CHAPTER V. CONDITIONS OF SALE. I.—General remarks upon conditions of sale. under ALL sales by auction are made subject to certain con- Auctions ditions, express or implied, with reference to all or some generally of the following matters: the biddings, the payment of a written deposit, the signing of a contract, the quantity or quality of conditions, the subject-matter of the sale, the title to be given by the vendor, the evidence of title, the completion of the purchase, misdescriptions in the particulars or catalogue, forfeiture of the deposit, and a resale of the property (a). As a rule, (a) In Scotland conditions of sale are called articles of roup, which are Articles of thus described in Bell's Dictionary, p. 76: "Articles of roup are the roup. conditions under which property is exposed to sale by auction. They refer generally to the nature of the right to be transferred, specify the titles by which the property is to be conveyed, regulate the manner of bidding, prescribe the rules by which offerers are to be preferred, and name a person to be judge of the roup, before whom the procedure takes place, and who is empowered to declare the purchaser. These articles are executed by the exposer on stamped paper, and when the day of sale arrives, they are read over in presence of the meeting at the place and time appointed for the sale. The subject being exposed to sale by an auctioneer, a minute of the offers is made, generally on the back of the articles, and signed by each offerer, and the highest offerer at the outrunning of a sand-glass is declared to be the purchaser by the judge of the roup. Minutes of the procedure are made and regularly signed and attested at the time of sale. These articles contain a clause of registration, by which the parties consent to a decree going out in terms of the conditions, under which they may be enforced by the diligence of the law. Besides the rules and conditions expressed in the written articles of roup there are implied rules binding on both parties. Thus, the exposer must bring the subject fairly to sale, and not attempt to raise the price by the assistance of a whitebonnet, or fictitious offerer; and, on the other hand, there must be no combination among the offerers to suppress the natural ardour of competition amongst intending purchasers." adapted to circumstances. Real estate. As to auc the conditions are reduced into writing or print, by or on behalf of the vendor (b). It is obvious that the conditions of sale will vary according to the nature of the property sold, the state of the title to the property, the character in which the vendor sells, and other circumstances. Upon a sale of personal property, the preparation of the conditions of sale is rarely a matter of any great difficulty; but upon sales of real estate, owing to the complexity of our system of tenures, the framing of the conditions often severely taxes the resources of the draftsman (c). An auctioneer should never prepare conditions of sale of tioneer drawing real estate : his doing so will expose him to great risk (d). conditions. On the other hand, he should be careful, in selling an estate by private treaty, to make his offer to sell, or his acceptance of an offer to purchase, conditional upon a formal contract to be prepared by the vendor's solicitor. If he omit to do this, the sale will be upon an open contract, and serious consequences are likely to ensue. Obligation In contracts for the sale of real estate an agreement to of vendor make a good title is always implied, unless that liability is expressly excluded (e). to make a title. (b) As to when writing is necessary, see post, Chapter VIII. It is said that where a sale is made public by statute the seller has no right to make any regulations in the conditions respecting the admissibility of persons to become buyers; Eagleton v. East India Company, 3 B. & P. 55-Morton, V. & P. 155. (c) This chapter consequently relates principally to real estate. Where personalty is included in any remark, the fact, unless obvious, will be found specially mentioned. (d) Denew v. Daverell, 3 Camp. 451. (e) Deverell v. Lord Bolton, 18 Ves. 505, 512; Doe d. Gray v. Stanion, 1 M. & W. 701; 2 Gale, 154; Barnett v. Wheeler, 7 M. & W. 364; Worthington v. Warrington, 5 C. B. 636; 18 L. J. C. P. 350; Hoy v. Smithies, 2 Jur. N. S. 1011; Wells v. Cuttling, 7 W. R. 448; Blachford v. Kirkpatrick, 6 Beav. 232. See post, p. 94, as to the purchaser's rights incidental to the vendor's obligation to make a title. prior to An intending vendor of real estate will, therefore, first Investigaexamine his title, to see how far it can be safely subjected tion of title to adverse scrutiny; and then, if necessary, he will proceed sale. to frame such conditions of sale as will properly protect his own interests without unduly alarming purchasers (ƒ). mon con If the title is known to be a good one, and there is nothing When comparticularly complex about it, or if there are only such ditions" imperfections in the title, or difficulties in proving it, as the sufficient. vendor thinks preferable to remove at his own expense, the conditions of sale may be short and simple. In these cases little more is necessary than to provide for the manner in which the biddings are to be conducted, the time when the purchase is to be completed, and the remedy of the vendor for a breach of the conditions. when used. But when, as frequently happens, the title is either intri- Special cate or insecure, it will probably be expedient to introduce conditions, special provisions adapted to the exigencies