Action by vendor’s executors following auction sale–Picture believed to be by de Chirico, although disowned by him–No warranty of genuineness given–Picture knocked down to absent Italian bidder–Conditions of sale–Rejection by buyer–Picture remaining with Christies and purchase price not paid–Auctioneers’ duties in sales of chattels–Authority to receive purchase price, power to sue for it, duty to account for it, but no duty to take active steps to get it in–No damage suffered–Judgment for auctioneers
This was an
action by John Myddleton Fordham and Richard Mayo Fordham, executors of the
late Mrs Ina Katherine Fordham, the vendor, against Christie, Manson &
Woods Ltd, alleging failure to obtain from the buyer the purchase price of a
picture sold on behalf of the vendor at an auction on March 30 1973.
N Primost
(instructed by How, Davey & Lewis) appeared for the plaintiffs; S Tumim
(instructed by Stephenson, Harwood & Tatham) represented the defendants.
Giving
judgment, MAY J said: In this case the plaintiffs are the executors of the
estate of the late Mrs Fordham, who died on June 1 1973. The defendants are the
well-known firm of auctioneers carrying on business in King Street, London W1.
Mrs Fordham,
prior to her death, was the owner of a picture. It was said to be a picture by
an artist by the name of Giorgio de Chirico. De Chirico was born in 1888 and he
is still alive. However, on the evidence I have, at a particular time in his
life his whole system of painting, and indeed his whole career, underwent a
fundamental change. It is put in the extract from the encyclopaedia which is in
the agreed bundle of correspondence in this way: ". . . after 1930 he
broke brutally and violently with his past, disowned his friends and former
works, and immersed himself in a feverish and frenzied exploration of empty
techniques." It is well known,
apparently, in the art world that for these reasons de Chirico is not averse
from denying that paintings, which on all the other evidence certainly appear
to have been painted by him prior to 1930, are indeed his at all. He is quite
liable, it seems, to disown pictures the provenance of which really is in
little doubt, namely that in truth they were painted by de Chirico himself.
Such was then
believed to be the painter of this picture which, as will appear, Mrs Fordham
wished to sell. It itself was a picture of a lion and gladiators. It had been
valued by Christies in 1969. It had clearly passed through the hands of a
gallery known as the Mayor Gallery–a very well-known gallery in London prior to
the last war. Unfortunately all its pre-war records were destroyed in the
bombing, so that one cannot trace the picture expressly through the gallery,
except that it has the Mayor Gallery label on the back and a number on that
label, as one would expect from their usual practice. It is also known that the
painting came to the Mayor Gallery from another well-known gallery in Berlin
before the last war. On the evidence before me, I think that one can certainly
say this, that there is a strong probability–notwithstanding, as will appear,
that he has disowned it–that this picture is in truth a de Chirico.
Towards the
end of 1972 in any event Mrs Fordham was minded to sell this picture, and after
consulting Christies, their Mr Burge in particular, she put it into a sale
which they were to hold in March, 1973. The receipt from Christies dated
December 5 1972 was expressed to be subject to certain conditions of acceptance
to which I must refer. By condition 1 Christies were stated to "act in
every respect relating to any goods and the sale thereof only as agent of the
person or persons sending such goods to or leaving such goods with Christies
with a view to the sale thereof (who in these conditions is or are called ‘the
seller’)." Condition 5 provided:
"The seller authorises Christies to sell the goods and any of them subject
to such conditions of sale as Christies may in their absolute discretion
consider appropriate. The seller may impose a reserve but shall not bid for his
own lot." Condition 6 plays a
substantial part in the case because it is repeated in the conditions of sale,
which are to be distinguished from these conditions of acceptance:
If within 21
days after the sale Christies receive from the buyer notice in writing that in
his view the lot is a deliberate forgery and within 14 days after such
notification the buyer returns the lot to Christies in the same condition as at
the time of sale and satisfies Christies that considered in the light of the
entry in the catalogue the same is a deliberate forgery then Christies are
authorised to rescind the sale of the same and to refund to the buyer the
purchase price thereof. In deciding whether or not the lot is a deliberate
forgery Christies shall be entitled to seek the views of any expert or other
authority.
