Under the present law, if a puffer, that is, a person engaged to bid on the vendor's behalf in order to prevent a sale at an undervalue or to force up the price, be employed without the vendor having expressly reserved to himself the right to bid, the sale will be invalid. At common law it was well settled that the employment of puffers or of a single puffer on the vendor's behalf rendered the sale void on the ground of fraud, where it had been announced that the sale would be without reserve or that the highest bidder should be the purchaser (u). In equity however there was authority to the effect that the employment of a single puffer, to prevent a sale at an undervalue, would not invalidate the sale, unless the property were expressly or impliedly offered for sale without reserve (x): though Lord case of a private sale made orally by an agent, the policy of the Statute of Frauds is sufficiently strong to prevail over the general principle that agency cannot be revoked after the agent has so acted under his authority as to induce a third party to alter his legal position (as to which, see Story on Agency, Sec. 466-8), it is difficult to see why a sale by auction should be governed by a different rule; especially when the publicity of an auction is expressly held to be no reason for excluding the operation of the statute; Blagden v. Bradbear, 12 Ves. 466.

Employment of a puffer at an auction.

(s) Above, p. 12, n. (n).

(t) Blagden v. Bradbear, 12 Ves. 466; and see Rainbow v. Hawkins, 1904, 2 K. B. 322, 324.

(u) Howard v. Castle, 6 T. R. 642; Thornett v. Haines, 15 M. & W. 367; Sug. V. & P. 9, 10; Green v. Baverstock, 10 Jur. N.S. 47; Mortimer v. Bell, L. R. 1 Ch. 10.

(x) Smith v. Clarke. 12 Ves. 477; Woodward v. Miller, 2 Coll. 279; Sug. V. & P. 9, 10; 1 Dart, V. & P. 195, 5th ed.; 224, 6th ed.; 209, 7th ed.

Cranworth, in Mortimer v. Bell (y), doubted whether he would be bound to hold that the rule, which had been established at common law, did not hold good in equity. The law is now settled by the Sale of Land by Auction Act, 1867 (z), whereby it is enacted (a) that whenever a sale by auction of land would be invalid at law by reason of the employment of a puffer, the same shall be deemed invalid in equity as well as at law. The Act also provides (b) that the particulars or conditions of sale by auction of any land shall state whether such land will be sold without reserve, or subject to a reserved price, or whether a right to bid is reserved; and if it is stated that such land will be sold without reserve, or to that effect, then it shall not be lawful for the seller to employ any person to bid at such sale, or for the auctioneer to take knowingly any bidding from any such person. And it is further enacted (c) that, where any sale by auction of land is declared either in the particulars or conditions of such sale to be subject to a right for the seller to bid, it shall be lawful for the seller or any one person on his behalf to bid at such auction in such manner as he may think proper. It has been held, under this Act, that if it be stated that land will be sold by auction subject to a reserved price or bidding, without saying that a right to bid is reserved, it is not lawful to employ a puffer to bid up to the reserve price (d). And the opinion has been judicially expressed that the Act limits a vendor, who has reserved the right to bid, to the employment of one person only to bid on his behalf (e). The terms of a condition reserving the right to bid must of course be strictly observed; as if the vendor reserve the right of bidding once, a second bidding on his behalf will invalidate the sale (f). In consequence of this law, when land is to be sold by auction, the conditions of sale usually provide that the vendor reserves the right to bid as often as he may please; and if the sale be stated to be subject to a reserved price, the right of bidding generally is reserved to the vendor as well (g).

(y) L. R. 1 Ch. 10, 16.

(z) Stat. 30 & 31 Vict. c. 48.

(a) Sect. 4.

(b) Stat. 30 & 31 Vict. c. 48, s. 5.

(c) Sect. 6.

(d) Gilliat v. Gilliat, L. R. 9

Eq. 60.

(e) Grove and Lindley, JJ., Parfitt v. Jepson, 46 L. J. N. S. C. P. 529, 532, 533.

Where land is sold by auction subject to a condition that there will be a reserve price, and the auctioneer inadvertently accepts a bid lower than the reserve price, he is at liberty to retract such acceptance and to decline to sign a memorandum of the sale, and will incur no liability in so doing; for the condition is in effect that the property will not be sold for less than the reserve price, and every bidder is bound by that stipulation (h). It appears that, if land be placed in the hands of an auctioneer to be sold, he has authority, in the absence of instructions to the contrary, to put up the property for sale without reserve (i), and that the vendor would be bound by a memorandum signed by the auctioneer on his behalf of a sale so made (l). But it seems that if an auctioneer instructed to put property up to auction subject to a reserve price should nevertheless advertise the sale to be without reserve and accept a bidding lower than the reserve price and sign a memorandum of such sale, the vendor would not be liable on the contract so made without his authority (l). It has Inadvertent acceptance of bidding lower than the reserve price.

(f) Parfitt v. Jepson, 46 L. J. N. S. C. P. 529, 532, 533.

(g) 1 Davidson, Prec. Conv. 607, 4th ed.; 518, 5th ed.; Key & Elphinstone, Prec. Conv. 257. 258 and n. (a), 4th ed.; 245 and n. (b), 8th ed.

(h) MeManus v.Fortescue, 1907, 2 K. B. 1.

(i) Rainbow v. Hawkins, 1904, 2 K. B. 322.

(k) Above, p. 21.

(l) See McManm v. Fortescue, 1907, 2 K. B. 1, 6, 7, apparently overruling the decision or dicta in Rainbow v. Howkins, 1904, 2 K. B. 322, to the contrary. The general rule certainly is that a plaintiff suing a principal upon a contract made by his agent has the onus of proving that the principal did been held that, where an auctioneer instructed to put up property to auction at a reserve price, inadvertently adveitises (without disclosing who is his principal) that the sale will be held without reserve and accepts a bid lower than the reserve price, but declines to sign a memorandum of the contract or to carry out the sale, he is liable in damages to the bidder for breach either of a contract or of an implied warranty of authority that the sale shall be without reserve (m). But it has been decided that an auctioneer, who advertises that by the direction of his principal, whose identity he discloses, a sale will be held without reserve, does not himself become liable to any bidder at the auction upon a contract that the sale shall be without reserve (n). It has been considered that a vendor, who as principal issues an advertisement that a sale of land by auction will be held without reserve or under the condition that the highest bidder shall be the purchaser, is liable, if the sale be held and he then decline to sell to the highest bidder, upon an independent contract that the sale shall be carried out under the conditions advertised, and such contract is not required to be put in writing by the Statute of Frauds (o). But it has been held that, if it be advertised that a sale of property by auction will be held on a certain day and that the highest bidder shall be the purchaser, that does not amount to an offer capable of being turned by acceptance into a contract that the sale shall be held on the day specified or at all; and if on the day named the property be not put up for or be withdrawn from sale, a person, who had intended to bid for it, has no cause of action to recover damages for his disappointment or his expenses of attending in expectation of the sale (p). If an advertisement of a sale by auction be fraudulently made, any person who is thereby induced to incur useless expense or other detriment has a good cause of action against the advertiser (q).