This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
(s) Warlow v. Harrison, (1858) 1 E. & E. 295; 28 L. J. Q. B. 18; (1859) 29 L. J. Q. B. 14; Woolfe v. Home, (1877) 2 Q. B. D. 534.
(t) Fleet v. Murton, (1871) L. R. 7 Q. B. 126; 41 L. J. Q. B. 49; Ariadne Steamship Co. v. James Mckelvie & Co., 1922, 1 K. B. 518. Cf. Chapman v. Smith, 1907, 2 Ch. 97.
(u) Collen v. Wright, (1857) 8 E. & B. 647; 27 L. J. Q. B. 215; Brett v. Ellis and Jones v. Dyke, Sug. 14th ed. 812, 813; Starkey v. Bank of England, 1903, A. C. 114; 72 L. J. Ch. 402; Anderson v. Croall, (1903) 41 Sc. L. R. 85. See also Gaby v. Driver, (1828) 2 Y. & J. 549; Wood v. Baxter, (1883) 49 L. T. 45; Yonge v. Toynbee, 1910, 1 K. B. 215; Simmons v. Liberal Opinion, Ltd., 1911, 1 K. B. 966.
(x) Heatley v. Newton, (1881) 19 Ch. D. 326; 51 L. J. Ch. 225; and) Ingram v. Gillen, 44 Ir. L. T. 103.
(y) Spittle v. Lavender, (1821) 2 Brod. & B. 452.
An auctioneer is liable to his principal in damages for any loss occasioned. by his negligence (b), but is entitled to an indemnity for any loss incurred by him in carrying out his principal's instructions'(c).
To the vendor.
On a sale of land an auctioneer has no right to sue in his own name. His right to sue depends on the written contract alone, and unless the contract is so framed as to render the auctioneer the ostensible vendor, he cannot, having signed the contract as agent for the purchaser(d), maintain an action against the purchaser in his own name(e); but he can, it seems, maintain the action when an entry in the auctioneer's sale-book has been made by the auctioneer's clerk on the purchaser's behalf (f). An auctioneer who accepted, with the vendor's consent, the purchaser's I.o.u. for the deposit, has been allowed to sue for it in his own name (g).
Auctioneer cannot sue the purchaser.
Unless especially authorised, the auctioneer has no power to receive more than the deposit (h). In respect of money which he is authorised to receive, he is in a fiduciary position, and may come within the Debtors Act, 1869 (i); and if he allows the purchaser to retain the deposit or any other part of the purchase-money which he is authorised to receive, on his personal or any other security, he does so at his own risk (k). And where the auctioneer is authorised to receive payment, he is not justified in taking a bill of exchange instead of cash (l); but he may take the purchaser's cheque in lieu of cash (m), though he is not compelled to do so (m); and his liability to the vendor for taking a cheque, when not expressly authorised to do so, seems to depend upon the reasonableness of his action under the circumstances of the case (o). At auctions it would be very inconvenient if the auctioneer was always bound to insist on the deposit being paid in cash; but where the sale is not at an auction, the agent would have no implied authority to accept a cheque (p).
Deposit and purchasemoney.
(z) Keighley, Maxsted & Co. v. Durant, 1901, A. C. 240; 70 L. J. K. B. 662; and see Union Bank of Australia v. Mcclintock, 1922, 1 A. C. 240.
(a) Union Bank v. Munster, (1887) 37 Ch. D. 51; 57 L. J. Ch. 124.
(b) Parker v. Farebrother, (1853) 1 C. L. R. 323; Hibbert v. Bayley, (1860) 2 F. & F. '48.
(c) Adamson v. Jarvis, (1827) 4 Bing. 66; 5 L. J. O. S. C. P. 68; Kelner v. Baxter, (1866) L. R. 2 C. P. 174; 36 L. J. C. P. 94; Natal Land Co. v. Pauline Colliery, 1904, A. C. 120; Williams v. Lister, (1913) 109 L. T. 699.
(d) Farebrother v. Simmons, (1822) 5 B. & Ald. 333.
(e) Cherry v. Anderson, (1876) Ir. R. 10 C. L. 204; Wright v. Dannah, (1809) 2 Camp. 203.
(f) Bird v. Boulter, (1833) 1 N. & M. 313; 4 B. & Ad. 443; Graham v. Musson, (1839) 5 Bing. N. C. 603, 608; 8 L. J. N. S. C. P. 324.
(g) Cleave v. Moors, (1857) 3 Jur. N. S. 48; Hodgens v. Kean, 1894, 2 Ir. R. 657.
(h) Sykes v. Giles, (1839) 5 M. & W. 645; 9 L. J. N. S. Ex. 106; but see Henry v. Hammond, 1913, 2 K. B. 515.
Until the purchase is completed the auctioneer is a stakeholder of the deposit, unless the conditions provide that he shall hold it as agent for the vendor, and should not part with it except by consent of both vendor and purchaser (q). Where he receives the deposit as agent for the vendor he must not, without express authority, pay it to the vendors solicitor (r). But on sales by the Court he may pay the deposit to the solicitor having the conduct of the sale for the purpose of its being paid into Court (s). If both claim it, or on an action being brought against him to recover the deposit, he may take proceedings by way of interpleader under R. S. C, Ord. LVII. (t). It seems clear that the auctioneer, who has a lien on the deposit when paid to him for his charges and commission (u), may deduct them without prejudice to his right to interplead (x). But the amount held by him must not be in dispute (y).
Holds deposit as stakeholder.
(i) Crowther v. Elgood, (1887) 34 Ch. D. 691; 56 L. J. Ch. 416.
(k) Williams v. Milling ton, (1788), 1 H. Bl. 81, 86; Wiltshire v. Sims, (1809) 1 Camp. 258; Sug. 14th ed. 48.
(l) Sykes v. Giles, (1839) 5 M. & W. 645; Williams v. Evans, (1866) L. R. 1 Q. B. 352; 35 L. J. Q. B. 111.
(m) Farrer v. Lacy, Hartland & Co., (1885) 31 Ch. D. 42, 46; 55 L. J. Ch. 149.
(n) Johnston v. Boyes, 1899, 2 Ch. 73; 68 L. J. Ch. 425.
(o) Farrer v. Lacy, Hartland & Co., sup.
(p) See Pape v. Westacott, 1894, 1 Q. B. 272; 64 L. J. Q. B. 222; Blumberg v. Life Interests, etc. Corporation, 1897, 1 Ch. 171; 1898, 1 Ch. 27.
(q) See Smith v. Jackson, (1816) 1 Madd. 620; Burrough v. Skinner, (1770), 5 Burr. 2639; Berry v. Young, (1788) 2 Esp. 640, n.; Spurrier v. Elderton, (1803) 5 Esp. 1; Edwards v. Hodding, (1814) 5 Taunt. 815; Furtado v. Lumley, (1890) 6 T. L. R. 168.
(r) See Brown v. Farebrother, (1888) 58 L. J. Ch. 3.
If the auctioneer is made a defendant to an action for specific performance, and the deposit brought into Court, he may deduct his charges and expenses, subject to ,the question as to who shall ultimately bear the same (z); but where the deposit is of small amount, he ought not to be made a defendant, unless he refuses to pay it into Court (a). If the contract be rescinded by the purchaser on the ground of fraudulent misrepresentations made by the vendor 'to the auctioneer, and innocently communicated by the latter, the fraud will be a good defence to an action by the vendor against the auctioneer who has received the deposit or purchase-money and repaid the same to the purchaser (b).