The highest offerer at a public roup, who failed to find caution according to the articles, by which the purchase devolved to the next, was found liable for the surplus of price.
Click here to view a pdf copy of this documet : PDF Copy
By the articles of roup of Mr Currie's estate of Newlaw, which was sold judicially, it was stipulated, “That in case the highest offerer should fail to find caution for payment of the price within thirty days after the roup, the immediately next offerer was to be preferred, &c.; without prejudice to the creditors to insist against the several offerers for the surplus parts of the prices offered by them respectively.”
Mr Hannay was the highest bidder by an excess of L. 290; and it appeared probable, that, by his interference, the price had been greatly enhanced. From some accidental cause, however, he failed to find caution within the time prescribed. He afterwards presented a regular bond, but the right to the purchase was then claimed by the next offerer, on whom, by the articles, it had devolved. This point was afterwards the subject of a litigation, in which Mr Hannay was unsuccessful.
An action having been brought against him for payment of the surplus part of the price offered by him, he, in defence,
Pleaded; The articles of roup, it is plain, conferred no new right. The terms, ‘without prejudice,’ instead of creating any such, could only reserve what already existed at common law. Now, the common law does not seem to warrant a claim of penalty or damages, like the present, against a party who has committed no fault, and has given occasion to no loss. On the contrary, the defender's appearance as a purchaser has actually produced a large augmentation of price. A special stipulation, therefore, would have been necessary for the support of this action.
Answered; The question here regards not any penalty, but a claim of indemnification, plainly arising ex contractu. The highest price offered, which is not to be presumed more than adequate to the value of the lands, was that which the creditors were entitled to receive; and since it has been by the defender's failure withdrawn from them, they have a right to be indemnified of the resulting loss.
The Lord Ordinary took the cause to report on informations.
The Court found Mr Hannay liable for the difference of price.
A reclaiming petition being advised with answers, was refused.
Reporter, Lord Stonefield.Act. Corbet.Alt. Dean of Faculty, Cathcart.Clerk, Home.
Fol. Dic. v. 3. p. 168. Fac. Col. No 195. p. 405.
