Mcmillan v. Harris
| Decision Date | 28 February 1900 |
| Citation | 35 S.E. 334,110 Ga. 72 |
| Parties | McMILLAN v. HARRIS et al. |
| Court | Georgia Supreme Court |
JUDICIAL SALE—"PUFFERS"—EXECUTORS' SALE!—AGREEMENT WITH ANOTHER TO RUN UP PRICE.
1. One who bids at a public sale, not because of any desire to purchase, but merely for the purpose, either in his own interest or that of another, to run up the price, is not a "puffer, " if, in case his bid is the last and highest, he can be compelled by the person conducting the sale to take and pay for the property; and this is so though, under an arrangement with another or others to whom the proceeds of the sale, or a considerable portion thereof, will ultimately go, he will not be compelled to keep and pay for the property.
2. Accordingly, it is neither contrary to law nor public policy for persons who will be entitled to the proceeds of land sold by an executor under a decree of court to engage a third person to run the property up to a specified price, with the understanding that, if it is knocked down to him, they will take it off his hands.
(Syllabus by the Court.)
Error from superior court, Chatham county; R. Falligant Judge.
Bill by A. B. Harris and others, executors of the estate of Sarah M. Parsons, against T. H. McMillan, to show cause why a judicial sale of decedent's property to him should not be confirmed. From an order confirming the sale, and directing McMillan to pay the amount of his bid to the executors, he brings error. Affirmed.
Denmark, Adams & Freeman, for plaintiff in error.
R. R. Richards, Geo. W. Owens, and A. C. Wright for defendants in error.
OOBB, J. Stoyell C. Parsons and Elizabeth Catharine 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. H. 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 his 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 McMillan to pay the amount of his bid into the hands of the executors. To this ruling McMillan excepted, assigning as error that the decision of the judge was contrary to law and the evidence, that the evidence required a finding that the sale was puffed, and was, therefore, illegal. 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 owninterest He was bidding for his client by authority given him to bid such an amount as, in his discretion, would be necessary to prevent the property from being sold at a sacrifice. It also appears that Mr. Owens 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. Owens became a bidder at the sale; and it is to be inferred from the testimony that, if the property had been knocked down 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 with the litigation were to be paid by the executors; the amount of such Items which were due and unpaid at the date of the hearing of the petition brought to confirm the sale being more than $250. The auctioneer who 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 with the arrangement made between Mr. Owens and Mr. Seabrook, and there was no reason whatever why he could not, if the property had been knocked down to Mr. Owens, 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 any connection with the same, and that it was done without their consent, knowledge, or authority.
The controlling question to be determined is whether the conduct of Mr. Owens in entering into the arrangement with Mr. Seabrook to bid on the property in behalf of their respective clients so as to prevent its sacrifice, and bidding at the sale for that purpose without the expectation of becoming a purchaser himself, was of such a character as to authorize the court to declare that McMillan was misled, and that for that reason the sale was void, and should be set aside. To properly determine this it is necessary to investigate the law of sales at auction, and determine who Is a puffer at an auction, and what conduct would amount to puffing so as to invalidate the sale. 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, 4 Brown, Pari. Cas. 193, 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 Cowp. 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. For this reason it is necessary to examine that case with some care. Au action was brought against an auctioneer for selling a horse at the highest price bid for him, contrary to the owner's express direction not to allow him to go under a larger sum named, and it was held that such an action would not lie, but that it would have been otherwise if the owner had directed the auctioneer to put the horse up at a particular price, and not lower. The opinion of Lord Mansfield in the case was as follows: "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 arises, 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, which might be fair. But the direction given to the defendant is 'that not to let the horse go under £15, ' 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...
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