I defer making
any comment about the condition until I read condition 7:
Christies
will pay the seller the net proceeds of the sale less any charges to the debit
of the seller’s account including commission, provided that Christies have been
paid by the buyer. The time for such payment will be normally one month after
the date of sale provided that there is no notification as referred to in
condition 6.
Now, in
relation to condition 6, although counsel has tried to give me some explanation
of the need to include the word "deliberate," I ask myself what an
"un-deliberate" forgery is and I still find it difficult to give
myself an answer. Be that as it may, I think that condition 6 contemplates a
sale by auction at Christies, payment by the buyer which has enabled him to
take the article away, and then within 21 days, having had a good opportunity
of looking at it, his deciding that it is a forgery and within a further 14
days giving notice of this to Christies, his return of the article to them, and
if they are satisfied thereafter that it is a deliberate forgery then the
condition authorises them to rescind the sale and to refund the buyer the
purchase price. I do not
has not yet been paid for and removed from Christies–because in those
circumstances there can be no question of its return to Christies in the same
condition as it was at the date of the sale, nor any question of refunding to
the buyer the purchase price. I do not think that condition 6 applies to
circumstances in which, as in this case, the buyer takes the view that the
article is a forgery at an earlier stage and refuses to pay the price at all;
those, I think, have to be dealt with under the general common law and such other
conditions that may be applicable to the sale.
Once Christies
had received the picture for the sale there was then correspondence and
discussion between Mrs Fordham and them about a reserve. Ultimately this was
agreed at £2,500. Mrs Fordham was sent by Christies a pre-sale advice; her
picture was Lot No 183 in the sale of March 30 1973 with an agreed reserve of
£2,500. At that stage everything was proceeding normally. Mrs Fordham had put
her picture in for the sale which Christies were intending to have on March 30.
They took the view that it was a de Chirico, they had valued it as such four
years before and it was on that basis that they and she had agreed the reserve
of £2,500.
I must now
introduce an art dealer in Italy, by the name of Dr Rusconi, who had a gallery
in Milan called the S Erasmo Club D’Arte Gallery. Although he was not a regular
customer at Christies, he was quite well known to them. He must have seen their
catalogue for the March 30 sale and then been in touch with their Rome office. In
consequence he sent a telegram to Christies in London on March 24, which read:
"FOLLOWING CONTACT WITH CHRISTIE ROMA . . . AUCTION 30/3 . . . DE CHIRICO
183" [that, of course, was the lot number] "DE CHIRICO 183
5000 POUNDS STERLING . . . SUBJECT TO THE AUTHENTICATION OF MEDUSA ROMA STOP
PLEASE CONFIRM."
Medusa Roma is
an institution, probably properly called a gallery, in which the works of de
Chirico are catalogued and through which de Chirico’s own acceptance or denial
of his authorship can be and is obtained. When there is doubt about de
Chirico’s connection with a picture it is usual practice in the art world to
send it, or details of it, to the Gallery a la Medusa in Rome and to obtain
through them from the maestro Giorgio de Chirico himself his statement whether
the picture was, or was not, painted by him at some time before 1930.
