Auctioneer Warrants Title

An auctioneer can be responsible to the Buyer of stolen property for a refund unless the auctioneer disclosed the principal (Seller).  It may be unclear what type of disclosure, timing and other factors may be involved.
 
An auctioneer who fails to disclose his principal--is deemed to warrant title to goods he sells--is widely accepted in other states. See, e.g., Universal C.I.T. Credit Corp. v. State Farm Mutual Automobile Insurance Co., 493 S.W.2d 385, 390 (Mo.App.1973); Abercrombie v. Nashville Auto Auction, Inc., 541 So.2d 516, 518 (Ala.1989); Michigan National Bank v. Michigan Livestock Exchange, 432 Mich. 277, 439 N.W.2d 884, 886 (1989); Masoud v. Ban Credit Service Agency, 128 Misc.2d 642, 494 N.Y.S.2d 598, 600 (1985); Oliver v. Eureka Springs Sales Co., 222 Ark. 94, 257 S.W.2d 367, 368 (1953); see also, 7 Am.Jur.2d Auctions and Auctioneers Sec. 67 nn. 47-50.

These courts have replied to the intuitive thought that surely an auctioneer is not acting for himself but selling the property for someone else in language such as this: That argument proceeds on a mistaken view of the law.... [T]he mere fact that a defendant is acting as an auctioneer is not in itself sufficient notice to provide immunity from liability. The requirement 573 So.2d 786 is that auctioneer disclose the name of its principal, and the record in this case is abundantly clear that this was not done.... [Moreover, ... the] bidder was not advised and could not ascertain the name of the selling dealer until after the sale had already been consummated. Under these admitted facts, Auction Company must be held to the obligation of an implied warranty to Banning....        Universal C.I.T., 493 S.W.2d at 391.        The theory of the rule is that an auctioneer is in a better position than buyers at an auction to ascertain the title to property being sold which would indicate the true owners. See State Bank of Independence v. Equity Livestock Auction Market, 141 Wis.2d 776, 782, 417 N.W.2d 32, 34 (App.1987) (quoting PCA v. Equity Coop Livestock Sales Ass'n, 82 Wis.2d 5, 8-9 n. 5, 261 N.W.2d 127, 128 n. 5 (1978); Accord Heritage Bank, N.A. v. Vilsmeier Auction Co., 218 N.J.Super. 440, 443, 527 A.2d 970, 971 (1986) (auctioneer could have known of bank's interest if it had applied for a title search from the DMV and paid a relatively small fee). Under the rule the auctioneer may protect himself by the simple act of disclosing his principal.

Jones v. Ballard, 573 So.2d 783 (Miss. 1990) 

 

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