Scottish Court of Session Decisions

The Sale of Goods Act 1893, sec. 58, enacts—“In the case of a sale by auction… . (2) A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer or in other customary manner. Until such announcement is made any bidder may retract his bid.”

In December 1903 Herbert George Fenwick raised an action against (1) Macdonald, Fraser, & Company, Limited, Perth, and (2) Claude Hamilton, of Sundrum, Ayrshire. The conclusions of the action were—(1) for declarator “That the sale by public roup of the Sundrum herd of Aberdeen Angus cattle belonging to the defender Claude Hamilton, which took place within the Perth Auction Market, Perth, on 19th September 1903, conducted by the defenders Macdonald, Fraser, & Company, Limited, as auctioners, being unreserved, the highest bona fide bidder for each lot composing said herd was entitled to be preferred as purchaser; and (2) that the pursuer being the highest bona fide bidder for the bull ‘Margrave of Ballindalloch,’ being lot 50 of the catalogue applicable to the sale, was and ought to have been declared by the defenders Macdonald, Fraser, & Company, Limited, to be the purchaser of said lot at the price of £44, 2s. offered by him; (2) that the defenders should be ordained to deliver to the pursuer the said bull upon payment to them of the said sum of £44, 2s., and the defenders should be ordained, conjunctly and severally or otherwise severally, to make payment to the pursuer of the sum of £30, and in the event of their failing to give delivery to the pursuer of the said bull within such time as the Court might appoint of the further sum of £100.”

The pursuer averred—“(Cond. 1) On 19th September 1903 the Sundrum herd of Aberdeen Angus cattle belonging to the defender Claude Hamilton, was by said defender exposed for sale by public auction in the Perth Auction Market, Perth. In terms of the catalogue under which the sale was conducted by the defenders Macdonald, Fraser, & Company, Limited, said Sundrum herd was offered for unreserved sale. A copy of said catalogue is herewith produced. (Cond. 2) The pursuer attended said sale and was an offerer for lot 50 of the catalague, i.e., the bull ‘Margrave of Ballindalloch.’ His offer, 42 guineas, was the highest bid made at the sale for said lot, and accordingly he was the purchaser in terms of the conditions of sale, and ought to have been preferred by the auctioneer to said lot. The auctioneer who was conducting the sale was John Maclaren Fraser, a director of the defenders Macdonald, Fraser, & Company, Limited. Instead, however, of declaring the pursuer to be the purchaser, as he was bound to do in terms of the conditions under which the said lot was exposed, the said John Maclaren Fraser withdrew the lot, intimating that the exposer had a reserve of 150 guineas on it. No intimation of a reserve was made by either of the defenders before said lot was exposed for sale. (Cond. 3) The pursuer attended said sale for the purpose of purchasing said bull, and made the offer to buy the animal upon the footing that the sale was, as it professed to be, without reserve. Accordingly he protested at the time that Mr Fraser, the auctioneer, had no right to withdraw the said bull… . As both defenders have refused to hand over the bull, as they are bound to do, the pursuer has been compelled to bring the present action. (Cond. 4) The pursuer has suffered loss and damage by the wrongful act of both defenders. He incurred considerable expense in going to the bid at the said auction market, and has been deprived of the bull. His loss so suffered is not less than £30. If the defenders fail to deliver the bull to the pursuer he will suffer loss in addition to said sum to the extent of £100.”

The catalogue of sale produced contained, inter alia, the following conditions of sale:—“( a) Conditions of Sale.—(1) The cattle will be exposed separately according to the numbers in the following catalogue, and the highest offerer on each lot will be preferred to the purchase—each offer exceeding the former by at least one guinea. … (3) The exposers reserve the usual power to make one offer for each animal. (4) All purchases must be settled for immediately

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after the sale in cash to Macdonald, Fraser, & Company, Limited, auctioneers… . (7) The auctioneer is appointed judge of the sale, to whom are hereby submitted all disputes and differences of every kind which may arise in relation to the sale, either between exposers and offerers or among offerers themselves, and his decision shall be final and binding on all parties. ( b) Note.—The Sundrum herd, which was founded a few years ago on the very best strains of blood, is now offered for unreserved sale… . The drafts from Pitpointie and Auchnague are well worthy of attention from breeders… . The drafts are offered because both herds are considerably overstocked.” …

