bidder stopped at $20,000, but the auctioneer continued to make fictitious bids until he ran it up to $40,000. Setting aside the sale as fraudulent, the court said: "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.

Nor does it lessen the injury or the fraud if the by-bidding be by the auctioneer himself. He, being agent of the owner, is equally with him forbidden by sound principle to conduct clandestinely and falsely on this subject. All should be fair,aboveboard. Indeed, in point of principle, any fraud by auctioneers is more dangerous than by owners themselves. 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. Great care is therefore proper to preserve them unsullied, and to discourage and repress the smallest deviations in them from rectitude. Here the auctioneer virtually said to his hearers, when he made a fictitious bid, 'I have been offered so much more for this property.' But he said it falsely, and said it with a view to induce the hearers to offer still more. He averred it as a fact, and not an opinion; and as a fact peculiarly within his knowledge. Now if, under such an untrue and fraudulent assertion, persons were persuaded to give more,relying, as they had a right to, on the truth of what was thus more within the personal knowledge of the auctioneer, and was publicly and expressly alleged by him, and being of course more willing to give higher for what others had offered more, who probably were acquainted with such property and had means to pay for it, -they were imposed on and injured by the falsehood. It is said: 'A naked, wilful lie, or the assertion of a false

hood knowingly, is certainly evidence of fraud,'"

In Miller v. Baynard (1863) 2 Houst. (Del.) 559, 83 Am. Dec. 168, it appeared that the seller employed another to bid for him at an auction sale in order to enhance the price of the property. It was held that the sale was invalid, and the seller could not recover on a note given for the price. The court said: "It seems to us that the employment of a puffer to enhance the price of the property is not only opposed to the soundest principles of public policy, but that a sale made under such circumstances is a fraud upon the purchaser, and consequently is invalid at law. The simple fact of offering property for sale, at public auction, is an invitation to all persons to come together and bid for the same upon fair and equal terms; and, indeed, is equivalent to a public declaration that the sale shall be conducted fairly and in good faith toward all bidders. Any secret arrangement, therefore, having a tendency to mislead a bidder, is, in our opinion, a serious departure from fair dealing; and if the price be thereby enhanced, it clearly amounts to a deception practised by the seller upon the purchaser, advantageous to the former and injurious to the latter."

"We may lay it down as a rule without exception that the employment of a puffer at an auction sale is such a fraud as will vitiate the sale." McMillan v. Harris (1900) 110 Ga. 72, 48 L.R.A. 345, 78 Am. St. Rep. 93, 35 S. E. 334.

But in Beasley v. Burton (1924) 32 Ga. App. 727, 124 S. E. 368, it was said in a syllabus decision that the mere bidding on property exposed to sale at public auction by by-bidders who are the agents of the owner is not sufficient to show that the owner was undertaking to "puff" the property and thereby commit a fraud on the purchaser. The owner may bid on property which he offers for sale at public auction and cause it to bring a specified price, and thus prevent a sale of the property to another for less than its value, without thereby

becoming a "puffer" and fraudulently inducing the purchaser at the sale to pay more than the property is worth. In Burdon v. Seitz (1924) 206 Ky. 336, 267 S. W. 219, it appeared that at an auction sale, purporting to be without reserve, the vendor's agent in charge employed by-bidders with the understanding that they were not to take the property if it should be knocked down to them. It was held that the purchaser could repudiate his bid and refuse to comply with his purchase. The court said: "In the United States it is clear, both upon principle and the weight of the authorities, that, where a sale is advertised or stated to be without reserve, there is an implied guaranty that the property is to be sold to the highest bidder, and each bidder has the right to assume that all previous bids are genuine, and the seller in substance so assures him; and hence the secret employment by the seller, of puffers, is equivalent to a false representation, and renders the sale voidable at the option of the purchaser.' . . The reason given for the majority rule is that the employment of by-bidders is not only against the soundest principles of public policy, but is a fraud upon the purchaser, and that such secret arrangements are offensive to fair dealing, which it is the purpose and intent of the law to administer between litigants."

