A-95649, JUNE 25, 1938, 17 COMP. GEN. 1110

A-95649, JUNE 25, 1938, 17 COMP. GEN. 1110

CONTRACTS - MISTAKES - BIDS - AGENT'S NEGLIGENCE IMPUTABLE TO PRINCIPAL WHERE THE INVITATION FOR BIDS FOR TRUCKS, INCLUDING THE TRADE-IN OF A USED VEHICLE, WAS UNAMBIGUOUS AS TO PLACE OF DELIVERY, CONDITION, INSPECTION, ETC., OF THE USED VEHICLE, AND SPECIFICALLY REQUESTED CASH OFFERS INDEPENDENT OF NEW TRUCK PURCHASES, THE CONTRACTOR TO WHOM AWARD WAS MADE ON THE BASIS OF THE CASH OFFER OF HIS AGENT MAY NOT BE RELIEVED OF HIS OBLIGATION UNDER THE CONTRACT NOTWITHSTANDING THE ALLEGATION THAT THE AGENT WAS NOT AUTHORIZED TO MAKE THE CASH OFFER FOR DELIVERY OF THE TRUCK AT THE PLACE INVOLVED AND BELIEVED IT WAS FOR DELIVERY AT ANOTHER PLACE, THE AGENT HAVING ACTED WITHIN THE SCOPE OF HIS AUTHORITY IN SUBMITTING THE BID; THE BID--- CLEAR, UNAMBIGUOUS, AND AS INTENDED--- HAVING BEEN ACCEPTED IN GOOD FAITH; AND THE MISTAKE, IF ANY, HAVING BEEN UNILATERAL AND BECAUSE OF THE NEGLIGENCE OF THE AGENT WHICH NEGLIGENCE IS IMPUTABLE TO THE PRINCIPAL.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, JUNE 25, 1938:

YOUR LETTER OF JUNE 11, 1938, IS AS FOLLOWS:

UNDER DATE OF MARCH 25, 1938, THE DEPARTMENT OPENED BIDS IDENTIFIED BY INVITATION USDA NO. 1632 FOR THE PURCHASE OF TWO PICK-UP TRUCKS FOR DELIVERY, ONE EACH, TO AMARILLO, TEXAS, AND CAMBRIDGE, OHIO. THE ITEM COVERING THE VEHICLE FOR DELIVERY TO AMARILLO, TEXAS, OFFERED FOR TRADE-IN OR CASH SALE ONE USED DODGE PICK-UP TRUCK MODEL KC-1935, SERIAL NO. 8069046, MOTOR NO. T-1222173 LOCATED AT THE REGIONAL OFFICE GARAGE OF THE SOIL CONSERVATION SERVICE AT THAT POINT.

PROPOSALS WERE RECEIVED FROM THE NORTHWEST MOTOR COMPANY, THE STEUART MOTOR COMPANY, GENERAL MOTORS CORPORATION, AND W. M. HANNAN, AND AN ANALYSIS OF THE CASE DISCLOSED THAT W. M. HANNAN OFFERED TO PURCHASE THE USED VEHICLE DESCRIBED ABOVE FOR $200.00 AND IN ADDITION QUOTED A PRICE OF $635.00 FOR THE NEW VEHICLE TO BE PURCHASED BY THE GOVERNMENT FOR DELIVERY TO CAMBRIDGE, OHIO. IT WAS DETERMINED THAT THE LOWEST COST TO THE GOVERNMENT RESULTED FROM AWARD TO THE GENERAL MOTORS CORPORATION FOR ONE VEHICLE F.O.B. ITS FACTORY FOR SHIPMENT ON GOVERNMENT BILL OF LADING TO AMARILLO, TEXAS, AND ONE VEHICLE DELIVERED TO CAMBRIDGE, OHIO, AND THE ACCEPTANCE OF THE CASH OFFER REFERRED TO. AWARDS WERE MADE ACCORDINGLY AND THE SUCCESSFUL BIDDERS NOTIFIED IN THE USUAL MANNER.

