be canceled, and that the executors take charge of the realty and dispose of the same for the benefit of petitioners. When the case came on for a hearing a decree was entered, providing that the trust deed referred to be set aside and canceled, and that the executors “take charge of and dispose of the property set out in said petition, in accordance with the terms of compromise as agreed on,” and to this end advertise the property in a designated way for sale at public outcry before the door of the court-house of Chatham county, during the legal hours of sale, to the highest bidder, and report the sale to the court for confirmation. The sale was had in the manner prescribed in the decree, and on the day fixed in the advertisement the property was sold in several parcels and knocked down to different purchasers. The executors reported the sale to the court, when it appeared that one of the parcels had been knocked ■down to T. IT. McMillan, the plaintiff in error, for the sum of $14,000. In answer to the rule nisi calling upon him to show cause why the sale should not be confirmed, McMillan set up that the price at which the property was knocked down to him was the result of “puffing” or “by-bidding” at the sale, done at the instance of parties owning an interest in the property, and in fraud of his rights as purchaser; that the property was run up by the owners thereof, without his knowledge, by bids that were not real or genuine but made for the purpose of puffing the property, and that such conduct rendered the sale illegal and released him from the obligation to pay for the property. After hearing the evidence the judge held that sufficient cause had not been shown to authorize him to refuse to confirm the sale, and an order was passed confirming the sale and' directing
It appears from the evidence that the petitioners in the original proceeding, Miss Mass and Dr. Parsons, were, under the will of Sarah M. Parsons, entitled each to a one-half interest in the property involved in the present case. Mr. Owens was an attorney at law representing Miss Mass. Mr. Seabrook was an attorney at law representing Dr. Parsons. Mr. Owens was at the sale' and made several bids on the property, one of these bids being immediately before the bid of McMillan at which the property was knocked down to him. Mr. Owens was not bidding in his own interest. lie was bidding for his client by authority given him to bid such an amount as in his discretion Avould be necessary to prevent the property from being sold at a sacrifice. It also appears that Mr. OAvens and Mr. Seabrook, representing their respective clients, had agreed that the property should not be sold for less than $13,000, and that in pursuance of this agreement Mr. OAvens became a bidder at the sale; and it is to be inferred from the testimony that, if the property had been knocked doAvn to him, the purchasers would have been neither himself nor Mr. Seabrook, but their respective clients. It also appears that out of the proceeds of the sale different items of costs and expenses connected Avith the litigation were to be paid by the executors; the amount of such items Avhich Avere due and unpaid at the date of the hearing of the petition brought to confirm the sale being more than $250, The auctioneer Avho conducted the sale was one of the executors, and it appeared that neither in his capacity as auctioneer nor as executor did he have any connection whatever Avith the arrangement made between Mr. Chvens and Mr. Seabrook, and there was no reason whatever why he could not, if the proj>erty had been knocked down to Mr. OAvens, have treated him as the purchaser and invoked the aid of the court to that end. It appeared distinctly from the testimony that if there was any puffing or by-bidding, neither the auctioneer nor the executors had
There is no decision of this court bearing directly upon this question. The presence at auction sales of persons who bid for the purpose of inflating the value of the property in behalf of those interested in the sale is a matter at the present time of very common occurrence, and has been from the time that auction sales were first known. This practice has brought about many controversies which resulted in numerous cases, and the effect of such conduct has been discussed by many Judges and text-writers. A person of the character referred to is usually denominated a puffer, but he is sometimes referred to as a by-bidder, capper, decoy duck, white bonnet, or sham-bidder'. The first time that this question seems to have come before the English courts, so far as the reported cases are concerned, was in the case of Walker v. Nightingale, 3 Bro. P. C. Cas. 263, which was decided in 1726. It was held by the House of Lords in that case that a puffer could not recover compensation for his services, since they were contrary to good faith. The next case in point of time was Bexwell v. Christie, 1 Cow. 395, which was decided by the court of King’s Bench in 1776. This was a decision by Lord Mansfield, and as it was rendered prior to the date named in our adopting statute it is controlling authority in this State. Thornton v. Lane, 11 Ga. 500. Eor this reason it is necessary to examine that case with some care. An action was brought against an auctioneer for selling a horse at the highest price bid for him, contrary to the owner’s express
“The matter in question is in itself of small value; but in respect of the principles by which it must be governed, it is a question of great importance. Since the trial I have mooted the point with many who are not lawyers, upon the morality and rectitude of the transaction. The question is, whether a bidding by the owner of goods at a sale under these conditions, namely, ‘that the highest bidder shall be the purchaser, and if a dispute arise, to be decided by a majority of the persons present, ’ is a bidding within the meaning of such conditions of sale.
“There is no express undertaking on the part of the defendant, nor is it, as has been ingeniously said, a direction that there should be no bidding under 15 l., which might be fair. But the direction given to the defendant is, ‘not to let the horse go under 15 l./ which implies there might be a bidding under that sum. The question then is, whether the owner can privately employ another person to bid for him? The basis of all dealings ought to be good faith; so, more especially in these transactions, where the public are brought together upon a confidence that the articles set up to sale will be disposed of to the highest real bidder. That could never be the case, if the owner might secretly and privately enhance the price, by a person employed for that purpose; yet tricks and practices of this kind ■daily increase, and grow so'frequent that good men give in to the ways of the bad and dishonest in their own defence. But such a practice was never openly avowed. An owner of goods set up to sale at an auction never yet bid in the room for himself. If such a practice were allowed, no one would bid. It is a fraud upon the sale, and upon the public. The disallowing it is no hardship upon the owner. Bor if he is unwilling his goods should go at an under price, he may. order them to be set up at his own price, and not lower. Such a direction would be fair. Or he might do as was done by Lord Ashburnham, who sold a large estate by auction; he had it inserted in the conditions of*77 sale, that he himself might bid once in the course of the sale; and he bid at once 15,000 or 20,000 l. Such a condition is fair because the public are then apprised and know upon what terms they bid. In Holland it is the practice to bid downwards.