a

In Springer v. Kleinsorge (1884) 83 Mo. 152, the court, in holding puffing or by-bidding at a public auction to be a fraud on the vendee, and the sale not to be binding on him, said: "The evidence further shows that, as means of inducing competition among bona fide bidders, it was publicly announced at the opening of the auction there would be no by-bidding. This assurance was violated. Justice and good morals demand that such a sale should not stand. The offer of property at public auction is itself a proclamation by the seller that the highest bidder, in a fair and open competition, is to obtain the property. Any combination or secret understanding between vendor and others,

calculated to thwart this end, is a wrong and a fraud upon the innocent." In Baham v. Bach (1839) 13 La. 287, 33 Am. Dec. 561, where the owner of the property secretly became a bidder, through the auctioneer, with the design of enhancing the price of the property sold, the sale was held to be fraudulent and void by virtue of a statute which provided that combinations with respect "to sales, to enhance the price by false bids or offers, or to depress it by false assertions, are artifices which invalidate the contract, when practised by those who are parties to it, or give rise to an action of damages when they are not."

In Bowman v. McClenahan (1897) 20 App. Div. 346, 46 N. Y. Supp. 945, the court held that the employment by the owner of land put up at auction, of puffers to bid up the price in his behalf, operates as a fraud on the real bidders, and invalidates the sale to a bona fide bidder thus induced to give more for the property. The court said: "The essence of a sale at auction is that the property offered shall go to the highest real bidder. Whenever it is put up, that act constitutes an offer on the part of the owner, through the auctioneer as his agent, to sell to the person who shall bid the highest price for it, and every bid constitutes an offer on the part of the would-be purchaser to take it at the amount of the bid if it shall be struck off to him at that sum. It is well known that bidders at auction sales are influenced to a considerable extent by the number of other bidders, the amounts offered by them, and the apparent anxiety they show to become the owners of the property; and, if these conditions are effected by a private arrangement between the auctioneer and the owner, as the result of which persons who not in reality intending to buy are allowed to appear as genuine competitors, it holds out to those who are real bidders false inducements, and makes false representations to them as to the desirability of the property, and the demand for it, which in fact operate as a fraud upon them. For this reason it would

seem, upon principle, that the private employment of a puffer by an owner at an auction sale rendered the sale void, and relieved the person to whom the property was struck off from the necessity of performing his contract."

In Walsh v. Barton (1873) 24 Ohio St. 28, the court held that where a sale at auction is announced to be "positive," these words are equivalent to "a sale without reserve," and it is a fraud on the part of the vendor or the auctioneer to employ by-bidders to keep up the price.

As to the effect of a sale to a puffer, it was held in Troughton v. Johnston (1804) 3 N. C. (2 Hayw.) 328, 2 Am. Dec. 626, that where a negro was exposed for sale at public auction, and a by-bidder, under an agreement with the owner, bid up the price of the property, and it was knocked down to him, he had good title to the negro against the owner, since the agreement, although fraudulent, could not be avoided by a party to the fraud. See to same effect, Small v. Boudinot (1853) 9 N. J. Eq. 381.

But in Freeman v. Poole (1915) 37 R. I. 489, L.R.A.1917A, 63, 93 Atl. 786, Ann. Cas. 1918A, 841, wherein it appeared that the puffer refused to complete his purchase, it was said that a sale to a fictitious bidder was equivalent to withdrawing the goods from sale, and that the highest bona fide bidder was not entitled to take them at his bid.

As to sales of personalty at auction, the majority rule heretofore stated is adopted by § 21 of the Uniform Sales Act. See 1 U. L. A. 115, and the following cases citing and applying this provision: Cranston v.

Western Idaho Lumber & Bldg. Co. (1925) 41 Idaho, 141, 238 Pac. 528; Freeman v. Poole (R. I.) supra.

b. Limitation on majority rule. The rule that an auction sale is vitiated by "puffing" or "by-bidding" has been limited by several decisions holding that no bid comes within the meaning of those terms except one made at the instance of the seller or his agent. Accordingly, the validity of an auction sale is not affected by the fact

that persons who have no interest in the property, and no control over the sale, but have an interest, direct or indirect, in the proceeds of the sale, bid thereat, with no intention of purchasing, but solely for the purpose of enhancing the price.

