97 F.2d 461 | 1st Cir. | 1938
As the petition of the trustee for leave to appeal in No. 3295 was seasonably presented, we think it should be allowed. The order of the District Court affirming the orders of the Referee was a step or proceeding in bankruptcy and not a controversy in bankruptcy, as it only adjudged that the assets were duly sold to Witte for the sum of $3,310 and that the sale be confirmed. Blanke Mfg. & Supply Co. v. Craig, 8 Cir., 287 F. 345. Viewed in this light the direct appeal from the District Court is dismissed.
The principal question in this case is whether, on the facts presented, the order of the Referee adjudging that the assets were duly sold to Witte for his offer of $3,-310 was correct as a matter of law. It clearly appears from the record in this case, as disclosed by the notice of sale, the petition and report of the trustee, and the petition of Witte, that the trustee never accepted but rejected the bid of Witte. The trustee specifically states in his report and petition to confirm a partial sale of the assets that “at no time did he ‘knock down’ or accept any bid or offer or complete a sale of any or all of said items, but expressly informed all persons present that he would consider the offers made and report thereon.” This statement is not denied but admitted by Witte, for, in his petition to the Referee, he specifically prays that “the trustee be ordered to accept said bid and consummate said sale by delivery of all the assets except said bond,” he having refused to do so.
The question is whether it can be said, as a matter of law, that in view of the non-acceptance and rejection of Witte’s bid the assets were duly sold to him. It is elementary that, in the absence of the acceptance of an offer, no sale can arise. Witte knew at the time he filed his petition with the Referee that his offer or bid had not been accepted but rejected, otherwise he would not have prayed that the trustee be ordered to accept it The Referee, how
“I want bidders who are invited to my auctions to know that in the absence of fraud or collusion the man who bids the high dollar gets the stuff. I want them to know that after a fair competition the winner can get what he bought, regardless of the disappointment of other buyers or of the seller [the trustee]. * * * No final bid has ever been rejected when the sale was properly advertised, and fairly held. We advertise to sell to the highest bidder, subject to confirmation by the referee. * * * Mere inadequacy of price is never a ground for rejection.”
The difficulty with this position of the Referee is that his order authorizing the sale did not restrict the trustee to any par-ticidar terms of sale or require him to accept the high bid, whether he regarded it as satisfactory or grossly inadequate, and we think it would have been a strange thing if the order had contained such a limitation or restriction. The fact, however, remains that no limitation or restriction of any kind was imposed in the order authorizing the sale, and the trustee, in the exercise of his best judgment, was at liberty to include in the notice of sale the provision that “the trustee does not by virtue of this notice or otherwise agree or undertake. to accept the highest bid or any bid made for any or all the assets and expressly reserves the right to refuse any or all bids, or to withdraw any or all of said assets at any time before delivery of the same to the purchaser and receipt of the purchase price.” This statement was made known to Mr. Witte as well as to every bidder or offeror at the sale and there could have been no misunderstanding in regard to it. To disregard such restrictions in a notice of sale, and hold, as the. Referee did, that the high dollar takes the stuff, could only result in giving Mr. Witte something that he did not buy and had no right to think he had bought and something that the trustee knew he had not sold, especially when, as here, he did not accept but rejected the bid as wholly inadequate.
Further the Referee seems to think that the reservation in the notice of sale “presents no difficulty” and “boils down to the usual condition that all sales are subject to confirmation by the Referee.*’ But this clearly is not so. The right to reject any and all bids was expressly reserved and the bid of Witte was rejected, not accepted.
In Nos. 3296 and 3297, the direct appeals are dismissed as improperly allowed, and the petitions for leave to appeal are denied, as the interests of creditors are fully protected on the petition of the trustee. No costs to either party.
In No. 3295, the petition for leave to appeal is sustained, the orders of the District Court and the Referee decreeing a sale to Witte are vacated, and the case is remanded to that court with directions to order a new sale of all the assets, with costs in this court to the appellant.