Consequently what Dr Rusconi was saying in his telegram was–"I will offer
£5,000 for that picture subject to your obtaining authentication from the
Medusa Gallery that it is, in fact, a de Chirico." Although the telegram read as though it were
a straight offer of £5,000 subject to that authentication, I am quite
satisfied, having heard Mr Lumley of Christies giving evidence, that anybody in
the trade would appreciate that it was not a straight offer of £5,000, it was
merely an authority to bid on Rusconi’s behalf up to £5,000 for that particular
lot. Mr Lumley told me that a couple of days or so after that telegram Dr
Rusconi came to London and he, Mr Lumley, can remember standing in front of the
picture in Christies during the view two days prior to March 30 discussing it
with him, discussing the provenance of it with him, where it had come from, its
history, telling him that in Christie’s view it was a de Chirico, but also
making it quite clear to Dr Rusconi that Christies gave no guarantee or
undertaking that it was such. Mr Lumley was not proposing in this particular
instance to send it off to Medusa, I think partly because he knew that there
was at least the risk that having regard to the erratic nature of de Chirico he
might get the answer he did not want. He (Mr Lumley) was himself quite
satisfied that it was in truth a de Chirico, whatever the maestro might
thereafter say about it. However, I also accept Mr Lumley’s evidence, having
seen him in the witness box, that he made it quite clear to Dr Rusconi that he
was giving no guarantee or undertaking in respect of this picture–indeed, when
one looks on to the conditions of sale, it is explicit in them that in general
Christies do not give any guarantee or warranty about the genuineness, or
otherwise, of the articles which they sell.
Dr Rusconi,
having seen the picture and having discussed it in this way with Mr Lumley,
then returned to Milan. From there on March 28 he sent a further telegram to
Christies in London: "REFERRING TO OUR COMMISSION AUCTION 30/3 . . .
PLEASE INCREASE OUR OFFER FOR DE CHIRICO 183 UP TO 7000 GUINEAS." In that telegram Dr Rusconi did insert the
words "up to," which I think must be read into the earlier telegram,
as I have already said, and by it gave Christies authority to bid on his behalf
up to 7000 guineas for this particular picture. I am quite satisfied on the
evidence that this procedure is followed time and time again with auctioneers
of the reputation and size of Christies or Sothebys. People come and look at
the articles for sale during the period of the view, and then leave with the
auctioneer’s authority to bid on their behalf up to a specified limit when the
auction is in progress. This is a very common practice, a practice understood
throughout the whole of the auctioneering and art world and about which no
criticism whatever can be or is made. There was, Mr Lumley told me, and again I
accept, another bid from another potential buyer on Christie’s books for this
particular lot, but quite clearly its limit was not as high as the one that Dr
Rusconi was prepared to go to.
The sale duly
took place on March 30 1973. It proceeded efficiently and rapidly. Mr Lumley
told those assembled in the auction rooms just before the bidding for this
particular picture started that there had been a considerable amount of
pre-auction interest in it, and with the rapidity for which auctioneers are
renowned the picture was knocked down to Dr Rusconi for 3,500 guineas, or
£3,675. It was knocked down to Dr Rusconi for this figure because Christies had
his authority to go up to 7,000 guineas; the bidding from the floor stopped at
something less and they were then, with that authority, able to bid higher on
Dr Rusconi’s behalf for the picture. On the evidence, I think that they bid
about 200 or 300 guineas above the highest bid from the floor.
Thus, at the
fall of the hammer, prima facie a contract was concluded between Mrs
Fordham, the seller, and Dr Rusconi, the buyer, of this painting for the sum of
£3,675 upon the terms of the conditions of sale, to which I now refer. In the
bundle is copied the first page of the relevant catalogue, then the notice to
persons taking part in all auctions that every statement in Christie’s
catalogues or elsewhere is made without responsibility on the part of Christies
or the seller of that lot. As I have already indicated, paragraph 2 of this
provides that: "Each and every statement in Christie’s catalogues,
advertisements or brochures of forthcoming sales as to the authorship, origin,
date, age, attribution, genuineness, provenance or condition of any lot is a
statement of opinion, and is not to be relied on as a statement or
representation of fact." And then
under "3"–"intending purchasers must satisfy themselves by
inspection or otherwise as to all of the matters specified in 2 above. . .
." Finally, under
"4"–"Neither the seller of any lot nor Christies, make or give,
nor has any person in the employ of Christies any authority to make or give,
any representation or warranty whatever in relation of any lot."