Thus, in McMillan v. Harris (1900) 110 Ga. 72, 48 L.R.A. 345, 78 Am. St. Rep. 93, 35 S. E. 334, it appeared that the person who was entitled to the proceeds of a sale at public auction by an executor engaged her attorney to bid the property up to a specified price in order to prevent the property from selling at a sacrifice, and in pursuance of this agreement the attorney became a bidder at the sale. The court held that the attorney was in no sense a puffer, and the sale was not invalid, saying: "If a person who has such control of an auction sale that he of his own volition can release a bidder from all responsibility for his bid employs another upon an understanding of that character to bid at the sale without disclosing for whom he is bidding, for the purpose of preventing the property from selling at a sacrifice or for the purpose of making the same bring more than its actual value, the bidding by one or more persons under such employment is such a fraud upon the real bidders that the sale will be declared void at their instance. The only lawful way in which such a person can prevent a sacrifice of the property sold is to fix a minimum price, of which public notice shall be given, or make public the fact that he, either by himself or by others, will be a bidder at the sale. On the other hand, the mere fact that the person is interested in the property to be sold or in the proceeds of the sale will not preclude him from either bidding himself or from procuring another to bid, either openly or secretly, in his behalf, without regard to what the agreement may be with such bidder, if the one employing such bidder has not himself such control of the sale that he could absolutely release the bidder from all responsibility growing out of his having participated in the sale in that capacity."

So, in Manuel v. Haselden (1925) 206 Ky. 796, 268 S. W. 554, it appeared that one of three joint owners of land which was to be sold at public auction entered into an agreement with a bidder of which the other joint owners had no knowledge, to purchase the land with the bidder, for a price not in excess of a certain amount. It was held that the bidding by such a bidder was not such by-bidding as to invalidate the sale, the court saying: "There yet exists, however, the still further question in this case, i. e., whether one joint owner of property offered for sale at auction may himself, or in conjunction with a stranger, bid at the auction sale, with the bona fide intention of taking the property if he should be the successful bidder, and at the same time not be a by-bidder within the meaning of the law so as to entitle the subsequent purchaser to avoid the sale. In other words, does or does not the rule forbidding the owner of the property to bid on it contemplate that the bidder or bidders shall own the whole title, 30 as that, if they should be successful, no one would be compelled to pay anything whatever, and the title would thereafter remain and be in the same condition as it was before the sale? In answering that question, it might first be considered that the reason for the rule characterizing a bid by the owner as one made by a by-bidder does not exist where one of two or more joint owners bids with the expectation of himself paying the other joint owners for the property if his bid should be accepted, since in that case he incurs a liability and will be compelled to account to his joint owners for their proportionate part of the accepted bid. He is thereby placed upon the same footing as any other bona fide bidder, and since the reason for the rule would not exist in that case, it would seem to follow that the rule itself would not apply. Nor do we think that the other nonconsenting joint prive him of such right, when exer

be for and on behalf of all, but only for and on behalf of himself. Therefore, the partnership as such, or the cotenants in the aggregate, who are the owners of the whole title to the property, were not bound by the action of one of them under the circumstances named, because he was neither authorized nor purported to act for the owners of the entire title; and his bid, we repeat, was not within the reason for holding the owner a bybidder within the rule above stated. In defining what is a by-bidder, the text in 2 R. C. L. 1128, says: 'A puffer (or by-bidder), in the strictest meaning of the word, is a person who, without having any intention to purchase, is employed by the vendor at an auction to raise the price by fictitious bids, thereby increasing competition among the bidders, while he himself is secured from risk by a secret understanding with the vendor that he shall not be bound by his bids.' . . . Independently, however, of what has been said, and of the authorities cited, to hold that one joint owner is precluded from bona fide bidding at an auction sale of the property, made by all of the owners, with the intention and expectation of taking and paying himself to his joint owners their proportionate part, upon the ground that he would be a bybidder, under such circumstances, would not only work a burdensome hardship upon such joint owner, but would also lose sight of the reason for the rule, and apply it against by-bidding in the absence of those reasons. A joint owner might, for the purposes of division, be perfectly willing for the joint property to be sold at the auction, and also be both willing and anxious to own it himself and to pay whatever price he thinks it is worth. His joint owners might not be willing to accept his price, and yet he might be able to buy it at the sale for less or not exceeding that sum. To de

owners would be bound by such an arrangement upon the ground of agency, since the act of the purchasing joint owner in bidding upon the property was neither intended nor purported to 46 A.L.R.-9. *

cised in good faith by himself alone, and not on behalf of the others, would be carrying the principle to an unjust extreme, and for which there is no sound reason to support. Of course