B-133796, DEC. 4, 1957

B-133796: Dec 4, 1957

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THERE WAS ENCLOSED WITH HIS OFFER HIS PERSONAL CHECK FOR THE GOOD FAITH DEPOSIT OF $100 REQUIRED BY THE TERMS OF THE OFFER AND PARAGRAPH 5 OF THE GENERAL CONDITIONS OF SALE. THIS REQUEST WAS NOT FORMALLY REFUSED UNTIL APRIL 30. HARBAUGH STOPPED PAYMENT ON THE CHECK AND SUBSEQUENTLY THE DWELLING WAS SOLD TO ANOTHER FOR $612.50 OR $612.50 LESS THAN THE DEBTOR'S OFFER. WHILE ORIGINALLY THE INDEBTEDNESS WAS REPORTED HERE IN THE AMOUNT OF $612.50. IT APPEARS THAT IN SIMILAR CASES WHERE VETERANS HAVE WITHDRAWN THEIR BIDS THE GOOD FAITH DEPOSITS HAVE BEEN ACCEPTED AS FULL RESTITUTION. YOUR DEPARTMENT WAS REQUESTED TO TAKE COLLECTION ACTION AGAINST MR. THE DEBTOR CONTENDS THAT HE IS NOT INDEBTED TO THE UNITED STATES.

B-133796, DEC. 4, 1957

TO THE SECRETARY OF LABOR:

THIS REFERS TO LETTER OF SEPTEMBER 6, 1957, FROM YOUR ADMINISTRATIVE ASSISTANT SECRETARY ENCLOSING COPY OF LETTER OF JULY 30, 1957, ADDRESSED TO HIM FROM THOMAS M. HARBAUGH, AN EMPLOYEE OF THE DEPARTMENT OF LABOR,RELATIVE TO HIS INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $100 RESULTING FROM STOPPING PAYMENT ON HIS PERSONAL CHECK FOR THAT AMOUNT DRAWN IN FAVOR OF THE UNITED STATES AND DELIVERED TO THE PUBLIC HOUSING ADMINISTRATION.

BY OFFER DATED FEBRUARY 21, 1954, MR. HARBAUGH OFFERED TO PURCHASE A DWELLING FOR $1,225. THERE WAS ENCLOSED WITH HIS OFFER HIS PERSONAL CHECK FOR THE GOOD FAITH DEPOSIT OF $100 REQUIRED BY THE TERMS OF THE OFFER AND PARAGRAPH 5 OF THE GENERAL CONDITIONS OF SALE. THE RECORD SHOWS THAT ON THE DAY FOLLOWING SUBMISSION OF THE OFFER AND BEFORE ACCEPTANCE OF SAME BY THE CONTRACTING OFFICER MR. HARBAUGH REQUESTED THE NATIONAL CAPITAL HOUSING AUTHORITY TO RETURN HIS DEPOSIT. THIS REQUEST WAS NOT FORMALLY REFUSED UNTIL APRIL 30, 1954. IN THE MEANTIME, MR. HARBAUGH STOPPED PAYMENT ON THE CHECK AND SUBSEQUENTLY THE DWELLING WAS SOLD TO ANOTHER FOR $612.50 OR $612.50 LESS THAN THE DEBTOR'S OFFER. WHILE ORIGINALLY THE INDEBTEDNESS WAS REPORTED HERE IN THE AMOUNT OF $612.50, IT APPEARS THAT IN SIMILAR CASES WHERE VETERANS HAVE WITHDRAWN THEIR BIDS THE GOOD FAITH DEPOSITS HAVE BEEN ACCEPTED AS FULL RESTITUTION, PRESUMABLY IN VIEW OF THE PROVISIONS OF PARAGRAPH 12 (G) OF THE GENERAL CONDITIONS OF SALE MADE A PART OF EACH BID BY REFERENCE.

FOLLOWING SEVERAL UNSUCCESSFUL DEMANDS ON THE DEBTOR FOR PAYMENT OF THE $100, YOUR DEPARTMENT WAS REQUESTED TO TAKE COLLECTION ACTION AGAINST MR. HARBAUGH BY ALL ADMINISTRATIVE MEANS CONSISTENT WITH THE PROVISIONS OF GENERAL REGULATIONS NO. 129, JULY 30, 1956. IN THE ABOVE LETTER OF JULY 30, 1957, THE DEBTOR CONTENDS THAT HE IS NOT INDEBTED TO THE UNITED STATES, AS FOLLOWS:

"1. FOR LACK OF ACCEPTANCE, THERE NEVER WAS A CONTRACT BETWEEN ME AND THE GOVERNMENT, AND THEREFORE THERE COULD HAVE BEEN NO BREACH OF CONTRACT ON ANY PART.

"2. FOR THE PURPOSE OF ARGUMENT ASSUME THERE WAS A CONTRACT. IF THERE WERE ANY BREACH, IT WAS NOT ON MY PART BUT THAT OF THE GOVERNMENT, WHICH SOLD THE PROPERTY AT A LOSS TO A NON-PRIORITY PURCHASER IN VIOLATION OF ITS OWN REGULATIONS.