Then there are
the "Conditions of Sale." The
only ones to which I need refer are, first, condition 4. At 4(A)–"The
buyer shall forthwith upon the purchase give in his name and permanent
address." In this particular case,
Dr Rusconi was not at the auction; he had left his bid with Christies. They
knew his name and address. And at 4(B)–"The buyer may be required to pay
down forthwith the whole or any part of the purchase money, and if he fails to
do so the
resold." Once again, of course, Dr
Rusconi was not at the auction and it is a little difficult to see how, in
those circumstances, he could have been required by Christies forthwith to put
down any part of the purchase money. Clearly the clause does not contemplate
the taking of any deposit before a person becomes a buyer; that is, it does not
contemplate taking a deposit from a potential buyer who has left a bid with
Christies which may or may not succeed. Condition 4(B) is, however, relied on
by the plaintiffs as I shall mention hereafter. Then condition 5(A) really
picks up all that has already been said in the notice: "Each lot is sold
by the seller thereof with all faults and defects therein and with all errors
of description and is to be taken and paid for whether genuine and authentic or
not and no compensation shall be paid for the same." By condition 5(B): "Christies act as
agents only and neither they nor the seller are responsible for any faults or
defects in any lot or the correctness of any statement as to the authorship,
origin, date, age, attribution, genuineness, provenance or condition of any
lot." These conditions are in the
same or much the same terms as the conditions of acceptance to which I have
already referred. A further echo of the latter is in condition 6, which is the
one concerned with deliberate forgeries returned after 21 days and notice
within 14 days that the buyer considers the article to be a deliberate
forgery–then it is up to Christies to consider the matter and to decide whether
or not it is and whether or not the sale should be rescinded. And then condition
7(A): "To prevent inaccuracy in delivery, and inconvenience in settlement
of purchases, no lot can be taken away during the times of sale, nor can any
lot be taken away unless it has first been paid for in full." Condition 7(B): "All lots are to be paid
for and taken away at the buyer’s expense within SEVEN days from
sale." The "seven" is
printed in capital letters in the conditions of sale, but Mr Lumley told me
that it was so printed rather in optimistic anticipation than in the realistic
expectation that all lots would be paid for within that time. Those then were
the circumstances in and the conditions upon which the sale took place on March
30.
What happened
next was that Christies received in course of post a letter dated April 3 from
the Medusa Gallery in Rome, signed by a Mr Bruni, in these terms: "We have
just received the catalogue for your auction ‘Impressionist and Modern
Paintings, Drawings and Sculpture’ of March 30 where we noticed a painting
attributed to the Maestro Giorgio de Chirico. The maestro has requested me to
advise you that without any possibility of doubt this painting is not by his
hand. Should the painting have been sold, you should advise the
buyer." Now whether there had been
any communication between Dr Rusconi in Milan and Mr Bruni in Rome I do not
know, but that was a letter from a representative of the putative painter
saying, not unusually in so far as this particular artist is concerned, that a
painting which in truth he probably painted in 1927 or 1928 was not his at all.
Be that as it may, that letter gave no indication that Mr Bruni was acting on
behalf of Dr Rusconi. Certainly the letter was no notification under the
deliberate forgery condition 6 to which I have referred. For one thing it did
not come from the buyer, nor purport to come from the buyer; for another,
because at that date the painting was still with Christies and had not been
paid for, and thus there was no question of its being returned to Christies, or
of their refunding the purchase money. Nevertheless, in consequence, on April 9
Christies issued an internal memorandum to all concerned saying in effect that
until further notice their accounting department were neither to pay nor to
deal further with this particular matter and in capital letters: "YOU ARE
TO ENSURE THAT PROCEEDS ARE NOT PAID."
On that same
day they wrote a letter to Mrs Fordham, which I think I ought to read in full:
Madam [and
they refer to the relevant lot] We received today a letter from Signor
Claudio Bruni, of which we enclose a copy. You will see from this that Giorgio
de Chirico maintains that he did not paint your picture, which we sold on March
30. We regret, therefore, that in accordance with condition 6 of our conditions
of sale, we must suspend payment on this picture until the matter has been
resolved. Do you by any chance have your original receipt from the Mayor
Gallery or, failing that, could you state definitely when this picture was
purchased from them? With the help of
these facts, we may be able to trace the picture through the Mayor Gallery to
its original source. Any other information you think might help would be much
appreciated.
