Sale by auction

AUCTION is a sale of property, whether real or personal, by which a person binds himself to transfer the ownership of the same to the highest bidder according to the conditions of sale. There are various methods in which the sale is conducted, and descriptions of the property to be sold and the conditions of sale are usually notified to the public by printed particulars of sale or by catalogues, and by the auctioneer himself. The bidding proceeds orderly, each bid being in the nature of an offer, which may be revoked until the auctioneer signifies his acceptance, usually by a stroke of his hammer, By this a contract is concluded with the last bidder, and the property becomes his. Ordinarily, however, the contract cannot be enforced by English law unless there is some memorandum of it in writing signed by the party to be charged therewith, or by his agent in that behalf.

Such a method of sale is, of course, honest and lawful if the conditions required either by the nature of the contract, or by law, or by special arrangement, be duly observed. The nature of the contract requires that, at any rate without notice, the owner himself should not bid, nor any other person on his behalf, and that the property should be knocked down to the highest bidder even if the price obtained be less than its value. The Sale of Goods Act, 1893, expressly provides that where a sale by auction is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for the seller to bid himself or to employ any person to bid at such sale, or for the auctioneer knowingly to take any bid from the seller or any such person. Any sale contravening this rule may be treated as fraudulent by the buyer.¹

However, in the next subsection the same Act also provides that a sale by auction may be notified to be subject to a reserved or upset price, and a right to bid may also be reserved expressly by or on behalf of the seller, and where a right to bid is expressly reserved, but not otherwise, the seller, or any one person on his behalf, may bid at the auction.

Similarly, if all those who are present at an auction conspi re together not to bid against each other, or if means are used to hinder people from bidding, injustice is committed. An agreement, however, between two persons not to bid against each other, when there are other bidders present, is not unjust or illegal, and knockouts, as they are called, are common, by which persons agree that only one of them shall bid for any particular article, and after the sale put up privately among themselves the goods that each one has bought.

¹ Sale of Goods Act, 1893, sec. 58, subsec. (3).

I. Sale with an added pact. Sale with a pact concerning the right of the seller to redeem the thing if he himself should demand it,¹ a sale of this kind, I say, is licit, provided that in establishing the price account is taken of the burden which is imposed on the buyer or seller (St. Alphonsus, III, 812, 813). Let the law of one's country also be consulted.

¹ Akin to this pact was the contract whose Spanish name was mohatra, by which someone sold on credit with an explicit or implicit pact that the thing would immediately be sold back to him at a lesser price, but for present money. It was therefore a disguised contract of loan and was for cloaking usury, and therefore was condemned by Innocent XI.² But since civil laws commonly permit interest to be received from money given as a loan, that contract has become obsolete (Sweens, n. 719; cf. St. Alphonsus, III, 813).

² Proposition 40, Denzinger-Bannwart, n. 1190.

II. Sale under the spear. 1. Notion. Sale under the spear, or auction, is a sale in which the things to be sold are proclaimed by a crier and are commonly adjudged to the last or first bidder: to the last, if successively greater prices are offered by the bidders; to the first, if the highest price proposed by the crier is diminished until one bidder assents. It is called sale under the spear because among the Romans in sales a spear, that is, a sign of ownership, was fixed in the ground. It is also called public auction, because a later bidder, by offering more, increases the price offered by a former bidder.

2. Division. It is distinguished as twofold, judicial and voluntary, according as it is made by precept of the judge or freely. In the former, the thing must be adjudged to the last or first bidder; in the latter, the seller can withdraw the thing. Public auction somewhat puts on the nature of an aleatory contract, insofar as the seller has hope of selling his things at a greater price because of the concurrence and rivalry, but runs the risk of selling them at a lesser price; likewise the buyer has hope of buying at a lesser price, but because of the concurrence he also runs the risk of buying at a greater price. These things, however, have more force for a judicial auction than for a voluntary one, because in the latter the seller can still retain his thing if a lesser price is offered.

3. The just price is that which is determined by bidding, even if it is above the highest or below the lowest; and this has force both for a judicial auction and for a voluntary one, provided nevertheless that the matter was done without fraud which restricts freedom of acting. It has force for a judicial auction; for since in the case authority absolutely wills the sale, it itself "implicitly approves as just that price which is publicly approved by the concurrence of buyers" (St. Alphonsus, III, 808). It has force for a voluntary auction; for all, being free to do the same thing if the occasion is given, freely judge as just the price approved by the concurrence of buyers. They judge thus both because the somewhat aleatory character of sale under the spear counsels this, and so that the sale of things, in a case greatly desired, may be better provided for. It was said: provided that the matter was done without fraud. Further, they act unjustly:

a) Sellers, if they positively deceive buyers as regards the thing to be sold. Mere concealment of defects now is not unjust, since they are accustomed to sell things as they are.

b) Buyers, if by an unjust means, for example deceit or fear, they prevent others from bidding; otherwise it must be said if they employ only prayers (St. Alphonsus, III, 808, dub. 1).

c) Officials, if they begin the auction before the time, that is, while buyers are still lacking, so that the thing is sold for less; likewise, if they adjudge the thing to a bidder too quickly.¹

Corollary I. The seller licitly: 1° bids himself, for example through a friend; 2° suborns fictitious bidders; 3° retains the thing if a lesser price is offered. These things indeed were formerly illicit, with attention paid to the commonly admitted aleatory character of an auction; but today, the character of an auction having been tempered by common and known practices, true fraud seems absent, and therefore the aforesaid devices seem licit. There is added that even those whom the seller harms use various devices; hence the devices employed by the seller do not harm the equality to be preserved in the contract.

Corollary II. Buyers licitly agree by pact, either to buy a thing in a common name; or, when a determined price has been offered by one of them, to abstain from bidding; or, that one shall in no way bid against another. Buyers, I say, act licitly in this way if there is question of a voluntary auction, because the seller can withdraw his thing when a lesser price is offered. If there is question of a judicial auction, it seems illicit, because a judicial auction has retained more the nature of an aleatory contract, in which the seller is obliged to yield his thing at whatever price. But the equality to be preserved in contracts of this kind requires that the said obligation be compensated by hope of obtaining a greater price, and this hope is diminished too much if the buyer turns many away from bidding (St. Alphonsus, III, 808, dub. 2). Except, however, if only one or another is turned away from bidding.

Corollary III. A buyer licitly gives or promises money to another so that the latter abstain from bidding; and this holds not only in a voluntary auction, since the seller can withdraw his thing, but also, as is drawn from what was said in Corollary II, in a judicial auction, if he gives or promises money to only one or another. But it is disputed whether one licitly accepts money who does not have the intention of bidding, or even has a positive intention of not bidding. It seems that it must be affirmed, because by accepting the money he takes on the obligation of not bidding; and this is estimable by price.

¹ Cf. Sweens, n. 707.

III. Buying and selling through a broker. 1. Notion. A broker is called one who buys or sells in the name of another, and therefore obliges that other person - not himself - toward the one with whom he deals. Some are public brokers, others are simple mandataries, according as they have been constituted by the municipality or have not been constituted by it. Brokers are distinguished from the so-called commission agents, who indeed act for another, but in their own name, and therefore oblige themselves - not another - toward the one with whom they deal.

2. Obligations of the broker. a) A broker, whether constituted publicly or privately: 1° by reason of the office undertaken, whether gratuitously or for payment, ought from strict justice to carry out the affairs of his patron diligently on account of at least a tacit contract; nevertheless one who receives a stipend for his office is held to greater diligence; 2° he is held from contract, and therefore from strict justice, to observe the obligations defined by a special mandate of the broker.

b) A public broker in addition, from the office tacitly undertaken according to the law in force concerning his function, and therefore from a tacit contract from strict justice, is held to the obligations which civil law decrees are to be observed by him.

c) A broker in the forum of conscience: 1° before any sentence whatever of a judge is held for damage which he has inflicted on the mandator either in bad faith or by grave culpable negligence; 2° for damage inflicted with merely juridical fault, he is not held except after the sentence of a judge.

Corollary I. A broker who in the name of the mandator buys below or sells above the price determined by the mandator cannot per se retain the profit thus made; for the mandator has a right to the profit which the contract entered into in his name carries with it, unless he must be judged to have yielded it to the mandatary. But determination of the price does not contain a cession of profit, since by determining the price the owner intends only this, that the thing not be bought more dearly or not be sold for less. Nevertheless he can retain the profit: 1° if the mandator is judged tacitly to consent, which is presumed by law to have place in the case in which the mandator assigns no wage of labor to the broker; 2° if the broker sold the thing more dearly because he himself improved it by undue industry. If he did not improve the thing, but sold it more dearly by employing undue diligence, likewise if by undue diligence he bought some thing for less, he can retain for himself a wage for the undue diligence (St. Alphonsus, III, 825).

Corollary II. A broker can buy for himself a thing of the mandator which is to be sold at a determined price, and afterward sell it for more, provided both that, after employing moral diligence, he has found no one who offers more, and that he truly buys the thing and therefore has it at his own risk. I said who offers more, because the owner, by determining the price, intends that his thing not be sold for less, but, if it can be done, for more (St. Alphonsus, loc. cit.); the broker is held by this disposition of the owner concerning his own thing. I said also and truly buys the thing and has it at his own risk, so that, if he does not sell the thing for so much, he nevertheless returns the determined price to the owner (St. Alphonsus, III, 825).

Since the matter is not without risk, several civil laws are opposed to a way of acting of this kind.

Corollary III. A broker can sufficiently probably buy for himself at a lower price a thing which the mandator committed to him to buy at a determined price, and afterward sell it to the mandator at a higher price, provided that afterward, after employing ordinary diligence, he has found no occasion of buying the thing except at that higher price (St. Alphonsus, loc. cit.).

Objection 1. The moral diligence to be employed demands that the broker not pass over an occasion of buying that thing for the owner at a cheap price.

Response. It is not clear that the diligence to be employed demands more than that the broker buy at the price assigned by the mandator.

Instance. If the opinion defended is admitted, a broker who in the name of the mandator buys below the price assigned by the mandator can - contrary to what was said in the first corollary - retain the profit for himself, because the mandator also in that case has only the right that the thing, if it can be done, be bought at the assigned price.

Response. I deny the parity of the cases; in the first corollary the mandatary buys something for the mandator, who has a right to the profit which the contract entered into in his name carries with it; in our case the mandatary buys something for himself.

Corollary IV. One who buys a thing for another, that is, not at his own risk but at another's risk - as a maid-servant who goes to a shop in the name of her mistress, a tailor who buys cloth not for himself but for a client, from which he is to make clothing - can retain the part of the price which the seller gives to him; or, as the same thing is expressed less precisely, he can retain what the seller remits from the price in favor of the broker or of any mandatary. Nevertheless, let deceit be guarded against, since "sometimes merchants in reality rather simulate giving to them than give, so that if the owner himself went, he would obtain the thing for the same price" (St. Alphonsus, III, 826).

Corollary V. Servants, who are going to pay for a thing previously bought for the owner, can retain the part of the price which the merchant refunds to them, or the little gifts which he bestows on them. For an intention of favoring the servant is presumed.

IV. Monopoly. 1. Notion. Monopoly is called the power of selling or determining the price acquired exclusively by one alone or by only a few.

2. Division. Monopoly is distinguished into public or legal and private. Public monopoly is that which the government reserves to itself, or grants to one or a few. Private monopoly is that which is acquired by the industry of private persons, for example by buying up all goods of some kind; by preventing goods of the same kind from being brought in by foreigners. Private monopoly is especially introduced by companies which either buy up certain goods in a very great quantity, or determine the regions where individual companies are to trade, and quasi-divide them among themselves. According to their diverse constitution they are called: trust, cartel or syndicates, pool, ring, corner.

There is also monopoly improperly so called, which is had when several persons conspire not to sell goods except at such and such a price.

3. Morality. 1. A monopoly which the government reserves to itself is licit, provided there is a proportionate cause, for example that the State may enjoy necessary revenues; that public order may be provided for, as in the monopoly of the postal office.

2. A monopoly which the government grants to another is likewise licit if a proportionate cause is present, for example that art, or industry generally, may be promoted.

3. One who, after buying up all the goods of some kind, sells them at the highest price which would be current if the monopoly were excluded, that seller, I say, sins neither against justice nor against charity. He does not sin against justice, "because everyone has a right to sell his own thing at the strict price" (St. Alphonsus, III, 816); he does not sin against charity, because no one is bound to neglect his own advantage in order to provide advantage for another (St. Alphonsus, loc. cit.). Nevertheless he is bound to abstain from a way of acting of this kind if competent authority, insofar as that is required by the common good and can practically be done, restricts the rights of private persons.

I said: "at the highest price which would be current if the monopoly were excluded"; for he would sin against justice if he increased the price above the highest at which the goods would be sold if the monopoly did not exist, or if the goods were available among several sellers (St. Alphonsus, loc. cit.). The reason is that the just price of a thing is that which is assessed by common estimation, with attention paid to the quantity of goods commonly known, whether they are or are not among several sellers - for the price does not increase precisely from fewness of sellers, but from the rarity itself of the goods; whence if there were few sellers but abundant goods, they would not on that account be estimated more highly. But the quantity of goods is the same in one seller as if it existed divided among several.

4. Those who conspire about not selling goods except at the highest price do not sin against justice; since they neither deprive buyers of a good to which they have a right - for no one has a right to buy at a lesser price - nor by an unjust means do they impede them from obtaining a good, that is, from buying at a lesser price. But it is more commonly taught that they sin against charity. "The reason is that although charity does not oblige you to sell below the highest price, it nevertheless seems to oblige you not to dissuade others from selling at a milder price; just as, although charity does not oblige you to give alms, it nevertheless seems to oblige you not to dissuade others who wish to give it" (St. Alphonsus, III, 817).

Corollary I. The things said about the conspiracy of sellers must also be applied to the conspiracy of buyers not buying except at such a price.

Corollary II. Those who sell goods at the lowest price with this event, that after others' shops have been overthrown they may demand a greater price, do not sin against justice, as is clear; nor against charity, because no one is bound to neglect his own advantage on account of another's damage, which will follow occasionally. And this has even more force if, with you abstaining, another perhaps less liberal person would do the same thing.

Corollary III. They act unjustly who compel their workers to buy goods in their own shops or in other determinate shops, and to receive goods less good or of greater price; which way of acting, moreover, is commonly also prohibited by civil laws.

Finally note that the contract of exchange is ruled by the same principles by which buying and selling is ruled.

V. Buying and selling of shares. Buying and selling of shares contains the buying and selling of a right to part of the profits of some company; but it is just if it is done at the current price; for otherwise trading would become morally impossible, so that all are presumed to consent. But one who has induced the price by fraud is held to restitution. Besides, trading in shares is especially to be dissuaded for the inexperienced.

What is sale by auction; is it licit; what is its nature? Sale by auction, or through bidding, is that which is made by a herald, and in which the thing is ascribed to the final bid. Sale by auction is licit, whether it is made with the consent of the owner or against his will, or by public authority; whether it is bought below the lowest price or sold above the highest. The reason is that in the first case there is a conventional price, but in the other "public power approves as just that price which is proved publicly by the concurrence of buyers." L. 808; C. G. 1686. Hence, if buyers concur, the thing becomes more estimable; if they do not concur, it is held cheaper since the thing is offered voluntarily; and it can be sold for as much more, bought for as much less. Consequently, in it there is no place for rescission under title of lesion, nor for redhibition. C. I. 1308, 1506, 1534; C. G. 1649, 1684. But eviction does not cease in it; and, when the thing has been evicted, the price must be restored to the buyer in forced sales, not by the debtor whose thing was sold and to whom it profited by payment, but by his creditor, because it was paid to him without cause. C. I. 1237; C. G. 1377; C. B. 156.

The price which is determined by the concurrence of buyers also has place in the lease of work and labor, e.g., in building a house, in conducting business.

Whether the seller can withdraw his own thing once bidding has begun, if a lower price is offered? Resp. Negatively per se. The reason is that buyers publicly summoned to an auction acquire a certain right to the saleable thing, insofar as a tacit stipulation is made that it yield to the one offering more. Nevertheless the rigor of this doctrine must be tempered if a contrary custom is in force, by force of which the contracting parties consent to this, that the seller withdraw his own thing if it would be sold below the lowest price. But this inconvenience is prevented by establishing from the beginning the lowest price at which bidding should begin.

Whether the seller can send fictitious bidders so that the price of the thing may increase? - Resp. Negatively. The reason is that this is fraudulent, especially if it is done with money offered to them, since it tends toward increasing the price, and thus toward deceiving sincere buyers, and accordingly does injury to them, since they are the cause that the price increases from that fraud, and not from the natural concurrence of things, namely from the free concurrence of buyers. Wherefore then restitution in integrum belongs from fraud. With money offered; this is permitted to the buyer, so that he may redeem the unjust vexation of other bidders; whence it is also permitted to the seller to draw other buyers in this way to the bidding, to redeem unjust vexation, so that his things may be sold at least at the lowest price. Much less is it lawful to feign wanting to participate in bidding, so that someone may extort something from true bidders. It is evident deceit and fraud.

Whether he whose goods are sold in favor of creditors can send friends to buy them in his name? Resp. Affirmatively, if the bidding is forced, or if it is made by public authority; for he whose goods are sold ought not to be of worse condition. Besides, he himself is not properly selling, since the sale is made against his will. Therefore. - Resp. Affirmatively also if the bidding is voluntary, because, as the buyer can turn away other bidders by using a request, so the seller, by using the same request, can summon other bidders; and if these, though not asked, could bid in favor of the seller, why could they not do the same when asked, provided that all fraud is absent in this matter, namely if they buy in their own and true name; and, if they buy in the name of the seller, by law or by custom he can withdraw his own thing when the thing would not obtain at least the lowest price. For if he can then withdraw it, he can also buy in this way.

Whether a buyer can make a pact with others that they not bid, or not offer more? St. Alphonsus denies it "at least in the case in which by sentence of the judge a thing is exposed to auction. The reason is that then the owner of the thing is altogether bound to hand over the thing to the one offering more; and therefore the buyer inflicts injury on him if, by offering only the lowest or middle price, he impedes the seller from the attainment of the highest price, to which he has a right, namely that he not be impeded from attaining it."

L. 808. - Several, however, except the case if the buyers are joined by partnership, or as though joined, as brothers, friends, etc., because they make as it were one moral person, and it cannot be demanded that they bid against themselves. Others also probably except if the custom is in force that the seller withdraw his own thing when a lower price is offered to him; because if he himself can impede the price from being too small, equity also requires that he not complain that buyers agree lest the price be increased too much. - Others, however, affirm absolutely. Reason 1: because in any sale by auction per se the owner is bound to hand over the thing to the one offering more. 2. By making a pact with someone, the buyer does not impede the owner from obtaining the highest price of the thing, for others can concur and offer. 3.

The seller does not have a right that someone not be impeded in any way whatever from concurring, but that he not be impeded by force and fraud; otherwise he could not be impeded even by requests. 4. As anyone can freely not concur at auction, so he can freely oblige himself not to concur. Nevertheless civil laws approve this in no way. C. I. Poen. 299; C. H. Poen. 555. - Gousset 843.

What is monopoly, and whether it is licit? - Monopoly, as to the name, is the same as the sale by one. As to the thing, it is the power of selling existing in the hands of one or of a few. Monopoly can occur in four ways: 1. If the Prince, for a just cause, grants a privilege to someone that he alone sell some kind of merchandise; and this certainly is licit, namely when it contributes to the common good, with a legitimate price fixed. Others, however, sin against justice if they themselves make and sell similar merchandise. 2. If a merchant by force and fraud prevents other goods from being brought in, so that he may sell his own goods to the damage of the commonwealth; and this certainly is illicit, and he is bound to restitution of the damage, e.g., if he spreads false news that ships have been sunk, or similar lies. 3. If one or a few buy all the goods so that afterward they may sell them at as high a price as possible. And this is illicit if the things are useful and necessary for life, and do not pertain only to luxury and delicacies, and if the highest price is that which results from the very fact of monopoly. 4. If sellers conspire among themselves about the price, so that they do not sell for less; and if the price is just, this of itself is not illicit. L. 814, 815.

This question of monopoly, as to its various cases, can easily be extended to the workers themselves, and the various resolutions can also be applied to them. But this question, as regards workers, is quite different from the other question of ceasing from work and labor, which, after a freely entered contract for the hiring of work, is not only illicit, but also unjust of itself, and very harmful to the good of private persons and to the good of the state.

907. • Sale under the spear is that which is made through a herald, and in which the thing is assigned to the last bid.

It is lawful, whether it is done with the owner consenting or unwilling, or by public authority, whether it is bought below the lowest price or sold above the highest; because the public power approves the just price publicly constituted from the concurrence of buyers. Hence if buyers concur, the thing becomes more estimable; if they do not concur, it is held cheaper. - St. Lig. n. 808. (Civil Code art. 1686.)

908. Questions. - Q. 1. Whether the seller can withdraw his thing, once the bidding has begun, if a lower price is offered?

Resp. Negatively, per se. The reason is that buyers publicly called to the auction acquire a certain right to the thing for sale, insofar as a tacit stipulation is made that it yield to the one offering more. Nevertheless, the rigor of this doctrine seems to be tempered where perhaps a contrary custom is in force, by force of which the contracting parties consent in this. For it seems hard to condemn for injustice a universal practice which the learned and even the pious hold without any scruple. - Thus Billuart, etc.

Q. 2. Whether the seller can send fictitious bidders, so that the price of the thing may increase?

Resp. It seems that it must be denied. The reason is that this appears too fraudulent to be excused, since it tends to deceiving sincere buyers and therefore inflicts injury on them, while they are the cause that the price increases from fraud, and not from the natural concurrence of things, namely from the free concurrence of buyers ¹. - St. Lig. n. 808. - Hom. apost. n. 175.

¹ If the seller does not wish to sell his own thing at a lower price, let him expressly set beforehand the price which he wants; otherwise let him keep his own thing for himself and not commit it to an uncertain lot. This indeed can also be noted with respect to the preceding question.

909. • Q. 3. Whether he whose goods are sold in favor of creditors can send friends to buy them in his own name?

Resp. 1. Affirmatively, at least with attention to common usage, if the bidding is voluntary, because this seems to follow from the fact that the seller can withdraw his own thing.

Resp. 2. Affirmatively a fortiori, if the bidding is compelled, or if it is done by public authority; for he whose goods are sold ought not to be of worse condition. Otherwise, he himself is not properly the one selling, since the sale is made while he is unwilling. Therefore.

910. • Q. 4. Whether the buyer can make a pact with others that they not bid, or not offer more?

Resp. Negatively, at least in the case of a compelled subhastation. The reason is that the seller has a right that the buyers be perfectly free, and that the increase of the price not be impeded. - St. Lig. n. 808. ².

² But indeed, if it is lawful to ask friends not to bid or not to offer more, as is said below (in the following number), it scarcely appears why the same friends cannot lawfully agree among themselves concerning that matter. For these do not impede others from bidding; if they are not present, this surely happens per accidens, just as it also happens per accidens that some one person, with no one at the same time concurring and contending, acquires a thing at a cheap price. See Diana, Tom. 6, Tr. 3, Res. 72-73.

Yet many except the case if the buyers are joined in society, or as if joined, as brothers, friends, etc., because they make as it were one moral person, and it cannot be required that they bid against themselves. Others also probably except the case if a usage is in force that the seller withdraw his own thing when a lower price is offered to him; because if he himself can impede the price from being too small, equity also demands that he not complain that the buyers agree so that the price may not be too greatly increased. - Bouvier, etc.

911. • Q. 5. Whether the buyer can ask others not to bid?

Resp. Affirmatively, because in this the right of the seller is not violated, since the liberty of bidding is not taken away, and the buyer uses his own diligence in order to consult for himself. Nevertheless, the requests ought not to be importunate. - See St. Lig. ibid. - See Cases, n. 951 and following.

(2) An auction is a contract by which one party binds himself to transfer and the other to acquire the ownership of some property, whether real or personal, at the highest price to be got at a public sale. There are various methods by which such sales are conducted, and descriptions of the property to be sold and the conditions of sale are usually notified to the public by printed catalogues or circulars. The bidding proceeds in an orderly manner, each bid being in the nature of an offer, which may be revoked until the auctioneer signifies his acceptance by the fall of his hammer or in any other customary way. By this a contract is concluded with the last bidder and the property becomes his.²⁷

²⁷ Slater, A Manual of Moral Theol., Vol. I, p. 533.

Auctions may be forced or voluntary. A forced auction is one by which property is sold by public authority, as in the case of a bankrupt merchant to satisfy his creditors. A voluntary auction is one held by the owner of his own accord, either in person or through an authorized representative. The owner may request his friends to bid for the goods put up at auction in order that the latter be not sold too cheaply, to his own detriment or that of his creditors, but he is not permitted to run up the price by means of fictitious bidders (licitatores ficti) because this would involve an injustice to the bona fide bidders. Similarly, the bidders present at an auction may not conspire together to make inadequate bids, or to use illegitimate means (intimidation, fraud, or violence) to hinder others from bidding.²⁸

²⁸ Ibid.—Cfr. St. Alphonsus, Theol. Mor., l. III, n. 808 (ed. Gaudé, I, nn. 851–854); Göpfert, Moraltheol., Vol. II, 6th ed., pp. 192 sqq.—An auctioneer, under our civil law, is primarily the owner’s agent only to the moment when he accepts the purchaser’s bid and knocks down the property to him. Authority may be conferred on an auctioneer in the same way as on any other agent for the sale of similar property, verbally or in writing. Authority to sell property does not of itself imply authority to sell it at auction. If goods are sent to an auction room to be disposed of, this is deemed sufficient evidence of authority to sell them by auction and to protect whoever buys them. The seller is not bound by any terms stated by the auctioneer differing from those given to him by the owner. If the owner has imposed no terms on him, he has the implied authority usually existing in such cases. An auctioneer cannot, consistently with his duty, refuse to accept bids from anyone, unless the bidder is irresponsible, or unwilling to comply with the terms of the sale. He is justified in rejecting the bids of insane persons, minors, drunken persons, trustees of the property, and, perhaps, in some cases, of married women. It is impossible with good faith to combine the inconsistent capacities of seller and buyer, crier and bidder, in one and the same transaction. The auctioneer has no authority to warrant the property sold unless such authority has expressly been given to him. He must use ordinary and reasonable care in keeping the goods entrusted to him for sale, but is not responsible for their safety. (A. S. Bolles, Putnam’s Handy Law Book, pp. 16 sqq.)

The auction price of an article is not the same as the ordinary buying price, which latter is supposed to represent the real value of the article. The auction price may fall far below the infimum pretium or rise far above the summum pretium. The just auction price is determined by the highest bid, whatever that may be. The element of equality required for all just contracts is provided in the case of auction sales in the equal chances afforded to seller and buyer, of profit and of loss. On the side of the buyer, as Fr. Cronin says, there is the chance of his succeeding in knocking out all other bidders; in favor of the seller there is the equal chance of each bidder being knocked out by the rest.²⁹

²⁹ Cronin, The Science of Ethics, Vol. II, p. 320 sq.

NOTION. Sale at auction, or by public auction (vente aux encheres), is that which is made through a herald, and in which the thing is adjudicated to the one offering the last greater price. - One is judicial, another voluntary, which is also called BIDDING.

1134. • PRINCIPLE. The just price in sale at auction is that which, without fraud, is constituted from the bidding itself. For it is determined by the free concurrence of buyers; wherefore, the thing becomes more estimable if many buyers concur, less estimable if few. The seller himself has tacitly accepted this estimation. Whence, from common sense, with public authority also approving, that is held as the just price which is offered by the last bidder, whether it is above the highest price or below the lowest; and the seller of himself does not have the right of withdrawing the thing, when bidding has begun, if a lesser price is offered.⁰² But the required equality is situated in this, that from each side, the same hope of gain and the same peril of damage are had.

We said without fraud; but fraud can be inferred both by the seller and by the buyer.

1. Fraud is inferred BY THE SELLER if he conceals an occult vice of the thing, or if he sends in fictitious bidders. Yet a seller would not be condemned who suborns fictitious bidders for redeeming himself from unjust vexation, for example because buyers agreed among themselves about not bidding. Likewise, in judicial sale, the inequity of conditions can easily excuse the seller if he sends fictitious bidders, namely lest things be sold below the middle price which, those adverse conditions being excluded, they would have.

2. Fraud is inferred BY THE BUYER if by deceit or threats he impedes others from bidding, or from offering more. But fraud will not be present if he asks others not to bid; for thus liberty of bidding is not taken away, provided the requests are not importunate.

1135. IT IS ASKED. Whether a buyer can ENTER A PACT with others, that they not bid, or not offer more?

Resp. Negatively, of itself. For the seller "has a right not to be deprived of the hope of obtaining a greater price, if several offerers intervene who, led by emulation, increase the price; for the right and nature of bidding seem to require this, so that equality be preserved. This has force at least in the case in which, by the sentence of a judge, the thing is exposed for auction; because then the owner of the thing is altogether held to hand over the thing to the one offering more, with danger of selling below the lowest price" (III, 808, dub. 2).

It is said of itself, because by accident this is sometimes licit. Thus buyers joined by society or friendship seem to be excused if they agree among themselves that only one of them will bid; because they make as it were one moral person, nor can it be exacted that they bid against each other.⁰³ Similarly buyers are excused in the case in which, from prevailing custom, the seller can withdraw his thing if a lower price is offered; because if he himself can impede the price from decreasing too much, equity demands that buyers also can impede it from increasing too much (Scavini, II, 405).

Note. Heralds to whom the sale of a thing is committed certainly sin against justice if they institute an auction at that time at which they know that few buyers are going to be present, namely so that they may favor friends; if they adjudicate the thing sooner or later than is usually and fittingly done; or employ other things of this kind, by which either damage is inferred on the seller, or favor is shown to one of the bidders, to the detriment of the others.

999. • By the name of sale under the spear, in the stricter juridical sense, there is understood only that sale by which, from the edict of a judge, certain things for sale, for example the goods of a debtor unequal to paying, are publicly exposed to be bought by those offering more. Yet commonly by the same name there is usually designated in general any sale in which the thing to be sold is proclaimed by a crier, whose bidding is admitted, and the thing is adjudged to the last bidding. Everywhere they also call this sale public auction, because on the part of buyers it is perfected by bidding, so that the later bidder increases the price offered by the former.

1000. • Sale under the spear, or public auction, is in use everywhere among nations, is approved by legitimate authority, and of itself contains nothing unjust. Whence without doubt it is licit in conscience; yet with this law, that the price be observed which in such a sale can be judged just. But in a public auction, with the holy Doctor Alphonsus, that price can be judged just which is determined by the public concurrence of bidding buyers; even if it descends below the lowest vulgar price, or is elevated above the highest vulgar price; provided frauds are truly absent, which, alas, in this species of sale intervene rather frequently, both on the part of the officials, and on the part of the sellers themselves, and on the part of the buyers coming together:

1001. • On the part of the criers fraud principally intervenes: if they adjudge the thing to be sold to someone more quickly than usual, with detriment to the seller; or if they begin the sale before the time, so that, buyers being lacking, the thing is sold at a lesser price.

1002. • On the part of the sellers themselves fraud principally intervenes: 1° If they positively conceal the vices of the thing, or expose one thing for another, or a defective thing as whole, unless nevertheless in that case, in the usual manner, the defective thing is simply sold as it is.¹ Likewise 2° of itself speaking, i.e. with attention to the original character of public auction, if they bid by themselves or suborn others as fictitious bidders; or if they withdraw the thing when a lesser price is offered. Nevertheless accidentally, namely: by reason of the contrary practice, nowadays almost universal, we think that it is possible to pronounce somewhat more mildly; because by reason of this practice the public auction itself seems to have put on as it were another nature; so that the seller would now imprudently be condemned who would withdraw the thing thus, or would bid himself by himself; since it is permitted not irrationally to presume that buyers, knowing this and prepared to do the same in a similar occasion, renounce their right, and therefore no injury is done to them.

1003. • On the part of buyers fraud principally intervenes: 1° If they impede others by force or deceit, for example by lies or other unjust means, so that they do not increase the price; but not if they simply ask others by non-importunate prayers, as is commonly practiced. 2° If they procure that the bidding be ended more quickly than is fair, and the thing be adjudged to them before the time. Likewise 3° of itself speaking also, if buyers agree among themselves not to bid or not to offer more; except nevertheless, according to many, the case in which buyers were joined in society, or quasi-joined as brothers, friends, etc.; since in this hypothesis they make as it were one moral person, and it would be harder to exact from them that they bid against one another. But accidentally, - namely: where the practice assigned above is in force, that sellers themselves by themselves or by others bid, and withdraw their thing when a lesser price is offered; - I would not dare to accuse of injustice even buyers who agree among themselves by pact that they cannot bid beyond a moderate price; for if the seller, by bidding and withdrawing the exposed thing, can impede the price from decreasing too much, equity also seems to demand that he not complain that buyers agree lest the price be increased too much. But whether by the same title, that the seller withdraws the thing, etc., the buyer can still be excused who gives or promises money to the rest so that they abstain from bidding, and thus the thing can be bought by him at a moderate price, is a very arduous question, concerning which Authors everywhere are silent, while fewer, touching it in passing, stand for a negative response, to which also the more common sense and practice of the fearful seem to give support. Indeed mindful of the wise warning of St. Antoninus: that no one is to be condemned of sin unless it is sufficiently clear concerning it, before the fact I deter the aforesaid buyer from a suspect manner of acting of this kind, but after the fact I do not presume to condemn him absolutely. As regards the case, not rarely occurring, in which someone has accepted money from the buyer under the condition of not bidding, while in reality he had no intention of bidding; it does not seem that the money must be restored to the buyer, since at least the right of bidding, which he abdicated, is worthy of a price. Cf. n. 857, 1°. But let all these things be said for the sole hypothesis that the seller can withdraw his thing, etc., and by no means for the case in which the seller is not able to do that in fact or in law, as happens, for example, in judicial sale under the spear.

1004. To be noted. - For judging the diverse arts and machinations which nowadays are practiced in public auctions, it is necessary chiefly to attend to these two things, taken collectively:

a) To the very nature of such a sale, namely that public auction is as it were an aleatory contract, to whose justice it pertains that as to the advantages to be hoped for and the disadvantages to be feared, the condition of the seller on the one side and the condition of the buyers on the other side be of itself equal; so that fraud is judged to be present where the order of this sale is subverted by either party in such a way that this due equality vanishes; and then:

b) To the practice commonly in force somewhere; for although common practice, even of the more fearful, does not necessarily furnish an unanswerable argument for the justice of a contract, nevertheless regularly it furnishes a founded presumption of that justice, which the confessor certainly ought not to reprove unless its falsity is sufficiently clear, as we have already warned above with St. Alphonsus. Yet the reins would be loosened too much for buyers if, as a practical principle, it were assumed that sellers, knowing the arts accustomed to be committed, voluntarily subject themselves to the same by this very fact, that they have proposed their things to be sold by the mode of public auction.

528. Sale by auction or public sale (vente aux encheres; openbare verkoop of veiling) is that by which a saleable thing, publicly set out, is proclaimed by a herald and adjudicated to the one offering the greater price. It can be voluntary or judicial, according as it is made spontaneously by the owner, or is established by law or imposed by a judge, for example, for paying debts.¹

¹ Cf. Civil Code, a. 826-827; 1686-1688; 2204-2218; Judicial Code, a. 673-677; 945-985.

It received its name from this, that formerly, by the judicial authority of a judge, it was made under some spear; it is also called public auction (a la hausse; bij opbod of hooger aanbod), because a later bidder increases the price of the earlier by ascending; also licitation, because by licitating, that is, by contending among several, the price is determined.

Therefore it is proper to this sale that the just price is not judged from common estimation, but is conventional, obtained from an honest contest among bidders; whence the contract is essentially aleatory, in which the seller and the buyer commit themselves to equal danger and hope, or take on an equal danger of losing and hope of gaining. Therefore, provided fraud is absent on each side, the price will be legitimate.

Such a sale can be made in two ways:

1. In itself, considering only the nature of the thing, the mode is fully aleatory, by which the seller establishes that the price, without any intervention, is to be determined by the bidding of buyers alone, and that the thing is not to be withdrawn, but handed over to the one offering more.

In this contract: a) it is illicit for the seller to send fictitious bidders who, without the intention of buying, increase the price of the thing (for thus he would impede what he had established: that the thing be handed over to the one offering more); and even if the price is offered below the common price, he is bound to yield the thing.

b) On the other side, buyers cannot by fear, fraud, or other unjust means (though indeed by prayers and persuasions) impede others from bidding or offering more, nor make an agreement among themselves not to bid beyond such a price or with respect to such a thing: for thus they act unjustly toward the seller, who is deprived of greater gain, and toward bidders who are deprived of the hope of procuring the thing for themselves. All these things, namely, are repugnant to the perfectly aleatory nature of the contract.

2. By accident, on account of custom, the mode is not fully aleatory, and the contract is mixed, by which the seller reserves to himself the right of increasing the price by himself or through others, and of retaining the thing for himself, if no one offers a greater price.

In this case a) the seller will be able to use false bidders and withdraw the thing, if the price offered is below the lowest.

b) On the other side, buyers can protect their own rights and at the same time make an agreement with certain others² not to bid beyond such a determined price.

² With certain others; for if it were done among all, there would be a monopoly, concerning which below.

By these devices, since some answer to others, equality is constituted. - Yet bidders could not by force, fear, or fraud turn other buyers away from bidding, since these means are unjust.

529. Principles concerning the justice and injustice of public auction.

1. The seller injures justice if he does not hand over the thing adjudicated, or if he sets out one thing and hands over another of lesser price.

2. Heralds injure justice if by unjust means they inflict damage on the seller or on certain buyers, whether by beginning before the time, or by instituting the auction at a time when they foresee there will be few bidders, or by adjudicating the thing sooner or later so that they may favor friends.

3. Bidders injure justice if by unjust means they impede other buyers from increasing the price.

4. The seller furnishes security as to eviction of the thing; but not as to defects, even redhibitory defects: for he sells the thing as it has been set out, unless nevertheless otherwise established by law or pact.

530. Question: Whether in auction it is licit to buy back one's own things by oneself or through another?

Resp. If the bidding is forced, this certainly is licit, since creditors rather than the owner sell, and certainly it is not fictitious bidding. If the bidding is free, then today it is licit by oneself or through others to take care that things not be sold below the lowest price: buyers ought to know this, especially because custom now permits the thing to be withdrawn altogether; - but it is not licit to send fictitious bidders for this end only, that the price be immoderately increased and buyers be deceived.

Retrovendition is a contract by which the seller reserves for himself the right of redeeming his own thing, under the condition that he compensate the expenses, improvements, or similar things. But mohatra is a certain species of retrovendition, or a contract by which someone sells a thing at a greater price on credit, with an agreement that the buyer sell it back to him at a lower price for cash. Let there be an example: Titius, needing cash here and now, approaches Peter, who, unwilling to give money as a mutuum, offers goods to be bought with money on credit and at the highest price, say $100, with an agreement that at once he sell them back to him for cash and at the lowest price, say $90. For thus Peter, not from the contract of mutuum, but from the contract of sale and purchase, gains that increase, and Titius provides for his present necessity by having $90, although after a year he must return $100.

I say 1st. The contract of retrovendition is wholly licit, provided the required conditions are present. The reason is both because in Lev. xxv, 24 such a pact is said to have been imposed upon the Jews, and because it contains nothing which contradicts natural law. But the conditions are 1st. that the price be diminished according to the estimation of the burden which is imposed upon the buyer; 2nd. that there be no pact concerning a retrovendition to be made at a greater or lower price; 3rd. that by the pact it not be required that the risk of the thing sold fall to the harm of the seller, since this of itself pertains to the buyer, unless however the price is increased according to the estimation of the risk; 4th. that the thing be sold back as it is handed over, vacant or with fruits. - Cf. St. Alphonsus, n. 812. - Kenrick, n. 61.

I say 2nd. The contract of mohatra is of itself illicit and nothing but disguised usury, as is established from proposition 40 condemned by Innocent XI, which reads thus: "The contract of mohatra is licit, even with respect to the same person and with a contract of retrovendition previously entered into with the intention of profit." - Cf. Viva on this proposition.

I say. Sale under the spear (auction, public sale), namely that which is made through a crier and in which the thing is assigned to the final bid, is licit, whether it is done with the owner's consent or against his will or by public authority, whether it is bought below the lowest price or sold above the highest; because public power approves that the just price be publicly constituted from the concurrence of buyers. Hence if buyers concur, the thing becomes more estimable; if they do not concur, it is held cheaper. - Cf. St. Alphonsus, n. 808.

"A Catholic official whose office is to preside when goods are sold under the spear," among which "sometimes there are found books of heretics or books containing other obscene things," is not bound "to investigate whether among the goods which are sold under the spear there are found books of heretics or others containing obscene things. But if by chance he has learned this, and can prevent bad books from coming to bidders who will abuse them, let him indeed do this, since each one ought to impede the sin of his neighbor when he can do this conveniently, or without his own grave harm." - S. C. de P. F. 27 June, 1820.

Question 1. Can a seller send fictitious bidders, so that the price of the thing may rise?

Resp. Negatively, according to St. Alphonsus, because this appears too fraudulent to be excused, since it tends to deceive sincere buyers, and therefore inflicts injury upon them, since they are the cause that the price rises from fraud, and not from the natural concurrence of things, that is, from the free consent of buyers. Nevertheless others say that, by force of custom, if any exists, indulgence is to be granted to those who act thus. - Cf. St. Alphonsus, n. 808; and Hom. Ap., n. 175. - Kenrick, n. 50.

Question 2. Can a buyer make an agreement with others, that they not bid, or not offer more?

Resp. Negatively, according to St. Alphonsus and several other theologians, at least in the case of a forced auction. The reason is that the seller has a right that the buyers be perfectly free and that the increase of the price not be impeded. Yet Cardinal de Lugo with Diana and others seems to hold the contrary, at least with regard to the guilt of injustice, and he admits that it is the common opinion of the Doctors that then a sin is committed only against charity. Cf. St. Alphonsus, n. 808. - Lugo, disp. 26, n. 175. - Baller., note (b), p. 739.

Monopoly is distinguished in two ways. One is legal, which consists in the power of selling certain goods granted by public authority, for a reasonable cause, to one or to several; and the other private, which consists in a manner of acting by which one or several bring it about that they alone sell or buy something.

I say 1st. Legal monopoly is licit, provided it is done with a just price. The reason is that, on account of a just cause of the public good, the Prince can grant it as a privilege or for exacting a tax from merchants.

I say 2nd. Private monopoly is illicit in the following cases: 1st. if a merchant impedes by fraud or lie, lest other goods be brought in, so that he may sell his own goods more dearly with common detriment; 2nd. if one or a few buy all the goods so as afterward to sell them more dearly; 3rd. if workmen or craftsmen agree that they will not teach their art except at an unjust price, or that no one will complete work begun by others; 4th. if laws enacted by the State for preserving the just price and not restricting commerce are violated. For these laws oblige in conscience and indeed, as it seems to us, to restitution when others suffer harm from the violation. Such laws protect rights, secure subjects against fraudulent actions of sellers and companies of merchants. These laws among us are "The Sherman Law"; two or three or more of the last sections of the most recent law, "The Clayton Trust Bill," amend that prior one, while other sections of the same and one section of the law, "Federal Trade Commission," complete it.

"Sec. 6. That the labor of a human being is not a commodity or article of commerce. Nothing contained in the anti-Trust laws shall be construed to forbid the existence and operation of labor, agricultural or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade under the anti-Trust laws." - Clayton Trust Bill, Section 6. Cf. The World Almanac an. 1915, p. 300. See below n. 994, Q. 5.

Question 1. Whether and in what way do merchants sin who conspire not to sell their goods except at the highest, although just, price?

Resp. They certainly seem to sin against charity, because although they are not bound to sell below their own price, nevertheless they are bound not to dissuade others from selling at a lower price. Thus, although by charity you are not bound to give alms to such a poor man, nevertheless you are prohibited from dissuading others if some wish to give it. - But more probably they do not sin against justice, because if others are compelled to buy at the highest price, they are not compelled by the sellers, but by their own necessity, which cannot be called true coercion on the part of the sellers. Yet the highest price here must be understood as that which would exist without the monopoly, not that which arises from the monopoly. - Cf. St. Alphonsus, n. 817. - Lugo, disp. 26, n. 173.

Question 2. Do merchants sin against justice or against charity who, at the time of harvest or vintage, buy all the wheat or wine of the region at the cheap price then current, so that afterward they may sell more dearly?

Resp. Negatively, more probably, as it seems, with regard to justice, provided they do not sell above the highest price which would be current with the monopoly excluded. The reason is that they violate the right of no one. Indeed a negative answer must also be given, at least probably, with regard to charity, provided they do not induce others to sell more dearly, nor themselves sell above the highest price which would have place with the monopoly set aside, because they use their own right; for no one is bound to neglect his own advantage so as to avoid another's harm, when he is not obliged to avert it. - Cf. St. Alphonsus, n. 816. - Kenrick, nn. 64 et seq.

Question 3. Can the justice of the price be taken from the very state introduced by force of monopoly?

Resp. Negatively. The justice of price must not be taken from the state which monopoly has introduced, but from the state which the goods would have with the monopoly excluded. For if the justice of price depended on the will of the seller or buyer unwilling to sell or buy except at such a price, in fact no price would be unjust. Therefore the justice of price "ought," as Lugo says, "to depend on other antecedent circumstances, namely on the abundance or scarcity of goods and of money, on the many or few who sell or buy, and on the necessity of selling or buying which they have." In the case of monopoly the abundance "of goods is the same" as if no monopoly had existed; "also the will of selling," for they wish to sell their own things and at the same time "to extort a greater price; but if they cannot obtain this, they will sell at a lower price; therefore there is nothing from which, antecedently to the will of the sellers, the price is to be increased, but the same price must be estimated just which would be just if monopoly had not preceded." Hence "monopoly occurs when someone at the time of harvest or vintage, for example, buys all the wheat or wine, or the greatest part of it, at the cheap price then current, so that afterward all may be compelled to buy from him at the highest price; and this very thing will be if some few agree and conspire for this. Therefore this will be against justice if afterward they sell above the highest just price. But the highest just price must be understood, not that which results from their agreement, who are unwilling to sell except at such a price, but that which, with that agreement excluded, would be the just price, considering the quantity of wheat or wine for sale and the greater or lesser frequency of buyers." (Lugo, disp. 26, n. 176.) And thus also when monopolists by force or fraud deprive small sellers of their commerce by establishing shops in the same neighborhood and selling the same goods at a price below the lowest, and then, having obtained the whole commerce of these goods, sell them at a price above the highest just price, they certainly violate commutative justice and are bound to restitution.

In like manner they are bound to restitution when they compel other sellers of the same goods to sell at a price above the highest just price, if, for example, monopolists greatly increased the price of coffins, which they would not sell to small undertakers unless they pledged that they would sell at too high a price.

But are these second sellers, selling at that price now current, which otherwise would be unjust, also bound to restitution? Very many indeed affirm this, whose reason is urgent: these are obliged because the price is unjust. Therefore not only the imposers, which all hold, but these also must restore. But the Salmanticenses: "the truer opinion is the one denying that such sellers sin, even if they are not ignorant that the increase of price had its origin from an unjust agreement, because now that price is common and vulgar. But that it has been increased from the injustice of others is accidental to me, because by selling a thing at the current price, I sell at the just price." (Salmanticenses.) Because the just price of the market is judged among all to be that which now commonly runs, from whatever source this comes. - Sal., tr. 14, cp. 2, p. vi, n. 57.

They also commit injustice who too greatly increase the price of things which are called of first necessity, for example, bread, flour, coffee, milk, etc., because the liberty of the contracting buyers is lacking, and hence equality; the same quantity is always consumed; for whether they wish or do not wish, men must obtain those things for themselves; hence there is the same will on their part. - Cf. Bulot, n. 804, 111, 3rd. - Lugo, l. c. - Bouvier, Law Dictionary, Restraint of Trade.

Sale through brokers is that which is not made immediately by him to whom the things belong, but through others by commission, and these are called brokers. But brokers can be either merely friends, or hired for this by a special wage, or employed for diverse works at an annual price.

Question 1. Can a broker who sells above or buys below the price designated to him retain the excess of price for himself?

Resp. Negatively, generally speaking, because he has no title for retaining anything. For he does not have it by reason of the thing, because it is not his own but the owner's; nor by reason of labor and industry, at least by a strict title of justice owed to him, because if he has been hired by a stipend, he has a right to nothing else; but if he renders the industry gratuitously, he has already renounced a wage. Except: 1st. if by extraordinary and undue labor, or by wholly special industry or diligence, he made the thing better; 2nd. if the owner expressly or equivalently declared that he requires nothing beyond the determined price; 3rd. if the owner knew the broker's manner of acting and held it ratified. Cf. St. Alphonsus, n. 825.

Question 2. Can the broker buy for himself a thing to be sold at a price determined for him, and afterward sell the same thing as his own at a greater price?

Resp. Affirmatively, with two conditions posited, namely: 1st. that, having employed moral diligence, he does not find a buyer who offers more; otherwise he would act against his own office and the certainly known will of the mandator; 2nd. that he buy the thing for himself not fictitiously, but truly, so that he undergoes its risk; and if perchance he does not sell it for so much, nevertheless he renders the determined price; otherwise equity is not preserved.

Question 3. Can a broker retain for himself those things which the seller gives gratuitously solely out of regard for him?

Resp. Affirmatively, if the true donation is established; because a merchant, absolutely speaking, can yield something from his own profit to some broker, that he may bring him to his shop; but for this it is required that he be truly disposed to sell to any other at the higher price, and in fact ordinarily sell thus. But the confessor ought not easily to give credence to brokers asserting that such donations were made to them, unless there is question of places where merchants are accustomed to act thus. - Cf. St. Alphonsus, n. 825; and Hom. Ap., n. 189.