John Bright, who was the agent for the owners of the property prior to the arrival of Stephen H. Williams, thus testified to the fourth interrogatory:

"I did not, nor did anyone to my knowledge or belief, request or authorize or in any way suggest to the auctioneer, or any other person, to bid at said sale, in behalf of the defendants, or to make any fictitious or pretended bid at the said sale, or to do anything, or permit any thing to be done, unfairly, to enhance the price of the said property."

To the fifth interrogatory:

"I did attend the sale. I did not bid on the property, nor did I then know, nor had I cause to believe, that said auctioneer was himself bidding on the said property, nor that anyone was bidding on said property for the defendants, or was using any unfair means to run up said property, or to enhance the price thereof." 142*] *The witnesses all concurred, that there had been a great depreciation in the market value of mills and mill privileges since January 1, 1836.

The terms of sale were ten per cent. of the purchase money payable immediately, and twenty per cent. more upon the delivery of the deed. These two sums together made $12,000, all of which was paid by Veazie. The balance, being $28,000, was divided into two notes of $14,000 each, payable in one and two years. The first was also paid; and the interest upon the second up to the 1st of January, 1840. The amount still due was, therefore, one note of $14,000, with interest from the 1st of January, 1840. Upon this note suit was brought against Veazie, prior to the filing of the bill in this case.

These were the circumstances attending the sale, as stated by the principal witnesses.

On the 21st of July, 1841, the following release was executed by Veazie to Head, viz.: "Know all men by these presents, that I, Samuel Veazie, of Bangor, in the County of

auctioneers; hereby, also, releasing the said Head & Pillsbury from any claim for damage, by or in consequence of any of their proceedings relating to said sale of said property. "In witness whereof, I have hereto set my hand and seal, this 21st day of July, A. D.. 1841. Samuel Veazie. [L. S.]"

This release was introduced into the cause by agreement of counsel, filed at a subsequent stage of the proceedings; by which agreement it was admitted that neither the respondents nor their counsel had any knowledge of the existence of the *release until after the [*143 publication of the evidence in the suit, and also further admitted, that the release and circumstances under which it was given might be referred to and made use of in the cause with the same effect as if the same had been put in issue by a cross bill and admitted by the answer. It will be seen by referring to the third volume of Story's Reports, p. 66, that Mr. Justice Story did not consider this agreement as a proper mode of introducing the release into the cause, when it came up before him for argument. According to his suggestion, the proper steps to do so were immediateproper ly taken by filing a supplemental bill. These remarks are here made for the purpose of connecting the report of the case in 3 Story's Reports, 54, with this statement.

On the 23d of July, 1841, Veazie filed his bill of complaint on the equity side of the Circuit Court of the United States for the District. of Maine.

The bill stated, that, on January 1, 1836, defendants owned two mill privileges in Maine, and on that day offered them for sale, at auction, at Bangor, in Maine, employing one Head as auctioneer, and, by themselves or agent, instructed Head to put them up, beginning with $14,500, minimum, and prescribed certain conditions of sale as to payment; that the complainant, relying on the good faith of defendants and of Head, attended the sale, and bid.. by one Foster as agent, and, the minimum having been offered, Head continued to announce a still higher sum, and Foster, supposing it fair and honest, made a still higher bid, and so on, until said property was struck off to Foster, for the plaintiff, at $40,000. And thereupon the complainant, supposing the sale had been conducted and the bidding made in good faith. complied with the conditions of sale, paid $4,000 in cash, $8,000 more on delivery of the

said notes, and another of $1,900, received as part of the $8,000 aforesaid.

The bill further alleges, that there was no real bid at said auction for more than $16,000 or $18,000; but that the auctioneer, by sham bids, run up said Foster from about $16,000 to $40,000, Foster's being the only real bona fide bids over about $16,000; by means of which pretended bidding and management of the auctioneer, defendants have received from the complainant a large sum of money which they

The answer to this supplemental bill stated that the existence of the release was not discovered by defendants until after the testimony had been taken in the original case; that defendants now insist on it as a bar; do not know whether any consideration was paid for it; and as to the intentions of the parties, or any understanding as to its legal effect, no fraud was practiced to procure it to their knowledge, or any language used that was not intended by complainant, by whom it was signed by the advice of counsel and under no mistake of fact; and it is not competent for him to control or alter it by extrinsic evidence. They have no knowledge of the intentions of the parties to it, or what inducements or agreements led to it. They have been informed by Head, that Veazie's counsel promised him an indemnity, and this was accordingly given. They deny that Head expected that, after said release, he would be liable to any action by defendants, or any construction given to the release which would prevent his being held harmless against them.

