Hoffman v. Horton
212 Va. 565 · Supreme Court of Virginia · 1972
Facts
At a foreclosure sale for the "Field Tract" in Arlington County, Hubert N. Hoffman, the plaintiff, made a bid of $177,000. The auctioneer, believing bidding was complete, announced "sold for $177,000.00" and struck his hand. Immediately, a trustee informed the auctioneer of a missed $178,000 bid that was made prior to or simultaneously with the hammer fall. Despite Hoffman claiming he purchased the property for $177,000, the auctioneer reopened bidding, and the property was ultimately knocked down to Hoffman for $194,000. Hoffman paid the $194,000 under protest and subsequently brought an action to recover the $17,000 difference.
Procedural history
The trial court denied the plaintiff’s claim. This court granted a writ of error to review the judgment of the trial court.
Issue
May an auctioneer at a foreclosure sale reopen bidding when an overbid is made immediately prior to or simultaneously with the falling of the hammer in acceptance of a lower bid?
Holding
Yes, an auctioneer at a foreclosure sale has the discretion to reopen bidding when a higher bid is made prior to or simultaneously with the fall of the hammer. The auctioneer in this case acted within his discretion by reopening the bidding.
Rule
While the Uniform Commercial Code (UCC) § 8.2-328(2) directly applies only to transactions involving "goods," the court adopted its principle for land sales. This rule states that an auction sale is complete when the auctioneer announces it by the fall of the hammer or other customary manner. However, if a bid is made while the hammer is falling in acceptance of a prior bid, the auctioneer may, in their discretion, reopen the bidding or declare the goods sold under the bid on which the hammer was falling. The court adopted this rule for land sales to achieve uniformity and to recognize a rule that is both necessary and fair.
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