Marten v. Staab

• Decision Date: 05 September 1995
• Docket Number: No. A-94-621,A-94-621
• Citation: 4 Neb.App. 19,537 N.W.2d 518
• Parties: Karl F. MARTEN and Adam J. Marten, Appellees, v. Barbara A. STAAB and Judith M. Marten, Copersonal Representatives of the Estates of Fred J. Marten and Ruthanna Marten, deceased, Appellants.
• Court: Nebraska Court of Appeals

Page 518

537 N.W.2d 518

4 Neb.App. 19

Karl F. MARTEN and Adam J. Marten, Appellees, v. Barbara A. STAAB and Judith M. Marten, Copersonal Representatives of the Estates of Fred J. Marten and Ruthanna Marten, deceased, Appellants.

No. A-94-621.

Court of Appeals of Nebraska.

Sept. 5, 1995.

Syllabus by the Court

1. Specific Performance: Equity. An action for specific performance sounds in equity.

2. Equity: Appeal and Error. In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, when credible evidence is in conflict on a material issue of fact, an appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.

3. Auctions: Words and Phrases. An auction is a public sale of property to the highest bidder by one licensed and authorized to do so and the goal is to obtain the best financial return for the seller by free and fair competition among bidders.

4. Auctions. In an auction with reserve, the bidder is deemed to be the party making the offer while the auctioneer, as agent for the seller, is the offeree. In a with reserve auction, the principal may choose to withdraw the property at any time, before 5. Auctions. In an auction without reserve, also known as an absolute auction, the seller becomes the offeror and the bidder becomes the offeree by reason of the collateral contract theory. In a without reserve auction, the seller is absolutely committed to a sale once a bid has been entered, no matter what the level of bidding is or the property's true value. In a without reserve auction, once one bid has been made the seller's offer to sell is held to be irrevocable.

the hammer falls, and if the bidding is too low--the auctioneer need do nothing and there is no contract between the seller and the bidder.

6. Auctions: Words and Phrases. The collateral contract present in a without reserve auction is simply the owner's agreement with all potential bidders that he will not withdraw the property from sale, regardless of how low the highest bid might be, and therefore the highest bona fide bidder at an auction without reserve may insist that the property be sold to him or that the owner answer to him in damages.

7. Auctions. An auction is deemed to be conducted with reserve unless there is an express announcement or advertisement to the contrary before the auction takes place.

8. Contracts: Specific Performance. Fundamental to a decree of specific performance is a meeting of the minds of the parties to the contract.

9. Contracts: Specific Performance: Proof. In order to establish a contract capable of specific enforcement it must be shown that there was a definite offer and an unconditional acceptance.

10. Auctions: Statute of Frauds. A memorandum of sale or contract must be signed by the seller in an auction sale of real estate in order to comply with the statute of frauds.

Claude E. Berreckman, of Berreckman & Berreckman, P.C., Cozad, for appellants.

Robert E. Wheeler, Broken Bow, for appellees.

SIEVERS, C.J., and IRWIN and MUES, JJ.

SIEVERS, Chief Judge.

We are called upon in this case to review the law of auctions. The dispute arises from an auction of a 2,840-acre ranch located in Thomas and Cherry Counties, Nebraska, which was owned by the decedents, Fred J. and Ruthanna Marten.

This action was brought in the district court for Thomas County by Karl F. Marten and Adam J. Marten, who contended they were the successful bidders for the Marten ranch at the auction. Karl and Adam contended that they were entitled to a decree of specific performance conveying the ranch to them.

FACTUAL BACKGROUND

Fred J. and Ruthanna Marten ranched on land located in Thomas and Cherry Counties, Nebraska. They had two sons, Karl F. and Herman, and two daughters, Barbara A. Staab and Judith M. Marten. Adam J. Marten, Karl's son, is the grandson of Fred and Ruthanna.

Fred died in May 1985, Ruthanna died in January 1991, and neither had a last will and testament. Although Karl had leased the ranch in partnership with his brother, Herman, prior to 1983, in 1983 Karl became the sole lessee of the ranch. Upon his father's death, Karl and his mother were appointed copersonal representatives of Fred's estate, and upon his mother's death, Karl and his sister Judith were copersonal representatives of that estate. The actual management of the estates was left to Karl, but he failed to properly perform his duties, and he was removed as personal representative of both estates in March 1993. Karl's sisters, Judith and Barbara, were appointed copersonal representatives and they, through their attorney, Tedd Huston, conducted the auction at issue to sell the Marten ranch. Huston was also a licensed real estate broker.

On September 30, 1993, an auction for the Marten ranch was held at the Thomas County courthouse in Thedford, Nebraska. The sale was tape-recorded by counsel for Karl and Adam and transcriptions of the tape are Huston began by describing the land and setting forth the legal description and improvements. In his initial remarks about the property and the sale, Huston stated, "This will be an auction with no protected bids, however, the sale is upon authority of the county court...." Huston was asked before the bidding began if the tracts were going to be tied together, and the following exchange then occurred:

in the record before us, as well as the actual tape.

HUSTON: It's going to be sold only by the tracts and we're not going to have one overall bid for all.

ADAM MARTEN: Is this an absolute sale?

... HUSTON: This is a sale subject to confirmation by the court, as I just read. It will have to be approved by the county court.

The land was offered in five separate tracts. As he called for bids on each separate tract, Huston announced a starting or minimum bid. The only bidder at the sale was Adam, who offered bids well below the starting bid for each tract.

At the conclusion of the sale, Mike Moody, a rancher and official with the Purdum State Bank, delivered his personal check for $52,200 to the clerk of the sale, Howard Furgeson, and to Huston. This check recited bids of "$125" on Tracts 1 and 2 and "$75" on Tracts 3, 4, and 5, which were the amounts per tract bid by Adam. The memo portion of the check stated, "20% down on 2840 acres Fred J. Marten Estate."

Moody's involvement requires reference to exhibit 9, a document entitled "Agreement for Option to Purchase Real Estate," dated October 7, 1993. Moody is designated therein as "Seller," and Karl and Adam are designated as "Buyer[s]." This agreement recites:

Seller and Buyer had on September 29, 1993 made an oral agreement that Adam J. Marten would bid at the sale of the real property of the Estates of Fred Marten and Ruthanna Marten on September 30, 1993 for Michael L. Moody as real purchaser, who would pay the consideration for the purchase, and in whose name the real property would be placed as buyer....

This October 7 agreement further provided that Moody, the "real purchaser," granted "an option to buy the premises" to Karl and Adam on terms conforming to the terms of the purchase "of the real estate by Michael L. Moody from the Estates of Fred Marten and Ruthanna Marten." The option is said to be "severable and may be exercised in whole or in part," although there is no evidence in the record that the option was ever exercised. Paragraph 13 of the agreement provides in part, "This option may be exercised by Buyer, jointly or severally, with prior ten day notice to the other buyer, by payment of the consideration and costs set out herein."

TESTIMONIAL EVIDENCE

Moody testified that he made the downpayment at the sale and that the check was returned to him thereafter, but he is ready, willing, and able to perform the contract once marketable title is established. Moody admitted hearing Huston state that Adam's bids were inadequate and could not be accepted. Furgeson and Huston testified that Moody and Adam were told that the proffered check would not be cashed. The check was never presented for payment, and Huston returned the check to Moody with a letter dated December 8, 1993.

Karl testified that he had an option agreement to purchase the real estate and that he had financing for that purpose through the Purdum State Bank or Moody. Karl testified that he was "ready, willing and able to purchase this property under the option if the deed is delivered to Adam Marten from that sale." The parties then stipulated that Adam's testimony would be the same as Karl's as to the option agreement and that Adam "was the sole bidder at the sale."

Huston testified that when conducting sales such as the one on September 30, he believes it is necessary at the end of the auction to secure a written contract of sale from a successful bidder and that is his typical

practice. No contract was executed in this instance.

DISTRICT COURT DECISION

In this lawsuit by Karl and Adam, Karl claims "[t]hat by reason of the Option Agreement [he] has an interest in the sale of the premises to Adam J. Marten." The prayer of the petition asks that the court order that "the defendants and their attorney specifically perform the contract above-alleged upon tender by the plaintiffs of the final payment due under that contract."

After trial, the district court found in favor of Adam on his petition for specific performance and ordered the personal representatives to provide evidence of good title and, upon payment of the balance of the amount bid on the five tracts, to deliver the deeds to the tracts of land to the highest bidder at the auction, Adam. The district court reasoned that a valid sale of the land had occurred at the auction, since the only bids made and "marked down" were those of Adam. The court further found that the auctioneer and...