## Facts

- A tractor was sold under a conditional sales contract that was assigned to John Deere Co. of Syracuse, Inc.
- After the original buyer defaulted, John Deere repossessed the tractor; because more than half the price had been paid, the law required resale at a public auction.
- John Deere advertised the auction as a sale “to the highest bidder.”
- At the auction, John M. Drew bid $1,500.
- The auctioneer did not accept Drew’s bid; instead, he announced a $1,600 bid by John Deere and struck the tractor down to John Deere.
- Drew alleged the auction was “without reserve,” making the owner ineligible to bid without advance notice under Personal Property Law § 102(4), rendering John Deere’s bid invalid.
- Drew claimed his bid was the highest lawful bid and that a contract formed that John Deere breached by refusing delivery after tender.

## Issues

1. Whether the advertisement that the tractor would be sold “to the highest bidder” established, as a matter of law, an auction “without reserve.”
2. Whether an alleged violation of Personal Property Law § 102(4) (seller bidding without prior announced intent) gave the second-highest bidder enforceable contract rights.
3. Whether Drew was entitled to strike the answer as sham and obtain summary judgment based on the auction record.

## Decision

- The Appellate Division affirmed the order denying Drew’s motion to strike the answer and for summary judgment.
- The record did not establish as a matter of law that the sale was “without reserve”; the phrase “to the highest bidder” was not conclusive.
- Even assuming a statutory violation regarding seller bidding, the violation did not create a contract in favor of an unsuccessful bidder whose bid was never accepted.
- Because Drew’s bid was not accepted, he did not show entitlement to judgment as a matter of law.

## Legal Principles

- In an auction “without reserve,” the seller’s announcement can constitute a collateral undertaking to sell to the highest bona fide bidder and not withdraw the goods after bidding begins; seller bidding is generally inconsistent with that undertaking.
- Advertising goods will be sold “to the highest bidder,” without more, may be ambiguous and does not necessarily establish a no-reserve auction as a matter of law.
- Statutory regulation of auction conduct (including limits on seller bidding) does not automatically convert an unaccepted, second-highest bid into an enforceable sales contract.
- In a “with reserve” auction, a bid is an offer; no contract arises unless the auctioneer accepts the bid (e.g., by striking the item down to that bidder).
- Summary judgment and striking pleadings are improper where material legal or factual questions remain genuinely disputable.

## Conclusion

The court held that Drew failed to show a no-reserve auction or contract formation in his favor, and that any alleged statutory defect in the owner’s bidding did not confer rights on a bidder whose offer was never accepted; the denial of summary judgment was affirmed.


Drew v. John Deere Co. of Syracuse, Inc., 19 A.D.2d 308, 241 N.Y.S.2d 267 (N.Y. App. Div. 4th Dep’t 1963)