— Auction and Auctioneers.
512 Sect.
Sect.
8.
Damping the Sale.
Damping."
8.
Damping
the Sale.
1042. Improper or fraudulent acts, which are likely to prevent the property put up from realising its fair value and to " damp " the sale, will invalidate any purchase by persons guilty of or privy to such acts, and will justify the auctioneer in withdrawing the property {u) An agreement between two or more persons not to bid against each other at an auction, even if amounting to what is popularly known as a " knock-out," would not seem to be illegal or to invalidate the sale (a). .
Knock-out.
Part V. Auctioneer as stakeholder.
Premature
payment to wrong party.
Purchaser entitled.
Loss of deposit falls upon vendor.
—
Deposit.
1043. In the absence of special agreement, the auctioneer receives the deposit as stakeholder for the vendor and the purchaser (b) ; and it is his duty to hold it until the completion or rescission of the contract, and to pay it to the party ultimately entitled (c). If the auctioneer pays the money prematurely to either vendor (d) or purchaser, and it turns out that the person paid was not entitled to it, the auctioneer is liable to make good the money to the party to the contract eventually held to be entitled (e). Where the purchaser is entitled to the return of the deposit, the auctioneer can set up the purchaser's right to the money in answer to any claim to it made by the vendor (/). 1044. Although the auctioneer the vendor's agent
that
is
the loss
a stakeholder, he is so far the deposit sustained by
of
v. Morrice (1788), 2 Bro. Ch. Cas. 326; Mason v. Armitage {l^m), Fuller v. Ahrahams (1821), 6 Moo. 0. P. 316. (a) The dictum in. Levi v. Levi (1833), 6 C. & P. 239, suggesting that such an agreement is an unlawful conspiracy, does not seem to be based on any sound principle or to be good law, though it has been adopted in a number of text-books. Galton v. Emuss (1844), 13 See Dooluhdass v. BamloJl (1850), 15 Jur. 257 L. J. (OH.) 388 Be Careiu's Estate Act (1858), 28 L. J. (cH.) 218 ; Heffer v.
Twining
{n)
13 Yes. 25
ILartijn (1867), 36 L. J. (cH.) 372. {b) Harington v. Hoggart (1830), 1 B. & Ad. 577. See Edwards v. Hodding (1814), 5 Taunt. 815, where it was held that a solicitor who was also auctioneer received the purchase-money as auctioneer and not as solicitor and agent for the vendor. As to receipt of a cheque by the auctioneer in payment of deposit, see p. 503, ante. (c) Gray v. Gutteridge (1827), 3 0. & P. -40; Yates v. Farehrother (1819), 4 Madd. 239; Edivards v. Hodding, supra; Burrough v. Skinner (1770), 5 Burr. 2639 Furtado v. Lumley (1890), 54 J. P. 407 Spurrier v. Elderton (1803), 5
Esp. 1 Spittle v. Lavender (1821), 2 Brod. & Bing. 452 Berry v. Young (1788), 2 Esp. 640 (n.) The auctioneer may pay Stevens v. Legh (1853), 2 C. L. E. 251. over to the vendor even when the latter is in insolvent circumstances {White v. Bartlett (1832), 9 Bing. 378). {d) Eor form of indemnity in such a case, see Encyclopaedia of Eorms, Vol. II.,
p. 462. (e)
Burrough
Hodding,
v.
Skinner, supra;
Furtado
v. Luniley,
supra;
Edivards
supjra.
(/) Stevens v. Legh, supra;
Murray
v.
Mann
(1848), 2
Excb. 538.
v.