As I have
already indicated, I do not think that that letter from Mr Bruni was indeed any
notification within condition 6. On April 9 when Christies wrote that letter to
Mrs Fordham, I do not think that they were entitled to rely upon condition 6 of
the conditions of sale, and as they used the phrase "we must suspend
payment on this picture until the matter has been resolved" I think that there
is considerable force in Mr Primost’s submission that anybody reading that
letter would have assumed that Christies had already received the purchase
price for the painting. Unfortunately, as will already have appeared, they had
not; and the picture was still in their hands.
Mrs Fordham
then initiated a number of inquiries about the origins of this picture and how
it had been acquired, but without success.
A few days
later Christies received a letter of April 13 written in Italian from Dr
Rusconi’s gallery in Milan, the the S Erasmo Club D’Arte, and a translation is
in the bundle. It referred to his purchase of three pictures in the relevant
sale, one of which was lot 183, the de Chirico, and went on to say that he had
already paid the Rome office of Christies for the first two pictures and that
somebody authorised by him would come and collect them next week. Then it
continued:
As regards
the picture by Chirico . . . we have made it a condition that for this there
would be a letter of authenticity from the Medusa Gallery in Rome or, at least,
that one could have a letter at a later date. When our Director, Dott Rusconi,
was in London, he was assured that the picture was absolutely authentic and
that there was every guarantee. On our side, we then made contact with the
Medusa Gallery which not only informs us that they have grave doubts about the
work, but also that they wrote to you before the sale encouraging you to
withdraw the picture. Naturally this state of affairs seems to us very odd and
in the circumstances we do not see how we can possibly collect the picture.
On the
material that I have and the evidence which I accept, I do not think that Dr
Rusconi had made it a condition that there should be a letter of authenticity
from the Medusa Gallery. I accept Mr Lumley’s evidence that there was no such
condition and it is quite clear from the conditions of sale that Christies
never normally gave any such guarantee or letter of authenticity.
Again I make
the point, although I think it does not in the end affect the result of the
case, that in my opinion neither was the letter of April 13 any notification by
Dr Rusconi under condition 6 of the conditions of sale or acceptance. He was
not saying "it is a deliberate forgery and therefore I am returning
it"; what he was saying in that letter was that "it was a condition
of the sale that I should have a letter of authenticity. I have not got that
and therefore the sale is off."
Nevertheless
on April 18 Christies spoke to Mrs Fordham on the telephone, told her that the
buyer had complained under condition 6 that this was not a genuine de Chirico
and encouraged her to make further inquiries about it. This she did, but again
without success. They thanked Mrs Fordham for a letter which she had written,
said that they were presently investigating the matter and would keep her
informed. On May 8 Mrs Fordham wrote to Mr Bathurst
second paragraph: "I should like to know of course, if under clause 6 of
your conditions of sale" [which I interpolate she had quite clearly
read] "the picture has now been returned to you." So whatever may have been the situation prior
to that she was then under the impression, no doubt fostered by the terms of
Christie’s letter of April 9, that Christies held the money and that the
picture had gone to the buyer. She was therefore inquiring whether it had been
returned to them as condition 6 contemplated. There was no satisfactory reply
to that letter from Christies. On May 17 Christies wrote to Dr Rusconi
acknowledging their receipt of his letter of over a month before, saying that a
copy of that letter had been sent to their lawyers and that they would be
writing to him again "as soon as we have heard from them."
Then there was
a letter from Dr Rusconi inquiring whether his letter of April 13 had been
received, and on June 26 Mr Bathurst, on behalf of Christies, wrote to Mrs
Fordham. He was unaware that unfortunately she had died on June 1. What he
wrote was this:
We have now
reached the point concerning your de Chirico where a decision will have to be
made by you. Invoking clause 6 of our standard conditions of sale, the
purchaser of your painting has returned it claiming it is a forgery and backing
his claim with a letter stating that de Chirico himself has declared the
picture not to be by him.
