owner of land was ready and willing to pay the taxes lawfully assessed against it, but was prevented from doing so by the fraudulent conduct of the collecting officer, or even by a blunder committed by such officer, and so the land was sold at tax sale, this will give ground in equity for vacating the sale or canceling a tax deed."9

§ 447. Announcements or Representations by Persons Conducting Sale.—The purchaser at a judicial sale is ordinarily justified in relying on any statements contained in the published notice or advertisement of the sale, and also on any announcements or representations made at the sale by the person conducting it (trustee, master, receiver, administrator, etc.) or the auctioneer.50 Thus, if the person in charge of the sale makes any promise or representation to the bidders that the estate shall be or is clear of incumbrances, or that the title is better or different from that which would flow from the proceedings, and the promise or representation cannot be complied with, or turns out to be erroneous, the sale will be set aside. 51 This rule was applied in a case where an auctioneer, conducting a receiver's sale of certain vessels, inadvertently gave notice to proposing bidders that the amount of the liens filed and claimed against the property was from $20,000 to $25,000 greater than it really was.52 So, where the purchaser of property received from the auctioneer a description of it which stated

Nat. Bank v. Douglas County, 124 Wis. 15, 102 N. W. 315, 4 Ann. Cas. 34; Bailor v. Daly, 7 Mackey (18 D. C.) 175.

Sohns v. Beavis,
But see Miles v.

49 Hickman v. Kempner, 35 Ark. 505; Gerke Brewing Co. v. St. Clair, 46 W. Va. 93, 33 S. E. 122; Thomas v. Jones, 98 Va. 323, 36 S. E. 382; Kneeland v. Wood, 117 Mich. 174, 75 N. W. 461. 50 Edwards v. Richards, 95 Ga. 655, 22 S. E. 690; 200 N. Y. 268, 93 N. E. 935, 34 L. R. A. (N. S.) 927. Diven, 6 Watts (Pa.) 148, holding that the advertisement and conditions of sale of real estate under order of the orphans' court determine the responsibilities of the vendee, and not the representations of the administrator, which, being beyond the scope of his special agency, are to be taken, like those of any third person, at the risk of the vendee.

51 Speed v. Smith, 4 Md. Ch. 299; In re Howe's Estate, 14 Pa. Co. Ct. R. 574; Dirks Trust & Title Co. v. Koch, 32 S. D. 551, 143 N. W. 952, 49 L. R. A. (N. S.) 513.

52 Hudson v. New York & Albany Transp. Co., 180 Fed. 973, 104 C. C. A. 129.

54

53

that it was sold with restrictions against nuisances, but did not mention restrictions as to buildings, it was considered that he was justified in bidding on the assumption that no restrictions as to buildings existed, and in refusing to complete the purchase on discovering the mistake. A similar principle applies to representations or announcements concerning the location of the property or easements or advantages connected with it. A bidder at an executor's sale of land who, because of misleading statements by the auctioneer, addressed to the bidders, bids off one of the lots, believing in good faith that he is bidding for a different one, is not bound by the purchase. But in such matters the mistake is not ground for avoiding the sale if attributable to the purchaser's own inattention or want of due care, as, for instance, where the published advertisement of an execution sale stated that the property was a corner lot, which was incorrect, but the purchaser, who was familiar with the neighborhood, could easily have located the lot and determined by a slight investigation whether or not it was on the corner. 56

These rules apply also to sales at auction which do not come within the definition of judicial sales, with this modification, that the false statement must have been made by the owner of the property sold, or by his authority or with his consent. But if he stands by and hears the auctioneer make a false statement concerning the property, without correcting him, this constitutes an acquiescence on the part of the owner in the misrepresentation, and has the same effect as an active fraud."7

§ 448. Chilling Bids or Stifling Competition.-A judicial or other public sale will be vitiated by any fraudulent agreement among the bidders, or any fraudulent practice. on the part of the successful bidder, having a tendency to prevent the attendance of bidders, to discourage bidding, or

