Section — Noldin, Summa of Moral Theology
Section 4. On Sales in Species
Three sales especially are to be considered in species: sale by auction, monopoly, and sale through brokers.
600. On sale by auction. Sale by auction, auction, bidding (Versteigerung) is a sale by which, when several buyers come together, a thing is sold in such a way that it is adjudged to the one offering the greater price.
a. Sale by auction is one kind voluntary, another judicial or forced, according as it is done spontaneously by the owner of the thing or is commanded by law, for example, for paying creditors.
b. In sale by auction the thing to be sold is estimable the more as more buyers come together, because with many coming together and offering there is hope of accepting a greater price.
c. The just price in sale by auction is that which is constituted from the bidding itself without fraud, namely that which is offered by the last bidder, whether it is above the highest or below the lowest.
d. The equality required for the justice of the contract consists in this, that on each side there is the same hope of gain and the same danger of damage.
601. Obligations of the seller. a. He is bound to hand over the thing to the one offering more, even if the price has remained below the lowest: for sale by auction implicitly contains the contract of handing over the thing to him who offers more, unless there exists a custom of withdrawing the thing if at least the lowest price is not offered.
b. It is not permitted to send fictitious bidders, who without intention of buying the thing intend only to increase the price of the thing: for bidders have the right of requiring that the price be increased only through the concurrence of buyers and not by frauds.
Authors disagree whether the seller himself, either through himself or through another, can join himself to the bidders. If the bidding is forced, they commonly concede this, because the sale is made not by him but against his will; if it is voluntary, they forbid it, because this would be the same as withdrawing the thing.
c. It is not permitted to change afterward into worse things those things exposed for sale and already inspected by the bidders.
602. Obligations of buyers. a. They are bound to take care that they do not impede others by force or frauds from bidding or from offering a greater price. In this matter sin is committed against justice in two ways: both against him who is impeded from bidding and against the seller, who is deprived of greater gain.
b. They can ask and exhort others to abstain from bidding, because the seller does not have the right that someone come together for buying. Whether it is unjust to agree with another not to bid is disputed.
St. Alphonsus (n. 808) affirms that it is unjust, because the seller has the right of requiring that anyone be able freely to intervene in the bidding; Lehmkuhl (n. 1120) and Ballerini (n. 771) probably deny it, because the agreement of some to abstain from bidding does not prevent others from coming together; but that determined men come together for the bidding, the seller cannot require. Moreover one is not impeded from bidding by force or fraud, but by a just means, namely by a pact freely entered.
603. On monopoly. Notions. 1. Monopoly is the exclusive power of selling certain merchandise, which belongs to one person only or to a few only.
- A distinction is made between monopoly of right or legal monopoly, which is exercised by public authority, and monopoly of fact, which is exercised without public authority by the deed of private persons. This monopoly especially arises from this, that one or several buyers buy up all merchandise of a certain kind in some place at a modest price and afterward sell it at a great price.
Monopoly of right is either public (Staatsmonopol) if civil society itself reserves to itself the right of selling certain merchandise; or private, if a man or particular society has the exclusive right of selling certain merchandise.
604. Assertions. 1. Public monopoly of right is of itself licit, even if because of it certain merchandise is sold above the highest price which otherwise, with monopoly excluded, it would have. For this monopoly pertains to the means which public authority employs in order to procure for itself money necessary for promoting the common good, and therefore the increased price of the thing has the character of an indirect tax.
Private monopoly of right is likewise licit: for public authority from a just cause of the common good can concede rights and privileges to men or particular societies, such as are customarily conceded to inventors of a new art. Those who enjoy this monopoly sin against justice if they sell their things at an excessive price; but the just price of such things can scarcely be established, especially if they have been made by a new art. Others sin against justice if they injure their privilege by making and selling similar things.
Monopoly of fact of itself is not repugnant to justice, provided the sellers do not exceed the highest price which the thing had before the monopoly: for by buying up merchandise of a certain kind in some place, they use their own right and, as is supposed, sell it at a just price. But it is against charity if others, especially the poor, with grave inconvenience to themselves, are forced to buy necessary things at a greater price.1
Similar to monopoly of fact is an agreement entered among all sellers of some certain merchandise not to sell it below a determined price (Ring).
a. With force or fraud excluded, this agreement is not opposed to justice if the price does not exceed the highest which the thing would have if the agreement were excluded: for the individual merchants use their own right of not selling their own thing except at the highest price.
b. But it is opposed to the charity owed to buyers if in this way things necessary either to all or to many are sold at the highest price, because to their own damage they are forced to buy at a higher price things which otherwise they would have received at a cheaper price. The same cannot be said concerning things not necessary, because they can abstain from buying these things.2
1 Cf. Ballerini-Palmieri III, n. 789.
2 Genicot I, n. 641. Cf. Lugo, disp. 26, n. 172 ss.
605. On sale through brokers. Notions. a. Sale through brokers is called that which is made by others from the commission of the owner of the thing to be sold.
b. A broker (Makler, Sensal) is called one who buys or sells in the name of another.
There are brokers who are constituted by public authority for exercising this office, and there are brokers who are constituted by owners alone for buying or selling certain things, as children of the family who buy for parents, servants who buy for masters, craftsmen who buy for those from whom they undertook work to be completed.
c. Brokers by their nature are mandataries of those in whose name they sell or buy; wherefore the obligations of a mandatary must also be applied to brokers.
606. Principles. 1. A broker who sells a thing above, or buys below, the price designated to him by the owner cannot retain the profit for himself, unless he acquired it by extraordinary industry: for since he acts not in his own name but in the name of the owner, what he acquires by negotiating he acquires not for himself but for the owner.
It is not permitted to a broker to buy for himself a thing to be sold at a determined price and afterward to sell the same thing at a higher price and retain the excess for himself: for the owner is considered to have excluded this mode of acting, as harmful to himself, except in the case in which the broker, after using moral diligence, does not find another buyer. Yet then he must seriously carry out the purchase and take the danger of the thing upon himself.
A broker can retain those things which merchants remit from the just price in his favor. But attention must be given whether the merchants remitting from the price intend in reality to favor the buyer or the mandator.
If brokers buy frequently and for diverse men, as craftsmen do, the remission of the price is considered to be made rather in favor of the buyer; but if brokers always buy for the same person, as servants and children of the family do, merchants are considered to remit from the price rather in favor of the mandator.