Recently, Mr. Zhang from Kaifeng, Henan reported to Red Star News that he had just entered the art collection industry and participated in an art auction last August at the invitation of Mr. Zhao, the general manager of Shijiazhuang Shengshi Oriental International Auction Co., Ltd. (hereinafter referred to as "Shengshi Oriental").
Mr. Zhang said that he had auctioned 8 collections through Shengshi Dongfang at the auction. Before participating in the auction, he asked Zhao whether some of his collections were authentic, and then he would participate in the auction. Zhao said that they were authentic. In addition, I asked Zhao whether I could auction the collection first without paying the deposit, and then pay the auction price after identifying it as authentic. Zhao replied that I could.
After Mr. Zhang took a picture of the collection, he took six of them for appraisal. The appraisal opinions given by the two appraisal agencies were imitations or forgeries. Mr. Zhang then hoped to return the lot and no longer pay the auction price.
▲ Paintings taken by Mr. Zhang For this reason, Mr. Zhang was sued by Shengshi Oriental. On March 18 this year, the People's Court of Yuhua District, Shijiazhuang City made a first instance judgment on the case, stating that Mr. Zhang's commitment to Zhao's "fidelity" did not fulfill his reasonable review obligation. At the same time, Zhao's commitment to the "fidelity" of the auction items conflicts with the exemption clause of defect guarantee in the Auction Rules. However, both the Auction Law of the People's Republic of China and the Auction Rules point out that the auctioneer (company) does not bear liability for warranty against defects. Therefore, Mr. Zhang needs to continue to pay 2.38 million yuan of auction price and commission and other expenses.
At present, Mr. Zhang has lodged an appeal against the judgment of first instance.
Bidder:
The "person in charge" of the auction company promises the authenticity of the auction
Identification shows 6 pieces of auction Imitation
Mr. Zhang told the Red Star News reporter that he met Mr. Zhao at an auction, and they added WeChat. At that time, friends in the circle introduced Mr. Zhao as the head of Shengshi Oriental.
Mr. Zhang said that he had just entered the art auction collection circle and hoped to make more friends. At present, art auction belongs to the buyer's market, and auction needs invitation. Before the spring auction in 2023, Mr. Zhao repeatedly invited himself and called him at least three times to invite him to participate in the auction.
Mr. Zhang said that he was willing to participate in the auction, but he proposed to Zhao that if he could "preserve the truth" of the auction, he would go to the auction. In the WeChat chat, Zhao said, "I will give you a good check. It's not easy to meet good customers, so you can rest assured.".
Before the auction, Mr. Zhang went to see several lots and sent Zhao the catalogue number of the favorite lots. He hoped Zhao would confirm with the client that these lots were real. Mr. Zhang proposed on WeChat that he would take the works he liked without paying the deposit, and then take them away after the auction, without paying the auction price. He would first take them for identification, and then pay if the things were identified as true. If they were not true, they would be returned.
According to the WeChat chat record provided by Mr. Zhang, Zhao's reply at that time was: Yes. However, Zhao also reminded that what they said should be kept confidential and not shared with anyone.
▲ Screenshot of chat records between Mr. Zhang and Mr. Zhao "On the day of the auction, I auctioned seven pieces of goods. When I was ready to leave, Zhao pointed to one of Ren Bonian's works and said, 'This one is also very good, you can auction it'. I also auctioned the eighth piece of goods." Mr. Zhang said that the eight pieces of works also included works by Lu Yanshao, Li Kuchan, Wu Changshuo, Li Keran, etc.
"After the auction, Mr. Zhao asked me to pay, and I said that we had all agreed. Later, Mr. Zhao signed a bill of lading for non payment. After picking up the goods, I found some friends in the art collection circle to see some pieces of auction, but everyone said they were wrong." Mr. Zhang said that after obtaining Mr. Zhao's consent, he took six pieces of auction to Rongbaozhai for identification, Rongbaozhai did not provide a written appraisal report, but gave the appraisal opinion that all the six pieces were fake. Mr. Zhang provided the identification audio and video at that time.
Since then, Mr. Zhang has also found a second appraisal institution - Henan Fajian Artwork Appraisal Co., Ltd. The Appraisal Opinion provided by the company also showed that the six pieces of auction were all imitations.
Therefore, Mr. Zhang refused to pay the auction price.
▲ Appraisal opinions of appraisal institutions Auction company:
Zhao is only the artistic director of the company
Their behavior does not represent the company
Later, Shengshi Dongfang sued Mr. Zhang to the court for payment of auction fees and commissions.
In the court, Shengshi Dongfang said that Mr. Zhao was only the art director of the company's art department, and he privately agreed Mr. Zhang to go to Rongbaozhai for appraisal, which seriously violated the company's rules and regulations, auction rules, and even the relevant provisions of the Auction Law of the People's Republic of China. His behavior could not represent the company, and the company was invalid if it did not know, did not recognize, or did not ratify. Zhao is neither the legal representative nor the shareholder of the company. His act of approving Mr. Zhang to go to Rongbaozhai for appraisal beyond his authority is his personal act and has no effect on the company.
Mr. Zhang pointed out that Mr. Zhao had always represented the company in "fidelity". Everyone knows that he is the general manager of the auction company, and there are also news reports that he is the general manager. Although, when participating in the auction, the company sent the auction catalogue first, and it was written in the auction catalogue that the company would not bear the guarantee liability for the defects of the auction. However, Mr. Zhang believed that the general manager of the company invited himself to participate in the auction, and later said that he would keep the auction authentic. In fact, the auction rules have been modified. So I went to the auction. "But after getting the appraisal conclusion, he said that he did not represent the company. Isn't that fraud?"
