"To the fourth cross-interrogatory he says: auctioneers; hereby, also, releasing the said Immediately after the sale, I was informed by Head & Pillsbury from any claim for damthe auctioneer, that, when Wadleigh stopped age, by or in consequence of any of their prohim at thirty-nine thousand dollars, he (the ceedings relating to said sale of said property. auctioneer) then bid the remaining one thou- "In witness whereof, I have hereto set my sand dollars on his own responsibility, al- hand and seal, this 21st day of July, A. Ď.. ternately with Foster. On my return to Bos- 1841. Samuel Veazie. [L. S.]" ton, I related this (with everything else that This release was introduced into the cause had transpired) to the defendants, my employ-by agreement of counsel, filed at a subsequent ers." stage of the proceedings; by which agreement it was admitted that neither the respondents nor their counsel had any knowledge of the existence of the *release until after the [*143 publication of the evidence in the suit, and "I did not, nor did anyone to my knowledge also further admitted, that the release and or belief, request or authorize or in any way circumstances under which it was given suggest to the auctioneer, or any other person, might be referred to and made use of in the to bid at said sale, in behalf of the defendants, cause with the same effect as if the same had or to make any fictitious or pretended bid at been put in issue by a cross bill and admitted the said sale, or to do anything, or permit any-by the answer. It will be seen by referring to thing to be done, unfairly, to enhance the price of the said property."

John Bright, who was the agent for the owners of the property prior to the arrival of Stephen H. Williams, thus testified to the fourth interrogatory:

To the fifth interrogatory:

the third volume of Story's Reports, p. 66, that Mr. Justice Story did not consider this agreement as a proper mode of introducing the release into the cause, when it came up before him for argument. According to his suggestion, the proper steps to do so were immediate

remarks are here made for the purpose of connecting the report of the case in 3 Story's Reports, 54, with this statement.

"I did attend the sale. I did not bid on the property, nor did I then know, nor had I cause to believe, that said auctioneer was himself bidding on the said property, nor that anyonely taken by filing a supplemental bill. These was bidding on said property for the defendants, or was using any unfair means to run up said property, or to enhance the price thereof." 142*] *The witnesses all concurred, that there had been a great depreciation in the market value of mills and mill privileges since January 1, 1836.

The terms of sale were ten per cent. of the purchase money payable immediately, and twenty per cent. more upon the delivery of the deed. These two sums together made $12,000, all of which was paid by Veazie. The balance, being $28,000, was divided into two notes of $14,000 each, payable in one and two years. The first was also paid; and the interest upon the second up to the 1st of January, 1840. The amount still due was, therefore, one note of $14,000, with interest from the 1st of January, 1840. Upon this note suit was brought against Veazie, prior to the filing of the bill in this case.

These were the circumstances attending the sale, as stated by the principal witnesses.

On the 23d of July, 1841, Veazie filed his bill of complaint on the equity side of the Circuit Court of the United States for the District. of Maine.

The bill stated, that, on January 1, 1836, defendants owned two mill privileges in Maine, and on that day offered them for sale, at auction, at Bangor, in Maine, employing one Head as auctioneer, and, by themselves or agent, instructed Head to put them up, beginning with $14,500, minimum, and prescribed certain conditions of sale as to payment; that the complainant, relying on the good faith of defendants and of Head, attended the sale, and bid.. by one Foster as agent, and, the minimum having been offered, Head continued to announce a still higher sum, and Foster, supposing it fair and honest, made a still higher bid, and so on, until said property was struck off to Foster, for the plaintiff, at $40,000. And thereupon the On the 21st of July, 1841, the following complainant, supposing the sale had been conrelease was executed by Veazie to Head, viz.: ducted and the bidding made in good faith. "Know all men by these presents, that I, complied with the conditions of sale, paid Samuel Veazie, of Bangor, in the County of $4,000 in cash, $8,000 more on delivery of the Penobscot, and State of Maine, Esquire, in deed, gave his note for $14,000 in one year. consideration of one dollar to me paid by Hen- with interest, which he has since paid, and his ry H. Head and Nehemiah O. Pillsbury, both other note for $14,000 in two years, with inof said Bangor, auctioneers, and late copartners terest, on which he has paid the interest annuin the auction business, under the firm and ally to January 1, 1840. And defendants exestyle of Head & Pillsbury, the receipt where-cuted a deed to complainant, and complainant of I do hereby acknowledge, do hereby release a mortgage of same to defendants to secure and discharge said Head & Pillsbury, jointly said notes, and another of $1,900, received as and severally, from all damages by me sus- part of the $8,000 aforesaid. tained, or supposed to be sustained, and from The bill further alleges, that there was no ail action, or causes of action, to me accrued or real bid at said auction for more than $16,000 accruing in consequence of any misfeasance, or $18,000; but that the auctioneer, by sham nonfeasance, or malfeasance, or any illegal bids, run up said Foster from about $16,000 to management by them done, performed, or suf- $40,000, Foster's being the only real bona fide. fered, at the sale at auction of Nathaniel L. bids over about $16,000; by means of which Williams and Stephen Williams's real estate, pretended bidding and management of the aucsituated in Old Town, in said County of Pe- tioneer, defendants have received from the nobscot, on or near Old Town Falls, so called, complainant a large sum of money which they which was sold at auction on or near January] ought not to have received; and so the [*144 1st. 1836, by the said Head & Pillsbury, as complainant has been deceived and defrauded.

