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) Biggs v. Bree, (1881) 51 L. J. Ch. 263; Brown v. Farebrother, sup.
(t) See Farebrother v. Prattent, (1818) 5 Pri. 303; Ex p. Mersey Bocks and Harbour Board, 1899, 1 Q. B. 546; 68 L. J. Q. B. 540.
(u) Robinson v. Butter, (1855) 4 E. & B. 954; 24 L. J. Q. B. 250; Webb v. Smith, (1885) 30 Ch. D. 192; 55 L. J. Ch. 343.
(x) See Yates v. Farebrother, (1819) 4 Madd. 239; Harwood v. Betham, (1823) 1 L. J. O. S. Ex. 180; Cotter v. Bank of England, (1833) 3 M. & Sc. 180; 2 L. J. C. P. 158; Best v. Hayes, (1863) 1 H. & C. at p. 722; 32 L. J. Ex. 129; Attenborough v. St. Katherine's Bock Co., (1878) 3 C. P. D. at p. 454; 47 L. J. C. P. 763; Be Rothschild Freres v. Morrison, Kekewich & Co., (1890) 24 Q. B. D. 750, 753; 59 L. J. Q. B. 557.
(y) Diplock v. Hammond, (1854) 2 S. & G. 141; 23 L. J. Oh. 550.
(z) Annesley v. Muggridge, (1816) 1 Madd. 593; Yates v. Farebrother, (1819) 4 Madd. 239.
(a) Earl of Egmont v. Smith, (1877) 6 Ch. D. 469; 46 L. J. Ch. 356; but if he is joined in an action for rescission, he must submit to give the plaintiff all the relief, to which he can in any event be entitled against him, before he can be dismissed from the suit: Heatley v. Newton, (1881) 19 Ch. D. 326; 51 L. J. Ch. 225.
(b) See Murray v. Mann, (1848) 2 Ex. 538; 17 L. J. Ex. 256; Stevens v. Legh, (1853) 2 C. L. R. 251.
If the estate is re-sold by the vendor, upon the alleged default of the first purchaser, the auctioneer receiving the deposits on both 6ales cannot, it seems, in one suit get rid of the conflicting claims of the vendor and two purchasers (c). In such a case he should pay the money into Court under the T. Act, 1925 (d).
After the purchase is completed, or before, with the consent of the purchaser, the auctioneer may, except in very special cases (e), safely pay the deposit to the vendor, though in embarrassed circumstances (f); if the purchase go off, or the vendor fail to make a title (g), the purchaser may recover the deposit from the auctioneer (h), but neither the purchaser nor the vendor can claim interest, though the auctioneer (as stakeholder) may, unless requested by both parties to invest the deposit, have actually made a profit upon it (i).
Deposit, right to, after completion.
If purchase goes off.
The amount of the auctioneer's remuneration, unless (as it ought to be) it is settled by agreement (k), seems to depend upon custom (l); and even in the trade there appears to be no settled rate of commission (m). In one case (n) the usual charge was by several auctioneers stated to be 5l. per cent. up to the first 500Z. of purchase-money; by others, up to the first 1,000l.; and by most of the witnesses, up to the first 2,000l., with 2l. 10s. per cent, on the remainder. But it is believed that at the present day the scale of fees of the Auctioneer's Institute is generally adopted. An agreement that the auctioneer shall receive nothing if there be no sale, will not deprive him of his commission, if, after he has taken the usual steps preparatory to a sale, the estate be sold by the owner by private contract (o).
(c) Boggart v. Cutts, (1841) Cr. & Ph. 197; 10 L. J. Ch. 314.
(d) S. 63.
(e) See Crossley v. Mills, (1834) 1 C. M. & R. 298, 302; 3 L. J. N. S. Ex. 297.
(f) White v. Bartlett, (1832) 9 Bing. 378; 2 L. J. N. S. C. P. 43.
(g) Gray v. Gutteridge, (1828) 1 Man. & R. 614; 6 L. J. O. S. K. B. 154; Edwards v. Sodding, (1814) 5 Taun. 815.
(h) Gray v. Gutteridge, sup.; Duncan V. Cafe, (1837) 2 M. & W. 244; 6 L. J. N. S. Ex. 81; Burrough v. Skinner, (1770) 5 Burr. 2639; Maberley v. Robins, (1814) 5 Taun. 625; Johnson v. Roberts, (1855) 24 L. T. O. S. 254.
(i) Lee v. Munn, (1817) 8 Taun. 45; Harington v. Hoggart, (1830) 1 B. & Ad. 577; 9 L. J. O. S. K. B. 14; Lord Salisbury v. Wilkinson, (1786) 3 Br. C. C. 44, n.; Browne v. Southouse, (1790) ib. 107; and see Gaby v. Driver, (1828) 2 Y. & J. 549.
(k) Re Page, (1863) 32 Beav. 487.
(l) See Maltby v. Christie, (1795) 1 Esp. 340.
(m) As to the allowance on sales by the Court, see Re Walford, (1889) W. N. 23; 59 L. T. 397. As to when a commission becomes due, see Re Maitland, 1903, W. N. 143; Peacock v. Freeman, 4 T. L. R. 541; Skinner v. Andrews, 26 T. L. R. 340; Knight, Frank & Rutley v. Gordon, 39 T. L. R. 399.