UPON RECEIPT OF THE DEPARTMENT'S NOTIFICATION OF ACCEPTANCE W. M. HANNAN REPLIED BY LETTER OF MAY 21, 1938, AND STATED THAT IT WAS NOT THE INTENTION OF HIS FIRM TO OFFER TO PURCHASE THE USED VEHICLE AND THAT THROUGH A MISINTERPRETATION OF THE BID FORM THE OFFER WAS MADE ON THE MISTAKEN ASSUMPTION THAT THE ITEM IN QUESTION REFERRED TO A TRADE IN ALLOWANCE TO BE APPLIED AGAINST THE PURCHASE, BY THE GOVERNMENT OF THE NEW VEHICLE FOR DELIVERY TO CAMBRIDGE, OHIO. THE BIDDER SEEKS RELIEF FROM HIS OFFER ON THE ALLEGATION OF ERROR IN BIDDING.

ALL BIDS RECEIVED EXCEPT THOSE OF THE SUCCESSFUL BIDDERS WHICH ARE ON FILE IN YOUR OFFICE, COPIES OF WHICH ARE ATTACHED, AN ABSTRACT OF BIDS AND LETTER FROM W. M. HANNAN ARE FORWARDED HEREWITH FOR YOUR DECISION AS TO THE PROCEDURE TO BE FOLLOWED BY THE DEPARTMENT. IN THIS CONNECTION IT WILL BE OBSERVED FROM THE ABSTRACT OF BIDS THAT IF THE OFFER OF W. M. HANNAN IS DISREGARDED IT WILL HAVE NO EFFECT ON THE AWARD FOR THE NEW EQUIPMENT AS THE GENERAL MOTORS CORPORATION WILL REMAIN THE LOW BIDDER.

PLEASE RETURN ALL PAPERS WITH YOUR DECISION.

THE INVITATION FOR BIDS WAS FOR THE PURCHASE OF TWO PICK-UP TRUCKS IN ACCORDANCE WITH ACCOMPANYING SPECIFICATIONS. ITEM 1 REQUESTED BIDS FOR DELIVERY OF THE TWO TRUCKS F.O.B. BIDDER'S SHIPPING POINT. ITEM 1A REQUESTED BIDS FOR DELIVERY OF ONE OF THE TRUCKS F.O.B. AMARILLO, TEXAS ,LESS TRADE-IN ALLOWANCE ON USED EQUIPMENT DESCRIBED HEREIN" AND IT WAS STATED---

THE FOLLOWING-DESCRIBED VEHICLE IS OFFERED FOR "TRADE-IN" ON THE PURCHASE OF THE NEW MACHINE CALLED FOR IN THIS ADVERTISEMENT; AND MAY BE INSPECTED FOR APPRAISAL UPON APPLICATION TO THE REGIONAL OFFICE GARAGE, 501 HARRISON STREET, AMARILLO, TEXAS.

MAKE, DODGE PICKUP; MODEL, KC-1935; SERIAL NO. 8069046; MOTOR NO. T 1222173; TRADE IN $------.

ITEM 1AA WAS AS FOLLOWS:

CASH OFFER: CASH OFFERS ARE ALSO REQUESTED FOR THE USED TRUCK DESCRIBED ABOVE, SAME TO BE INDEPENDENT OF ANY PURCHASE OF THE NEW TRUCK. DEALERS HANDLING SECOND-HAND EQUIPMENT, AND OTHERS INTERESTED, SHOULD MAKE THEIR OFFERS UNDER THIS PARAGRAPH.

MAKE, DODGE PICKUP; MODEL, KC-1935; SERIAL NO. 8069046; MOTOR NO. T 1222173; CASH OFFER $------.

ITEM 1B REQUESTED BIDS FOR ONE OF THE TWO NEW TRUCKS DELIVERED TO CAMBRIDGE, OHIO, AND NO USED TRUCK WAS OFFERED FOR TRADE-IN UNDER THAT ITEM.