The pursuer pleaded—“(1) The sale of the Sundrum herd being a sale by public auction, et separatim, being in terms of the catalogue under which it was conducted an unreserved sale, decree in terms of the declaratory conclusions of the summons ought to be pronounced. (2) No notice that the sale was subject to a reserve having been made by either of the defenders to the members of the public bidding at said sale, the pursuer is entitled to decree in terms of the declaratory conclusions of the summons. (3) The pursuer being the highest bona fide offerer for lot 50 under said catalogue is entitled to delivery of the bull ‘Margrave of Ballindalloch’ upon payment of £44, 2s. as concluded for. (4) The defenders having by their wrongful actings deprived the pursuer of the possession of said bull are liable to him in damages. (5) The pursuer having suffered loss and damage to the extent sued for, decree ought to be pronounced therefor, with expenses. (6) In the event of the defenders failing to deliver the bull to the pursuer they ought to be found liable to him in the further sum concluded for in that event.” The defenders Macdonald, Fraser, & Company, Limited, pleaded—“(1) No title to sue. (2) The action is incompetent. (3) The averments of the pursuer are irrelevant, and insufficient to support the conclusions of the summons. (4) The pursuer's statements so far as material being unfounded in fact, the defenders should be assoilzied. (5) The pursuer not having sustained any loss or damage through the fault of these defenders, they are entitled to absolvitor.”

The defender Claude Hamilton pleaded—“(1) The pursuer's statements are irrelevant and insufficient to support the conclusions of the summons. (2) There having been no sale to the pursuer this defender should be assoilzied. (3) The bull in question having been exposed for sale subject to a right of a reserved bid to this defender as set forth in the signed conditions of sale, the claim made by the pursuer is not well founded. (4) The pursuer's averments so far as material being unfounded in fact, this defender should be assoilzied. (5) In respect of the reference constituted under the conditions of sale, the action should be sisted until the determination of the arbiter has been obtained on the questions mentioned in ans. 3. (6) Esto that the auctioneer exposed the said bull for sale unconditionally as alleged by the pursuer, this defender is not bound by any contract made with the pursuer on this footing, in respect that the auctioneer in so acting exceeded the scope of his authority as the defender's agent.”

On 12th March 1904 the Lord Ordinary ( Kyllachy) assoilzied the defenders from the conclusions of the action.

Note.—“In this case I am of opinion, as against the defenders Macdonald, Fraser, & Company, Limited, the action is excluded by the fact, which is not disputed, that they acted in the matter in question as agents of a disclosed principal, and that the pursuer does not allege that they exceeded their authority. The case falls I think clearly within the principle of the case of Mainprice v. Westley, 1865, 34 L.J., Q.B. 229. It is not I think possible to represent the pursuer's case as founded on conspiracy to defraud or other delict. On his own statement the question is only at most one of breach of contract.

“But I think the pursuer's case fails also, and as against both defenders, upon its merits. The pursuer's first complaint is, that although the conditions of sale provided that ‘the exposer reserves the usual power to make one offer for each animal,’ there was a note which followed prefixed to the particulars of the animals advertised to be sold—a note which described the defender Mr Hamilton's herd as being to be ‘offered for unreserved sale.’ But the announcement thus made in the said note must if possible receive a construction consistent with the express terms of the conditions of sale, and it appears to me to be quite reasonable to read the reference to ‘unreserved sale’ as meaning only as regards the Sundrum herd the sale was to be of the whole ‘herd’ without exception, and not merely a ‘draft’ from the herd as in the other lots belonging to other exposers after described. That meaning, quite, I think, satisfies the language, and on the whole I think it is the true meaning.

The pursuer's second complaint is, that assuming the exposer's right to a reserved bid, the auctioneer in fact withdrew the animal in question from the sale, merely mentioning the owner's reserved bid and its amount, but not formally announcing the bid and calling for any further advance.