Rule 11 to Part. I. of Sched. I. of the General Order of 1883, under the Solicitors' Remuneration Act, 1881, provides (p) that the scale for conducting a sale by auction shall apply only when no commission (q) is paid by the client to the auctioneer. The intention of the rule is to make the scale fee an inclusive charge for conducting the sale, and to prevent the solicitor from being paid twice over. The solicitor may employ an auctioneer when necessary (r); but, if he does so, must pay the auctioneer out of his own pocket; he cannot charge his client with the scale fee and the auctioneer's commission as well (s); nor can he evade the rule by means of a condition charging the purchaser with the auctioneer's commission (t). If the solicitor elects to charge the auctioneer's commission to his client, he can only charge according to the old system, as modified by Sched. II., for the work done by him (u).
Solicitor's charges on sales by auction.
(n) Re Page, sup.
(o) Green v. Bartlett, (1863) 14 C. B. N. S. 681; 32 L. J. C. P. 261; Rainy v. Vernon, (1840) 9 C. & P. 559; Driver v. Cholmondeley, (1835) ib. n.
(p) As to the amendment of this Order (increasing the amount a solicitor is authorised to charge), see the Solicitors' Remuneration Act General Order, 1925, W. N. (1925) p. 283 (S. R. & O., 1925, No. 755/L. 12), in which the earlier Order is called the General Order of 1883.
(q) Commission here includes all charges by the auctioneer: Drielsma v. Manifold, 1894, 3 Ch. 100; 63 L. J. Ch. 653.
(r) Re Wilson, (1885) 29 Ch. D. 790; 55 L. J. Ch. 627.
(s) Re Peace and Ellis, (1887) W. N. 186; 36 W. R. 61; Drielsma v. Manifold, 1894, 3 Ch. 100; 63 L. J. Ch. 653.
(t) Cholditch v. Jones, 1896, 1 Ch. 42; 65 L. J. Ch. 83.
(u) See Re Lacey, (1883) 25 Ch. D. 301; 53 L. J. Ch. 287; Re Stead, 1913, 1 Ch. 240.
The auctioneer's (or agent's) claim to remuneration will be defeated by any negligence on his part, as to the mode of conducting the sale or otherwise, whereby the sale is defeated (x); and if he negligently misdescribes the property, he will be liable to repay to the vendor the amount claimable by the purchaser in respect of such misdescription (y). An executor or trustee (z) or mortgagee with power of sale (a), or interested agent (b) acting as his own auctioneer, cannot charge commission, unless it can be collected from the trust instrument or mortgage that 6uch was the intention (c).
If auctioneer negligent.
Trustee, etc. cannot claim commission.
In general, loss occasioned by the auctioneer's insolvency or bad faith falls on the vendor as his employer (d); and a mortgagee, adopting his mortgagor's contract for sale, adopts also this liability, as between himself and the purchaser (e), though not as between himself and the mortgagor, where the money is misappropriated by the mortgagor's agent, even though acting also for the mortgagee (f); but a fiduciary vendor will not be personally responsible to his beneficiaries for such loss, if he has acted prudently and under proper advice in the matter (a).
Insolvent, loss falls on vendor.
Sales by auction have been held to be within the Statute of Frauds (h), and would accordingly be within s. 40 of the L. P. Act, 1925, which, as regards contracts for the sale of land or any interest in land, has taken the place of s. 4 of the Statute of Frauds.
Auctioneer, agent within the Statute of Frauds:
(x) Denew v. Daverell, (1813) 3 Camp. 451; Duncan v. Blundrll, (1820) 3 Stark. 6; Jones v. Nanney, (1824) 13 Pr. 76.
(y) Parker v. Farebrother, (1853) 1 C. L. R. 323; Hibbert v. Bayley, (1860) 2 F. & F. 48.
(z) Kirkman v. Booth, (1848) 11 Beav. 273; 18 L. J. Ch. 25.
(a) Mathison v. Clarke, (1854) 3 Dr. 3; 24 L. J. Ch. 202; 25 ib. 29: and see Furber v. Cobb, (1887) 18 Q. B. D. at p. 509; 56 L.j. Q. 15. 273. When the sale is under the direction of the Court commission may be allowed: Arnold v. Garner, (1847) 2 Ph. 231; 16 L. J. Ch. 329.
(b) Salomons v. Pender, (1865) 3 H. & C. 639; 34 L. J. Ex. 95.
(c) Douglas v. Archbutt, (1858) 2 D. & J. 148; 27 L. J. Ch. 271; but see Miller v. Beal, (1879) 27 W. R. 403.
(d) See and consider Sanderson v. Walker, (1807) 13 Ves. 601, 602; Fenton v. Browne, (1807) 14 Ves. 144, 150; Annesley v. Muggridge, (1816) 1 Madd. 593, 596; Smith v. Jackson, (1816) ib. 618, 620; Sug. 14th ed. 52. (e) Rowe v. May, (1854) 18 Beav. 613.
(f) Barrow v. White, (1862) 2 J. & H. 580.
(g) Edmonds v. Peake, (1843) 7 Beav. 239; 13 L. J. Oh. 13.
(h) Walker v. Constable, (1798) 1 Bos. & P. 306; Blagden v. Brad-bear, (1806) 12 Ves. 466; Shardlow v. Cotterell, (1881) 20 Ch. D. 90.
The auctioneer has an implied authority to sign the memorandum of contract on behalf of the vendor (i). This authority may be extended to the auctioneer's clerk either by express authorisation, or by the acquiescence of the vendor in the signature of the clerk (k).
The auctioneer, unless he is selling his own property (l), becomes the agent of the purchaser to sign the memorandum on the fall of the hammer (m). So far as regards the purchaser, the auctioneer's authority to sign on his behalf "must be exercised so as to form part of the transaction of the auction sale" (n); but it seems that the authority of the auctioneer as agent for the vendor is of a more permanent character, so that signature on behalf of the vendor the day after the auction may be sufficient (o).