To this answer there was a general replication.

On the 3d of August, 1844, a bill of revivor was filed against Louisa Williams, the widow 147*] and executrix of Stephen *Williams, deceased, and at May Term, 1845, the bill was revived by consent of counsel, and the cause set down for hearing.

At the same term it came on to be heard upon the bill, answer, pleadings, and evidence, when the judges of the court, being divided in opinion on the merits of the cause, ordered and decreed that the bill be dismissed, without costs to either party.

This decision is reported in 3 Story's Reports, 612.

An appeal from it by the complainant below brought the case up to this court.

It was very elaborately argued by Mr. Fessenden and Mr. Webster for the complainant and appellant, Veazie, and by Mr. Davies and Mr. Gilpin for the defendants.

The points on the part of the appellant were thus stated by Mr. Fessenden. They were stated somewhat differently by Mr. Webster, as will be mentioned afterwards.

As stated by Mr. Fessenden they were

the ground that he was a public officer.

IV. That an auctioneer cannot legally be a bidder on his own account; and therefore, whether the bidding by Head was really for himself, as intending to purchase, or merely pretended, for the purpose of enhancing the price, it was equally a fraud upon the complainant, and vitiated the sale.

V. That defendants became actual parties to the fraud by having received information of one illegal act of the auctioneer at the sale, before the contract was closed, which they did not *communicate to the complainant, [*148 but concealed, and by which they were put upon inquiry.

VI. That equity will not allow the defendants to retain the proceeds of a fraud committed by their agent, whether they had knowledge of it or not.

VII. That Head was not a necessary party to the bill.

VIII. That the release to Head & Pillsbury is no bar

1. Because equity will not extend its operation beyond its legal effect and the intention of the parties, which were a release of damages.

2. Because it was a release to the agent, and not to the principal.

3. Because the defendants would have no right of action against Head & Pillsbury, should the sale be rescinded.

4. The extent and design of a release, like a receipt, are explainable by extrinsic evidence. IX. That the claim of the complainant to remplainan scind the contract is not barred by lapse of time. Because six years had not elapsed between the sale and the filing of the bill, or between the discovery of the fraud and the filing of the bill, and there had been no loss of evidence or change in the actual condition of the property, such as would justify the court in refusing relief; and because the circumstances attending the sale were not such as to excite the complainant's suspicions, or put him upon inquiry.

X. Even if there was no fraud, the sale should be rescinded for mutual mistake of a material fact.

As stated by Mr. Webster, they were:

1. That an auctioneer is the agent of the

wards, until he gives a memorandum in writing. This writing is given in order to avoid the statute of frauds, and in making it, the auctioneer becomes the agent of both parties.

2. That fraud by an auctioneer, committed whilst he is the agent of the vendor, vitiates a sale as thoroughly as if it had been committed by the vendor himself.

3. That it is not necessary to show that the principal was cognizant of the fraud.

4. That the auctioneer is the alter ego of the party who employs him. What he knows, the principal knows; or, as the rule is substantially

stated in 6 Clark & Fin. 448, 449, if an agent made willfully false representations, and then made a contract, equity will relieve just as much as if the scienter were traced to the principal.

149*] *5. An agent to sell cannot buy. Therefore an auctioneer cannot bid for him self. This rule may not be very applicable in this case, because the auctioneer does not say that he intended to purchase the property for himself.

6. The owner of real estate, put up at auction, may protect himself in one of two ways.

1st. He may fix a minimum or starting point. If no bid is made for this amount, then it is no sale. This mode appears to have been pursued here. The minimum was fixed at $14,500, and this fact was made known to the purchasers at the sale. This fact is highly important.

2d. The owner may employ one person to bid up to the minimum, or he may bid himself. But in this mode, as in the preceding, where the bidding has reached the minimum, then all by-bidding or puffing is fraudulent, and vitiates the sale. The highest real bidder, after reaching that point, is entitled to the property. The points stated and argued by the counsel for the defendants were the following:

1. That neither on the allegations or form of the complainant's bill, nor on the evidence, is he entitled in the Circuit Court of the United States, sitting in equity, to the relief he prays

for.

2. That neither on the allegations of the bill, nor on the evidence, is there ground to charge the defendants with fraud.

3. That the evidence does not establish any fraud on the part of Head, the auctioneer, but if it does, it will not entitle the complainant to the relief prayed for in this suit.

