B-134965, FEBRUARY 11, 1958, 37 COMP. GEN. 520

B-134965: Feb 11, 1958

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THE ACTION OF THE AUCTIONEER IN CLOSING THE SALE THE FIRST TIME MAY BE REGARDED AS AN EXCUSABLE MISTAKE AND HIS ACTION IN CONTINUING THE SALE WAS PROPER AND IN CONSONANCE WITH HIS DUTY TO DETERMINE THAT ALL BIDS WERE RECEIVED. A SOLE BIDDER WHO WAS ADVISED OF THE ACCEPTABILITY OF HIS BID ON THE THIRD CALL. HAS WAIVED ANY RIGHT HE MAY HAVE HAD TO ACQUIRE THE PROPERTY AT THE ORIGINAL BID PRICE BY FURTHER BIDDING WITHOUT PROTEST AND BY FAILURE TO OFFER AN IMMEDIATE DEPOSIT. 1958: REFERENCE IS MADE TO LETTER OF JANUARY 20. THE CIRCUMSTANCES GIVING RISE TO THE QUESTIONS SUBMITTED ARE STATED TO BE AS FOLLOWS: THE SALE WAS HELD ON APRIL 8. THE LAND WAS APPRAISED AT $2. 500 AND THIS WAS THEREFORE THE MINIMUM AMOUNT FOR WHICH A BID COULD BE ACCEPTED.

B-134965, FEBRUARY 11, 1958, 37 COMP. GEN. 520

SALES - GOVERNMENT PROPERTY - AUCTION SALES - REOPENING WHERE, DURING AN AUCTION SALE OF GOVERNMENT LAND, UNDER REGULATIONS WHICH MADE IT INCUMBENT UPON THE DISPOSAL OFFICER TO SEE THAT ALL BIDS HAD BEEN RECEIVED, AND AT THE TIME THE AUCTIONEER ANNOUNCED THE SALE TO THE SOLE BIDDER ON THE THIRD CALL, ANOTHER BIDDER CAME FORWARD AND BOTH BIDDERS CONTINUED BIDDING UNTIL THE SALE FINALLY CLOSED WITH THE HIGH BID OF THE FIRST BIDDER, THE ACTION OF THE AUCTIONEER IN CLOSING THE SALE THE FIRST TIME MAY BE REGARDED AS AN EXCUSABLE MISTAKE AND HIS ACTION IN CONTINUING THE SALE WAS PROPER AND IN CONSONANCE WITH HIS DUTY TO DETERMINE THAT ALL BIDS WERE RECEIVED. IN AN AUCTION SALE OF GOVERNMENT LAND UNDER REGULATIONS WHICH DID NOT PERMIT THE TRANSFER OF TITLE TO THE PROPERTY UNTIL THE BIDDER COMPLIED WITH CERTAIN CONDITIONS, INCLUDING THE DEPOSIT OF ONE-FIFTH OF THE PURCHASE PRICE, A SOLE BIDDER WHO WAS ADVISED OF THE ACCEPTABILITY OF HIS BID ON THE THIRD CALL, BUT WHO CONTINUED TO BID AFTER ANOTHER BIDDER CAME FORWARD AND STARTED BIDDING, HAS WAIVED ANY RIGHT HE MAY HAVE HAD TO ACQUIRE THE PROPERTY AT THE ORIGINAL BID PRICE BY FURTHER BIDDING WITHOUT PROTEST AND BY FAILURE TO OFFER AN IMMEDIATE DEPOSIT.

TO THE SECRETARY OF THE INTERIOR, FEBRUARY 11, 1958:

REFERENCE IS MADE TO LETTER OF JANUARY 20, 1958, FROM YOUR ADMINISTRATIVE ASSISTANT CONCERNING CERTAIN QUESTIONS INCIDENT TO THE SALE OF A TRACT OF LAND BY PUBLIC AUCTION HELD BY THE BUREAU OF LAND MANAGEMENT UNDER THE ALASKA PUBLIC SALE ACT (48 U.S.C. 1952 USED. SECS. 364A-364E) AND REGULATIONS ADOPTED PURSUANT THERETO 43 C.F.R. 75.19-36.