Red Star journalists have retrieved several news reports on the Internet. Zhao once attended the public event as the general manager of Shengshi Dongfang. However, through Tianyan's inquiry, it is not shown that Zhao is the legal representative and shareholder of the company.
▲ According to the reporter, in recent years, Mr. Zhao has repeatedly accepted interviews and attended activities as the general manager and person in charge of Shengshi Dongfang Shengshi Dongfang also proposed in the court that Article 4 of the Auction Rules clearly stipulates that the company will not be liable for defects in the authenticity and quality of the auction items, and bidders and their agents should personally examine the original auction items and bear legal responsibility for their acts of bidding for the auction items. Mr. Zhang has received and understood the auction rules before the auction. He has also participated in other auctions for many times and collected a lot of works. He has his own gallery in Zhengzhou for a long time. He is an insider in the art circle, has judgment on the authenticity of works of art, and is more familiar with the auction rules. Therefore, his claim that the company has fraud has no factual basis.
The court ruled that:
Failure to fulfill reasonable review obligation
The defendant needs to pay auction money and commission, etc
On May 20, the Red Star News reporter, as a friend and reporter of Mr. Zhang, verified with Mr. Zhao about his position in the company and why he promised Mr. Zhang that the auction would be authentic. Mr. Zhao said that at present, there has been a court judgment, and everything shall be subject to the judgment.
The People's Court of Yuhua District, Shijiazhuang City, mentioned in the judgment of the first instance that the focus of the dispute in the case was: first, whether the plaintiff's staff member Zhao's commitment to the defendant's "fidelity" before the auction constituted apparent agency; The second is whether the plaintiff's disclaimer of warranty against defects is valid.
With regard to the question whether Zhao's commitment to the defendant's "fidelity" before the auction constituted a prima facie agency and thus changed the Auction Rules, the court held that prima facie agency refers to the act of agency performed by the actor without agency power. If the counterpart has reason to believe that he has agency power, the agency act is effective. Apparent agency is based on the premise that it constitutes unauthorized agency. Secondly, the unauthorized agency behavior of the actor objectively forms the appearance of having agency power. Moreover, the counterpart is bona fide, that is, the counterpart does not know that the actor has no right of punishment and no gross negligence.
The court held that Mr. Zhang, as the counterpart, did not fulfill the reasonable review obligation for Zhao's "fidelity" commitment, and did not have the element of good faith. Because the first auction is a kind of spot transaction of public bidding, which is different from ordinary sales contracts. As a bidder, Mr. Zhang should have a full understanding of the nature of the auction, while Mr. Zhao's commitment to the "fidelity" of the auction items is only verbal form of WeChat, which is not symmetrical with the public bidding nature of the auction. Secondly, Zhao's commitment to the "fidelity" of the auction items conflicts with the exemption clause of defect guarantee in the Auction Rules. Therefore, the defendant should have a strong duty of care in this case. However, Mr. Zhang did not further express his intention to confirm "fidelity" with the plaintiff, and he did not express his intention to confirm "fidelity" to the plaintiff even when signing the transaction confirmation letter after the successful bidding. The court therefore held that Mr. Zhang was guilty of gross negligence.
▲ Paintings taken by Mr. Zhang The Court also mentioned that, Article 496 of the Civil Code stipulates that: "Where a contract is concluded by using standard terms, the party providing the standard terms shall follow the principle of fairness to determine the rights and obligations between the parties, and take reasonable measures to remind the other party to pay attention to the terms that have a significant interest in the other party, such as the exemption or mitigation of its responsibilities, and explain the terms in accordance with the requirements of the other party". According to the WeChat chat record between Mr. Zhang and Mr. Zhao and the auction closing confirmation signed by them, it is sufficient to prove that the plaintiff has fulfilled the reasonable obligation of prompt and explanation, and the defendant has paid attention to and is aware of the defect warranty exemption clause.
According to Article 61, paragraph 2 of the Auction Law of the People's Republic of China, "if the auctioneer and the trustee declare before the auction that they cannot guarantee the authenticity or quality of the auction object, they will not bear the liability for defect guarantee", the auction company has declared in the case of the Auction Rules that "the company will not bear the liability for defect guarantee for the authenticity and/or quality of the auction products" "Bidders and/or their agents have the responsibility to understand the actual situation of the auction items themselves and bear legal responsibility for their bidding for an auction item", and have performed the obligation to provide preview, so the auction company shall not be liable for defects of the auction items.
As for Mr. Zhang's claim that the auction products involved in the case are imitations, due to the fact that the authenticity identification of art auctions is more dependent on personal subjective knowledge in reality, there is no legally mandated audit means, and there is no necessary audit method spontaneously formed by the market exchange and widely recognized, and the Appraisal Opinion of Henan Fajian Art Appraisal Co., Ltd. submitted by Mr. Zhang It is his unilateral application, which is not recognized by the auction company. Therefore, Mr. Zhang, knowing the disclaimer, should bear the normal transaction risk unique to art auction when he makes his own bidding choice.
In the end, Mr. Zhang was sentenced to pay 2.38 million yuan of auction price and commission and other expenses.
However, Mr. Zhang refused to accept the judgment of the first instance. He believed that Mr. Zhao's act was an official act of the company, and the legal consequences of his "fidelity" commitment should be borne by the company. At present, Mr. Zhang has appealed.
Wu Yang, Chief Reporter of Red Star News
Edited by He Xianfeng and Edited by Feng Lingling