of the case. necessary, Special conditions of sale should always be drawn with should be great care, and strictly with reference to the particular cir- sparingly cumstances of the property to be sold. No branch of the art of conveyancing calls for greater circumspection. Every point must be embraced which by any probability may afterwards arise; and as much discretion must be used in omitting unnecessary stipulations as in inserting proper ones. (f) See 2 Law Review, 81. The vendor should have a perfect abstract Abstract of his title prepared and carefully examined with the deeds in his posses- of title. sion, in which abstract all the facts-such as marriages, births and deaths -connected with his estate should be faithfully stated; and he should be well assured of his ability to produce all documents and verify all facts so stated; and he should then obtain the opinion of an experienced conveyancer upon the sufficiency of his title and upon the expediency of delivering a corresponding abstract, or of omitting any, and what, part, and also upon the necessity of providing in the particulars and conditions of sale against the production or proof of any document or other fact, so as to compel any purchaser to accept a conveyance without the same; and he is recommended to prepare such an abstract before advertising his particulars of sale; 1 Chit. Prac. 295. Trustees &c. Conditions should be clearly The use of depreciatory conditions (i. e. conditions calculated to damp the sale) by persons in a fiduciary capacity may not only involve the vendors in personal liability to their cestuis que trust, but may also constitute an objection to the title (g). In the drawing of conditions the following rules must be observed : 1. The language of restrictive conditions should be perfectly clear (h). The vendor of real estate may oblige expressed. the purchaser to take a title which is absolutely defective (i); and the buyer of goods may be bound by a contract to take them with all their faults (j); but in such cases the intention of the parties must be expressed in no ambiguous terms. They must not be misleading. 2. The language of the conditions must not be misleading (k). If, not confining himself to mere encomium, the vendor attributes to his property direct advantages which it does not possess, the purchaser will be discharged from his contract (7); or if a vendor holds out his property as free from inconveniences or incumbrances to which it is (g) Hobson v. Bell, 2 Beav. 17; Rede v. Oakes, 4 De G. J. & Sm. 505; Ord v. Noel, 5 Madd. 438; Dance v. Goldingham, L. R. 8 Ch. 902; 42 L. J. Ch. 777; 1 Dav. 507. The act 44 & 45 Vict. c. 41, s. 35, now, however, provides that trustees in whom a trust for sale or power of sale is vested may, subject to the terms of the instrument creating the trust or power, sell "subject to any such conditions respecting title, or evidence of title, or other matter," as they think fit; cf. 37 & 38 Vict. c. 78, s. 3; and 23 & 24 Vict. c. 145, ss. 1, 2, 32. (h) Osborne v. Harvey, 7 Jur. 229; Brownlie v. Campbell, 5 App. Cas. 925. (i) Freme v. Wright, 4 Madd. 364; Hume v. Pocock, L. R. 1 Ch. 379; 35 L. J. Ch. 731; cf. Wilmot v. Wilkinson, 6 B. & C. 506; 9 D. & R. 620; Hanks v. Pulling, 25 L. J. Q. B. 375. (j) Cf. ante, pp. 59, 60. Such a condition is very commonly introduced into contracts for the sale of ships; Maclachl. 13; cf. Shepherd v. Kain, 5 B. & Ald. 240; and Taylor v. Bullen, 5 Ex. 779; 20 L. J. Ex. 21. (k) Else v. Else, L. R. 13 Eq. 196; 41 L. J. Ch. 213; Blenkhorn v. Penrose, 29 W. R. 237. (1) Lachlan v. Reynolds, Kay, 52. in fact subject, the Court will not decree him specific performance (m). A condition of sale is bad, as misleading, if it states that the state of the title is not accurately known, when, in fact, it is well known to the vendor; or if it requires the purchaser to assume what the vendor knows to be false (n). clauses. 3. Sweeping general clauses in the conditions cannot be As to relied upon to cure the omission from the particulars or general conditions of anything which ought to have been stated there (o). "A vendor," says Mr. Davidson, "will usually find it more politic, as it certainly is more honest, to state plainly in the conditions any defect of which he may be aware in his title, and to stipulate that it shall not be made an objection, than to endeavour to disarm suspicion by the concise simplicity of a general condition, throwing on the purchaser the risk, as well as the expense, of removing the defect, should he discover it (p)." construed When a vendor, taking advantage of his position as the Restrictive framer of his own conditions of sale, introduces stipulations conditions the object of which is to exclude the purchaser from his against common right and impose an estate upon him devoid of that vendor. which is essential to its enjoyment, the courts always construe such stipulations strictly in favour of the purchaser and take every opportunity of discouraging them and remitting the purchaser to his ordinary rights as derived from an unconditional contract (g). On the other hand, the purchaser will not be allowed to take undue advantage of the omission of special conditions; and even a stipulation that the vendor (m) Drysdale v. Mace, 2 Sm. & G. 225. (n) In re Banister, 12 Ch. D. 131. (0) Edwards v. Wickwar, L. R. 1 Eq. 68. (p) 1 Dav. 510; cf. Dart, 176. (q) Southby v. Hutt, 2 My. & Cr. 207; Symons v. James, 1 Y. & C. C. C. 487, 490; 6 Jur. 452; Morley v. Cook, 2 Hare, 106, 115; Beioley V. Carter, L. R. 4 Ch. 230; 38 L. J. Ch. 283; 20 L. T. N. S. 381. |