BELLOWS v. RUSSELL.

[20 NEW HAMPSHIRE, 427.]

AGREEMENT THAT ONE SHALL BID FOR SEVERAL FOR MAIL CONTRACT is not void unless made for some illegal purpose, affecting public policy. WHETHER CONTRACT WAS MADE FOR ILLEGAL PURPOSE is a question of fact for the jury.

ASSUMPSIT on the following contract: "It is agreed that the subscribers shall on their joint account endeavor to procure the mail contract on route No. 169, from Haverhill to Lancaster, New Hampshire, from July 1, 1837, to June 30, 1841; and in case they succeed, it shall be divided at Littleton, the north half to belong to the subscriber, George Bellows, and the south half to the subscribers, the Littleton Stage Company; and in case of disagreement between the parties in relation to the division and apportionment of the mail money, it shall be submitted to the decision of some competent person. In case the contract shall be obtained by either of the parties, or by a third person for the benefit of either party, it shall be in trust for the purpose aforesaid. GEORGE BELLOWS,

"May 2, 1837.

LITTLETON STAGE Co.,

By L. A. RUSSELL, Agent."

When the contract was made the parties met, and learning that each intended to bid for the mail route named, and had made some preparation for that purpose, entered into the written contract above. The case was submitted to auditors who made their report, presenting the question as to the legality of the contract, which was transferred to this court.

Bellows, for the defendant.

Wells, for the plaintiff.

By Court, GILCHRIST, J. Fraudulent practices at auctions, either on the part of vendors employing by-bidders or puffers, as they have been termed, "to screw up the price," or on the part of purchasers, combining to prevent competition at the bidding, and thus to buy in the property at a smaller price than such a competition would probably secure, have been held illegal at common law, and there are many decisions to that effect.

A leading case is Bexwell v. Christie, 1 Cowp. 395, in which Lord Mansfield, announcing the doctrine of the court, declared that the bidding at the sale by the owner of the goods, or another on his behalf, was a fraud upon the contract involved in the offer of the article at auction, that it should go to the highest

bidder. This was in an action by the owner against the auctioneer, for selling the chattel at a price below that at which he had been directed to sell.

The doctrine was confirmed in Howard v. Castle, 6 T. R. 642, and has frequently been recognized as law.

In Doolin v. Ward, 6 Johns. 194, the action was upon a contract between the parties, that one of them should buy certain articles about to be sold at the navy-yard, at Brooklyn, and that the parties should share the purchase equally, it was hell by the court, that the contract declared on was void; that it was against public policy, and tended injuriously to affect the character and value of sales at auction.

Wilbur v. How, 8 Johns. 444, was on a like contract for bidding off a job upon a certain road. The contract was, upon the authority of Doolin v. Ward, held to be “a nudum pac1un, and a fraud upon the vendor."

Mr. Justice Story, Story's Eq. Jur., sec. 293, asserts the doctrine to be that "agreements, whereby parties engage not to bid against each other at a public auction, especially where such auctions are directed or required by law, as in sales of chattels or other property, by execution, are held void, for they are unconscientious and against the public policy, and have a tendency injuriously to affect the character and value of sales at public auction, and mislead public confidence. They operate virtually as a fraud upon the sale."

It is, therefore, a well-settled doctrine, and is undoubtedıg a reasonable one, that holds to be illegal and fraudulent a combination of parties for the express purpose of preventing competition among bidders at an auction, with a view to take advantage of such a state of things for their own benefit.

It is, however, a different thing entirely to hold that where several parties desire, for any reasonable and just purpose, to become the joint purchasers of property exposed at auction, or to become interested together in a contract so exposed for the competition of bidders, they may not lawfully employ one of their number to act in behalf of the whole, and to bid off for their benefit the property, job, or contract so offered.

Accordingly, it has been held in Massachusetts, Phippen v. Stickney, 3 Metc. 384, upon a thorough examination of the cases, that the question as to the legality of such associations depended upon the circumstances in which they are formed. Mr. Justice Dewey, in delivering the opinion of the court, observes: "It seems to us, after some consideration of this question, and an

examination of the adjudged cases bearing upon it, that we can not judicially declare that every contract between two or more individuals, in which it may be stipulated that one is to be the purchaser for the joint benefit of himself and another, and that the other is not to interfere with his bidding, shall, when attempted to be enforced for the benefit of the associates, be held void, as a fraud upon the rights of the vendor, and as against public policy, merely because he who seeks to enforce the contract, may have been thereby induced to abstain from bidding. Cases may readily be imagined, and indeed are of frequent occurrence, in sales of large magnitude, where persons do thus unite, and are thereby enabled to become purchasers, when neither of them could otherwise have participated in the bidding."

The conclusion of the court in that case was that fraud could not be presumed, and that the party who would avail himself of such a defense must first establish the fact by a verdict of the jury.

We are of the opinion that such is the only just and tenable doctrine on the subject. The intent, and other circumstances attending the consent of the parties to the arrangement disclosed in this case, must settle its legal character.

