The Sale of Personal Property by Auction as Well as Real Estate by Auction are Governed by the Same Law

In Collins v. Heitman, 225 Ark. 666, 284 S.W.2d 628 (1955), Mrs. Helen Thomas had offered her land for sale at auction. In an instrument Mrs. Thomas and the auctioneer, entered into an escrow agreement, whereby, appellant herein was designated as the escrow agent. The terms and conditions governing the sale provided that the owner of the land reserved the right to reject any bids. The appellee was the successful bidder and reduced his bid to writing and delivered his check for one-half of this amount. His check was accepted for the required deposit, and was issued a certificate of bid, showing the balance due on the purchase price. Later, the attorney for Mrs. Thomas rejected four of the bids including the appellee's bid. Mrs. Thomas delivered to appellant a warranty deed to the property. This deed was filed for record in Saline County. Appellee filed suit against Mrs. Helen M. Thomas in the Saline Chancery Court, for specific performance of his alleged contract of sale of the land. The trial court found, that a valid sale had been made to appellee and ordered Mrs. Thomas to execute and deliver to appellee a deed to the land. The commissioner executed a commissioner's deed to appellee for the land in question, pursuant to said decree.

On appeal, the Supreme Court of Arkansas found that there was undeniable evidence that the appellee submitted the highest bid for the subjective property. This bid was acknowledged by the auctioneer and appellee delivered his check for the requisite down payment. The appellant contended that Mrs. Thomas, the owner of the land, had an unfixed time boundary in which to reject the proposals. However, the executed printed instrument simply stated ‘that the owners of the property involved reserved the right to reject a bid or bids on any lot, group of lots, or the entire farm.’
 
“Ark.Stats.1947, Section 68–1421(2), covers sale by auction of personal property and provides as follows: ‘A sale by auction is complete when the auctioneer announces its completion by the fall of the hammer, or other customary manner. Until such announcement is made, any bidder may retract his bid; and the auctioneer may withdraw the goods from sale unless the auction has been announced to be without reserve.’” Collins v. Heitman, 225 Ark. 666, 670, 284 S.W.2d 628, 632 (1955).
 
The Supreme Court stated that, “[t]he law that governs the sale of personal property by auction also governs the sale of real estate by auction. Such terms and conditions that may affect the rights of the parties must be announced and agreed upon before the completion of the sale. Unless otherwise provided, the seller's right to reject any or all bids must be exercised before the acceptance of the successful bid. The auctioneer is the agent of the seller and his act in accepting the bid is binding on the seller. The seller has no right to reject a bid after the bid has been accepted and the purchaser has delivered the required payment. The same rule applies to the purchaser, who has no right to reject the sale after he has submitted the successful bid and has delivered the required payment.” Id.

The court further stated that, “[i]n this case, a contract was entered into when appellee's bid was accepted at the auction sale, without rejection by the seller, and appellee delivered the required payment. The contract was binding at this time.” Id.
The court concluded deciding that the auction purchaser's title related back to time of acceptance of bid by auctioneer and was superior to later acquired title of escr