THE CIRCUMSTANCES GIVING RISE TO THE QUESTIONS SUBMITTED ARE STATED TO BE AS FOLLOWS:

THE SALE WAS HELD ON APRIL 8, 1955, BY THE MANAGER, LAND OFFICE, ANCHORAGE, ALASKA, FOR A TRACT OF SURVEYED LAND DESCRIBED AS LOTS 9 AND 22, SEC. 11, T. 14 N., R. 2 W., SEWARD MERIDIAN, ALASKA. THE LAND WAS APPRAISED AT $2,500 AND THIS WAS THEREFORE THE MINIMUM AMOUNT FOR WHICH A BID COULD BE ACCEPTED. NO SEALED BIDS HAD BEEN SUBMITTED AND AT THE APPOINTED TIME THE MANAGER INQUIRED OF THOSE PRESENT AS TO THE NUMBER WHO WERE INTERESTED IN THE SALE. THE MANAGER ASKED IF THERE WERE ANY QUESTIONS CONCERNING THE CONDITIONS OF THE SALE. ONLY A MR. POLYEFKO INDICATED HIS INTEREST IN THE SALE. THE MANAGER THEN ANNOUNCED THE MINIMUM ALLOWABLE SALES PRICE WHICH MR. POLYEFKO BID. AFTER CALLING MR. POLYEFKO'S BID TWICE THE MANAGER IN HIS OWN WORDS: "* * * ANNOUNCED THE SALE ON THE THIRD CALL * * *.'

AT THAT EXACT MOMENT A MR. GIALAROWSKI WHO HAD BEEN STANDING IN THE DOORWAY OF THE LAND OFFICE INDICATED THAT HE HAD HAD HIS HAND UP ON THE SALE AND APPARENTLY HE WAS NOT IN VIEW OF THE MANAGER OR OTHER PERSONNEL OF THE LAND OFFICE. HE THEN CAME FORWARD AND INDICATED THAT HE WAS INTERESTED IN THE SALE. JUST AS THE MANAGER ASKED WHETHER THERE WERE ANY OBJECTION TO REOPENING THE BIDDING MR. GIALAROWSKI MADE A BID OF $2,550 AND MR. POLYEFKO COUNTERED WITH A BID OF $3,000. ASSUMING FROM THE COUNTER BID BY MR. POLYEFKO THAT THERE WERE NO OBJECTIONS ON HIS PART, THE MANAGER PROCEEDED FURTHER WITH THE BIDDING WHICH FINALLY CLOSED WITH A HIGH BID BY MR. POLYEFKO OF $8,250.

IT IS STATED THAT THEREAFTER MR. POLYEFKO DEPOSITED ONE-FIFTH OF THE $8,250 BUT PROTESTED THE PROCEEDINGS ON THE GROUND THAT ONCE THE BIDDING HAD CLOSED WITH THE SUBMISSION OF HIS ORIGINAL BID THE MANAGER WAS WITHOUT AUTHORITY TO RECEIVE FURTHER BIDS; THAT HIS OWN FURTHER BIDDING WAS NOT INTENDED AS A WAIVER OF HIS ORIGINAL BID OF $2,500; AND THAT THEREFORE HE SHOULD HAVE BEEN DECLARED THE SUCCESSFUL BIDDER AT THAT AMOUNT, SUBJECT TO FURTHER COMPLIANCE WITH THE REGULATIONS. IT IS STATED, HOWEVER, THAT THE MANAGER HELD THAT UNDER THE APPLICABLE REGULATIONS IT WAS WITHIN HIS AUTHORITY TO DETERMINE THAT IN FACT ALL BIDS HAD NOT BEEN RECEIVED; THAT MR. GIALAROWSKI HAD BEEN OVERLOOKED IN AN ATTEMPT TO ENTER A BID; AND THAT IN ANY EVENT MR. POLYEFKO HAD WAIVED WHATEVER RIGHTS HE MAY HAVE HAD BY HIS FURTHER BIDDING. ON THE BASIS OF THE FOREGOING TWO QUESTIONS ARE SUBMITTED FOR OUR DECISION AS FOLLOWS:

(1) ONCE THE BIDDING UPON A TRACT OF LAND HAS BEEN ANNOUNCED CLOSED IN THE USUAL MANNER AFTER THE SUBMISSION OF AN ACCEPTABLE BID, MAY THE OFFICER REOPEN THE PROCEEDINGS IMMEDIATELY THEREAFTER TO ENTERTAIN A FURTHER BID BY ONE WHO WAS PRESENT BUT WHO FAILED TO MAKE HIS BID KNOWN TO THE OFFICER BEFORE THE BIDDING WAS CLOSED?