In essentials
that correctly represented the end state, but to say the least I do not think
that it can be said that the contents of that letter were accurate. There was
no question of the purchaser of the painting having returned it to Christies;
the painting remained with them throughout. Equally, for the reasons that I
have given, I think Christies were wrong in thinking that Dr Rusconi was in
fact invoking condition 6; he had merely said that in his view the picture was
not a de Chirico and that he was not going on with the sale. The letter
continued:
Our
conditions of sale state that the sale should normally be cancelled only after
Christies is satisfied that the lot is a deliberate forgery. Given the history
of the painting, as we understand it, we are not satisfied that the picture is
a forgery although de Chirico’s statement is obviously a serious matter. It is
now, therefore, up to you to decide whether you want to take the matter
further, bearing in mind the problems that are likely to arise in view of de
Chirico’s attitude. If you do not want to pursue the matter with the purchaser,
then the sale will be cancelled. If, however, you decide to do so, then the
matter will lie between you and the purchaser.
As was said in
argument in this case, there Christies put the ball very firmly back in Mrs
Fordham’s court or at any rate in the court of her executors.
On July 27
solicitors acting on behalf of the executors wrote telling Christies of Mrs
Fordham’s death and that they were acting for her executors. They continued:
We have also
perused your catalogue incorporating the conditions of sale and it would appear
that the only basis on which the sale can be rescinded is if the buyer can
satisfy you that the painting is a deliberate forgery. As far as we are aware
the only evidence to this effect adduced by the buyer is a letter from the
painter denying that he painted it, even though he has not in fact inspected
it. We understand that it is well known in the art world that de Chirico was in
the habit of painting gladiators in a period during the 1920s but that after
1930 he broke with his past and disowned his former works. It is, therefore,
understandable that he should deny having painted this work. However, it would
appear that the painting has been considered to be genuine by both yourselves
and the Mayor Gallery, by whom it was sold to our late client’s predecessor in
title. We should be glad to hear that you agree that the sale should stand. In
due course we will forward you copy grant of probate so that payment of the
proceeds of sale can be made to the executors.
This was a
letter written, in my view, clearly in the belief (to which I have already
referred) that the painting had been delivered to Rusconi, which necessarily
involved that the £3,675 purchase price had been received by Christies, because
it was a term of their conditions of sale that purchasers could only have the
goods sold against payment of the purchase price. I find as a fact that at this
time Mrs Fordham and those acting for her estate after her death wrongly
understood this to be the situation because of what can only be described as
the unfortunate wording of the various letters from Christies to her.
However, on
October 30 Mrs Fordham’s executors’ solicitors wrote to Christie’s solicitors,
who by this time had appeared on the scene:
Referring to
the writer’s recent meeting with Mr Lusada, our clients are pressing us to make
certain inquiries in Italy . . . we should be much obliged if you could let us
know the name and address of the purchaser. We understand that in fact no
moneys were paid by the purchaser at any time following the auction so that
your clients have not been holding the purchase moneys pending the settlement
of this matter. Perhaps you would confirm.
That was
confirmed on November 2, the name and address of the purchaser was given by the
solicitors on November 12, and then on May 22 1974 what may be described as the
"letter before action" was written by the solicitors for the
plaintiffs to Christie’s solicitors. It referred to the previous correspondence
and then to counsel’s opinion and his advice that Christies had been
negligent,
inter alia, in the following respects: . . . They failed to insist that a
substantial part of the price or a deposit be paid at the auction. . . . They
failed to take any steps to compel the buyer to pay for and take away the
painting within seven days of the sale. . . . They gave our late client the
impression that the painting had been paid for. . . . They failed to notify the
deceased’s executors that the painting had not been paid for until September. .
. . In the circumstances we have been instructed to say that our clients hold
your clients responsible for any loss they may suffer upon the resale of the
painting at auction at a lower figure than that obtained at your client’s
auction on March 30. . . . We should therefore, be glad to hear from you in his
matter.