4. That the release of Head is a conclusive bar to the complainant's prayer for relief.

law, that they have, in some degree, divided this court, as well as the court below, and great care and discrimination will be necessary in order to reach conclusions that can be satisfactory.

The relief here is not sought, as has been objected, on account of inadequacy of pricethough that may at times be so gross as to show fraud, and might here very well raise some presumption of it. Warner v. Daniels, 1 Wood. & M. 111; Coles v. Trecothick, 9 Ves. 234; 2 Ves. Sen. 155. But it is sought for a fraud practiced in augmenting the price; or, in other words, for taking false steps to enhance it; and it is the consequence and injury caused by these unfair means that the plaintiff would avoid.

The

How far, then, in point of fact, was the price increased above the real bids? and by what means? A minimum price of $14,500 is clearly proved to have been fixed by the owners. weight of the testimony is, that the real bids went only $3,500 to $5,500 higher. There is no pretense that Wadleigh the rival or competitor of the plaintiff-bid or authorized others to bid for him above eighteen or nineteen thousand dollars, though a statement of the auctioneer to one person has been relied on to the contrary. Wadleigh denies it-nobody testifies to it-and nobody is produced who bid or employed others to bid higher, unless the auctioneer himself did it. The true value, also, as fixed by the owners at $14,500, tends to confirm the idea that no real, fair bid would be likely to go above $20,000-or over $5,000 or $6,000 beyond the owners' own estimate.

It is, then, a leading feature in this case, that should not be overlooked, as it gives a stamp

firmed.

Mr. Justice Woodbury delivered the opinion of the court:

This was an appeal from a decree of the Circuit Court in the Maine District, dismissing a bill which was brought originally by Veazie, the appellant.

As to the contents of the bill, and the evidence in its support, it may suffice to say here, that the bill asked the rescission of a sale at auction, made about the 1st of January, 1836, of certain mills, owned by the respondents, and a return of the money paid, and the notes still held by them for a part of the purchase money. It asked this, on the alleged ground 150*] of imposition in *the sale by means of puffing or by-bidding, so as to advance the

sale of their property at $14,500, and authorized the auctioneer to dispose of it for that amount, when in truth, by some means or other, and *without any real rival bids above [*151 $20,000, they obtained for it $40,000. Whether this extraordinary result was effected by any improper conduct on their part, or that of any agent for whom they may in law be responsible, is the next prominent inquiry.

In the outset, the probability certainly is, that property like this could not be sold at auction for from $25,000 to $26,000 more than the owner asked for it, unless under some imposition or great mistake. And the further presumption seems at first to be reasonable, that the respondents, whose property was thus sold, and by an auctioneer employed by themselves, and who have benefited by the large ex

might have existed by a release to the auctioneer, one of the persons implicated in the bybidding. The answer insisted, also, that the auctioneer should have been made a party to the bill, and that any claim to relief by the plaintiff is barred by the lapse of time since the sale.

with it.

It is conceded, in point of fact, that some other bids than Veazie's went nearly to $40,000, and as no person is shown to have made them but the auctioneer, it follows that they must have been real bids by him for himself, or fictitious ones by him, with a view to insum so much larger than had been anticipated when the sale began.

Looking to the supposition that the bids were real and for himself, that idea is not supported, but rather disproved, by the testimony. The auctioneer does not appear to be a man of wealth, able to buy so valuable property for investment, nor was such a purchase in the line of his business or profession, nor does he seem to have had the means or disposition for speculation, and especially on so large a scale; and he must have well known that the true value of this property was not considered by the owners above $14,500, nor its value to Wadleigh as enhanced by its locality in his dispute with Veazie, as above $18,000.

The weight of the testimony, then, is decidedly against the correctness of the supposition, that the bids above $20,000, except the plaintiff's, were by the auctioneer for himself and on his own account.

