Case Name: Lena Moser, Respondent, v. The Bankers' Surety Company, Appellant, and Curt Kernblum, Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-11
Citations: 109 A.D. 172
Docket Number: 
Parties: Lena Moser, Respondent, v. The Bankers’ Surety Company, Appellant, and Curt Kernblum, Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 109
Pages: 172–174

Head Matter:
Lena Moser, Respondent, v. The Bankers’ Surety Company, Appellant, and Curt Kernblum, Defendant.
Second Department,
November, 1905.
Bond of auctioneer —when no redress against surety.
The bond.required of auctioneers in cities Of 1,000,000 inhabitants (Lavra of 1897, chap. 682) is intended to protect individuals who have intrusted property ' to an auctioneer for sale, and to protect the municipality against violations of , its regulations concerning, auctioneers,' It has no relation to the purchase and ;• sale of property by an auctioneer .on his own account.
Hence, when an auctioneer purchases mortgaged property of the mortgagor and \ sell's it at auction for his own profit, the mortgagee has no redress against the. ! surety of the auctioneer.
1 Appeal by the defendant, The Bankers’ Surety Company, from a judgment of the Municipal Court'of the city of Hew-York in- favor of the plaintiff, entered in the office of the clerk of said court on the 24th dáy of January, 1905. .
Henry White, for the appellant.
J. Wilson Bryant, for the respondent.

Opinion:
Woodward, J.:
Under the provisions of chapter 682 of. the Laws of 1897 no "person, persons, corporation or association shall hereafter carry on the business of auctioneer in cities of one million -inhabitants and over, without having first obtained from the mayor of said city a license authorizing such person, persons, corporation or association to carry on the business of auctioneer." This license can only be issued upon the person, persons, corporation or association filing a bond with the comptroller or city treasurer of the city in which they shall be licensed, in the penal sum of $2,000, and section 5 of the act provides that the "sureties upon a bond as provided in section one hereof, shall be liable for breach of contract or of duty towards the person or persons consigning goods for sale, as well as for the other acts, omissions and matters now provided by law."
It was held in Viadero v. Morton (6 Civ. Proc. Rep. 238) that an action would lie upon such a bond by one who had lost his property through the dishonest and fraudulent acts of the auctioneer, and it was likewise held in Saul v. United States Fidelity Co. (71 App. Div. 77) that the surety was liable for a breach of contract to one who had deposited goods with the auctioneer for sale, but neither of these cases disposes of the exact question here presented. The defendant became the surety upon the bond of one Curt Kernblum as auctioneer under the provisions of chapter 682 of the Laws of 1897. It appears from the evidence that one Edson J. Howard gave a chattel mortgage upon certain property to the plaintiff for seventy-two dollars, which had not been paid; that the mortgage was filed in the register's 'office of Hew York county; that Curt Kernblum was an auctioneer; that the said Edson J. Howard had a store on Willis avenue; that Kernblum.personally bought the fixtures in Howard's store and sold them the next day where he had bought them, keeping the proceeds; that Kernblum subsequently, when told that he had sold mortgaged property, said he did not care, that he was not supposed to know there was a mortgage on it; that Kernblum bought the goods and sold them and made a profit. The defendant upon the trial made proper motions to raise the question of its liability under the provisions of the bond, and the question is one of law upon the facts as we have stated them.
The purpose of the statute (Laws of 1897, chap. 682) was to provide for the regulation and control of auctioneers, and incidentally to protect those who should consign goods to the auctioneer for sale. The bond provided for is a statutory bond (Saul v. United States Fidelity. Co., supra), and limits the liability of the surety to the matters stated in section 5 of the act. It has no relation whatever to the acts of the auctioneer Regarding property which he purchases and exposes for sale upon his own account, for the statute does not undertake to provide for his personal transactions, but for his acts as auctioneer, and the' contract of the surety is' that the principal will do and'perform the duties of an auctioneer, and that the surety will be "liable for breach of contract or of duty towards-the person or persons consigning goods for salé, as well as for the other acts, omissions and matters now provided by law." We find no provisions of law in respect to an auctioneer purchasing property and exposing it for sale, which.would bring him within the scope of the bond; Kernblum purchased the goods and sold them, and the mere fact that he sold his own goods, or the goods which were subject to the chattel mortgage, at auction did'not give the plaintiff any rights under the bond- of the defendant. If Kernblum had purchased the goods and sold them on the following day at private sale the defendant would certainly not have, been liable under its bond that Kernblum would do his duty as an auctioneer, and the law of the case is not changed because he chose to sell at' auction rather than at private sale. The fair intent of the statute is to provide a bond • which shall protect individuals who have intrusted goods to the auctioneer for sale, and. to protect the municipality against the violation of its' public rules and regulations made in reference to auctioneers, and we are of opinion that under the. facts here disclosed there is no liability on the part of the. defendant. The judgment of the plaintiff against Kernblum is not the foundation of a liability against the defendant, and the complaint, should have been dismissed.
The judgment appealed from should be reversed, with costs,
Bartlett, Hooker and Miller, JJ., concurred.
Judgment of the Municipal Court reversed' and new trial ordered, costs to abide the event.
Bio. The bond is prescribed by section 4 of the statute.— [Bep.