Rowley v. D'Arcy
| Decision Date | 07 January 1904 |
| Citation | 69 N.E. 325,184 Mass. 550 |
| Parties | ROWLEY v. D'ARCY. D'ARCY v. ROWLEY. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Exceptions from Superior Court, Suffolk County; Edward P. Pierce, Judge.
Actions by C. W. Rowley, as assignee of the firm of Berkman Bros., against one D'Arcy, to recover the price of property purchased at an assignee's sale at auction, and by D'Arcy against Rowley, as assignee, to be relieved from the sale. From a judgment in favor of the assignee in both cases, D'Arcy brings exceptions. Overruled.
Frank N. Nay and Leon M. Abbott, for purchaser.
George R. Swasey, Clarence W. Rowley, and John S. Salter, for assignee.
The principal question in these cases is whether the defendant D'Arcy can be held to pay any further sum under a written contract of sale made between the parties, or is entitled to recover back what he has already paid, on the ground that he bought the property at auction, at which, unknown to him, fictitious bids were made to raise the price, and in consequence of which he was deceived and defrauded. As a verdict was ordered for the assignee, the evidence is to be considered in the light most favorable to this contention. It was understood by the parties to these suits that there was to be a final sale of the rights of the debtors in the property described in the contract, to be held at the office of the assignee, and at the time appointed they and other creditors of the debtors attended. The property was offered for sale by the assignee, and bids were called for, and made by different persons. And it appears that, in response to a call for bids by the assignee, some of the creditors would make a bid; then the bidding would cease for a time, and they would leave the room, apparently for consultation between themselves, after which they returned, and bidding would be resumed. All the proceedings appear to have been conducted with great deliberation, and a period of four hours elapsed between the time when the property was put up and when it was sold. The conduct of the bidders and the manner of bidding does not seem to have aroused at the time any suspicion in the mind of the defendant D'Arcy that the sale was not being fairly conducted, and it is to be noted in this connection that during all this period his counsel was present to assist and advise him, so far as advice might be deemed necessary. Finally the successful bid or offer was made by the buyer and accepted by the assignee in writing, and this was followed by, and formed the basis of, the contract in suit. While some of the conditions that attended the sale are unusual, yet the characteristic features of a sale by auction are found. At a time duly appointed and announced, property to which the vendor had a good title is openly put up and offered for sale, bids are made, and it is sold to the highest bidder. Such a sale must be considered and treated as having been made by auction.
It was clearly the purpose of the assignee and of the creditors present, and who made bids, to realize for the property the highest obtainable price; and in good faith, by proper means, they might lawfully carry out this purpose, in order to prevent a sacrifice of the estate of the insolvent debtors. Phippen v. Stickney, 3 Metc. 384, 388, 389. But a combination by them to enhance the price to be obtained by fictitious bids at a sale to be made without reserve to the highest bidder would be a fraud practiced upon those who bid without knowledge of the arrangement, and give to the buyer a right to avoid the sale. Curtis v. Aspinwall, 114 Mass. 187, 19 Am. Rep. 332. From the testimony of one of the...
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