2 Bramley v. Alt, 3 Ves. 624: Veazie v. Williams, 3 Story, 620; Wheeler fore, all of the bidders except the purchaser be fictitious bidders, or if the bid immediately preceding that of the purchaser be made by a puffer, the buyer may avoid the sale; for it is evident, that, as he has purchased under the false supposition that he is contending with real bidders, he has been deceived wilfully and injuriously, and the very condition of an auction sale, which is, that the highest real bidder shall take the subject-matter, is broken. But if a person be employed merely to bid up the subject-matter of sale to a certain price, in order to prevent a sacrifice of the property, and the price be afterwards raised by real bidders, after one of whose bids the purchaser makes the last bid, the sale will be valid, because there has been no fraud in purpose, and no damage or fraud in fact.1 v. Collier, Mood. & M. 125; Howard v. Castle, 6 T. R. 642; Bexwell v. Christie, 1 Cowp. 396; Smith v Clarke, 12 Ves. 477; Crowder v. Austin, 3 Bing. 368; Sugden on Vend. 18,19; Conolly v. Parsons, 3 Ves. 625, note. See Towle v. Leavitt, 3 Fost. 360, an able case on this subject. Staines v. Shore, 16 Penn. St. 200; Green v. Baverstock, 14 C. B. (n. 8.) 204 (1863). See ante, § 637 and notes.
1 The rule of law applicable to this class of cases is far from being distinctly settled. The cases are quite contradictory, and cannot be harmonized; but the weight of doctrine seems to be upon the whole the rule propounded in the text. The first case in which the question as to the effect of puffers at an auction sale came before the court was in Bexwell v. Christie, 1 Cowp. 396, in which Lord Mansfield held the practice to be a fraud upon the buyer and on the public. "The question, then, is," said he, " whether the owner can privately employ another person to bid for him. The basis of all dealings ought to be good faith; so more especially in these transactions, where the public are brought together upon a confidence that the articles set up for sale will be disposed of to the highest real bidder: that could never be the case if the owner might secretly and privately enhance the price by a person employed for that purpose; yet tricks and practices of this kind daily increase, and grow so frequent, that good men give in to the ways of the bad and dishonest in their own defence. But such a practice was never openly avowed. An owner of goods set up to sale at an auction never yet bid in the room for himself. If such a practice were allowed, no one would bid. It is a fraud upon the sale and upon the public. The disallowing it is no hardship upon the owner. For if he is unwilling his goods should go at an under price, he may order them to be set up at his own price, and not lower; such a direction would be fair." This case is recognized and the same rule adopted by Lord Kenyon, in Howard v. Castle, 6 T. R. 643, in which he says: "I will not go into the general reasoning on this subject, because it is very ably stated by Lord Mansfield in the case alluded to. Only part of that reasoning has now been adverted to by the plaintiff's counsel,
Again, the vendor may employ puffers and by-bidders, if he give notice of such fact at the time of the sale, since, in such case, it would not operate as a fraud.1 but the rest of it is applicable to this case. The whole of that reasoning is founded on the noblest principles of morality and justice, - principles that are calculated to preserve honesty between man and man. The acts of Parliament that have been referred to did not intend to interfere with this point, but to leave the civil rights of mankind to be judged of as they were before. In the case cited Lord Mansfield mentioned an instance in which the owner may legally and fairly bid at the auction, namely, where, before the bidding begins, he gives public notice of his intention; and in such a case no duty is to be paid under the acts of Parliament that have been referred to. The circumstance of puffers bidding at auctions has been always complained of: if the first case of this kind had been tried before me, perhaps I should have hesitated a little before I determined it; but Lord Mansfield's comprehensive mind saw it in its true colors, as founded in fraud; he met the question fairly, and made a precedent which I am happy to follow." But Lord Loughborough, in Conolly v. Parsons, 3 Ves. 625, note, questions the soundness of this opinion, and doubts whether "the judgment of one person is deluded and influenced by the bidding of others." He says: "This point comes now before me very much by surprise. I should not have thought the case decided by Lord Mansfield bore much upon it. The last case carries a great degree of authority with it; but I fancy it turned upon the circumstance that there was no real bidder, and the person refused instantly. It was one of those trap auctions that are so frequent in this city. The reasoning goes large certainly; and does not at all convince me. I should wish it to undergo a reconsideration; for if it is law, it will reduce every thing to a Dutch auction, by bidding downwards. I feel vast difficulty to compass the reasoning, that a person does not follow his own judgment because other persons bid; that the judgment of one person is deluded and influenced by the bidding of others. It may weigh, if A., a skilful man, B., a cautious man, and C, a wealthy man, are in competition; but where it is publicly known that persons are employed to bid, it would be very foolish in any one to let himself be so influenced."
