An Auctioneer may not Retrieve or Reopen the Bid Once an Auction Sale is Final

Commonwealth Court of Pennsylvania in Stiles v. Auctioneers Examiners Bd.,  816 A.2d 1254, 1255 (Pa. Commw. Ct. 2003) held that in an auction sale, the sale is complete by the fall of hammer.  An auctioneer may not retrieve or reopen the bid and resell an item once the hammer falls and the sale is final.  

In Stiles, the Plaintiff auctioneer, Stiles (“Plaintiff”) announced that he would be conducting auction sale at one location and that his assistant would be conduction auction at a different location to sell certain items. He also announced that he would return and sell two of the items found at the assistant's location. However, the Plaintiff reached the assistant’s location only after the assistant sold the two items.  Martin Hughes (Hughes) was the successful bidder for the tiller, (one of the two items) and the assistant announced that the tiller was sold to Hughes. At the request of unsuccessful bidders, the Plaintiff retrieved the tiller from Hughes and resold it to someone else.  Consequently, Hughes filed a complaint before the State Board of Auctioneer Examiners  (“Board”). The Board concluded that Plaintiff violated Section 20(a) (7) of the Act when he demonstrated incompetence by retrieving the tiller from the successful buyer at auction and by auctioning the property for a second time. The Board ordered Plaintiff to pay a civil penalty of $ 1000.00. Then, Plaintiff petitioned the Board’s Order in the Commonwealth Court.

Plaintiff argued that he had the right to reopen the bid and the Board did not consider situations which allow him to reopen the bid under Sec2328 of Article2, Sales, of the Uniform Commercial Code (The Code).  The  Plaintiff stated that the Board only considered the first part of Section 2328(b) of the Code and did not consider or understand the circumstances that allowed for the reopening of the bid. Stiles 816 A.2d 1256
  
 Stiles contended  that because he had informed the public that he would return to auction off the disputed item that the associate auctioneer erred in selling the item and that in doing so the public was not properly informed of the auction, that as a result bidders who wished to bid on the items were not present at the time of the auction, and that Section 2328(b) allows an auctioneer the option of reopening the bid when he or she recognizes that one or more bidders were wanting to bid at "the time the hammer was falling". Id.

The court observed that Section 20 of Auctioneer and Auction Licensing Act provides in pertinent part as follows:
(a) General rule. - The board may, upon its own motion, and shall, promptly upon the verified complaint in writing of any person setting forth specifically the wrongful act or acts complained of, investigate any action or business transaction of any person licensed by the board and may temporarily suspend or permanently revoke licenses issued by the board or impose a civil penalty not exceeding $ 1,000 at any time when, after due proceedings provided in this act, it finds the licensee to have been guilty in the performance or attempt to perform any of the acts prohibited to others than licensees under this act, as follows:…

(7) Any act or conduct in connection with a sales transaction which demonstrates incompetency, bad faith or dishonesty.

Court also observed further that, Section 2328 of the Uniform Commercial Code provides in pertinent part as follows:
(b) When sale complete. - A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

The appellate court found that Plaintiff misconstrued the law as it applies to his case. The court clarified that the Code allows the auctioneer to reopen a bid if it is made "while the hammer is falling." The Code does not allow a person to come in after the sale is final and say that he had intended to bid on an item and therefore, the auctioneer should go retrieve and resell it. The Code refers to the time period between when the auctioneer raises the hammer and when the hammer actually falls as the time period for which a person may have yelled out a bid and the auctioneer may reopen the bid to accept this proposal and continue with the bidding. Once the hammer falls and the sale is final, the auctioneer may not retrieve and resell an item. 
Therefore the court affirmed the Board’s decision.