Dudley v. Little

2 Ohio 504

• Court: Ohio Supreme Court
• Decided: December 15, 1826
• Status: Published

Opinion

By the Court :

A partnership or contract formed for the purchase of land at sale for taxes, is against the policy of the law; and if such contract or partnership be entered into for the express purpose of making such purchases, it is a fraud on the owner of the property,, and the purchaser can not obtain an available title.

Such combinations have, necessarily, a direct tendency to prevent competition, which it is the duty-of the legislature and the-policy of the law to encourage. Over a sale of this description, the owner has no control — he can not refuse a bid, or adjourn the-sale, or fix a sum below which the property shall not be struck down. The sale is managed by the agent of the state. The. owner is not consulted. The highest bidder becomes the purchaser, although the sum bid be less than a hundredth part of the* value of the property. This being the case, any combination which has a tendency to reduce the price of the property, by preventing competition, must operate as a fraud on the owner. The • effects of such combinations can not be controlled by any vigilance on the part of the owner.

It frequently happens that large quantities of land are offered for sale on these occasions, in the absence and without the knowledge of the owners; and if such combinations are permitted, all the persons present at the sale might form themselves into companies, and, by an agreement not to bid against each other, might purchase in the whole of every tract offered for the amount of tax -due on it.

We do not mean to say that partners can not purchase property •at a tax sale, for the convenience of the business they are engaged in, when speculation is not their object, but that a partnership or combination can not legally be formed for the purpose of making ■such purchases. As this *was evidently the fact in the case before us, the complainants are entitled to a decree. They must take it, however, on the condition of refunding the purchase jnoney and interest, with the penalty of fifty per cent, allowed by law, and on the payment of cost.