ALSO THE INVITATION FOR BIDS STATED AS FOLLOWS:

IF A CASH OFFER OR TRADE-IN ALLOWANCE IS ACCEPTED, THE GOVERNMENT RESERVES THE RIGHT TO RETAIN POSSESSION OF, AND CONTINUE TO USE THE OLD TRUCK UNTIL THE NEW TRUCK TO REPLACE IT HAS BEEN DELIVERED. IT IS UNDERSTOOD AND AGREED THAT THE USED TRUCK WILL BE DELIVERED TO THE SUCCESSFUL BIDDER AT POINT SPECIFIED FOR INSPECTION IN THE SAME CONDITION AS WHEN APPRAISED BY THE BIDDER, NORMAL WEAR AND TEAR EXCEPTED.

TRADE-IN ALLOWANCES AND/OR INDEPENDENT CASH OFFERS ON USED VEHICLE QUOTED IN THIS BID ARE TO BE BASED UPON SAID VEHICLE AND ALL EQUIPMENT AND ACCESSORIES ATTACHED THERETO OR USED IN CONNECTION THEREWITH AT THE TIME OF INSPECTION BY THE BIDDER, BEING SURRENDERED TO THE SUCCESSFUL BIDDER IN AS GOOD CONDITION, NORMAL WEAR AND TEAR EXCEPTED, AS AT THE TIME OF INSPECTION AND APPRAISAL, EXCEPTING SUCH EQUIPMENT AND ACCESSORIES AS MAY HAVE BEEN RESERVED IN THE SPECIFICATIONS FOR RETENTION BY THE GOVERNMENT.

W. M. HANNAN DID NOT BID UNDER ITEM 1 OR UNDER ITEM 1A, BUT UNDER ITEM 1AA HIS BID SUBMITTED A CASH PRICE OF $200 FOR THE USED TRUCK IN AMARILLO, TEXAS. HANNAN'S CASH OFFER OF $200 WAS ACCEPTED AND AWARD FOR THE SALE OF THE USED TRUCK TO HIM WAS MADE ON APRIL 14, 1938. UPON BEING INFORMED OF THE ACCEPTANCE OF HIS OFFER MR. HANNAN, IN A LETTER OF MAY 21, 1938, TO YOUR DEPARTMENT STATED, IN SUBSTANCE, THAT THE ENTIRE MATTER (OF SUBMITTING THE BID) WAS HANDLED BY ,MR. LYTTLE" AT HIS PLACE OF BUSINESS; THAT NEITHER MR. LYTTLE NOR ANYONE ELSE HAD AUTHORITY OR RIGHT TO MAKE SUCH A PURCHASE OR MAKE SUCH AN OFFER; THAT MR. LYTTLE INFORMED HIM THAT HE, LYTTLE, MADE THE OFFER WITHOUT SUCH AUTHORITY, BUT THOUGHT THE USED TRUCK WAS TO BE DELIVERED AT CAMBRIDGE, OHIO; THAT MR. LYTTLE THOUGHT HE WAS BIDDING ON THE OLD TRUCK AS A TRADE-IN ON A NEW TRUCK AT CAMBRIDGE, OHIO, AND THAT---

* * * HE WAS JUSTIFIED IN HIS BELIEF IF WE LOOK TO THE SECOND PAGE OF THE OFFER AND IT IS NOT PLAIN AT ALL THAT HE WAS MAKING AN OFFER OF $200.00 FOR A TRUCK IN AMARILLO, TEXAS, WHICH HE NEVER SAW, KNEW NOTHING OF ITS CONDITION, HAD NO USE FOR, AND WHICH WOULD COST PROBABLY AS MUCH AS IT WAS WORTH OR MORE TO BRING IT TO CAMBRIDGE, OHIO.

MR. HANNAN STATED THAT HE WAS IN THE HOSPITAL AT THE TIME OF THE SUBMISSION OF THE BID, AND THE MATTER HAD COME TO HIS KNOWLEDGE FOR THE FIRST TIME ON MAY 21, 1938, THE DATE OF HIS LETTER. IN THIS CONNECTION IS IS OBSERVED THAT THE COPY OF HANNAN'S BID INCLOSED WITH YOUR SUBMISSION HAS TYPED ON THE FACE THEREOF "W. M. HANNAN, OWNER," WHICH WOULD INDICATE THAT THE ORIGINAL BID WAS SIGNED BY MR. HANNAN IN PERSON. HE FURTHER STATED THAT---

* * * WHEN I LOOK INTO THE FILE PAPERS TODAY FOR THE FIRST TIME, I OBSERVE THAT THE PROPOSAL UNDER 1AA, WOULD LEAD ANYONE TO BELIEVE THAT IT (THE USED TRUCK) WAS TO BE DELIVERED AT CAMBRIDGE, OHIO, AND IN THIS, UNDOUBTEDLY, MR. LYTTLE WAS SINCERE IN HIS BELIEF AND THE FACTS WOULD SEEM TO JUSTIFY IT.

