Bank of Eastern Arkansas v. Bank of Forrest City

• Decision Date: 21 March 1910
• Citation: 126 S.W. 837,94 Ark. 311
• Parties: BANK OF EASTERN ARKANSAS v. BANK OF FORREST CITY
• Court: Arkansas Supreme Court

126 S.W. 837

94 Ark. 311

BANK OF EASTERN ARKANSAS v. BANK OF FORREST CITY

Supreme Court of Arkansas

March 21, 1910

Appeal from St. Francis Circuit Court; Hance N. Hutton, Judge affirmed.

Judgment affirmed.

S. H Mann and Norton & Hughes, for appellant.

The paper submitted by appellee makes no definite proposition and could not alone be the basis of a contract. The law contemplates definite bids, which, together with the acceptance will amount to a contract, without reference to any other bid or thing. 11 Ill. 254.

James P. Clarke, for appellee.

1. Appellant has proceeded upon the erroneous theory that because it was a bidder at the offering it was the party aggrieved, and, without having made application to be made a party and having such application granted, either directly or indirectly, that it therefore had the right of appeal. 52 Ark. 100; 77 Ark. 588.

2. Appellant is in no position to question the sufficiency of the bid. Under section 3 of the act the county court was given power to reject any and all bids, at discretion, and this discretion will not be interfered with except for fraud. 8 Fed. Cas. 955-956; 35 Neb. 346; 24 Neb. 106.

3. An unsuccessful bidder, as such, has no such rights as entitle him to compel the award of the contract to him in opposition to the action of the official appointed by law to make the award. 26 L.R.A. 707; 24 Wis. 683; 27 N.Y. 378; 78 F. 31; 57 Ark. 322.

OPINION

FRAUENTHAL, J.

This is an appeal from a judgment of the circuit court affirming an order of the county court of St. Francis County selecting the Bank of Forrest City as the depository of all the public funds of said county. This order was made in pursuance of an act of the Legislature approved March 9, 1909, entitled "An act to provide a depository for the county funds of * * * St. Francis * * * counties" (Acts of 1909, p. 150). By said act it is provided that it shall be the duty of the county court of said county at a specified term, and at the same term every two years thereafter, to receive propositions from any bank, banker or trust company in said county desiring to be the depository of the public funds of the county, and that notice of the intention to receive such propositions or bids should be published in some newspaper. Any such institution desiring to become such depository was directed to file, on or before the first day of said term of court, a sealed bid stating the rate of interest which it offered to pay upon the public funds that might be deposited with it if such bid should be accepted; and, as an evidence of good faith, a certified check for $ 250 should accompany said bid. On the first day of said term of court it was provided that the bids should be publicly opened and entered of record, and that the court should select as the depository the bidder offering the highest rate of interest on the funds; and it was also provided that the court should have the right to reject any and all such bids. The act directed that in the event no bids should be offered, or should such bids be deemed too low or not for the whole amount of the county funds, the court should order said funds deposited with one or more banks in the county which it might select at a rate that might be agreed upon between the court and the banks.

In pursuance of the provisions of said act, the notice therein required that sealed bids would be received was given, and the notice also stated that the right was reserved to reject any and all such bids. Appellant, Bank of Eastern Arkansas, and the appellee, Bank of Forrest City, respectively, made sealed bids for said funds, and they were the only institutions making such bids. The appellant in its bid stated that it offered for said funds five and one-fourth per centum per annum, to be computed on daily balances. In its sealed proposal the appellee did not name any specific rate of interest, but stated that it agreed to pay five-sixteenths of one per cent. more on the funds than the highest and best bid that should be made by any other bidder. Thereupon the county court made the following order: "Whereupon the court, after due consideration, adjudged that the Bank of Forrest City is the highest and best bidder for the custody of said funds at and for the price of five and nine-sixteenths per centum per annum, to be computed on daily balances, for a term of two years;" and said bank was thereby selected as said depository of said funds. The Bank of Eastern Arkansas then filed an affidavit for appeal from said order to the circuit court. Upon a hearing of said appeal, the circuit court entered a judgment affirming in all things the above order of the county court; and from this judgment the Bank of Eastern Arkansas prosecutes this appeal.

The appellant was a bidder to become the depository of the public funds of St. Francis County, and solely in the character of a bidder it appealed from the order of the county court selecting the appellee as such depository, and now prosecutes this appeal solely in the right of such bidder. It does not appear as a taxpayer of said county, nor does it present any interest in or right to prosecute an appeal from the order of the county court other than such as may arise by reason of its having been such a bidder.

Appellant contends that the proposal of the appellee, purporting to be a bid to become the depository of the funds of said county, was in fact not a bid at all because it named no specific rate of interest which it agreed to pay on the funds. The result of the contention made by appellant is that the proposition made by the appellant was the only legal bid made, and that therefore it should have been selected as the depository of said funds. The merits of this contention, and the rights of the appellant, must be determined by the provisions and purposes of the act.

One of the chief purposes of this act was to secure the highest rate of interest on the county funds from the institution becoming its depository. One of the methods by which it was expected to obtain the highest rate of interest was to advertise for and receive from competitors sealed propositions or bids stating the rate of interest offered by each bidder. This was but another mode of offering the depository to the highest bidder by auction. Fairness and justice demand that in both such cases, whether by sealed bids or upon auction, all bidders should be treated on equal terms. Public policy demands that anything that prevents competition on the one hand, or which gives to one party an undue advantage over another by any surreptitious action, should be deemed tainted with fraud, and should thereby invalidate the bid.

It is the evident intent of this act that every bidder should make his bid without any knowledge of the bid made by any other institution. By section 7 of the act it is provided that it shall be a misdemeanor for the county judge, or the county clerk or his deputy, to disclose to any person prior to the time of opening the bids the amount or terms of any such bid. It thus appears that it was the clear purpose of this act to place all bidders upon exactly equal terms, so that no one of them could have any advantage over the others in making his proposition. If the proposals are made by sealed or secret...