
    RICHARD MILLER, TRADING AS JOHNSON’S FAIR, v. THE UNITED STATES
    [No. 49454.
    Decided October 7, 1952]
    
      
      Mr. S. Donald Bean for the plaintiff. • Messrs. Wolf, Block, /Schorr, and Solis-0ohen, were on the brief.
    
      Mr. Frank J. Keating, with whom was Mr. Assistant Attorney General Holmes Baldridge, for the defendant.
    
      Mr. Wilson Oowen, Trial Commissioner.
   LittletoN, Judge,

delivered the opinion of the court:

The facts in this case are not in dispute and are set forth in detail in the findings. If, as a matter of law, upon the facts the plaintiff is entitled to recover it is agreed that the amount due is $6,338.20.

On September 13, 1948, the War Assets Administration, hereinafter referred to as the WAA, conducted a sealed bid sale of surplus merchandise. The sale took place in the WAA Customer Service Center in Washington, D. C., which Center was one of the branches of the Field Disposal Division of the Philadelphia Regional Office. The sale was advertised and announced in brochure published by the WAA, which stated, under the heading “General Information

Where must bids be sent?
Bids must be received at the WAA Customer Service Center, Temporary R Building, 4th St. & Jefferson Drive, Washington 25, D. C., by 10 A. M. (EDST), September 13.

Prior to 10 a. m., on September 13, the plaintiff went to the WAA Philadelphia Regional Office and handed his written bid for seven lots of merchandise included in the advertised sale, together with the required check, to William J. Stevenson, Chief of the Field Disposal Division of the Philadelphia Regional Office, of which the Washington Customer Service Center was a branch. As Head of the Field Disposal Division, Stevenson was the official in charge of this sale and was a member of the Board of Awards which made the awards for the sale. Plaintiff was the highest bidder for Lots 8,13, and 32, offered for sale.

One of the WAA standard terms and conditions of sale, printed on the bid form, was as follows:

RejectioN of bids. The Government reserves the right to reject any and all bids, regardless of whether the same constitute the highest bid, and also to waive any informality in connection with the submission of bids.

William J. Stevenson, as the Head of the Field Disposal Division in charge of the sale, received plaintiff’s bid without objection and telephoned the bid to H. C. Wentworth, the Manager of the WAA Washington Customer Service Center. Wentworth thereupon handed the plaintiff’s bid so received from Stevenson, to the WAA official who was in charge of the opening of bids and who was Chairman of the Board of Awards. Although the Government in the advertisement of sale reserved the right to reject any and all bids it also, as one of the terms and conditions of submitting bids on sale, reserved the right as above stated “to waive any informality in connection with the submission of bids.” No objection was made by any Government official to plaintiff’s bid upon the ground that it was originally filed with the Chief of the Regional Office at Philadelphia and telephoned by him to the Washington Branch, and such bid was considered with all other bids at the opening of bids on the 13th.

Although no official of the Government interposed any objection to plaintiff’s bid upon the ground of informality in connection with the submission thereof, Mr. Wentworth in the Washington branch of the Philadelphia Regional Office telephoned Mr. Stevenson in Philadelphia, on the afternoon of September 13, the day of sale, stating that a representative of the second highest bidder for Lot 13, a Mr. Frank, had objected to the consideration of plaintiff’s bid, which was the highest bid for this lot, on the ground that plaintiff’s bid had been first filed with the Regional Office at Philadelphia and telephoned to Washington, instead of being submitted or filed, in writing, to the Washington office on or before September 13.

An abstract of the bids made was sent by the Washington Customer Service Center to the Philadelphia Regional Office, for consideration by the Board of Awards, which met in Philadelphia on September 17, 1948. The function of the Board was to review the bids, pass on their eligibility, and make the awards. Before the Board met, Mr. Stevenson, Chief of the Regional Office and a member of the Board, orally stated, to legal counsel for the Philadelphia Regional Office, all the facts concerning the submission of plaintiff’s bid and the objection which had been made to the Washington office with reference thereto. Counsel advised Stevenson that plaintiff’s bid was valid. In our opinion this advice was entirely correct because the Government reserved the right, as one of the conditions of sale, to waive any informality in connection with the submission of bids. It is clear that no other bidder had been prejudiced by the informality in connection with the submission by plaintiff of its bid, which consisted of the filing of a written bid at the main office of the WAA, Field Disposal Division, and with the chief official of the Regional Office instead of with the branch office at Washington. When the Board of Awards met on September 17, Stevenson informed the other members of the Board, in detail, about the submission of plaintiff’s bid and the objection by another bidder to the plaintiff’s bid for Lot 13, and also informed the Board that the counsel for the Regional Office had advised him (Stevenson) that plaintiff’s bid was valid. Upon consideration of the facts and circumstances the Board concluded that plaintiff’s bid was valid and that the sale of Lots 8,13, and 32, should be awarded to plaintiff, but in order to preserve a written record of the facts respecting plaintiff’s bid and the objection thereto by the next lowest bidder, the Board concluded that it should make the award to plaintiff conditional upon obtaining from the counsel of the Regional Office another opinion as to the validity of plaintiff’s bid. Some time after the meeting of the Board, Mr. Stevenson sent to counsel for the Regional Office a complete memorandum on the matter and the counsel again gave an opinion that plaintiff’s bid was valid (findings 11 and 12).

Thereafter, and prior to October 7, 1948, the defendant made a public announcement of the results of the sale by exhibiting in the Washington Customer Service Center a mimeographed statement, stating that Lots 8,13, and 32, had been awarded to plaintiff (finding 13). A copy of the announcement was given to a bonded agent-cashier employed by defendant in the Washington Customer Service Center. This official was also authorized, as a part of her regular duties in such cases, to send bidders notices of awards made by the Board of Awards and to collect and to receive all money bid by purchasers on their bids. After receiving the above mentioned announcement of awards made by the Board of Awards, the defendant’s agent-cashier mailed the following notices of award and letter to plaintiff:

Dear Sir: With reference to your bid on Special Offering PHL-OL-466 we wish to inform you that you have been awarded the following lots at the listed prices.
Lot No.: Awarded price
8 _ _' $47.47
13 _ _ 6, 777. 71
32 _ _ 477.37
We are in receipt of your deposit in the amount of $8,023.14. As this amount is in excess of the award price, it is requested that you please forward the correct amount $7,296.55 in cash, cashiers check, certified check or postal money order and upon receipt, your original deposit will be returned to you, together with your copy of Form WAA1, sales document and Form 659, cash receipt voucher. Form WAA 1, must be presented at time of pick-up of property within 10 days of receipt.
Yery truly yours,
(S)Darline R. Volk,
Agent Cashier.

This notice, accompanied by a copy of the announcement of the action by the Board of Awards, was received by plaintiff in Philadelphia on the morning of October 8, 1948.

Thereafter, on October 8, Mr. Wentworth of the Washington branch of the Philadelphia Regional Office of the WAA was told by an attorney employed in the Center Office at Washington, that plaintiff’s bid on Lot 13 had been held in abeyance by the Board of Awards at Philadelphia, pending a decision by counsel as to its validity and that the notice of award which had been mailed to plaintiff on the 7th, should not have been mailed. This advice was erroneous, for the reason, as above stated, that legal counsel for the Philadelphia Regional Office had given the Board of Awards two opinions that plaintiff’s bid was valid long before the Board of Awards prepared and published the public announcement of the results of the sale showing that plaintiff’s bid had been accepted and the sale of Lots 8,13, and 32, had been awarded to plaintiff.’ However, on the afternoon of October 8, after plaintiff had, on the morning of that day received the written notice of the award to him, Wentworth of the Washington office sent plaintiff a telegram stating that he should disregard the reference to Lot 13 in the notice of award, since the award as to that lot was awaiting legal interpretation. Plaintiff immediately replied protesting this action.

The outcome of the matter was that as a result of a memorandum, on October 26,1948, from Stevenson in Philadelphia, to Wentworth in Washington, as shown in finding IT, the sale of Lot 13 to plaintiff was cancelled and awarded to the next highest bidder, N. Frank & Son, but the award of sale to plaintiff on the same bid for Lots 8 and 32 was permitted to stand, and these lots were delivered to and paid for by plaintiff.

The reason for and the basis of this attempted change in position by Stevenson, as to plaintiff’s bid for Lot 13, is not clear from the record. The Board of Awards did not undertake to change the decision which it had made, and the statement of Stevenson to Wentworth, on October 26, that plaintiff’s bid was not valid “as it was not submitted in accordance with the instructions in the Brochure,” was of no effect since the Board of Awards had authority to waive this informality and had done so on September 17, on the advice of counsel for the Philadelphia Regional Office. Moreover, a binding contract of sale had resulted before the defendant undertook to change its position as to Lot 13. In addition to this, the defendant proceeded to carry out the decision of the Board of Awards and to complete the sale by delivery to plaintiff of the merchandise included in Lots 8 and 32, which .were included in the same bid covering Lot 13.

There was an offer by plaintiff, and an acceptance by defendant, which was communicated in writing to and received by plaintiff before defendant undertook to change its position as to the sale of Lot 13. This offer and acceptance gave rise to a binding contract, Nisley Co. v. Rudolph & Bauer, 64 Fed. 2d 571; Restatement Of Contraéis, §§ 19 and 22. The defendant’s attempt to cancel its acceptance after plaintiff had received formal notice of the acceptance of its bid and notice of award of sale to him was without legal effect. There was no proper basis, in our opinion, for the defendant’s action in attempting to cancel the sale of Lot 13 on October 26, since the Board of Awards, as it had a right to do, had already exercised its right to waive any informality in connection with the submission of plaintiff’s bid, as set out in the Terms •and Conditions of Sale.

The plaintiff is entitled to recover, and judgment will be entered in his favor for $6,338.20. It is so ordered.

Howell, Judge; MaddeN, Judge; Whitaker, Judge; and Jones, Chief Judge, concur.  