Liability of auctioneer advertising a sale without reserve.

Liability of the owner of property advertising a sale by auction without reserve.

Advertise -ment of a Bale by auction is not an offer, open to become a contract on acceptance that the sale shall take place.

In fact authorise the agent so to contract for him; see below, Chap. XIX. Sec. 2 , at end.

(m) Warlow v. Harrison, 1 E. & E. 295, 309. This was so decided on the theory of the advertisement being an offer open to all, which was turned into a contract by acceptance of the bidding.

(n)Mainprice v. Westley, 6 B. & S. 420.

(o) Johnston v. Boyes, 1899, 2 Ch. 73, 77. following Warlow v. Harrison, above, n. (m): and see Blackburn and Quain, JJ., Harris v. Nickerson, L. R. 8 Q. B. 286, 288, 289

A matter to be considered before the formation of a contract is the payment of a deposit. For no deposit of any part of the purchase-money can be lawfully demanded after an open contract for sale has been concluded; as the whole price is not payable until the time for completion, which in the case of an open contract is the time when the vendor shall have shown a good title (r). On sales by auction a stipulation is invariably made that a deposit of a certain proportion (generally ten per cent.) of the purchase-money shall be paid by the purchaser immediately on entering into the contract. On London sales, it is usually provided that the deposit shall be paid into the hands of the auctioneers; on country sales, the vendor's solicitors are generally appointed to receive it (.s). The deposit is taken not only in part payment of the purchase-money, but also as a guarantee for the due performance of the contract; and it is liable to be forfeited by the purchaser if he fail to carry out the agreement. This is the case, whether the stipulation for payment of the deposit expressly so provide, or not (t). When the deposit is paid to an auctioneer, he receives it as stakeholder, being liable to pay it to the vendor, should the contract be completed or the purchaser break the contract, but to the purchaser, should the contract be broken by the vendor (u). The auctioneer is responsible for the sum deposited with him; and as he receives the deposit in this character and with this responsibility, and not as agent for either party, he is entitled to retain for his own benefit any interest he may make by the use of the money, whilst it remains in his hands. Until the purchase is completed, the auctioneer ought not to part with the deposit without the consent of the purchaser as well as of the vendor (x). Where the deposit is paid to the vendor's solicitor, it is generally received by him as agent for the vendor. In that case he cannot put it out at interest without accounting therefor to the vendor; and if the vendor demand payment of the deposit to himself, the solicitor will be bound to hand it over to him(y). If however the vendor's solicitor receive the deposit in the character of stakeholder, and not as the vendor's agent, he will be subject to the same responsibilities and enjoy the same advantages as any other stakeholder (z).

Payment of a deposit.

(p) Harris v. Nickerson, L. R. 8 Q. B. 286.

(q) Mainprice v. Westley, 6 B. & S. 420, 427; Richardson v. Silvester, L. R. 9 Q. B. 34.

(r) Sinks v. Rokeby, 2 Swans. 222; Doe d. Gray v. Stanion, 1 M. & W. 695, 701; 2 Dart, V. & P.

630, 5th ed.; 711, 6th ed.; 623, 7th ed.

(s) 1 Davidson, Prec. Conv. 619 and n. (c), 5th ed.; 1 Key & Elphinstone, Prec. Conv. 258 and n. (b), 4th ed.; 246, n. (a), 8th ed.

(t) Howe v. Smith, 27 Ch. D. 89; Sprague v. Booth, 1909, A. C. 576, 579, 580.

Sometimes provision is made for payment of a deposit on sales by private contract. The insertion of such a condition is of great advantage to the vendor, owing to the rule that the deposit is a guarantee for the purchaser's performance of his agreement (a). To the purchaser, however, the payment of a deposit is correspondingly prejudicial; as it leaves him exposed to the danger of losing his deposit in a case where the Court, while refusing to enforce specific performance against him, will yet hold him to his bargain at law (b). A purchaser by private treaty should therefore take care not to bind himself by a stipulation for payment of a deposit, if he can possibly avoid doing so. And if the vendor refuse to sell except on condition of the payment of a deposit, the purchaser should on no account agree to the payment of the deposit to the vendor, or to the vendor's solicitor as his agent, but should insist on placing the deposit in the hands of a stakeholder. If the vendor's solicitors be of good repute, they may usually be accepted as holders of the deposit, the contract expressly providing that the same is to be paid to them as stakeholders. For if a purchaser submit to pay a deposit to the vendor's solicitors as the vendor's agents, he may find that the vendor can make no title to the property sold and is insolvent; and in such a case the purchaser will have no right to sue the solicitors for the recovery of his deposit (c).

Payment of deposit on sales by private contract.

(u) Harington v. Hoggart 1 B.

& Ad. 577. See below, Chap. XIX. Sec. 1.

(x) 1 Dart, V. & P. 178, 5th ed.; 205, 6th ed.; 203, 7th ed.

(y) Edgell v. Day. L. R. 1 C. P. NO.

(z) Wiggins v. Lori, 4 Beav. 30. (a) Above, p. 26.

All contracts for the sale of land, whether made by formal memorandum or by letter (d), must be duly stamped; otherwise they cannot be given in evidence, except in criminal proceedings, and are not available for any purpose whatever. But they may be stamped after execution, and so received in evidence on payment of the proper duty and the appointed penalty (e).

Stamp on contract for sale of lands.

(b) Scott v. AIvarez, 1895, 2 Ch. 603. See below, Chap. VI.

(c) Elis v. Goulton, 1893, 1 Q. B. 350.

(d) See Guythor v. Gordon, 3 Times L. R. 461; Carlill v. Carbolic Smoke Ball Co., 1892, 2 Q. B. 484, 489, 490, affirmed 1893, 1 Q. B. 256.