Hoffman v. Horton

Brief Fact Summary. During a foreclosure sale, an auctioneer was about ready to signify the close of bidding when he was informed that he missed a bid.  The auctioneer reopened the bidding over the objections of the party that had been leading the bidding.

Synopsis of Rule of Law. In order to achieve uniformity, an auctioneer auctioning off a piece of land should be granted "the same discretion to reopen bidding that he has in the sale of goods".

Facts. The Defendants, Howard P. Horton, his wife and Ralph R. Kaul and his wife (the "Defendants"), were the owners of the "Field Tract".  The property was for sale during a foreclosure sale.  During the foreclosure sale, the Plaintiff, Hubert N. Hoffman (the "Plaintiff"), made a bid of $177,000, which was accepted by the auctioneer.  To signify that the bidding was closed, the auctioneer "struck the palm of his left hand with his right fist."  One of the trustees quickly approached the auctioneer and informed him that he missed a bid of $178,000 for the property.  The auctioneer re-opened the bidding over the Plaintiff's objections, and the Plaintiff eventually had to pay $194,000 to purchase the property.  The Plaintiff eventually paid the entire purchase price under protest and brought this action against the Defendants and the trustees for $17,000, the difference between the two bids in dispute.  The trial court ruled against the Plaintiff.  The trial court found that the $178,000 bid was made "prior to or simultaneously with" the falling of the auctioneer's fist.  As such, the court held the $178,000 bid was made before the $177,000 bid was accepted. 

Issue. May "an auctioneer at a foreclosure sale [ ] reopen the bidding when an overbid is made immediately prior to or simultaneously with the falling of the hammer in acceptance of a lower bid"?

Held. Yes.  The court recognized, but disagreed with how the trial court relied upon "Code §8.2-328(2), a part of the Uniform Commercial Code", because the Uniform Commercial Code ("UCC") only applies to the sale of goods.  Nonetheless, the court decided to borrow from the UCC to establish a rule applicable to this case.  The court recognized that it "is both necessary and fair" to grant "the auctioneer the same discretion to reopen bidding that he has in the sale of goods is to achieve uniformity."  The court then held that the auctioneer "was vested with discretion to reopen the bidding for the land which was being sold." Additionally, the court agreed with the trial court that the auctioneer was within his right to reopen the bidding "when it was made apparent to him that a higher bid had been submitted 'prior to or simultaneously with' the falling of his fist in acceptance of the plaintiff's lower bid."

Discussion. This case offers an interesting discussion into how a court will borrow certain rules from the UCC and apply them to transactions not involving goods.