I must say I think this question is hypercritical, and raises a question of form and not of substance. If the amount of the exposer's bid had not been announced it would have been different; but the amount being duly stated, it was of course quite open to the pursuer, if he desired to bid higher, to do so and secure the purchase. I see no reason to think that if he had done so there would have been any difficulty.

I may say further that I greatly doubt whether both this point and the other point as to the construction of the note are not both matters which properly fall within the clause of reference to the auctioneer as judge of the roup. But the pursuer does not plead upon the reference, and the

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defenders succeeding upon the merits do not, I assume, desire to do so.

On the whole I think the defenders fall to be assoilzied with expenses.”

The pursuer reclaimed, and argued—The Sundrum herd was offered for sale “without reserve.” This negatived the condition in the catalogue that the exposers were entitled to make one bid for each animal. “Without reserve” barred all bidding on behalf of the exposer, and meant that the property exposed was to be sold to the highest bidder. All auction sales were without reserve unless otherwise stated. If there was a sale by auction without reserve and the lot was exposed and was bought in by the owner or the auctioneer on his behalf, or was bid up by a white bonnet, the bona fide bidder who made the last bid was entitled to insist on being preferred as the highest bidder—Bell's Prin., sec. 131 (1); Ersk. iii. 3, 2, note 97 by Lord Ivory; Benjamin on Sales (4th ed.), 462 to 465; Cree v. Davie, December 1, 1810, F.C.; Grey v. Stewart, July 7, 1753, M. 9560; Bexwell v. Christie, 1776, 1 Cowper 395, opinion of Lord Mansfield, 396; Faulds v. Corbet, February 25, 1859, 21 D. 587; Anderson v. Croall & Sons, Limited, November 27, 1903, 6 F. 153, 41 S.L.R. 95. Sections 58 (3) and (4) of the Sale of Goods Act 1893 showed that the Act contemplated three situations in a sale by auction, viz. ( a) with a reserve, ( b) without reserve, and ( c) where one bid by exposer was allowed. The Act had not altered the former law on the subject. Both the owner and the auctioneer were necessary parties to the contract, and were therefore liable— Woolfe v. Horne, 1877, 2 QBD 355; Levy & Co. v. Thomsons, July 12, 1883, 10 R. 1134, 20 S.L.R. 753. Condition 7 of the catalogue did not apply. There was no clear bargain that the auctioneer was to be the judge as to whether he had performed his own duty. His office was simply to see that both sides got fairplay during the sale— Strachan v. Auld, March 19, 1884, 11 R. 756, 21 S.L.R. 747.

Argued for the defenders Macdonald, Fraser, & Company, Limited—An agent was not responsible if he acted for a disclosed principal. In this case the principal was disclosed, and the auctioneers were therefore not liable— Hanson v. Roberdeau, 1792, Peake's Cases 120; Story on Agency, 9th ed. 321. A buyer was not entitled to sue both the principal and the auctioneer. If he did so he must be held to have elected to sue the principal— Ferrier v. Dods, February 23, 1865, 3 Macph. 561. The case fell within the principle of Mainprice v. Westley, supra. On the other points he agreed with the argument for the defender Hamilton.

Argued for the defender Hamilton—There was no completed sale here, as in terms of section 58 (2) of the Sale of Goods Act 1893 there was no contract of sale by auction till the hammer fell. The pursuer had never purchased the bull, and had no claim as purchaser— Warlow v. Harrison, 1858, 28 L.J., Q.B. 18; 1859, 29 L.J., Q.B. 14. The note to the conditions of sale did not interfere with the conditions. A sale might be “without reserve” and yet the owner might have a right to bid.— Dimmack v. Hallett, 1886, L.R., 2 Ch. App. 21. The pursuermust choose to sue either the auctioneer or the owner. He could not sue them concurrently. If the auctioneer was independent and liable qua auctioneer, the owner was not liable, as he did not act at the sale. Condition 7 applied, as the dispute arose at the sale, and it was no objection that the auctioneer was mixed up with the question — Buchan v. Melville, February 28, 1902, 4 F. 620, 39 S.L.R. 398.