Jones v. Ballard, 89-CA-1044
| Decision Date | 19 December 1990 |
| Docket Number | No. 89-CA-1044,89-CA-1044 |
| Citation | 573 So.2d 783 |
| Parties | 14 UCC Rep.Serv.2d 731 Bill JONES d/b/a Sunbelt Auctions and Associates v. Dwayne D. BALLARD d/b/a DDB Construction Company. |
| Court | Mississippi Supreme Court |
Jerry L. Bustin, Forest, for appellant.
Robert W. King, King & Spencer, Jackson, for appellee.
Before DAN M. LEE, P.J., and ROBERTSON and ANDERSON, JJ.
Affirmed.
En Banc.
ON PETITION FOR REHEARING
I.
This case requires that we articulate an auctioneer's liability where the title he conveys at public auction contains a fatal defect. The facts reflect that the auctioneer sold stolen goods, and the buyer at auction has sued to get his money back. The Circuit Court entered judgment against the auctioneer summarily. We affirm.
II.
Bill Jones is an adult resident citizen of Scott County who does business as Sunbelt Auctions in Forest, Mississippi. On January 9, 1988, Jones offered for sale at public auction a used John Deere 410-D backhoe. Several days earlier, Robert Luckey of Clinton, Mississippi, had delivered the backhoe to Jones under a consignment agreement which authorized Jones to sell it for an eight percent commission. These facts, however, were not disclosed, and in due course, Dwayne D. Ballard of Clinton, Mississippi, purchased the backhoe at public auction for the sum of $10,500.00. Immediately thereafter, Ballard delivered his check to Jones and took possession of the backhoe.
Ballard improved the backhoe, making certain repairs at an expense of in excess of $1,000.00. Ballard then sold the backhoe to a third party, Stan Black, for the sum of $15,000.00.
On April 22, 1988, Officer Thomas Ward of the Mississippi Department of Public Safety, Criminal Investigation Division, contacted Black and asked to examine the backhoe. After investigation, Officer Ward determined that the backhoe was one that had been stolen from one Sam Thomas in Shelby County, Tennessee, on January 5, 1988--four days before Jones sold it to Ballard at auction. Officer Ward then took possession of the backhoe and returned it to its lawful owner in Tennessee. Understandably miffed, Black contacted Ballard, told him of what had happened, and demanded return of his $15,000.00 purchase price. Under the circumstances, Ballard had no alternative but to accede to the demand and, in fact, refunded what Black had paid him.
Ballard, plaintiff below and appellee here, then looked to Jones, his auctioneer, and demanded that Jones reimburse him for his purchase price and the money he was out due to the work he had done on the backhoe. Jones refused the demand, and, on May 28, 1988, Ballard commenced the present civil action by filing his complaint in the Circuit Court of Scott County, Mississippi, naming Bill Jones, d/b/a Sunbelt Auctions and Associates, as defendant. Ballard charged that under the circumstances, Jones had impliedly warranted that he had title to the backhoe at the time of the auction sale and that the title had proved defective, in consequence of which Ballard was out the $10,500.00 purchase price and the sums he had expended improving the backhoe.
Jones answered and denied the essential allegations of the complaint and thereafter filed a third party complaint against Robert Luckey, demanding indemnity of and from Luckey in the event Jones should be held liable to Ballard. See Rule 14(a), Miss.R.Civ.P. 1 Ballard then moved for summary judgment on his complaint against Jones and supported his motion with his own affidavit and that of Barney Barefield, who also attended the January 9 auction in Forest, Mississippi. The record reflects no formal opposition to the motion and, particularly, no counter affidavits or other materials filed on Jones' behalf. On September 5, 1989, the Circuit Court granted the motion and entered judgment in favor of Ballard and against Jones in the principal sum of $11,500.00 together with interest and costs. The Circuit Court granted Jones' motion for an immediate appeal, his third party complaint against Luckey remaining active on the docket. See Rule 54(b), Miss.R.Civ.P.
III.
What quality of title an auctioneer conveys a purchaser may, of course, be the subject of contract. Insofar as we are aware, this state has never addressed the question of the quality of title the auctioneer is held to convey absent contract. The record before us reflects a conventional public sale held at Jones' auction house in Forest, Mississippi. Nothing before us suggests any special contract or agreement between Jones and Ballard beyond the simple fact that Ballard was the successful bidder for the John Deere 410 backhoe for the sum of $10,500.00 and that Ballard did, in fact, pay Jones that amount.
Years ago, the United States Court of Appeals for the Fifth Circuit made an Erie -guess 2 that we would follow the general rule and hold that an auctioneer impliedly warrants that he has title to that which he sells. McElroy v. Long, 170 F.2d 345, 347 (5th Cir.1948) recognized that an auctioneer who sells property without divulging his principal is considered to be a vendor responsible to the buyer for any deficiency in the title in the goods conveyed. The McElroy court explained that
The fact that [a person] is known to a bidder to be an auctioneer, by profession selling as an agent for others, is of no import and is no notice that he may not be selling his own property.
McElroy, 170 F.2d at 347. More than four decades later, we declare McElroy's Erie -prophesy fulfilled.
This rule--that an auctioneer who fails to disclose his principal--is deemed to warrant title to goods he sells--is widely accepted in other states. See, e.g., Universal C.I.T. Credit Corp. v. State Farm Mutual Automobile Insurance Co., 493 S.W.2d 385, 390 (Mo.App.1973); Abercrombie v. Nashville Auto Auction, Inc., 541 So.2d 516, 518 (Ala.1989); Michigan National Bank v. Michigan Livestock Exchange, 432 Mich. 277, 439 N.W.2d 884, 886 (1989); Masoud v. Ban Credit Service Agency, 128 Misc.2d 642, 494 N.Y.S.2d 598, 600 (1985); Oliver v. Eureka Springs Sales Co., 222 Ark. 94, 257 S.W.2d 367, 368 (1953); see also, 7 Am.Jur.2d Auctions and Auctioneers Sec. 67 nn. 47-50. These courts have replied to the intuitive thought that surely an auctioneer is not acting for himself but selling the property for someone else in language such as this:
That argument proceeds on a mistaken view of the law.... [T]he mere fact that a defendant is acting as an auctioneer is not in itself sufficient notice to provide immunity from liability. The requirement is that auctioneer disclose the name of its principal, and the record in this case is abundantly clear that this was not done.... [Moreover, ... the] bidder was not advised and could not ascertain the name of the selling dealer until after the sale had already been consummated. Under these admitted facts, Auction Company must be held to the obligation of an implied warranty to Banning....
Universal C.I.T., 493 S.W.2d at 391.
The theory of the rule is that an auctioneer is in a better position than buyers at an auction to ascertain the title to property being sold which would indicate the true owners. See State Bank of Independence v. Equity Livestock Auction Market, 141 Wis.2d 776, 782, 417 N.W.2d 32, 34 (App.1987) (quoting PCA v. Equity Coop Livestock Sales Ass'n, 82 Wis.2d 5, 8-9 n. 5, 261 N.W.2d 127, 128 n. 5 (1978); Accord Heritage Bank, N.A. v. Vilsmeier Auction Co., 218...
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