Case XLI: Sham Bidding at an Auction

The property of Sempronius is sold at auction by order of his creditors. Sempronius knows that Rufinianus desires to buy his garden, so he sends two friends to the sale, who, by bidding against Rufinianus, are to raise the price, and they do this so successfully that the garden fetches a good sum. The question is asked whether Sempronius is bound to make restitution.

The seller at an auction can act fraudulently in several ways: (1). If he conceals a defect in a thing put up for sale; (2) if he puts up men to bid against one another in order to raise the price; (3) if he joins in the bidding himself or through others, unless (a) at a compulsory sale, where this is certainly permissible, or (b) in places where it is customary for the seller to join in bidding; (4) if he afterwards substitutes another article for the thing sold; (5) if he refuses to hand over the article for the price offered, except in places where it is the custom to withdraw things if a suitable price is not reached.

From what has been said it appears that Sempronius, if liable to make restitution, would be so solely because of his intention to raise the price of his garden, for, although it is a compulsory sale, he does not really make a bid for purchase, either in person or through his friends. Two points have to be taken into account. Where such tricks are commonly practised, as is very frequently, even almost universally, the case, the matter must be judged more leniently, as a tacit acquiescence can be assumed on the part of the bidders, who are aware of the custom, and can protect themselves by similar devices (Konings, 1002; Aertnys, 490).

It is also very doubtful what is meant by a sham bidder (ficte licitans). Regarded objectively, every bidder is a real bidder, since his bid may be the last, in which case he will have to pay the sum he offered, although he may not originally have intended to acquire the thing. The distinction between a real and a sham bidder is therefore only in the intention with which they bid, and is something within them. As, at a compulsory sale, it cannot be regarded as unfair for the owner to join in the bidding either in person or through some one else, it is probably very doubtful whether the inward intention in this case can render the outward action unfair. Therefore it is scarcely possible to condemn Sempronius for having acted unfairly, and therefore he cannot be required to make restitution.—Dr. A. Goepfert.