This is my first “aberrant auction law” find, and numbered as such. When I find more, I’ll attempt to number sequentially, although I hope my searching is generally unsuccessful.
Aberrant auction law refers to auctioneer licensing law (or other auction related law) that is abnormal, odd, bizarre, or otherwise unusual. The basis for determining if an auction law is aberrant is all the other auction law that is out there, which collectively is widely considered normal.
In Pennsylvania, we have the law cited as the Auctioneer and Auction Licensing Act, enacted by The General Assembly of the Commonwealth of Pennsylvania. Section 19 is titled, “Revocation or suspension of license for violation by employee.” Within Section 19, there is the following subsection:
(a) General rule.-The board may, upon its own motion, and shall, promptly upon the verified complaint in writing of any person setting forth specifically the wrongful act or acts complained of, investigate any action or business transaction of any person licensed by the board and may temporarily suspend or permanently revoke licenses issued by the board or impose a civil penalty not exceeding $1,000 at any time when, after due proceedings provided in this act, it finds the licensee to have been guilty in the performance or attempt to perform any of the acts prohibited to others than licensees under this act, as follows:
In 19 (a) there is #13:
(13) For any licensed auctioneer or apprentice auctioneer to bid and buy for himself at any auction he is conducting. For reference, The Pennsylvania Auctioneer and Auction License Act, Section 19 (a) (13)
In other words, auctioneers cannot bid at their own auctions without the risk of license suspension, revocation, and/or a fine.
Why are auctioneers in Pennsylvania not permitted to bid at their own auctions? This is a great question, especially in light of no other state having such a prohibition. We referenced this particular aberrant law in our previous post about auctioneer’s bidding titled: https://mikebrandlyauctioneer.wordpress.com/2009/11/15/can-the-auctioneer-bid/
This would seem to us as a private matter between the client and the auctioneer. If the client wishes his auctioneer to refrain from bidding, then that agreement could be simply placed in the contract between the auctioneer and client. If, however, the client is okay with his auctioneer bidding, why not? If the auctioneer’s own bidding would yield the client more money, isn’t that something the client might prefer?
The other oddity about this law is that it doesn’t appear clear if the auctioneer is permitted to bid without buying? Can the auctioneer bid for someone else? Can the auctioneer bid for the seller? The latter, of course, lies in the adoption of the UCC 2-328.
So, what other issues arise? The auctioneer cannot bid, but can the auctioneer’s wife or husband bid? What about a cousin, grandparent, friend, or staff member? Then, after the auction, that new owner can sell the item to the auctioneer (or if spouse, it becomes martial property automatically?)
Further, would anyone bidding with the intent of selling to the auctioneer be, in essence, the auctioneer bidding? If the auctioneer bid for the seller in a with reserve format, and then was the high bidder, can the auctioneer than buy the item from the client after the auction? Lastly, does “conducting” mean under contract with the client, and/or assisting another auctioneer with an auction?
We find The Pennsylvania Auctioneer and Auction License Act, Section 19 (a) (13) aberrant.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.face book.com/mbauctioneer. He is Executive Director of The Ohio Auction School.