The bill further alleges, that complainant bid above $16,000, or $18,000, or any such discovered the fraud since January 1, 1840, sum; or that the auctioneer run up Foster, by and notified defendants of it, and hoped they sham bids, from $16,000, or any such sum, to would have refunded the money; but they not $40,000; or that there was no real bid above only refused to rescind, but have commenced $16,000, or any such sum. a suit on the unpaid note, which is now pending in this court, and attached complainant's property.

That more than five years and six months have elapsed since said sale, and defendants have lost the benefit of evidence as to occurrences at said sale, and there has been a great depreciation in such property, owing to an increase in the number of mills, the scarcity of timber, and financial difficulties in that region, The prayer of said bill is, that said suit may by which mill sites have much depreciated in be enjoined, the note delivered up, the sale re- value; and defendants believe that changes scinded, and the money paid back with in-have been made in the property by building or terest.

the sale, and in all the transactions connected therewith; and they are responsible for all his acts, and his knowledge, connected with the sale, and cannot avoid that responsibility on the ground that he was a public officer.

Head's liability to defendants was asked or intended. The supplemental bill then prayed that said release may be reformed and restrained to the true intention of the parties. The answer to this supplemental bill stated that the existence of the release was not dis- IV. That an auctioneer cannot legally be a covered by defendants until after the testimony bidder on his own account; and therefore, had been taken in the original case; that de- whether the bidding by Head was really for fendants now insist on it as a bar; do not know himself, as intending to purchase, or merely whether any consideration was paid for it; and pretended, for the purpose of enhancing the as to the intentions of the parties, or any under-price, it was equally a fraud upon the comstanding as to its legal effect, no fraud was plainant, and vitiated the sale. practiced to procure it to their knowledge, or any language used that was not intended by complainant, by whom it was signed by the advice of counsel and under no mistake of fact; and it is not competent for him to control or alter it by extrinsic evidence. They have no knowledge of the intentions of the parties to it, or what inducements or agreements led to it. They have been informed by Head, that Veazie's counsel promised him an indemnity, and this was accordingly given. They deny that Head expected that, after said release, he would be liable to any action by defendants, or any construction given to the release which would prevent his being held harmless against them.

To this answer there was a general replication.

On the 3d of August, 1844, a bill of revivor was filed against Louisa Williams, the widow 147*] and executrix of Stephen *Williams, deceased, and at May Term, 1845, the bill was revived by consent of counsel, and the cause set down for hearing.

At the same term it came on to be heard upon the bill, answer, pleadings, and evidence, when the judges of the court, being divided in opinion on the merits of the cause, ordered and decreed that the bill be dismissed, without costs to either party.

This decision is reported in 3 Story's Reports, 612.

V. That defendants became actual parties to the fraud by having received information of one illegal act of the auctioneer at the sale, before the contract was closed, which they did not *communicate to the complainant, [*148 but concealed, and by which they were put upon inquiry.

