In Washington, an Auctioneer who has Actual or Constructive Knowledge of an Owner's or Lienor's Interest in the Goods being Auctioned is liable for Conversion if the sale was not Authorized by the Owner/Lienor

The Washington Court of Appeals in Top Line Equip. Co. v. Nat'l Auction Serv., 32 Wn. App. 685, 687 (Wash. Ct. App. 1982) held that, in Washington, an auctioneer is liable for conversion if he sells goods without the consent of an owner or mortgagee and with actual or constructive knowledge of an owner's or lienor's interest in the items being auctioned.
In this case, the National Auction Service, Inc., a Washington corporation (“Appellant”) was engaged by Ireco to sell some of its goods.  Ireco had leased from Top Line, the lessor,  (“Appellee”)  two Clark forklift trucks.  The Appellee perfected its interests in the forklifts by filing U.C.C. financing statements with the Oregon Secretary of State and the county clerk in Eugene. 
 
The Appellant conducted the auction and sold the forklifts.  The Appellee initiated a suit against the auctioneer for conversion.  The Appellant was not aware of the Appellee’s interest in the truck.  The trial court found that the Appellant auctioneer as Ireco’s agent was liable for conversion.  This appeal followed. 
 
The Court stated that an auctioneer becomes the seller’s agent when he is involved in auction sales. Id. at 689.  An auctioneer's liability for the unauthorized sale of property is based on agency. Id.  The Court stated that an auctioneer stands in the shoes of his principal and is liable for conversion when the owner or mortgagee is unaware of or has not consented to an auction sale. Id. at 690.  The Court pointed out that the majority rule is that the auctioneer cannot take the defense of good faith, innocence, or lack of knowledge of the Appellee’s/Plaintiff's interest in the property. Id. at 691. 
 
However, Washington law states that the auctioneer should have actual or constructive notice of the plaintiff's interest in the property before he can be held liable for conversion of property. Id.  [A]n auctioneer who sells mortgaged personal property, without the knowledge or consent of the mortgagee, can be held liable for the conversion of the mortgaged property, if he had either actual or constructive notice of the mortgagee's interest therein. Id. (citing Bunn v. Walch, 54 Wn.2d 457, 460, 342 P.2d 211 (1959).)
 
In the present case, the auctioneer had constructive notice of Plaintiff Top Line's interest in the auctioned item because of the Plaintiff’s U.C.C. filings in Oregon. Id. The Court held that the evidence that the owner was unaware of the sale is sufficient to prove that the sale was not conducted with the Plaintiff’s authorization. Id.  The Court stated that, if the Plaintiff was not aware of the sale, it could not have consented to it. The Court found that there is substantial evidence to support the trial court's  finding that "no responsible agent of [Top Line] was aware of this sale.”  The Court affirmed the lower court’s judgment.