53 Sohns v. Beavis, 133 App. Div. 717, 118 N. Y. Supp. 139.

54 Chalon v. Pepin, 13 La. 534.

55 Clay v. Kagelmacher, 98 Ga. 149, 26 S. E. 493.

56 Clarke v. Cooper, 148 Mo. App. 230, 128 S. W. 47.

Dayton v. Kidder, 105 Ill. App. 107.

to stifle a genuine competition between them.58 As a general rule, "a purchaser at a sheriff's sale who practises any deceit or imposture, or who is guilty of any trick or device, the object of which is to get the property at an undervalue, thereby renders the title so acquired utterly void and worthless in his hands.” 59 Hence if it is shown that the successful bidder obtained the land by means of a secret agreement which he made with another person who was bidding or intending to bid, giving the latter money to induce him to refrain from bidding, or promising to divide the land with him or otherwise to compensate him, it is ground for vacating the sale, which, in the case of a sale at auction, may be done at the instance of the vendor, and in the case of a judicial sale, on the application of any party in interest.0 On the same principle, an execution sale of land may be set aside where the judgment plaintiff, who became the purchaser, failed to keep a promise which he had made to an intending bidder to notify him of the time and place of sale, in consequence of which that bidder was not present, and the property was sold for much less than its value." Again, if a bidder discourages competition by publicly throwing doubts on the title to be sold, as by asserting that he has a deed to the property, or a claim adverse to the reputed owner, or declaring that the judgment under which the sale is held is not valid, and so secures the property for himself, it is a fraud which will justify the setting aside of the sale.62 Another method of chilling competition is to work upon the sympathies of the by-standers, as where a

61

58 Ingalls v. Rowell, 149 Ill. 163, 36 N. E. 1016; Hamilton v. Hamilton, 2 Rich. Eq. (S. C.) 355, 46 Am. Dec. 58; Froneberger v. First Nat. Bank, 203 Fed. 429, 121 C. C. A. 539; In re Shea, 126 Fed. 153, 61 C. C. A. 219; In re Ethier (D. C.) 118 Fed. 107.

59 Abbey v. Dewey, 25 Pa. 416.

60 Hammond v. Wallace, 85 Cal. 522, 24 Pac. 837, 20 Am. St. Rep. 239; Lynch v. Reese, 97 Ind. 360; Whitaker v. Bond, 63 N. C. 290; Owens v. Wright, 161 N. C. 127, 76 S. E. 735, Ann. Cas. 1914D, 1021; Abbey v. Dewey, 25 Pa. 416; Bolling v. Mullins, 111 Va. 250, 68 S. E. 982; Hopkins v. Tanqueray, 15 C. B. 130.

61 Pell v. Vreeland, 35 N. J. Eq. 22. But see Bailey v. Smock, 61 Mo. 220.

62 Taylor v. Courtnay, 15 Neb. 190, 16 N. W. 842; Collins v. Smith, 75 Wis. 392, 44 N. W. 510.

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bidder represents to the others that he is acting for the unfortunate person whose property is being sold or for his family or orphan children, and expostulates with them and begs them not to bid against him, and so secures the property at a bargain. Such conduct is a fraud in law, and will be cause for vacating the sale. And in a case in South Carolina, where property was sold on foreclosure of a mortgage, and the mortgagor publicly announced that she intended to bid, that she was a widow and dependent on the property for her support, and requested that no one should bid against her, thus preventing free competition among the bidders, it was held sufficient ground for setting aside the sale if made to her."

§ 449. Unfair Combinations Among Bidders.-A judicial sale or sale at public auction is vitiated by an agreement or combination among the bidders to refrain from bidding against each other, where the object is to depress the bidding or stifle competition and secure the property for less than its actual value. Thus, upon a sale of land for taxes, an agreement among several that they will advance funds and that one shall buy, so as to prevent competition and afterwards divide the land purchased among them, is fraudulent and equity will relieve against the purchase.