(2) IF THE ANSWER TO QUESTION (1) IS IN THE NEGATIVE, MAY MR. POLYEFKO NEVERTHELESS BE HELD TO HIS HIGHEST AND LAST BID ON THE GROUND THAT HE ACQUIESCED IN THE FURTHER PROCEEDINGS AS EVIDENCED BY HIS CONTINUED BIDDING AFTER THE BIDDING HAD ONCE BEEN ANNOUNCED CLOSED, OR ON ANY OTHER BASIS?

AS INDICATED IN THE SUBMISSION THE LAND WAS OFFERED FOR SALE UNDER AUTHORITY OF THE ACT OF AUGUST 30, 1949, 63 STAT. 679, 48 U.S.C. 364A 364E, AND THE ABOVE CITED REGULATIONS PROMULGATED PURSUANT THERETO. SECTIONS 75.29 (A) AND (B) OF THE REGULATIONS PROVIDE AS FOLLOWS:

(A) WHEN ALL BIDS FROM THE PERSONS PRESENT SHALL HAVE BEEN RECEIVED, THE MANAGER WILL IN THE USUAL MANNER, DECLARE THE BIDDING CLOSED. HE WILL THEN ANNOUNCE THE AMOUNT OF THE HIGHEST BID AND REQUIRE THE OFFEROR IMMEDIATELY TO DEPOSIT ONE-FIFTH THE AMOUNT OF THE BID. IN THE ABSENCE OF SUCH PAYMENT THE MANAGER WILL AT ONCE PROCEED WITH THE SALE, EXCLUDING THAT BID AND STARTING WITH THE NEXT HIGHEST BID NOT WITHDRAWN. * * * WHEN THE FULL AMOUNT OF THE BID IS PAID THE MANAGERS WILL DECLARE THE OFFEROR AS THE SUCCESSFUL BIDDER, BUT NO CERTIFICATE OF PURCHASE WILL BE ISSUED UNLESS AND UNTIL THE BIDDER HAS MADE SATISFACTORY COMPLIANCE WITH SECTION 75.30.

(B) IF THE REMAINDER OF THE BID IS NOT PAID WITHIN THE TIME ALLOWED OR THE BIDDER FAILS TO QUALIFY IN ACCORDANCE WITH SECTION 75.30, THE BID WILL BE REJECTED AND THE ONE-FIFTH DEPOSIT WILL BE FORFEITED; AND AN AUTHORIZED OFFICER MAY OFFER THE LAND TO THE PARTY WHO MADE THE NEXT HIGHEST BID, IF SUCH BIDDER IS STILL INTERESTED IN THE PURCHASE. UNTIL THE SUCCESSFUL BIDDER HAS FULLY COMPLIED WITH SECTION 75.30, THE AUTHORIZED OFFICER MAY AT ANY TIME DETERMINE, IN THE PUBLIC INTEREST, THAT THE LAND SHOULD NOT BE SOLD, AND THE APPLICANT OR ANY BIDDER SHALL HAVE NO CONTRACTUAL OR OTHER RIGHTS AS AGAINST THE UNITED STATES, AND NO ACTION TAKEN SHALL CREATE ANY CONTRACTUAL OR OTHER OBLIGATION OF THE UNITED STATES.

SECTION 75.30 CONCERNS A STATEMENT TO BE FILED BY THE PURCHASER PERTAINING TO HIS QUALIFICATIONS, HIS FINANCIAL MEANS, AND BONA FIDE INTENTIONS OF HIS PROPOSED USE AND DEVELOPMENT OF THE LAND.