"3. THE ONLY PROVISION FOR FORFEITURE OF THE GOOD FAITH DEPOSIT IS IN SECTION 12G OF THE GENERAL CONDITIONS, WHICH HAS NO APPLICATION TO THE FACTS IN THIS CASE IN VIEW OF THE FACT THAT MY OFFER WAS NOT ACCEPTED.

"4. EVEN IF I WERE NOW TO PAY THE $100, THE GOVERNMENT WOULD BE OBLIGED TO IMMEDIATELY TURN AROUND AND REFUND THE MONEY TO ME, UNDER THE PROVISIONS OF SECTION 10 OF THE GENERAL CONDITIONS.'

AS TO THE DEBTOR'S CONTENTION THAT THERE NEVER WAS A CONTRACT AND THEREFORE NO BREACH OF HIS PART IT IS TRUE, OF COURSE, THAT UNDER ORDINARY PRINCIPLES OF CONTRACT LAW AN OFFEROR MAY WITHDRAW HIS OFFER, NOT UNDER SEAL OR FOR A CONSIDERATION, AT ANY TIME BEFORE ACCEPTANCE, WHICH RIGHT OF REVOCATION EXISTS EVEN THOUGH THE OFFEROR AGREED TO KEEP THE OFFER OPEN FOR A TIME CERTAIN. UNITED STATES V. LIPMAN, 122 F.SUPP. 284. THIS RULE, HOWEVER, HAS BEEN HELD NOT TO APPLY TO GOVERNMENT CONTRACTS ON THE BASIS THAT THEY CONSTITUTE A WELL RECOGNIZED EXCEPTION TO THE GENERAL RULE. SCOTT V. UNITED STATES, 44 C.CLS. 524. REFINING ASSOCIATES V. UNITED STATES, 124 C.CLS. 115; 27 COMP. GEN. 436.

IN THIS INSTANCE PARAGRAPH 5 OF THE ABOVE GENERAL CONDITIONS REQUIRED ALL BIDDERS TO SUBMIT A GOOD FAITH DEPOSIT OF $100 FOR EACH HOUSE THE BIDDER DESIRED TO PURCHASE. A SIMILAR PROVISION IS CONTAINED IN PARAGRAPH 4 OF THE BID. THE PURPOSE OF SUCH DEPOSIT WAS TO INSURE GOOD FAITH ON THE PART OF THE BIDDER. THE COURT IN THE CASE OF UNITED STATES V. CONTI, 119 F.2D 652, 655, DEFINED THE TERM "BID SECURITY" AS A DEPOSIT "REQUIRED OF THE BIDDER IN ORDER TO ASSURE THE GOVERNMENT THE SERIOUSNESS OF THE BID, THE DEPOSIT TO BE FORFEITED IF THE BIDDER SHOULD WITHDRAW HIS BID BEFORE THE GOVERNMENT ACCEPTED IT.' UNDER THE PLAIN TERMS OF PARAGRAPH 3 OF THE OFFER THE DEBTOR OBLIGATED HIMSELF TO KEEP HIS OFFER OPEN--- AT THE OPTION OF THE SELLER--- FOR A PERIOD OF 30 DAYS FROM FEBRUARY 21, 1954, THE SPECIFIED DELIVERY DATE. ALSO, UNDER PARAGRAPH 3 IT IS STIPULATED THAT THE OFFER SHALL BE BINDING UPON THE PURCHASER IN THE MANNER AND FOR THE PERIOD SET FORTH IN THE GENERAL CONDITIONS. SINCE THE PURCHASER ELECTED TO WITHDRAW HIS BID PRIOR TO THE EXPIRATION OF THE 30-DAY PERIOD IN CONTRAVENTION OF THE TERMS OF PARAGRAPH 3 AND 8 OF THE OFFER FORFEITURE OF HIS BID DEPOSIT BY THE ADMINISTRATIVE OFFICE WAS PROPER. CF. SCOTT V. UNITED STATES, CITED ABOVE.

AS TO THE OTHER CONTENTIONS OF THE DEBTOR IT IS SUFFICIENT TO STATE THAT THE WITHDRAWAL OF THE DEBTOR'S BID MADE IT UNNECESSARY FOR THE GOVERNMENT TO PERFORM ANY OTHER CONDITIONS OF THE CONTRACT INCLUDING FORMAL ACCEPTANCE OF THE OFFER OR THE RETURN OF THE BID DEPOSIT OR ANY OTHER PAYMENT UNDER THE CIRCUMSTANCES AS PROVIDED FOR IN PARAGRAPH 10 OF THE GENERAL CONDITIONS. COUNTRY CLUB OIL CO. V. LEE, 58 N.W. 2D 247; CORBIN ON CONTRACTS SEC. 977.

IN VIEW OF THE FACTS SET FORTH ABOVE AND THE LAW APPLICABLE THERETO WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT MR. HARBAUGH IS INDEBTED TO THE UNITED STATES IN THE SUM OF $100.

ACCORDINGLY, IT AGAIN IS REQUESTED THAT COLLECTION ACTION BE TAKEN CONSISTENT WITH THE PROVISIONS OF GENERAL REGULATIONS NO. 329, JULY 30, 1956.