The act of congress relating to the subject, and to which our attention has been directed, seems to contain nothing relating to the question between these parties, more than is comprised in the general principles of the common law. It prohibits the postmaster general from granting contracts to such as shall have entered into "any combination to prevent the making of any bid," or who shall have given or promised to give any consideration to induce others not to bid.

The fair construction of this statute seems not to require us to consider as such a combination, an agreement in good faith between several, that one should bid for the whole.

The case must, therefore, stand for trial upon the question of the alleged fraud.

Remanded for trial.

WELD V. SABIN.

[20 NEW HAMPSHIRE, 533.]

MORTGAGEE DISCHARGING AN ELDER MORTGAGE IS SUBSTITUTED in the place of the incumbrancer, and may treat the mortgage as if assigned to him, and enforce the lien.

THE opinion states the facts.

Leland, for the petitioner.

Cushing, for the defendant.

By Court, GILCHRIST, J. It appears that proceedings were commenced by Sabin against the petitioner and another, under the revised statutes, chapter 209, providing an "action against tenants." It also appears that the defendants in the process suffered default through the omission of one of them, Daniel Weld, jun., to give the attention to the matter which he had promised the petitioner to give. The consequence has been that Sabin has taken out his writ of possession, and taken possession of the land by means of it. The petitioner having thus, through misfortune, failed to have a hearing of his cause, brings his petition to this court for a review, according to the provisions of the revised statutes, chapter 192.

Without pausing to inquire whether this is such a case as would admit of relief in the form of a review, to which form of remedy the court seem to be limited in the statute referred to: Dickinson v. Davis, 4 Mass. 520; Borden v. Borden, 7 Id. 93 [4 Am. Dec. 32]; Stone v. Davis, 14 Id. 360; Pope v. Pope, 4 Pick. 129; Smith v. McDaniel, 15 N. H. 474; we shall consider the petitioner's case as if no such technical difficulty intervened.

The estate in regard to which the controversy has arisen was at one time the property of Moses Weld and Daniel Weld, jun., subject to a mortgage which had been made to the petitioner and his wife, to secure their support for life. Daniel Weld, jun., and Moses Weld, having that interest in the farm on the tenth day of January, 1835, mortgaged it to Chase to secure a sum of money which he advanced to them, and the petitioner joined in that mortgage. Moses Weld soon after released his interest to Daniel Weld, jun., who, on the sixth day of April, 1836, mortgaged the same to Sabin.

On the eighth of March, 1845, Sabin paid the mortgage which Chase held, at the same time requesting Chase to assign it to him, which Chase declined to do, and executed a release of the premises, as advised by counsel. A question is made as to what right Sabin acquired by the act of paying the mortgage.

It is perfectly well settled that when a mortgagee, for his own protection, discharges an elder mortgage, or other incumbrance, he becomes entitled to treat such mortgage as if it were assigned to him, and that he becomes substituted in the place of such in

AM. DEC. VOL. LI

cumbrancer, and may enforce the lien accordingly: Robinson v. Leavitt, 7 N. H. 100; Page v. Foster, Id. 392.

An attempt is made in the argument to distinguish this from ordinary cases in which the rule is applicable, by the fact, that although the petitioner joined in the mortgage, he owed no part of the debt. But we think this not to be a material feature. The mortgage made to secure the debt attends it, into whose hands soever the debt passes, whether by assignment in fact, by intestacy, or by force of the equitable principle of substitution which has been referred to; and by this is meant the mortgage that was made, and not a mortgage of a less estate.

The rule extends as well to mortgages made to secure debts other than those of the mortgagor, as to those which individuals make to secure debts contracted by themselves; and there is no difference between the two kinds, nor is the distinction which has been taken by counsel sustained by any authority to which we have been referred.

Sabin, therefore, having, by paying the debt due to Chase, acquired his rights under the mortgage, had the right of a mortgagee to immediate possession of the premises mortgaged; and this seems to be all that he has acquired by the default of the petitioner, or of the party to whom he intrusted the conduct of his defense.

The petition does not suggest that he had a defense to the process; much less does it point out what that defense is. It states, indeed, that the mortgage to Chase had been paid, and that the petitioner's title was better than that which Sabin acquired under the mortgage of Daniel Weld, jun., to him; but the payment of Chase's mortgage has been seen to be merely equivalent to an assignment of it to Sabin.

Nothing could possibly be gained, in the promotion of justice, by granting to the petitioner a review upon the case made. It would, perhaps, afford him the means of retaining possession of the land for a little longer time; but the possession clearly belongs to Sabin, who, without violence, fraud, or other misconduct that has been made to appear, has gained the possession. Petition dismissed.

BARTLETT V. PEASLEE.

[20 NEW HAMPSHIRE, 547.]

GRANT OF PRIVILEGE TO GRIND CORN DOES NOT BIND THE GRANTOR to keep the mill in repair to enable the grantee to do so, but the grantor can not destroy the mill.