“The question then is, is such a bidding fair ? If not, it is no argument to say it is a frequent custom. Gaming, stock-jobbing, and swindling are frequent. But the law forbids them all. Suppose there was an agreement to abate so much, which is the case where goods are sold by one person in the trade to another ; they abate sometimes 10 or 15 per cent. Such an agreement between the owner and a bidder, at a sale by auction, would be a gross fraud. What is the nature of a sale by auction? It is that the goods shall go to the highest real bidder. But there would be an end of that, if the owner might privately bid upon his own goods. There is no contract with the auctioneer. He is only an agent between the buyer and seller. He may fairly bid for a third person who employs him, but not for the owner.
“In this case there is another fraud upon the public. Tor by the catalogue the goods are described to be The goods of a gentleman deceased, and sold by order of the executor.’ Hpon this representation many people would attend to bid on a supposition that the goods were necessarily to be sold at all events, • whether valuable or not valuable; whereas they might have their suspicions if they were the property of persons living. Horses, or any other species of property, belonging to persons that are dead, are not so likely to be faulty as those which are parted with by persons in their lifetime.
“We all remember the sale of a gentleman’s wines, where vast quantities had been sent in belonging to other persons; and all sold at a very high price under an idea they were his. The consequence was, most of the buyers were taken in.
“Therefore, upon full consideration, I am of'opinion, that a bidding by the owner in the manner contended for, and agreeable to the directions given in this case, would have been a fraud upon the sale; and consequently that this action against the defendant as auctioneer can not be maintained.”
In Howard v. Castle, 6 T. R. 642, the decision of Lord Mans
In the case of Peck v. List, 23 W. Va. 338, s. c. 48 Am. Rep. 398, which is one of the leading American cases on the subject, the English decisions above referred to, as well as many others by the English common-law and chancery courts, are collected and commented on in the opinion of Mr. Justice Green. We have referred to such of those decisions as we deem necessary to the present discussion. The decision of Lord Mansfield must be treated as binding authority in this State, as there are none of our own decisions in conflict with the rule he there lays down. Attention was called in the argument to the fact that the record in the case of Locke v. Willingham, 99 Ga. 297, disclosed that certain charges of the trial judge bearing upon the subject under consideration in the present case were under review, and that the effect of the ruling in that case, which was merely a head
An examination of the authorities above cited, as well as of many others which might b'e cited, will show that the conclusions reached by the American courts on this question are far from being'uniform. Some have followed the rule laid down by Lord Mansfield; others the rule announced by Lord Lough-borough; and still others are not in exact accord with either, but are modifications of one or the other. It is not possible to reconcile the American decisions on this subject, and it would not be profitable to undertake to do this, even if it were possible. We may lay it down as a rule without exception, that the employment of a puffer at an auction sale is such a fraud as will vitiate the sale. Such being the rule, the question now to be determined is, who is a puffer ? Mr. Justice Green in Peck v. List, cited above, thus defines a puffer: “A puffer in the strict
In many of the cases it is said that a person employed by the owner to secretly bid upon the property would be a puffer. In still others it is said that a person so employed by the vendor would be a puffer. In still others it is stated that a person so employed by the seller would be a puffer; and in still others it is declared that a person employed by those who are pecuniarily interested in the property would be a puffer. In dealing with this subject the terms, owner, vendor, seller, and person pecuniarily interested in the property or its proceeds, are to be given the same meaning, and they all refer to one who, without regard to what may be his peculiar interest in the property, must have absolute control of the auction sale and is at liberty of his own volition to discharge any bidder from liability on account of his bid. If the person conducting the sale can, notwithstanding the agreement of one who has a larger interest in the proceeds of the sale, hold the bidder responsible for the amount of his bid, then a person employed by the person having such larger interest in the proceeds would not be a puffer within the meaning of the law. Bidding by such a person would not be fraudulent, and therefore the sale would not be affected by the employment of such a person. An auctioneer is the agent of the person who directs him to make the sale. The sale is, therefore, controlled by one who directs the auctioneer. When an auction sale is declared by the auctioneer to be without reserve, this is, in effect, a statement that the person who directs the auctioneer to make the sale, no matter what his interest in the' property may be, has empowered the auctioneer to sell the property to the highest bidder, and that the person directing the
Such being the right of one who' is -interested in the property sold or in the proceeds of the sale, who is himself not conducting the sale and who has not such control over the sale as that he can make a binding agreement with a bidder that he will not be held responsible for his bid, it can not be a fraud for such person to -employ one to bid at a sale in his behalf, even though the fact that the bidder is bidding in behalf of one interested in the
The matter may thus be summed up: If a person who has such control of an auction sale that he of his own volition can release a bidder from all responsibility for his bid employs another upon an understanding of that character to bid at the sale without disclosing for whom he is bidding, for the purpose of preventing the property from selling at a' sacrifice or for the-purpose of making the same bring more than its actual value, the bidding by one or more persons under such employment is such a fraud upon the real bidders that the sale will be declared void at their instance. The only lawful way in which such a person can prevent a sacrifice of the property sold is to fix a minimum price, of which public notice shall be given, or make public the fact that he, either by himself or by others, will be a bidder at the sale. On the other hand, the mere fact that the person is interested in the property to be sold or in the proceeds of the sale will not preclude him from either bidding himself or from procuring another to bid, either openly or secretly, in his behalf, without regard to what the agreement may be with
Judgment affirmed.