THERE APPEARS NO REASONABLE BASIS FOR SUCH CONCLUSION. THE BID FORM WAS PERFECTLY CLEAR AS TO WHERE THE USED VEHICLE WAS LOCATED AND COULD BE INSPECTED AND APPRAISED, AND AS TO WHERE, WHEN, AND IN WHAT CONDITION IT WAS TO BE DELIVERED. ITEM 1A STATED PLAINLY THAT THE USED VEHICLE "IS OFFERED FOR "TRADE-IN" ON THE PURCHASE PRICE OF THE NEW MACHINE CALLED FOR IN THIS ADVERTISEMENT," AND MANIFESTLY REFERRED TO THE NEW VEHICLE FOR DELIVERY TO AMARILLO, TEXAS. ITEM 1AA STATED THAT ,CASH OFFERS ARE ALSO REQUESTED FOR THE USED TRUCK DESCRIBED ABOVE, SAME TO BE INDEPENDENT OF ANY PURCHASE OF THE NEW TRUCK" AND AGAIN IT WAS OBVIOUS THAT THE NEW TRUCK REFERRED TO WAS THE ONE FOR DELIVERY TO AMARILLO, TEXAS. IT WAS UNDER THIS ITEM THAT THE HANNAN BID OFFERED $200 CASH FOR THE USED TRUCK. ITEM 1B OF THE INVITATION REFERRED TO THE NEW TRUCK FOR DELIVERY AT CAMBRIDGE, OHIO, AND HAD NO CONNECTION WITH THE USED DODGE TRUCK OFFERED UNDER ITEMS 1A AND 1AA.

IT IS CLEAR FROM MR. HANNAN'S LETTER THAT THE MR. LYTTLE TO WHOM HE REFERS WAS HANNAN'S AGENT AND REPRESENTATIVE, PRESUMABLY THE MANAGER IN CHARGE OF HIS BUSINESS DURING HANNAN'S CONFINEMENT IN THE HOSPITAL IF NOT AT OTHER TIMES, AND THAT HE WAS ACTING ON BEHALF OF MR. HANNAN AND WITHIN THE SCOPE OF HIS AUTHORITY IN SUBMITTING A BID TO THE GOVERNMENT UPON THE INVITATION. THE RULE OF LAW, GENERALLY STATED, WITH CITATIONS, IN 2 CORPUS JURIS, PAGES 833 AND 834, IS THAT A PRINCIPAL IS LIABLE TO THIRD PERSONS FOR ALL CONTRACTS MADE FOR HIM BY HIS AGENT, AND FOR ALL ACTS OF THE AGENT IN CONNECTION THEREWITH, WHILE ACTING IN THE COURSE OF HIS EMPLOYMENT AND WITHIN THE SCOPE OF HIS ACTUAL OR APPARENT AUTHORITY, AND THAT THIS IS TRUE, ALTHOUGH THE AGENT FAILS TO COMPLY WITH PRIVATE INSTRUCTIONS GIVEN BY HIS PRINCIPAL, OR HAS DEFRAUDED HIS PRINCIPAL. THERE IS NO SUGGESTION IN THE PRESENT RECORD THAT LYTTLE WAS NOT ACTING WITHIN THE GENERAL SCOPE OF HIS EMPLOYMENT IN SUBMITTING A BID TO THE GOVERNMENT, OR THAT HE FAILED TO COMPLY WITH PRIVATE INSTRUCTIONS OF HIS PRINCIPAL, OR THAT THERE WAS ANY BAD FAITH ON HIS PART IN ANY RESPECT. THE ONLY CLAIM IS THAT LYTTLE WAS NOT AUTHORIZED TO MAKE A CASH OFFER ON THE OLD TRUCK FOR DELIVERY AT AMARILLO, TEXAS; THAT HE SUBMITTED THE BID IN THE BELIEF THAT THE USED TRUCK WAS TO BE DELIVERED TO CAMBRIDGE, OHIO, AND THAT IT WAS FOR TRADE-IN ON THE NEW TRUCK ADVERTISED FOR DELIVERY TO CAMBRIDGE, OHIO, UNDER ITEM 1B OF THE INVITATION.

