HC Deb 21 May 1867 vol 187 cc919-24

Bill considered in Committee.

(In the Committee.)

Clause 5 (Rule respecting Sale without Reserve).


objected to the clause as it stood, and proposed that, with the view of making the law on the subject with which it dealt simple and plain, the seller of land should be prohibited from bidding at sales at which he caused it to be stated that the property was to be sold without reserve. If, however, a reserved price was announced, then the auction should be left open and the matter left to right itself. He made that proposal in order that no unnecessary restriction should be imposed in those cases, and in making it he was aware that he had the authority of several ex-Lord Chancellors against him; but, although he had the greatest respect for their authority, he did not think the clause was one to which in its present shape the Committee ought to assent. It was represented that the auctioneers were favourable to the Bill, whereas the view which they took of it really was that the latter part of it was good, and that sooner than lose that part they would not oppose the passing of clauses which they believed would be inoperative.


said, that the auctioneers had not only agreed to, but had petitioned in favour of the entire Bill, the objections which they entertained to it having been removed since it had taken its amended shape. It, besides, was sanctioned by the authority of Lord St. Leonards, who was intimately acquainted with the subject, as well as by that of another ex-Lord Chancellor, who was a member of the Government to which the hon. Gentleman had belonged. It introduced, as seemed to be supposed it did, no new restrictions, and was intended to do away with a very doubtful exception established by the Courts of Equity to a well known rule of law which invalidated a sale at which more than one puffer was employed. There could, he maintained, be no more gross system of fraud than that which the hon. Gentleman sought by his Amendment to legalize, and which was somewhat like those practices which one might witness on a racecourse, where two or three confederates were in league to take in the public. If these Amendments were carried, it would be practically the same thing as rejecting the Bill, for there would be no chance of such a measure passing in the House of Lords; and, if such Amendments were made, then, as Lord St. Leonards had said, the title of the Bill ought to be altered to "a Bill to legalize fraudulent Sales by Auction."


said, the hon. Member for Sandwich (Mr. Knatchbull-Hugessen) did not propose to legalize fraud, but to enable persons owning land to sell it without a number of minute restrictions, which would prevent them from effecting a sale without being involved in a Chancery suit. If fair notice were given that the sale was to be a sale with reserve, all the bidders would be put upon their guard as to the conditions; and it was idle to say that a fraud would be practised upon them. He should like to hear the opinion of the Attorney General whether it would not be better to confine the clause to a simple declaration that the sale was either to be with or without reserve, or whether it should go on to specify that the right to bid was reserved. There was an extraordinary recital at the beginning of the clause to the effect that owners of land were engaged in selling their property in an illegal manner; and he should propose that the first four lines and a half of the clause containing the recital should be omitted.

Amendment proposed, in page 2, line 11, to leave out from the words "And whereas," to the words "as follows: That," in line 16, inclusive.—(Mr. Ayrton.)


said, they had already agreed to the 4th clause, which affirmed that there was now a conflict between the Courts of Law and Equity in respect to the validity of sales of land by auction where a puffer had bid, although no right of bidding on behalf of the owner was reserved; the Courts of Law holding that all such sales were absolutely illegal, and the Courts of Equity under some circumstances giving effect to them; but that even in Courts of Equity the rule was unsettled. It could not therefore be wrong in a subsequent clause to follow that up by saying, as was done in the recital to which the hon. Member for the Tower Hamlets objected, that many such sales of land as now conducted were illegal.


said, the clause to which the hon. and learned Attorney General referred related to an entirely different question. He denied that there was any illegality in the mode of selling land referred to in the clause, and therefore he would vote for the omission of the words that said so.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided:—Ayes 28; Noes 26: Majority 2.


proposed to omit the words requiring the specification of the person in whom the right of a reserve bid is vested.


assented to the Amendment.

Words struck out.

Clause, as amended, ordered to stand part of the Bill.

