Levi Woodbury

“ It is said that fraud is denied as to the defendants, and is not proved against them by two witnesses. It is conceded that the denials that the respondents were personally guilty of fraud, or expressly directed falsehood and fraud, are not overcome, nor are they in controversy. But it is the puffing or by-bidding of the auctioneer, their agent, which is in controversy as a fact. ”

“ A minimum price of $14,500 is clearly proved to have been fixed by the owners. The weight of the testimony is, that the real bids went only $3,500 to $5,500 higher. There is no pretence that Wadleigh-the rival or competitor of the plaintiff-bid or authorized others to bid for him above eighteen or nineteen thousand dollars, though a statement of the auctioneer to one person has been relied on to the contrary. Wadleigh denies it,-nobody testifies to it,-and nobody is produced who bid or employed others to bid higher, unless the auctioneer himself did it. ”

“ Residing on the spot and acquainted with the character of the parties, he doubtless suspected that Veazie, rather than let the property go to Wadleigh, might bid very high,-and perhaps, by rumor, even to $40,000,-and proceeded, after the real bids were over at about $20,000, to make by-bids, either on his own judgment, to benefit his employers and increase his own commissions, or on the suggestions or signs of Stephen H. Williams, who was present as agent of the respondents, and is proved to have sat behind and near the auctioneer at the sale. ”

“ The auctioneer does not appear to be a man of wealth, able to buy so valuable property for investment, nor was such a purchase in the line of his business or profession, nor does he seem to have had the means or disposition for speculation, and especially on so large a scale; and he must have well known that the true value of this property was not considered by the owners above $14,500, nor its value to Wadleigh as enhanced by its locality in his dispute with Veazie, as above $18,000. ”

“ And the further presumption seems at first to be reasonable, that the respondents, whose property was thus sold, and by an auctioneer employed by themselves, and who have benefited by the large excess in the price given, by taking the money and securities, were either instrumental in causing the excess, or, having availed themselves of it and all its advantages, should be answerable civiliter for any wrong and error connected with it. ”

“ The defendants do not know when, in particular, the complainant pretends to have discovered the alleged fraud; but whatever was done at the sale might have been known, on inquiry, at any time; and they pray for proof of diligence. ”

“ They believe that complainant, since the changes in value, would gladly annul the bargain, and compel defendants to repay the price, and pay for his expenditures; but they submit that this ought not to be, after such a lapse of time and the changes in condition and value, especially as they deny the fraud alleged, and any concealment, on their part, of any thing done at the sale. ”

“ The owner may employ one person to bid up to the minimum, or he may bid himself. But in this mode, as in the preceding, where the bidding has reached the minimum, then all by-bidding or puffing is fraudulent, and vitiates the sale. The highest real bidder, after reaching that point, is entitled to the property.
The points stated and argued by the counsel for the defendants were the following:--
1. That neither on the allegations or form of the complainant's bill, nor on the evidence, is he entitled in the Circuit Court of the United States, sitting in equity, to the relief he prays for. ”

“ In some countries, under the civil law, a buyer of immovables is of right entitled to a rescission of the sale if it turn out, though without fraud, that the price was more than fifty per cent. above the true value. ”

“ IV. That an auctioneer cannot legally be a bidder on his own account; and therefore, whether the bidding by Head was really for himself, as intending to purchase, or merely pretended, for the purpose of enhancing the price, it was equally a fraud upon the complainant, and vitiated the sale.
V. That defendants became actual parties to the fraud by having received information of one illegal act of the auctioneer at the sale, before the contract was closed, which they did not communicate to the complainant, but concealed, and by which they were put upon inquiry. ”

“ And that what the vendor may not do in person, or may not employ others to do in his absence,-that is, make by-bids to enhance the price,-his agent, the auctioneer, cannot rightfully do.
But they are held liable on ground beyond and apart from all this, and as well settled in England as here, that if a principal ratify a sale by his agent, and take the benefit of it, and it afterwards turn out that fraud or mistake existed in the sale, the latter may be annulled, and the parties placed in statu quo ”

“ It is, then, a leading feature in this case, that should not be overlooked, as it gives a stamp and character to the whole equity as between these parties in favor of the plaintiff, that the respondents fixed the minimum bid for the sale of their property at $14,500, and authorized the auctioneer to dispose of it for that amount, when in truth, by some means or other, and without any real rival bids above $20,000, they obtained for it $40,000. ”

“ It is suggested, however, secondly, that this course does not set aside the whole sale, or whole contract, which ought to be done, if intermeddled with at all. It is true that, generally, a part of a deed, or contract, or sale, cannot be avoided without avoiding the whole. 2 Ves., 408; 1 Madd. Ch., 262. Though at times there may be a division or break in them where fraud begins and good faith ends, and where beyond that line only it would seem just to annul them. ”

“ Mr. Veazie resides in Bangor, and is the president of a bank; I don't know his occupation. Mr. Williams resides in Boston, and is retired from business; he is my uncle.
'To the second interrogatory he says:-In the winter of 1835-36, I was employed by the defendants to go to Bangor, and act as their agent in selling at auction certain mill privileges, at Orono or Old Town; I went to Bangor; the sale took place, January 1, 1836; the property was sold by Henry A. Head, as auctioneer, and was knocked off to a man named Foster, but Mr. Veazie was the purchaser. The price was forty thousand dollars. ”

“ The bill further alleges, that there was no real bid at said auction for more than $16,000 or $18,000; but that the auctioneer, by sham bids, run up said Foster from about $16,000 to $40,000, Foster's being the only real bon a fide bids over about $16,000; by means of which pretended bidding and management of the auctioneer, defendants have received from the complainant a large sum of money which they ought not to have received; and so the complainant has been deceived and defrauded. ”

“ The sales through the former extend to many millions annually, and are distributed over the whole country, and the acts accompanying them are more confided in as honest and true than acts or statements made by owners themselves in their own behalf, and to advance their own interests. ”

“ The by-bidding deceives, and involves a falsehood, and is, therefore, bad. It violates, too, a leading condition of the contract of sales at auction, which is that the article shall be knocked off to the highest real bidder, without puffing. 2 Kent Com., 538, 539. It does not answer to apologize and say that by-bidding is common. For, observed Lord Mansfield, 'Gaming, stockjobbing, and swindling are frequent. ”

“ Olmsted et al. v. Hotaling, 1 Hill (N. Y.) , 317; Taylor v. Green, 8 Carr. & P., 316. Whether the principal knew all those acts or not, is not the test in this case, as in 2 East, 92 notes, and 13 East, 634, note, though it may be in some others, as in 5 Bing., 97; 6 Cl. & F., 444.
But the test here is, Was the purchaser deceived, and has the vendor adopted the sale, made by deception, and received the benefits of it? ”