VI. That equity will not allow the defendants to retain the proceeds of a fraud committed by their agent, whether they had knowledge of it or not.

VII. That Head was not a necessary party to the bill.

VIII. That the release to Head & Pillsbury is no bar

1. Because equity will not extend its operation beyond its legal effect and the intention of the parties, which were a release of damages: 2. Because it was a release to the agent, and not to the principal.

3. Because the defendants would have no right of action against Head & Pillsbury, should the sale be rescinded.

4. The extent and design of a release, like a receipt, are explainable by extrinsic evidence. IX. That the claim of the complainant to rescind the contract is not barred by lapse of time. Because six years had not elapsed between the sale and the filing of the bill, or between the discovery of the fraud and the filing of the bill, and there had been no loss of evidence or change in the actual condition of the property, such as would justify the court in refusIt was very elaborately argued by Mr. Fes-ing relief; and because the circumstances atsenden and Mr. Webster for the complainant and appellant, Veazie, and by Mr. Davies and Mr. Gilpin for the defendants.

An appeal from it by the complainant below brought the case up to this court.

The points on the part of the appellant were thus stated by Mr. Fessenden. They were stated somewhat differently by Mr. Webster, as will be mentioned afterwards.

As stated by Mr. Fessenden they were— I. That the defendants were owners and sellers of the property described, at said auction sale, by and through Head, as auctioneer; and that the complainant was purchaser of the same through the agency of Foster.

II. That Head, the auctioneer, did, by pretended and illegal bidding at the sale, greatly enhance the price to the complainant; that he actually received no bid from any bona fide bidder, or person proposing to purchase, other than the complainant's agent, above the sum of twenty thousand dollars, or thereabouts; but, by illegal and fraudulent practices, induced the complainant's agent to bid, and the complainant to pay, a much larger sum than they would have done had said sale been fairly conducted.

III. That Head, the auctioneer, was the general agent of defendants for all the purposes of

tending the sale were not such as to excite the complainant's suspicions, or put him upon inquiry.

X. Even if there was no fraud, the sale should be rescinded for mutual mistake of a material fact.

As stated by Mr. Webster, they were:

1. That an auctioneer is the agent of the owner until the sale is made, and also afterwards, until he gives a memorandum in writing. This writing is given in order to avoid the statute of frauds, and in making it, the auctioneer becomes the agent of both parties.

2. That fraud by an auctioneer, committed whilst he is the agent of the vendor, vitiates a sale as thoroughly as if it had been committed by the vendor himself.

3. That it is not necessary to show that the principal was cognizant of the fraud.

4. That the auctioneer is the alter ego of the party who employs him. What he knows, the principal knows; or, as the rule is substantially stated in 6 Clark & Fin. 448, 449, if an agent made willfully false representations, and then made a contract, equity will relieve just as much as if the scienter were traced to the principal.

149*] *5. An agent to sell cannot buy., law, that they have, in some degree, divided Therefore an auctioneer cannot bid for him- this court, as well as the court below, and self. This rule may not be very applicable in great care and discrimination will be necessary this case, because the auctioneer does not say in order to reach conclusions that can be satisthat he intended to purchase the property for factory. himself. The relief here is not sought, as has been ob6. The owner of real estate, put up at auc-jected, on account of inadequacy of pricetion, may protect himself in one of two ways. though that may at times be so gross as to 1st. He may fix a minimum or starting point. show fraud, and might here very well raise If no bid is made for this amount, then it is no some presumption of it. Warner v. Daniels, 1 sale. This mode appears to have been pursued Wood. & M. 111; Coles v. Trecothick, 9 Ves. here. The minimum was fixed at $14,500, and 234; 2 Ves. Sen. 155. But it is sought for a this fact was made known to the purchasers fraud practiced in augmenting the price; or, in at the sale. This fact is highly important. other words, for taking false steps to enhance it; and it is the consequence and injury caused by these unfair means that the plaintiff would avoid.

2d. The owner may employ one person to bid up to the minimum, or he may bid himself. But in this mode, as in the preceding, where the bidding has reached the minimum, then all by-bidding or puffing is fraudulent, and vitiates the sale. The highest real bidder, after reaching that point, is entitled to the property. The points stated and argued by the counsel for the defendants were the following:

1. That neither on the allegations or form of the complainant's bill, nor on the evidence, is he entitled in the Circuit Court of the United States, sitting in equity, to the relief he prays for.