GENERALLY, A SALE BY AUCTION IS COMPLETE WHEN THE AUCTIONEER ANNOUNCES ITS COMPLETION, AND TITLE TO THE SUBJECT MATTER OF THE SALE PASSES TO THE SUCCESSFUL BIDDER AT THAT TIME UNLESS THE PARTIES INTEND TO THE CONTRARY. 7 C.J.S. AUCTIONS AND AUCTIONEERS, SECTION 8. 1 RESTATEMENT, CONTRACTS, 34 SECTION 27; 2 WILLISTON ON SALES ( REV. USED.) 200 SECTION 296; 11 A.L.R. 545. OF COURSE, THE UNITED STATES AS OWNER OF THE PROPERTY OFFERED FOR SALE AT THE AUCTION HAD THE RIGHT TO PRESCRIBE THE MANNER, CONDITIONS AND TERMS OF SALE AND SUCH TERMS AND CONDITIONS BECAME BINDING UPON THE UNITED STATES AND THE BIDDERS ALIKE EVEN THOUGH THE LATTER HAD NO KNOWLEDGE OF SAME. 7 C.J.S. AUCTIONS AND AUCTIONEERS; 5 AM.JUR. AUCTIONS, SECTION 15; ERIE COAL AND COKE CORP. V. UNITED STATES, 266 U.S. 518; UNITED STATES V. BLAIR, 193 F.2D 557.

IT IS CLEAR FROM THE ABOVE REGULATIONS THAT THERE WAS NO INTENTION TO TRANSFER TITLE TO THE PROPERTY OFFERED FOR SALE UNDER THE ABOVE STATUTE UNTIL THERE HAD BEEN FULL AND COMPLETE COMPLIANCE WITH THE TERMS AND CONDITIONS OF SUCH REGULATIONS INCLUDING THE IMMEDIATE DEPOSIT OF ONE- FIFTH OF THE PURCHASE PRICE. IN THE ABSENCE OF SUCH COMPLIANCE THERE COULD HAVE BEEN NO SALE OR TRANSFER OF TITLE TO THE PROPERTY BASED UPON THE ORIGINAL BID SUBMITTED BY MR. POLYEFKO. LOTT V. DELMAR, 142 N.J.EQ. 298, 50 A.2D 832, AFFIRMED 2 M.J. 229, 66 A.2D 25.

UNDER SECTION 75.29 OF THE ABOVE REGULATIONS IT WAS INCUMBENT UPON THE MANAGER BEFORE DECLARING THE BIDDING CLOSED AND ANNOUNCING THE SUCCESSFUL BIDDER TO SEE THAT ALL BIDS FROM PERSONS PRESENT HAD BEEN RECEIVED. AWARD WITHOUT COMPLIANCE WITH THIS REQUIREMENT CLEARLY WOULD HAVE BEEN UNAUTHORIZED. THE REPORTED FACTS INDICATE THAT GIALAROWSKI MADE KNOWN HIS INTENTIONS TO BID ON THE PROPERTY SIMULTANEOUSLY WITH THE MANAGER'S THIRD CALL, WHICH HAD THE EFFECT OF NULLIFYING SAME. ANNOUNCING THE THIRD CALL UNDER THE CIRCUMSTANCES CONSTITUTED AN EXCUSABLE MISTAKE. CF. BYRNE V. FREMONT REALTY CO., 120 APP.DIV. 692, 105 N.Y.S. 838. WHEN THE MANAGER BECAME AWARE OF THE FACT THAT MR. POLYEFKO INTENDED TO BID IT WAS HIS PLAIN DUTY UNDER THE REGULATIONS TO CONTINUE THE BIDDING. AN AUCTIONEER IS POSSESSED OF A LARGE MEASURE OF DISCRETION IN THE CONDUCT OF THE SALE AND WE AGREE WITH HIM THAT IT WAS WITHIN HIS AUTHORITY TO DETERMINE WHETHER IN FACT ALL BIDS HAD BEEN RECEIVED FROM PERSONS PRESENT AS REQUIRED BY THE REGULATIONS. 5 AM.JUR. SECTION 20. WE FURTHER AGREE THAT ANY RIGHT MR. POLYEFKO MAY HAVE HAD TO ACQUIRE THE PROPERTY FOR HIS ORIGINAL BID PRICE WAS WAIVED BY HIS FURTHER BIDDING, WITHOUT PROTEST, AND HIS FAILURE TO OFFER IMMEDIATE DEPOSIT OF ONE-FIFTH OF THE AMOUNT OF SUCH ORIGINAL BID.

IN THE LIGHT OF THE FOREGOING THE ANSWER TO THE FIRST QUESTION BASED UPON THE FACTS REPORTED IN THE SUBMISSION MUST BE IN THE AFFIRMATIVE. ANSWER TO THE SECOND QUESTION IS THEREFORE UNNECESSARY.