HL Deb 08 February 1866 vol 181 cc191-3

said, he rose to call the attention of their Lordships to the law relating to biddings at sales of estates by auction, and would conclude by introducing a Bill upon that subject. In point of fact, there was scarcely an occasion on which an estate was put up for sale by auction without some one being employed to bid on the part of the owner. It was a matter—and he believed the only matter—on which there was a conflict between the common law courts and the equity courts; for while the former held that a sale was actually void if any bidder was employed on the part of the owner, it was maintained by the latter that the owner might appoint a person to bid for him up to a certain value, for the purpose, not of unduly stimulating other persons to go on bidding, but of preventing the sacrifice of his property. The law as to auctions of real estate was the only instance yet remaining which was not construed alike in the courts of law and of equity; and it was quite time this discordance should be put an end to. If a man put up an estate by auction, with the common condition that the highest bidder should be the buyer, and should appoint also a person to bid for him, the courts of law would hold that sale to be void, on the ground that the seller, by his "puffer," had bid for himself. A court of equity, on the contrary, if no unfair advantage was taken by the use of a "puffer," would decide that the sale was good. It was discreditable that such a conflict should exist, and he therefore begged to introduce a Bill to amend the present law upon the subject. By the provisions of his Bill an auctioneer was forbidden to bid at the sale of any property cither on account of himself, the owner of the property, or any other persons; but the owner of the estate was permitted to engage a "puffer," who might bid up to a certain price, provided that such price was communicated to him and to the auctioneer in writing before the commencement of the sale. Those provisions would enable a man to insure that his property should not be sold at a price far below its real value, and yet would prevent the public from being induced to give more than the estate was worth by fictitious bidding on the part of either the auctioneer or the "puffer." Great mischief had resulted in past times by allowing auctioneers to bid; and there were numerous instances in which sales had been declared invalid from this practice. There had recently been a decision in a case before the present Lord Chancellor, in which it appeared that the auctioneer and the "puffer" bid eleven times before any bonâ fide purchaser began to bid, and then the property was immediately knocked down to that bidder. His noble Friend on the Woolsack rightly held that this sale was void. He was aware that Lord Loughborough, when Lord Chancellor, had spoken with something like disrespect of the idea that the biddings of one man influenced those of others; but he (Lord St. Leonards), on the contrary, believed that all men were influenced more or less at auctions by the biddings of those around him. In the first place, the biddings at an auction gave some indication of the real value of the property; and, in the second place, a little bit of vanity induced a man to show that he possessed the longest purse. He therefore thought it absolutely necessary that the public should be protected from being taken in by fictitious biddings. In sales under the Court of Chancery, where a bidding was reserved, the sum below which the estate was not to be sold was stated in a sealed paper, which was placed in the hands of the auctioneer, who was not allowed to open it till the sale was commenced. If the bids stopped short of the price stated in that paper, he announced to the persons assembled that no sale had taken place. That was very proper, and this Bill provided that where there was a reserved bidding, as in sales under the Court of Chancery, the sum below which the estate was not to be sold should be stated in writing and delivered to the auctioneer, so that there should be no misunderstanding; and where the biddings were real, but did not come up to the sum fixed, he was to announce that no sale had taken place; but he would then be at liberty to receive any bidding equal to or beyond the sum fixed as the value. An auctioneer acting contrary to the directions of this Bill would be liable to an action for the damage which any real bidder might sustain. There was another provision in the Bill of a different nature. It was not one man in a hundred who knew the extremely important conditions under which auctions took place, and the expense incurred in making up the title was often very onerous. When he came into the hands of his own solicitor, the buyer generally found he had some £200 to pay for making out the title. That expense ought to fall on the seller. The noble and learned Lord concluded by presenting a Bill for amending the Law of Auctions of Estates.


said, that the subject to which the noble and learned Lord had called attention was one of considerable importance, and he thought their Lordships were indebted to the noble and learned Lord for the care he had bestowed on it". His noble and learned Friend would not, he hoped, think that he was treating the proposed enactment with disrespect if he declined at present to enter into a discussion upon it; for it was precisely one of those measures with respect to which, until one saw the Bill and entered into its consideration, clause by clause, it was impossible to say more than that its general object seemed advisable.

Bill read 1a [No. 2.]