They did hear,
with a denial of liability. Hence these proceedings. The picture itself remains
at Christies to the order of the executors. It has not yet been resold. It has
not been put up for auction at any time since 1973.
In these
circumstances the principal submission which Mr Primost makes on behalf of the
executors is this. Christies held themselves out as auctioneers and it was
therefore their duty to take reasonable care and skill in and about acting as
such, and in particular in and about getting in, that is to say obtaining from
the purchaser, Dr Rusconi, the £3,675 for which the painting had been knocked
down to him. Mr Primost accepts that, subject to one or two ancillary
submissions, if he cannot satisfy me as a matter of law that Christies were
under such a duty, then this action must fail.
In my view an
auctioneer, like any other professional man, is under an obligation to his
client to use reasonable care and skill in and about his calling as an
auctioneer and to act in accordance with the terms of his contract with his
client, the intending vendor. He must, for instance, obtain the best possible
price for the property being auctioned. He must not negligently miss the nod of
the head, or the wink of the eye or the raise of the hand in the auction room,
indicating a higher bid. He must take reasonable care to ensure that he obtains
a binding contract with the purchaser for his client, the vendor. In the
ordinary auction of anything other than real property, the binding contract is
made by the fall of the hammer. In effecting that contract the auctioneer must
take reasonable care that there is no uncertainty in the mind of either the man
on the rostrum or the person bidding about what the one is offering and for
what the other is bidding. Nor must there be any lack of reasonable care in
ascertaining the amount of the final bid for which the property is knocked
down. I think also that there is a clear duty on an auctioneer selling in these
circumstances
buyer to whom the goods have been knocked down.
Where there is
an auction of real property, it may well be necessary to go further and, for
instance, to obtain the buyer’s signature to a sufficient memorandum under
section 40 of the Law of Property Act 1925. Also, if the terms of the
auctioneer’s contract with the vendor require, which will probably be reflected
in the conditions of sale at the auction, to obtain the stated, usually 10 per
cent, deposit. But these circumstances apart, in my judgment auctioneers are in
general under no duty to take active steps to get in the purchase money from
buyers. They have authority to receive it: having received it they must then
account for it with due care to the vendor, deducting their commission and
whatever else their contract may permit or require, for instance VAT or
whatever it may be.
Mr Primost’s
principal submission is that in this case Christies undertook to obtain the
actual agreed purchase money and that therefore they should have, but failed to
exercise reasonable care to do so. But I do not think that Christies, nor, so
far as I know, any other similar auctioneers, did or do undertake the function
of actually getting in the price. They send out invoices to their purchasers to
indicate to the latter the amount that they must pay, including any additional
commission, any insurance charges, any package or similar charges. But in my
judgment there was nothing in the conditions of acceptance or conditions of
sale to lead one to the conclusion that there was any undertaking between
auctioneer and vendor that the former get in the purchase price, in the sense
of taking active steps to obtain it. It is true that in a recent case, Chelmsford
Auctions Ltd v Poole [1973] 1 QB 542, the Court of Appeal decided
that auctioneers can sue a purchaser in their own name, not merely for the
amount of their commission and other charges but for the whole of the purchase
price. However, the fact that they are at law entitled to sue for the full
purchase price in my opinion does not impose upon them any obligation to do so.
They can do so if they wish but they are not bound to do so. If they do set
about doing so, then they may well have to take reasonable care in and about
what they do. But I do not think, nor have I been referred to any decided case
which suggests, that the authority given to auctioneers under the conditions of
sale in the present case, or generally at common law, in relation to the
purchase money is anything more than the authority to receive it, which carries
with it the obligation properly to account for it to the vendor when received.
