REVIEW QUESTIONS

1. What recourse has a seller who has the goods still in his possession: (a) If a sale was to be for cash; (b) if it was on credit; (c) if the goods are perishable?

2.

How can goods be shipped so that title remains in the seller? 3. What is meant by the right of "stoppage in transitu"? If this right is exercised on a false rumor of the buyer's insolvency, what is the effect?

4. A seller of goods under contract that no payment is to be made till all goods are shipped, ships some, and then finds that the buyer has failed. What can the seller do?

5. If a seller wrongfully refuses to deliver goods, what remedy has the buyer? When can the buyer enforce specific performance of his contract?

6. A salesman sells a bill of goods. The employer refuses to accept the order. Has the buyer any recourse?

7. When goods are ordered and on arrival they fail to come up to a warranty that has been made, what two alternatives has the buyer?

8. How can a sale be called off?

9. Jackson bought 70 cords of wood of Smith. The wood was piled and measured on Smith's property, and Jackson was to come to get it. Nothing more was said. Before Jackson paid for or took the wood away, he went into bankruptcy. His receiver claimed the wood, which the seller refused to give up. Who was right?

10. Farley sold a carload of furniture to a retail firm. While the goods were en route over the railroad, he learned that the firm was insolvent, and accordingly ordered the railroad to return the lot to him, offering freight and other charges. The railroad, however, claimed that it had attached the goods to satisfy a claim of its own against the insolvent firm. Could such attachment take precedence of the seller's lien?

CHAPTER XX

SALES AT AUCTION

§ 116. Regulations for Sales at Auction

A sale at auction is held in accordance with terms printed in the auction bills. The sale is made when the auctioneer lets his hammer fall. He need not accept any bid unless required to do so by the terms of the printed auction advertisement. Generally such an advertisement will specify that the property is to be sold to the highest bidder. An auctioneer may refuse to recognize bids that are not substantially higher than the last bid, the amount depending on the value of the article offered for sale.

If the seller had printed in the auction bill a provision that he reserved the right to take part in the bidding himself, he might bid at the sale or have his friends do so for him. Otherwise if the seller himself bids, or has bids made for him, the person to whom the goods are finally knocked down may refuse to take them if he discovers the situation.

§117. Compliance with Conditions

The sale may be made on some condition. The buyer must then comply with the condition before he can receive the goods. Sometimes bidders are required to make a deposit before being allowed to bid; sometimes they are required to make a deposit after the bid is accepted. If the bidder does not comply with the terms of the sale he forfeits this deposit, unless it appears that the seller could not give him good title to the property, in which case he may recover his deposit and refuse to take the goods.

A purchaser at an auction sale must always pay cash before he is entitled to the property unless the printed terms provide otherwise.

The seller may sue the purchaser for damages if the purchaser fails to take property which was knocked down to him. The seller may also sell the goods to someone else for what he can get for them. This amount will be deducted from his damages.

$118. Duties of Auctioneer

The auctioneer acts as an agent for the seller in selling the property; for the buyer in signing a memorandum of the sale. The seller will be bound to carry out the sale which the auctioneer makes, and the buyer to take the goods according to the memorandum of sale. An auctioneer is not allowed to bid for himself at a sale, but he may make bids for someone else. If he does not state for whom he is selling the property, he is personally responsible to the purchaser for seeing that the terms of the sale are carried out.

An auctioneer who sells property that does not belong to the seller is personally responsible to the owner of the property, even though he honestly thought it was part of the goods to be sold. Because of all this responsibility, the law usually requires an auctioneer to have a license. In New York a man must take out a license to act as auctioneer in order to sell even his own property.

The auctioneer has a lien on the property for his commission, and may require the commission to be paid him before giving up the property to the purchaser.

Note:

1. In planning for an auction sale, all the terms should be decided upon and printed in the handbills advertising it. If the owner of the property wants

to reserve the right to bid or to have bids made for him, it must be definitely stated.

REVIEW QUESTIONS

I. Has the owner of goods sold at auction the legal right to bid

2.

3.

4.

on them?

What should be announced in the auction bills?

Whose agent is the auctioneer?

In your state does the auctioneer have to be licensed? May a man sell his own goods at auction without a license?

5. What lien has an auctioneer?