By-Bidding

Bidding on property offered for sale at auction, by or in behalf of the owner, for the mere purpose of raising the price, or inducing others to bid higher. Sometimes called "puf Hng." Bybidding by the owner, or caused by the owner, or ratified by him, has often been held to be a fraud, and avoids the sale. 8 How. (U. S.) 153.

Bidding with tbe connivance or at the request of the vendor. of goods by auction, without an intent to purchase, for the purpose of obtaining a higher price than would otherwise be obtained. By-bidders are also called puffers, which see. It has been said that the practice is probably allowable if it be done fairly, with an intention only to prevent a sale at an unduly low price; Latham's Ex'rs v. Morrow, 6 B. Monr. (Ky.) 630; Veazie v. Williams, 3 Sto. 622, Fed. Cas. No. 16,907; 15 M. & W. 371; Steele v. Elknaker, 11 S. & R, (Pa.) 86. A bidder is required to act in good faith and any combination to prevent a fair competition would avoid the sale; 3 B. & B. 116; Martin v. Ranlett, 5 Rich. (S. C.) 541. 57 Am. Dec. 770; Barnes v. Nays, S8 Ga. 69G, 16 S. E. 67; Towle v. Leavitt, 23 N. H. 360, 55 Am. Dec. 195; Veazie v. Williams, 8 How. (U. S.) 153, 12 L. Ed. 1018. See Bid; Auction. Lord Mansfield held that the employment of a single puffer was a fraud; Cowp. 395; this rule was afterwards relaxed, in equity only, so as to allow a single bidder; 12 Ves. 477. The rule was stated in L. R. 1 Ch. 10. to be, that a single puffer will vitiate a sale in law. but may be allowed in equity: though either at law or in equity, such bidding is permissible upon notice at the sale. By 30 and 31 Vict c. 48. the rule in equity was declared to lie the same as at law. See L. R. 9 Eq. 60. Lord Mansfield's opinion was followed in Appeal of Peunock, 14 Pa 148, 53 Am. Pee. 561, per Gibson, O. J., overruling Steele v. Ellmaker, 11 S. & R. (Pa.) S6: Towle v. Leavitt, 23 N. H. 360, 55 Am. Dec. pi.-,; Baham v. Bach, 13 La. 287,:'.:: Am. Dec. 561. In New Jersey it seems that if there is a bona fide bid next before that of the buyer, the bidding of puffers will not avoid intimated that it would be a better rule to forbid puffing; National Bank of the Metropolis v. Sprague, 20 N. J. Eq. 159. Kent favors Lord Mansfield's rule; 2 Kent *540. The employment of a puffer to enhance the price of property sold is a fraud; Fisher v. Hersey, 17 Hun (N. Y.) 373. So held in Caldwell v. U. S. 8 How. (U. S.) 378, 12 L. Ed. 1115. Exceptions to the rule may occur when it does not appear that the buyer paid more than the value of the property or than he had determined to bid; Tomlinson v. Savage, 41 N. C. 430. A purchaser thus misled must restore the property as soon as he discovers the fraud; Backenstoss v. Stahler's Adm'rs, 33 Pa. 251, 75 Am. Dec. 592; Veazie v. Williams, 3 Story 611, 631, Fed. Cas. No. 16,907. In Phippen v. Stickney, 3 Mete. (Mass.) 384, the validity of the sale is held to depend upon tbe animus with which the puffing is carried on. Where a sale is advertised to be "without reserve" or "positive," the secret employment of by-bidders renders the sale voidable by the buyer; Curtis v. Aspinwall, 114 Mass. 187, 19 Am. Rep. 332.

Bidding on property offered for sale at auction, by or in behalf of the owner, for the mere purpose of raising the price.

In the law relating to sales by auction, this term is equivalent to “pulling.” The practice consists in making fictitious bids for the property, under a seeret arrangement with the owner or auetioneer, for the purpose of misleading and stimulating other persons who are bidding in good faith.