" I have seen public advertisements of lots put up again as lots bought in for the owner. If it is considered as a contract with all the world, he cannot countermand the sale and sell by private contract. They meet upon these terms: the seller has fixed the value in his own mind, but hopes to get more; the buyer has done the same, but hopes to get it for less. They stand entirely equal. If it is unfair for the seller to get more, it is equally unfair for the buyer to get it for less. It is not doubted at any sale, except where there is an express stipulation to sell without reserve, that there is somebody latter must be against the party committing the fraud, whether he be the sham-bidder, or the owner, or the auctioneer.1 upon this subject, which, if they do not fully reconcile the cases, are at all events well adapted to subserve the purposes of private justice and convenience, as well as public policy. Where all the bidders at the sale, except the purchaser, are secretly employed by the seller, and yet are apparently real bidders, and the purchaser is misled thereby, and is induced to give a larger price in consequence of their supposed honesty and exercise of judgment, there the sale ought to be held a fraud upon the purchaser, because be has been intentionally deluded by them. But where there are real bidders, as well as secret bidders for the sellers, there, if the last bid before the purchaser's bid be a real bid, and no intentional deceit has been practised by what have been sometimes called decoy-ducks, to mislead or surprise the judgment or discretion either of other real bidders or of the purchaser, there seems to be a solid ground to hold that the sale is valid, and for the very reasons stated by Lord Loughborough and Lord Alvanley. It seems to me that Sir William Grant, in Smith v. Clarke, 12 Ves. 477, 482, has pointed out the true line of distinction in his comments upon the cases; and although he did not then express any positive opinion, it is sufficiently evident what his opinion was, - an opinion entitled to very great weight, for he was among the ablest judges that ever graced the courts of equity of England. He there said: ' After the case of Bramley v. Alt, and what Lord Rosslyn stated to be his strong and clear opinion in Conolly v. Parsons, it would be too much for me to say this is in itself a fraud; unless I could say, every direction by a vendor to any person to bid in his behalf is of itself such a fraud as to vitiate every agreement that takes place at an auction, at which that direction is given. In Bexwell v. Christie, very general and broad principles are laid down by the Court of King's Bench; beyond any that the case immediately before the court required. The subsequent case, Howard v. Castle, proceeded upon the ground of plain and direct fraud; Lord Kenyon stating, that it appeared at the trial to be bottomed in fraud; that it was fraud from beginning to end. There was no real bidder; and there were several bidders for the vendors. Whenever I shall be able to state the same proposition of any case, I shall come to the same conclusion. But it is clear Lord Kenyon had not always entertained the same opinion as to the doctrine in Bexwell v. Christie; for in Twining v. Morrice, he states, with respect to bidders being employed for the vendors, that he does not say the doctrine in Bexwell v. Christie is wrong; but everybody knows that such persons are constantly employed. In Bramley v. Alt, Lord Alvanley expresses his opinion that it is perfectly legal for a man to state a price, below which he would not permit a sale; and his lordship observes, that there is no difference between setting up the lot at a given price, and employing a person to prevent a sale under that price; if