There is no obligation to get it in in the sense of demanding it or taking
steps to recover it from the purchaser. As I have said, that does not
necessarily apply where there are special circumstances, for instance in the
case of the sale of land, where under the conditions of the contract the
purchaser is required to enter into a contract in the usual form and pay a 10
per cent deposit. In those circumstances it will be the duty of the auctioneer
to take reasonable care to get the signature on the contract after the property
has been knocked down and it may be also to get in the 10 per cent deposit. But
this is not so in the ordinary case where there is no such requirement in the
conditions of sale. Consequently, in my view, this claim fails in limine
for that reason.
It is also
said, however, that having regard to condition 4 of the conditions of sale, in
the circumstances of this particular case Christies ought to have taken a
deposit from Dr Rusconi. But as I have already pointed out, Dr Rusconi was not
at the auction. He was not the buyer until the goods were knocked down to him
at that auction and in those circumstances I find it very difficult to see how
Christies could have obtained any deposit or part payment from him. As I have
also said, I think that this clause only enables the auctioneers to obtain a
deposit or part payment after a sale has been made. The evidence of Mr Lumley,
which I accept, is that this power is only exercised in exceptional
circumstances and one can see why this should be so, for Christies are at all
relevant times in possession of security for the ultimate payment of the money,
namely the goods auctioned. It is only when those goods leave their hands that
they no longer have that security, and their conditions of sale provide that
the goods shall not leave their hands until the purchase money has been paid. In
those circumstances the vendor is protected: he either gets the purchase moneys
into the hands of Christies, or Christies retain the property they have sold
for him until they do. One can well see that with the international trade that
Christies, Sothebys or any other similar auctioneers carry on to require
deposits from persons attending auctions and bidding at them merely because
they happen to be from a foreign country or because there may be a surprising
answer by a painter of a particular picture to a question about its
authenticity would be very difficult and in most cases unnecessary.
Finally, Mr
Primost submits on behalf of the plaintiffs that having regard to the way that
Christies conducted themselves in the period between the sale and September or
October 1973 and thereby led Mrs Fordham and her executors and solicitors
erroneously to believe, as I think they did and were entitled to do so, that
Christies had got the money in their hands and that the picture was with Dr
Rusconi but would be returned, they negligently prevented Mrs Fordham or her
executors from taking proceedings against Dr Rusconi either in this country or
in Italy for the £3,675 which he had undertaken to pay. It may be, as I have
indicated, that Christies could have expressed themselves better in their
letters and dealt with the relevant problem more efficiently over that period,
but I do not think that anything that Christies did or did not do constituted
any breach of their contract with Mrs Fordham or any breach of their obligation
to take reasonable care as her auctioneers of the painting. In any event, even
if it did, what could the damage be? The
fact of the matter is that the picture is still in England, at Christies at the
executors’ order. It is however suggested that they lost the chance, which can
be evaluated, of suing Dr Rusconi and getting the money. But I think that the
only way that I could assess this chance would be to pluck a figure out of the
air–and that I am not entitled and do not propose to do. Indeed, as I asked Mr
Primost more than once, even if there was any breach of contract, even if there
has been any negligence on the part of Christies, what damage have his clients
suffered? With all respect to him, I do
not think that he was able to give any satisfactory answer to that question,
because in truth the plaintiffs have in any event suffered no damage. They
remain the owners of a picture, albeit its value may be slightly affected by
the fact that the maestro has disowned it; but on the evidence before me, for
the reasons I have given, I doubt whether its value has been substantially
affected merely because of this. They have the picture just as they had in
1973. The evidence is that its value has in fact appreciated, in addition to
any appreciation due to the fall in the value of the pound. They still possess
the asset which they have always possessed; in respect of which they have
sustained no loss; and in relation to which they can now take whatever steps
they may be advised–to sell it or to hold on to it for a time yet–possibly to
hold it until the death of the painter–I do not know.
I do not
propose to deal with Mr Primost’s ancillary submissions in detail, because
again, for the reasons which I have indicated, I do not think there was any
breach of contract or duty on the defendants’ part. Even if there had been a
breach, once again I do not think that this causes any damage.
In these
circumstances, this claim must fail.
Judgment was
given for the defendants with costs.
