Court Opinion

ID: 8061149
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:38:38.922404+00
Date Added: 2024-06-11T16:38:03.743291
License: Public Domain

The opinion of the court was delivered by
Van Syckel, J.
Agreements having for their object the suppressing of competition in bidding at public sales have been very generally regarded with disfavor by courts when their aid has been invoked to enforce them. ’
As early as the days of Lord Mansfield it was held to be contrary to good faith, and a fraud upon the real bidders, for the owner to employ puffers to bid for him at an auction. Bexwell v. Christie, Cowp. 395; Howard v. Castle, 6 T. R. 642.
*286The converse must be equally true that an arrangement to suppress bidding, to the detriment of the owner, is inimical to good faith and a fraud upon the owner.
The law, justly administered, guards with like care the rights and interest of bidder and owner.
In Jones v. Caswell, 3 Johns. Cas. 29, the court refused to enforce payment of a promissory note, given to induce the payee to desist from bidding at a sheriff’s sale.
Mr. Justice Kent united with Mr. Justice Rad cliff in placing the contract in the same category with the employment of puffers by the vendor, and in pronouncing it contrary to good faith and sound public policy.
That case came under review in our own court and was approved by Chief Justice Ewing, in Gulick v. Ward, 5 Halst. 87, where the court refused to recognize the validity of an engagement by the defendant to pay the plaintiff $1,000 if he would forbear to bid for carrying the mails.
In Morris v. Woodward, 10 C. E. Gr. 32, the complainant agreed with a mortgagee defendant that if such mortgagee would not bid, and would permit the complainant to buy the mortgaged premises, the complainant would pay said defendant his claim against the property. It was held that this arrangement was a fraud upon the mortgagor, and that it vitiated the sale.
In Gardiner v. Morse, 25 Me. 140, the agreement was that if defendant would not bid at a bankrupt sale plaintiff would • in consideration thereof surrender a claim he had against defendant. The court refused to entertain such a defence to a suit by the plaintiff for the claim, on the ground that the stipulation was to be classed with fraudulent combinations and contrary to public policy.
The like view was taken in the following cases where the undertaking sought to be enforced was made in consideration of a promise to abstain from bidding at a public auction: Gibbs v. Smith, 115 Mass. 592; Goldman v. Oppenheim, 118 Ind. 95; Atlas Bank v. Holm, 71 Fed. Rep. 489; Doolin v. Ward, 6 Johns. 194; Barton v. Benson, 126 Pa. St. 431.
*287Judge Story, iu treating of this subject, says: “Such contracts are void as against public policy and as tending injuriously to affect the character and value of sales at public auction, and to mislead public confidence. They operate virtually as a fraud on the sale.” 1 Story Eq. Jur., § 293.
In the ease of Marie v. Garrison, 83 N. Y 14, there was no contract to refrain from bidding, and in Hopkins v. Ensign, 122 Id. 144, the contract was regarded as not infirm, because everyone who had any substantial interest in the land consented to the arrangement.
In the case sub judiee, the agreement of the defendant was that he would pay the plaintiff and other legatees under the will the amount of their legacies.
There is no proof that any of the other legatees, except George, knew of or consented to the agreement. Those not assenting might have been unwilling to accept the personal obligation of the defendant to pay their legacies.
It may also be that there are creditors who were injuriously affected by this arrangement.
The Circuit Court is advised that the contract is against public policy and void, and that a nonsuit should be ordered.