Had it been otherwise, it would be very questionable whether, in point of law or equity, an auctioneer can be allowed to bid off for himself the very property he is selling. It has been laid down that he cannot. Hughes's case, 6 Ves. 617; Oliver et al. v. Court et al. 8 Price, 126; 9 Ves. 234; 8 Ves. 337; Long on Sales, 228; Babington on Auctions, 164. The principles against it are stronger, if possible, and certainly were enforced earlier in courts of equity than of law. An opposite course 152*] *would give to an auctioneer many undue advantages. It would tend, also, to weaken his fidelity in the execution of his duties for the owner. He would be allowed to act in double and inconsistent capacities, as agent for the seller and as buyer also; and the precedents are numerous holding such sales voidable, if not void, and at all events unlawful, as opposed to the soundest public policy. See Michoud v. Girod, 4 Howard, 554; 15 Pick. 30; 1 Mason, 344; 2 Johns. Ch. 51; Tufts v. Tufts, Mass. Dist. 1848, and cases there cited; Long on Sales, 228; 9 Paige, 663; 1 Story's Eq. Jur. sec. 315; 3 Story's R. 625. That an auctioneer is a general agent for the owner usually, though questioned in the argument, cannot be doubtful. See How ard v. Braithwaite, 1 Ves. & Beam. 209; Story's on Agency, secs. 27, 28; 4 Burr. 1921; 1 H. Bl. 85. He is so till the sale is completed. Long on Sales, 231; Seton v. Slade, 7 Ves. 276; Babington on Auctions, 90; 20 Wendell, 43. And though he may be agent of the buyer after the sale for some purposes, such as to take the case out of the statute of frauds (Williams v. Millington, 1 H. Bl. 84; 3 D. & E. 148; Cowp. 395; Long on Sales, 228, 60, 63; Emerson v. Heelis, 2 Taunt. 38; 1 Esp. 101), yet this does not affect the other principle, that till the sale, and before it, he acts for the vendor alone. Nor is an auctioneer a public officer in Maine, and a license required to him. 2 Laws of Maine, p. 390, ch. 134. But whether a public officer or not is a circumstance that does not generally appear to have changed the liability of the principal for his acts, if taking the benefit of them.

Treating his bids, then, as made by the auctioneer, not for himself, and the proof having failed to show that they were for a stranger, the only remaining hypothesis is, that they were made by him while agent of the owners,

with a view to their benefit particularly, though with hopes of some incidental gain to himself in increased commissions. How does this view accord with the evidence of the transaction, taken as a whole? It is the only plausible aspect of it existing. The auctioneer found Wad leigh willing, on account of his quarrel with Veazie and his interests near the property, to go about $5,000 higher than the owners' estimate, and then found Veazie, for like reasons, willing to go still higher rather than let Wadleigh purchase the premises, for whom he supposed the auctioneer was bidding. In the eagerness of competition and with ample capital, Veazie seems in this way to have been induced to go even as high as $40,000, under the exciting but delusive and false impression, that he thus was obtaining the property against the efforts of Wadleigh or others, real bidders and real competitors. That *impression the [*153 auctioneer sought to create, and did create, by deceptive means.

Residing on the spot and acquainted with the character of the parties, he doubtless suspected that Veazie, rather than let the property go to Wadleigh, might bid very high-and perhaps, by rumor, even to $40,000-and proceeded, after the real bids were over at about $20,000, to make by-bids, either on his own judgment, to benefit his employers and increase his own commissions, or on the suggestions or signs of Stephen H. Williams, who was present as agent of the respondents, and is proved to have sat behind and near the auctioneer at the sale.

Veazie being thus situated so as to be more easily duped by either of them, and his condition and fears and anxieties being probably known to Head, if not to Stephen H. Williams, the auctioneer, by the means before described, procured for his employers nearly treble what they expected or what had been agreed on as the minimum price. The next inquiry is, if such a transaction renders the sale in point of law void, either for fraud or mistake. In some countries, under the civil law, a buyer of immovables is of right entitled to a rescission of the sale if it turn out, though without fraud, that the price was more than fifty per cent. above the true value. Pothier on Contracts of Sale, part 5, ch. 2, sec. 2; and see Domat, tit. 6, sec. 3. Here the price was at least a hundred per cent. above-yet there must in this country be fraud also, or a mistake.

Though no evidence is seen of fraud practiced by the respondents in person, nor by their express directions, yet a fraud was evidently perpetrated by the auctioneer, as agent for the respondents, or by him in connection with Stephen H. Williams, and the respondents have taken and still retain the benefit of it. This conclusion is indisputable, whatever obscurity or concealment may have been flung over the case by the auctioneer.

Does this state of things, then, in point of law, require the sale to be relieved against, on sound principles of equity and public morals?

By-bidding or puffing by the owner, or caused by the owner, or ratified by him, has often been held to be a fraud, and avoids the sale. Cowp. 395; 6 B. Monroe, 630; 11 S. & R. 86; 4 Harr. & McH. 2S2; Babington on Auctions, 45; 3 Bingh. 368; 2 Carr. & Payne, 208; 6 D. & E. 642; Rex v. Marsh, 3 Younge & Jerv. 331; 11