2. That neither on the allegations of the bill, nor on the evidence, is there ground to charge the defendants with fraud.

3. That the evidence does not establish any fraud on the part of Head, the auctioneer, but if it does, it will not entitle the complainant to the relief prayed for in this suit.

4. That the release of Head is a conclusive bar to the complainant's prayer for relief.

5. That, both on the facts of the case and the well settled principles of equity jurisprudence, the decree of the Circuit Court, dismiss ing the bill, was correct, and ought to be affirmed.

Mr. Justice Woodbury delivered the opinion of the court:

This was an appeal from a decree of the Circuit Court in the Maine District, dismissing a bill which was brought originally by Veazie, the appellant.

The

How far, then, in point of fact, was the price increased above the real bids? and by what means? A minimum price of $14,500 is clearly proved to have been fixed by the owners. weight of the testimony is, that the real bids went only $3,500 to $5,500 higher. There is no pretense that Wadleigh-the rival or competitor of the plaintiff-bid or authorized others to bid for him above eighteen or nineteen thousand dollars, though a statement of the auctioneer to one person has been relied on to the contrary. Wadleigh denies it-nobody_testifies | to it-and nobody is produced who bid or employed others to bid higher, unless the auctioneer himself did it. The true value, also, as fixed by the owners at $14,500, tends to confirm the idea that no real, fair bid would be likely to go above $20,000—or over $5,000 or $6,000 beyond the owners' own estimate.

It is, then, a leading feature in this case, that should not be overlooked, as it gives a stamp and character to the whole equity as between these parties in favor of the plaintiff, that the respondents fixed the minimum bid for the sale of their property at $14,500, and authorized the auctioneer to dispose of it for that amount, when in truth, by some means or other, and *without any real rival bids above [*151 $20,000, they obtained for it $40,000. Whether this extraordinary result was effected by any improper conduct on their part, or that of any agent for whom they may in law be responsible, is the next prominent inquiry.

As to the contents of the bill, and the evidence in its support, it may suffice to say here, In the outset, the probability certainly is, that the bill asked the rescission of a sale at that property like this could not be sold at auction, made about the 1st of January, 1836, auction for from $25,000 to $26,000 more than of certain mills, owned by the respondents, the owner asked for it, unless under some imand a return of the money paid, and the notes position or great mistake. And the further still held by them for a part of the purchase presumption seems at first to be reasonable, money. It asked this, on the alleged ground that the respondents, whose property was thus 150*] of imposition in *the sale by means of sold, and by an auctioneer employed by thempuffing or by-bidding, so as to advance the selves, and who have benefited by the large exprice about $20,000 above what it otherwise cess in the price given, by taking the money would have been. In their answer, the re-and securities, were either instrumental in causspondents denied any such bidding by their ing the excess, or, having availed themselves procurement, or that it avoided the sale if hap- of it and all its advantages, should be answerpening; and further contended, that they had able civiliter for any wrong and error connected been discharged from any liability which with it. might have existed by a release to the auction- It is conceded, in point of fact, that some eer, one of the persons implicated in the by- other bids than Veazie's went nearly to $40,bidding. The answer insisted, also, that the 000, and as no person is shown to have made auctioneer should have been made a party to the them but the auctioneer, it follows that they bill, and that any claim to relief by the plain- must have been real bids by him for himself, tiff is barred by the lapse of time since the sale. or fictitious ones by him, with a view to inThe leading point arising in this case in-crease the price to be obtained by the respondvolves so difficult questions both of fact and ents, and to increase his own commissions on a

Looking to the supposition that the bids were real and for himself, that idea is not supported, but rather disproved, by the testimony. The auctioneer does not appear to be a man of wealth, able to buy so valuable property for investment, nor was such a purchase in the line of his business or profession, nor does he seem to have had the means or disposition for speculation, and especially on so large a scale; and he must have well known that the true value of this property was not considered by the owners above $14,500, nor its value to Wad-ness of competition and with ample capital, leigh as enhanced by its locality in his dispute with Veazie, as above $18,000.