Online Encyclopedia

AUCTIONS

Online Encyclopedia
Originally appearing in Volume V02, Page 895 of the 1911 Encyclopedia Britannica.
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AUCTIONS and AUCTIONEERS. An auction (Lat. audio, increase) is a proceeding at which people are invited to compete for the purchase of property by successive offers of advancing sums. The advantages of conducting a sale in this way are obvious, and we naturally find that auctions are of great antiquity. Herodotus describes a custom which prevailed in Babylonian villages of disposing of the maidens in marriage by delivering them to the highest bidders in an assembly annually held for the purpose (Book i. 196). So also among the Romans the quaestor sold military booty and captives in war by auction—sub pasta—the spear being the symbol of quiritarian ownership. The familiarity of such proceedings is forcibly suggested by the conduct of the Praetorian Guard when Sulpicianus was treating for the imperial dignity after the murder of Pertinax. Apprehending that they would not obtain a sufficient price by private contract, the Praetorians proclaimed from their ramparts that the Roman world was to be disposed of by public auction to the best bidder. Thereupon Julian proceeded to the foot of the ramparts and outbid his competitor (Gibbon, vol. i. ch. v.). Though, however, auctions were undoubtedly common among the Romans both in public and private transactions, the rules whereby they were governed are by no means clearly enunciated in the Corpus furls Civilis. In England the method of conducting auctions has varied. In some places it has been usual to set up an inch of lighted candle, the person making the last bid before the fall of the wick becoming the purchaser. By an act of William. III. (1698), this method of sale was prescribed for goods and merchandise imported from the East Indies. Lord Eldon speaks of "candle-stick biddings," where the several bidders did mot know what the others had offered. A " dumb bidding " was the name given to a proceeding at which a price was put by the owner under a candlestick with a stipulation that no bidding should avail if not equal to it. In a " Dutch auction " property is offered at a certain price and then successively at lower prices until one is accepted. According to the practice now usual in England, a proposed auction is duly advertised, and a printed catalogue in the case of chattels, or particulars of sale in the case of land, together with conditions of sale, are circulated. Sometimes, in sales of goods, the conditions are merely suspended in the auction room. At the appointed time and place, the auctioneer, standing in a desk or rostrum, " puts up " the several lots in turn by inviting biddings from the company present. He announces the acceptance of the last bid by a tap with his hammer and so "knocks down " the lot to the person who has made it. Sometimes property is offered on lease to the highest bidder. " Roup " is the Scottish term for an auction. A bid in itself is only an offer, and may accordingly be retracted at any time before its acceptance by the fall of the hammer or otherwise. Puffing is unlawful. Unless a right to bid is expressly reserved on behalf of the vendor, he must neither bid himself nor employ any oneelse to bid. When a right to bid has been expressly reserved, the seller or any one person (but no more) on his behalf may bid at the auction. If it is simply announced that the sale is to be subject to a reserved or upset price, no bidding by or on behalf of the seller is permissible: it is only lawful to declare by some appropriate terms that the property is withdrawn. Where a sale is expressed to be without reserve, or where an upset price has been reached, the auctioneer must, after the lapse of a reasonable interval, accept the bid of the highest bona fide bidder. By not doing so he would render the vendor liable in damages. The auctioneer must not make a pretence of receiving bids which are not in fact made, as it would be fraudulent to run up the price by such an artifice. A "knock-out" is a combination of persons to prevent competition between them-selves at an auction by an arrangement that only one of their number shall bid, and that anything obtained by him shall be afterwards disposed of privately among themselves. Such a combination is not illegal. A " mock auction " is a proceeding at which persons conspire by artifice to make it appear, contrary to the fact, that a bona fide sale is being conducted, and so attempt to induce the public to purchase articles at prices far above their value. Those who invite the public to enter the room where the supposed auction is proceeding, or otherwise endeavour to attract bidders, are called " barkers." A conspiracy to defraud in this way is an indictable offence. American law is in general the same as the English law with regard to auctions. As to bidding by the vendor, however, it is less stringent. For, though puffing or by-bidding, as it is often called, will, under both systems alike, render an auction sale voidable at the option of a purchaser when it amounts to fraud, the weight of authority in the United States is in favour of the view that an owner may, without notice, employ a person to bid for him, if he does so with no other purpose than to prevent a sacrifice of the property under a given price. By a charter of Henry VII., confirmed by Charles I., the business of selling by auction was confined to an officer called an outroper, and all other persons were prohibited from selling goods or merchandise by public claim or outcry (see Henry Blackstone's Reports, vol. ii. p. 557). The only qualification now required by an auctioneer is a Ii' ence on which a duty of £10 has to be paid, and which mist be renewed before the 5th of July in each year. A liability to a penalty of £loo is incurred by acting as an auctioneer without being duly licensed. The duty formerly imposed upon the purchase-money payable by virtue of a sale at auction was abolished by an act of 1845. An auctioneer is bound under a penalty of £20 to see that his full name and address are displayed before the commencement of an auction and during its continuance in the place where he conducts it. He is the agent of the vendor only, except in so far that, after he has knocked down a lot to the highest bidder, he has authority to affix the name of the latter to a memorandum of the transaction, so as to render the contract of sale enforceable where written evidence is necessary. An auctioneer does not, by merely announcing that a sale of certain articles will take place, render himself liable to those who, in consequence, attend at the time and place advertised, if the sale is not in fact proceeded with, provided he acts in good faith. One of the chief risks run by an auctioneer is that of being held liable for the conversion of goods which he has sold upon the instructions of a person whom he believed to be the owner, but who in fact had no right to dispose of them. The number of auctioneers' licences issued during the year ended the 31st of March 1908 was in England 6639, in Scotland 76o, and in Ireland 839. A central organization having its headquarters in London, the Auctioneers' Institute of the United Kingdom, was founded in 1886, in order to elevate the status and further the interests of auctioneers, estate agents and valuers. It has nearly 2000 members. (H. HA.)
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