CHAPTER I. OF SALES BY AUCTION AND PRIVATE CONTRACT. 1. By three Acts (a) of his present Majesty's reign, a duty is imposed of 7d. for every twenty shillings of the purchasemoney, which shall arise or be payable by virtue of any sale at auction in Great Britain, of any interest in possession or reversion, in any freehold, copyhold, or leasehold lands, tenements, houses, or hereditaments. But sales by way of auction, of estates under the decree of the Court of Chancery, or Exchequer, in England; or of the courts of Great Sessions in Wales; or of the Court of Session, or Exchequer, in Scotland (b), are not liable to the duty; nor do the acts extend to auctions held on the account of the lord or lady of any manor, for granting copyhold or customary lands, for lives or years; or to any auction held for the letting any estate for lives or years to be created by the persons on whose accounts such auctions shall be held (c) (1): neither does the duty attach upon the purchase-money of any estate, sold under a sheriff's authority, for the benefit of creditors, in execution of any judgment; nor to the purchasc-money of any bankrupt's estate, sold by order of the assignees under any commission of bankruptcy (d). And, (a) 27 Geo. III. c. 13. §. 36; 37 Geo. III. c. 14. and 45 Geo. III. c. 30. (b) 19 Geo. III. c. 55. s. 13. (c) Id. s. 14. (d) Id. s. 15, (1) This mode of letting estates is adopted by the City of London, and some other public bodies. lastly, lastly, no auction duty is payable in respect of monies produced by sale of estates, sold by auction, for the redemption of land tax (e). By an order of Lord Rosslyn's (f), it is directed, that upon application by a mortgagee of a bankrupt's estate, the mortgaged estate shall be sold before the commissioners, or by public auction, if they shall think fit. And it has been decided (g), that a sale of a mortgaged estate by auction, under this order, is liable to the auction duty, and is not within the exception in the acts of sales of bankrupts' estates by the order of the assignees. This decision was made at nisi prius, and, perhaps, cannot be supported. The legislature intended that the creditors of bankrupts should have the advantage of selling the estates by auction without being charged with the auction duty. Now this intention is, in the case under consideration, clearly subverted by the decision in Coare v. Creed. The argument was, that the sale was by the mortgagee, and so not part of the bankrupt's estate. But if the money produced by sale of the pledge is insufficient to cover the mortgagee's debt, he of course resorts to the general effects for a dividend on the residue. If the pledge produce more, the surplus sinks into the general fund; so that assuming, as the legislature clearly did, that the auction duty is in substance a charge on the land, it, in this case, takes so much from the bankrupt's property, distributable for the benefit of his creditors. It was considered to be clear, however, that where the estate was sold by order of the assignees, with the consent of the mortgagee, no duty would be payable. But it has been decided that a sale by assignees of an estate in fee, which was in mortgage for a term of years, was liable to the auction duty, because the assignees sold the whole estate, and they (e) 42 Geo. III. c. 116. s. 113. (f) 4 Bro. C. C. at the end. (g) Coare v. Creed, 2 Esp. Ca. 699. had had only the equity of redemption (h). But the act of parliament draws no such distinction. Most bankrupts' estates are in mortgage; and the exception would indeed be illusory, if it only extended to estates upon which there was no incumbrance. The simple question however is, whether such a sale is not a bona fide sale by order of the assig nees? The auctioneer, agent, or seller by commission, is bound to pay the auction duty, which he may deduct out of the money he receives at the sale. If he receives none, he may recover it from the vendor by action. But if the owner of estates sold by auction, or any other person on his behalf, buy in the same, without fraud or collusion, no auction duty will become payable (i); provided notice be given in writing (k) to the auctioneer before such bidding, signed by the owner and the person intended to be the bidder, of the latter being appointed by the former, and having agreed accordingly to bid at the sale for his use (7); and provided the delivery of such notice be verified by the oath of the auctioneer, as also the fairness of the transaction to the best of his knowledge. Neither will the duty be payable where the estate is bought in by, or by the order of the steward (m) or known agent of the owner, actually employed in the management of the sale of such estate; but notice in writing of his intention must be given by the steward or agent, if he himself bid, or by him and the bidder, if he appoint a person to bid (n); and the delivery of such notice must be verified in the same manner as the delivery of a notice given by the (h) Rex v. Abbott, Excheq. Michas. T. 1816. MS. (i) 19 Geo. III. c. 56. s. 12, Appendix, No. 1. (m) 42 Geo. III. c. 93. s. 1. (n) See forms of such notices, Appendix, Nos. 2 and 3. owner. owner. And to exempt a vendor from payment of the duty, every notice must at the time appointed by law for the auctioneer's passing his account of the sale, be produced by the auctioneer to the officer authorised to pass the account of such sale; and also be left with the officer (o). It is not necessary that the sale should be a regular auction. The acts apply to every mode of sale, whereby the highest bidder is deemed to be the purchaser. There fore, where after an auction at which there was no bidding, the seller's agent stated that he should be ready to treat for the sale by private bargain, and the meeting broke up; and the agent shortly afterwards went into a private room, with several of the persons who attended the sale, and he stated that the highest offer above 50,000l. would be accepted; and offers were accordingly made to him, and he having opened them said that the one which was the highest would be accepted, provided the terms of payment could be adjusted, and these terms having been adjusted the bargain was concluded the following day; this was held to be within the act. The agent put himself under an obligation to treat with all the persons assembled, and to give the estate to the highest bidder. The question was not, whether this was what was usually called a sale by auction, but whether for the purposes of this act every thing must not be considered as much a sale where the contract was with various persons, with an engagement to let the highest bidder be the purchaser. He might have taken any individual he pleased and concluded a bargain with him; that would have been a transaction of a different kind: but here he treated with a number, and came under an engagement to accept the highest offer (p). Any thing in the nature of a bidding is within the acts; (0) 42 Geo. III. c. 93, s. 2. 1 Dowe, 111, and and therefore where the owner put the price under a candlestick in the room, (which is called a dumb bidding), and it was agreed that no bidding should avail if not equal to that, it was holden (q) to be within the acts; as being in effect an actual bidding of so much, for the purpose of superseding smaller biddings at the auction. she So in the case of a female auctioneer who continued silent during the whole time of the sale, but whenever any one bid, gave him a glass of brandy. The sale broke up, and in a private room he that got the last glass of brandy was declared to be the purchaser. This was decided to be an auction (r). But to bring a bidding within the Acts, the sum must be named by the party eo intuitu, with a view to the purchase of the estate. Therefore, in the case of Cruso v. Crisp (s), it was decided, that putting-up an estate in lots at certain prices, was not a bidding within the acts; but this has since been doubted by Lord Eldon (t), and although it would be difficult to hold the transaction to be a sale within the act, yet of course although the owner intends only to put up the estate at a certain price, and not to bid for it in case of an advance, a previous notice of his intention should be given. If an estate be bought in by the owner, and proper notices were not given of his intention to bid, the sale will be held real, and the duty must be paid, however fair the transaction may be. The duty is made a charge on the auctioneer, which he must pay if the proper notices were not giyen. It is not given by way of penalty. In one case, an auctioneer who had neglected to require proper notices was compelled to pay 5 or 6000l. out of his own pocket for the duty, although he had not received any part of it (9) See the case cited, 3 East, 340, Capp v. Topham, infra, (r) 1 Dowe, 115. (s) 3 East, 337. (4) 1 Dowe, 114. from |