Tuesday, December 17, 2013

The Jenack Decision

Was running around today, but the big news was that the Court of Appeals issued its decision in the Jenack case.  The decision is here.  Tons of coverage, including Graham Bowley in the NYT, Laura Gilbert in The Art Newspaper, and Nicholas O'Donnell at The Art Law Report.  The bottom line, as Gilbert puts it, is that the court "reversed an earlier decision that had alarmed auctioneers and those in the trade because, if upheld, it could have required them to disclose sellers’ identities" if they wanted to create a binding contract.  A few quick thoughts:

1.   Footnote 10 seems to vindicate the Olsoff Interpretation -- that the lower court decision was "narrow and technical" and "deal[t] only with the evidence that is required if an auction purchaser defaults."  The footnote says:  "Of course, if Jenack had other written documentation of this transaction that provided the seller's name, that certainly would satisfy the [statute of frauds], but there is no such documentation in the record" (my emphasis).  Of course!

2.   Though I think the decision is ultimately the right one, there's still something odd about the statutory interpretation the court employs to get there.  The relevant statutory provision says that, in the case of a sale at public auction, the statute of frauds can be satisfied if, at the time of sale, the auctioneer "enters in a sale book," among other information, (a) "the name of the purchaser" and (b) "the name of the person on whose account the sale was made."  But, says the court, since "it is well settled that an auctioneer serves as a consignor's agent," the relevant sale book (or "clerking sheet") provided "the name of the person on whose account the sale was made" by listing the name of the auctioneer (Jenack).  But if that's the case, it seems the court has read prong (b) right out of the statute:  the provision at issue only applies to sales at public auction -- but since the auctioneer is (always) the consignor's agent, prong (b) will always, by definition, be satisfied.  The court has redrafted the statute to say only the buyer's name must be entered in the sale book.

3.   The main sense you get, reading the decision, was that the court felt like the buyer here was getting away with something -- that he was "using the Statute of Frauds as a means of evading a just obligation" -- and they just weren't going to let him do that.  Sometimes that's what it comes down to.