Clause 6 (Rule respecting Sale subject to Right of Seller or his Agent to bid once or oftener).


proposed to leave out from "be" to end of clause, and insert— With reserve or to that effect, it shall be lawful for the seller, or any person or persons on his behalf, to bid at such auction in such manner as he or they may think proper. There were combinations among buyers which ought to be provided for as well us combinations among sellers. He was afraid that by the Bill they were striking a blow at the principle of sales by auction. The old doctrine was a good one—caveat emptor—let the buyer take care of himself. It was, he thought, the business of every purchaser to make up his mind as to the value of the property for which he was bidding and how much he would give, quite irrespective of the persons who were bidding against him.


said, that the measure had been introduced into the other House by a noble and learned Lord who was not only an ex-Lord Chancellor as he had been described, but who had been the master and the great authority on this subject of vendor and purchaser from the early part of the present century, if not before. The Bill had also the sanction not only of an ex-Lord Chancellor, but of an expectant Lord Chancellor, the hon. and learned Member for Richmond. It was said that a buyer ought to take care of himself; and no doubt these sham biddings would have no effect on an experienced and strong-minded man. But there were others who might be led in the excitement of a sale by sham bidders and puffers to give more for the property than it was worth. But was there no such thing as legislating for the protection of weakness and inexperience? He thought it right to legislate on this subject. Buyers might say they would not purchase and go away, and that would not deceive any one; but it was very different when the seller put up a dummy to deceive persons in the auction-room.


, whilst admitting the great authority of Lord St. Leonards in interpreting the law as it stood, thought that any hon. Member of that House was quite as capable as that noble Lord of dealing with this matter, which was simply that of saying how an auctioneer's business should be carried on. The clause as it stood provided that the seller should state in writing his reserved price; but this would simply lead to a very large sum, which would afford perfect protection, being named in each case. There could be no fraud if the public were told that the sale was with reserve. The Amendment asserted the right of the seller to protect himself against those who made a livelihood by attending sales of landed estates for the purpose of asking damaging questions with a view to depreciate the value of the land, and afterwards to buy it themselves, and have a "knock out," the proprietor not being allowed under the clause to interfere, though he happened to be standing by.


said, the subject had received a good deal of knocking about; but, as one not learned in the law, he desired to express an opinion that it was unnecessary and unreasonable to require a man to state in writing what he would take for his property, as generally a seller had full confidence in his auctioneer, and would be perfectly willing to leave the whole matter to him. Intending purchasers ought to be protected against sham bidders attending the sale in the interest of the owners. He objected to any provision which would permit dummies to bid and thus deceive bonâ fide bidders. Such a proceeding was tricky, and not honest, and he was afraid the Amendment would legalize it. He also suggested that the words "or to that effect," should be omitted, as they were calculated to give rise to litigation.

Amendment agreed to.

Further Amendments made.

Clause, as amended, agreed to.

Remaining clauses agreed to.


then moved the insertion of the following clause:— It shall not be lawful for any auctioneer to place out at interest, for his own use and benefit, any sum of money which he may have received as deposit on any property he may have sold by auction, but if any such interest be obtained for such deposit it shall be paid and accounted for to the purchaser who has made such payment.

Mr. REARDEN, Mr. KNATCHBULL - HUGESSEN, and Mr. SELWYN objected to the clause.

Clause negatived.

On Motion that the Preamble be agreed to,


expressed a hope that his hon. and learned Friend (Mr. Selwyn), having undertaken to deal in the manner contemplated by this Bill with the sale of land by auction, would also bring in a Bill assimilating the law with regard to the sale of other descriptions of property.


said, that the Bill had reference exclusively to sales of land, and to the practice of opening the biddings in Courts of Equity, where it was not likely that property other than land would frequently be disposed of, and hence there was no such incongruity as might be supposed in special legislation. He admitted that it would be very desirable to deal, if possible, with "knock-outs" and frauds of various descriptions; but it was imposing rather a wide and difficult task upon a private Member to require him to initiate legislation having for its object to make all horsedealers, teadealers, and others honest. His humble services were at the disposal of his hon. Friend if the Government thought fit to introduce such a Bill.


thought the Government would act wisely in declining the invitation.


said, that as the Government had aided so strongly in getting this Bill through Committee, they were rather committed to extending its principle to other kinds of property.


said, that his hon. Friend the Secretary for the Treasury and his hon. and learned Friend (Mr. Selwyn) ought to put their heads together and frame a Bill applying to other kinds of property.

Preamble agreed to.

House resumed.

Bill reported, with Amendments; as amended, to be considered on Thursday.