63 Bunts v. Cole, 7 Blackf. (Ind.) 265, 41 Am. Dec. 226; Bethel v. Sharp, 25 Ill. 173, 76 Am. Dec. 790; Walter v. Gernant, 13 Pa. 515, 53 Am. Dec. 491; Griffith v. Judge, 49 Mo. 536; Fenner v. Tucker, 6 R. I. 551. But see Sharp v. Long, 28 Pa. 433, holding that an agreement between the defendant in an execution and a bidder at a sheriff's sale thereon, that the latter shall buy in the property for the former on certain terms, and a representation of that fact at the sale, would not avoid the sale, though it may have caused the property to sell for less than it otherwise would have brought.

64 Herndon v. Gibson, 38 S. C. 357, 17 S. E. 145, 20 L. R. A. 545, 37 Am. St. Rep. 765.

65 Slater v. Maxwell, 6 Wall. 268, 18 L. Ed. 796; Ruis v. Branch, 138 Ga. 150, 74 S. E. 1081, 42 L. R. A. (N. S.) 1198; Mapps v. Sharpe, 32 I. 13; Loyd v. Malone, 23 Ill. 43, 76 Am. Dec. 179; Gardiner v. Morse, 25 Me. 140; Swofford v. Garmon, 51 Miss. 348; Griffith v. Judge, 49 Mo. 536; Durfee v. Moran, 57 Mo. 374; Shuck v. Missouri Lumber & Mining Co., 244 Mo. 366, 148 S. W. 609; Currie v. Clark, 90 N. C. 355; Dudley v. Little, 2 Ohio, 504, 15 Am. Dec. 575; James v. Fulcrod, 5 Tex. 512, 55 Am. Dec. 743.

* Dudley v. Little, 2 Ohio, 504, 15 Am. Dec. 575.

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But "agreements between two or more persons that all but one shall refrain from bidding, and permitting that one to become the purchaser, are not necessarily and under all circumstances void. They may be entered into for a lawful purpose and from honest motives, and in such cases will be upheld, and they will not vitiate the purchase or necessarily destroy the completed contracts to which they refer and in respect to which they were made." Thus, various persons who, by virtue of liens or otherwise, have existing interests in the property to be sold at a judicial sale, may lawfully combine together for the protection of their interests, and may even expressly agree not to bid against each other in furtherance of a plan to conserve their rights, provided that, in so doing, their activities do not operate to exclude any part of the general public from bidding. For instance, on a foreclosure sale, two mortgagees who have separate liens on the property, each claiming that his lien is the superior, may purchase the premises for their joint benefit, and are not obliged to bid against each other. So, where an insolvent railroad is for sale on foreclosure of a mortgage, it is not unlawful or fraudulent for the bondholders to combine their interests and appoint a committee to bid in the road at the sale.70 Again, an agreement between a mortgagee and a prospective buyer, by which the former agrees to foreclose and the latter agrees to bid at the sale the full amount due on the mortgage, and to buy up certain conflicting claims to the land, but which contains no provision that the land shall be sold to him unless. he is the highest bidder therefor, is not fraudulent as against the mortgagor." Furthermore, the doctrine that

69

67 Hopkins v. Ensign, 122 N. Y. 144, 25 N. E. 306, 9 L. R. A. 731; Snouffer v. Heisig (Tex. Civ. App.) 130 S. W. 912; James v. Fulcrod, 5 Tex. 512, 55 Am. Dec. 743.

68 Investment Registry v. Chicago & M, Electric R. Co. (D. C.) 206 Fed. 488; Kropholler v. St. Paul, M. & M. R. Co. (C. C.) 2 Fed. 302, 1 McCrary, 299; Cureton v. Wright, 73 Ga. 8; Myers v. Dorman, 34 Hun (N. Y.) 115; Colton v. Kennedy, 74 Misc. Rep. 217, 131 N. Y. Supp. 483; Delisi v. Ficarrotta, 76 Misc. Rep. 488, 135 N. Y. Supp. 653.

69 Huber v. Crosland, 140 Pa. 575, 21 Atl. 404.

70 Walker v. Montclair & G. L. Ry. Co., 30 N. J. Eq. 525.

71 Ritchie v. Judd, 137 Ill. 453, 27 N. E. 682.