BUT THERE WAS NOTHING UPON THE FACE OF THE PUBLISHED INVITATION TO JUSTIFY SUCH A MISUNDERSTANDING, AND IT IS MANIFEST THAT ANY ALLEGED MISTAKE MADE BY LYTTLE WAS THE RESULT OF HIS OWN NEGLIGENT FAILURE TO READ THE INVITATION WITH SUFFICIENT CARE TO GRASP ITS IMPORT BEFORE SUBMITTING THE BID. UNDER PREVAILING LAW THIS NEGLIGENCE ON THE PART OF THE EMPLOYEE WAS IMPUTABLE TO HIS PRINCIPAL AND EMPLOYER W. M. HANNAN AND WAS BINDING UPON HIM.

THE BID AS SUBMITTED WAS CLEAR AND UNAMBIGUOUS AND, IT IS EVIDENT, WAS AS INTENDED, EVEN IF IT SHOULD BE CONCEDED THAT IT WAS SUBMITTED UNDER MISTAKE OF FACT. THE BID UNQUESTIONABLY WAS ACCEPTED IN GOOD FAITH, AS THE CONTRACTING OFFICER OBVIOUSLY HAD NO REASON TO QUESTION THE CORRECTNESS OF THE BID, OR ANY KNOWLEDGE OF REASONS WHICH MIGHT HAVE PROMPTED HANNAN TO SUBMIT A CASH BID FOR THE USED TRUCK. WHEN THE BID WAS ACCEPTED, IT CONSTITUTED A CONTRACT BINDING UPON THE GOVERNMENT AND W. M. HANNAN IN STRICT ACCORDANCE WITH ITS TERMS. THAT IS TO SAY, THE GOVERNMENT WAS AND IS OBLIGATED TO DELIVER THE USED TRUCK AT AMARILLO, TEXAS, AND W. M. HANNAN IS OBLIGATED TO ACCEPT IT AT THAT POINT AND TO PAY FOR IT THE AMOUNT OF $200 CASH AS PROVIDED IN THE BID AND CONTRACT.

ANY MISTAKE OR ERROR ON THE PART OF MR. LYTTLE WAS A UNILATERAL MISTAKE DUE ENTIRELY TO HIS OWN NEGLIGENCE, AND AFFORDS NO GROUND FOR RELIEF. ELLIOCOTT MACHINE CO. V. UNITED STATES, 44 CT.CLS. 127; GRIFFITH V. UNITED STATES, 22 CT.CLS. 165.

IT FOLLOWS THAT UPON THE FACTS HERE PRESENTED W. M. HANNAN IS BOUND BY THE ACT OF HIS AGENT AND BY THE CONTRACT ENTERED INTO WITH THE GOVERNMENT BY THE AGENT ON HIS BEHALF, AND THERE APPEARS NO LEGAL BASIS FOR RELIEVING W. M. HANNAN FROM THE OBLIGATION OF HIS CONTRACT.

ACCORDINGLY, MR. HANNAN SHOULD BE CALLED UPON AND REQUIRED TO ACCEPT DELIVERY OF THE USED TRUCK AT AMARILLO, TEXAS, AND TO PAY FOR IT THE CONTRACT PRICE OF $200. IF HE SHOULD FAIL OR REFUSE TO COMPLY, THE TRUCK SHOULD BE ADVERTISED FOR SALE AND SOLD TO THE HIGHEST BIDDER, W. M. HANNANTO BE CHARGED WITH THE DEFICIENCY IN PRICE RECEIVED, IF ANY. AS TO THE PROPER PROCEDURE SEE 7 COMP. GEN. 193; 8 COMP. GEN. 588.