Kraft v. Otman

EVANS, Circuit Judge (after stating the facts as above). [1] A sale through proceedings in bankruptcy is a judicial sale, subject to the same rules as an auction. The bidder may withdraw his bid at any time before the hammer falls. Hibernian Savings & Loan Society v. Behnke, 121 Cal. 339, 53 Pac. 812; Grotenkemper v. Achtermeyer, 11 Bush (Ky.) 222; Neb. T. & L. Co. v. Hamer, 40 Neb. 281, 58 N. W. 695; Blossom v. Railroad Co., 3 Wall. 196, 206, 18 L. Ed. 43. [2, 3] Had the hammer fallen, so as to prevent the bidder from withdrawing his bid, on June 3d?- The answer to the question turns upon the construction of the language of the order of sale and the action of the trustee thereunder. The so-called order of sale was sorfiewhat inconsistent. Viewing it as a single order, it was a direction to advertise for sealed bids and to submit them to the court with recommendations. The trustee was the instrument'by which the bids were to be received and transmitted to the court, which in turn stood in the place of the vendor. The notice of sale given pursuant to the order is consistent with this construction, and clearly indicates the trustee considered his duties restricted to receiving and reporting bids with recommendations. It was not, strictly speaking, an order of sale. The bidder’s position was therefore not similar to a bidder at a public auction whose bid was accepted subject to tire approval of the court. Again the recommendation of the trustee was against the acceptance of the bid. If we are to- draw any inference from the action of the trustee when the bid was-received, it would be that the bid was rejected. Respondent relies upon In re Lane Lumber Co., 207 Fed. 762, 125 C. C. A. 300. The facts in the two cases are not alike. In the Lane Lumber Company Case the referee ordered the trustee to sell at private sale all of the real estate and personal property. The buyer made a written proposal containing among other things the following : “As an evidence of my good faith, in making this bid, X band yon herewith the sum of $1,000.” After the trustee petitioned the court to confirm the sale, but before hearing the same, the bidder asked to withdraw his bid, arid his deposit. The trustee refused, and the action was brought to recover the money so deposited. The suit was dismissed. Differing from the case at bar, the order was to sell the property. The sale -was made subject to the-approval of the court. Money was deposited and terms fixed by the bidder for,its forfeiture. The bidder sought to recover the money so deposited contrary to the terms of the deposit fixed by himself. Petitioner’s bid in the instant case had not been accepted, and nothing had occurred to prevent his withdrawing it. The court should have permitted him to do so. The decree is reversed, with direction to enter an order permitting petitioner to withdraw his bid. Footnotes [1] <gs»For otiler cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes [sz] — .Ti-nr other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes