Hunt v. Rice

• Decision Date: 15 April 1988
• Docket Number: No. 87-309,87-309
• Citation: 521 N.E.2d 751,25 Mass.App.Ct. 622
• Parties: Robert B. HUNT et al. 1 v. Harry F. RICE et al., executors. 2
• Court: Appeals Court of Massachusetts

Page 751

521 N.E.2d 751

25 Mass.App.Ct. 622

Robert B. HUNT et al. ¹ v. Harry F. RICE et al., executors. ²

No. 87-309.

Appeals Court of Massachusetts Norfolk.

Argued Dec. 9, 1987.

Decided April 15, 1988.

Richard W. Renehan (Bruce E. Falby, William F. Kehoe, Stanley H. Rudman and Dana F. Rodin, Boston, with him), for defendants.

John D. Donovan, Jr. (R.K. Gad, III, Boston, with him), for plaintiffs.

Before BROWN, KAPLAN and KASS, JJ.

KASS, Justice.

Among the assets left by Amelia Peabody upon her death was a choice forty-acre property, "Mill Farm," in Dover. Her executors elected to sell it by inviting sealed bids from interested parties whom the executors had previously approved. Robert B. and Katherine L. Hunt submitted the highest sealed bid. The question before us is whether the executors' response to the Hunt bid produced an enforceable contract. We hold that it did and affirm the judgment below.

Before inviting bids, the executors had the property appraised. On the basis of that appraisal, the detailed bid kits which the executors sent out established a minimum price of $975,000. Included in the kits were: the form of purchase and sale agreement to be executed; the form of deed which would be delivered (it spelled out significant easements and a conservation restriction to which the land was subject); an escrow agreement; a map of the premises; and a letter of instructions to the prospective bidders.

What was required of a bidder was simple and precise. A bidder needed to: (1) fill in the name and address of the party designated "Buyer" in paragraph 1 of both copies of the purchase and sale agreement in the bid kit (the proffered agreement was on a 1978 edition of a form published by the Greater Boston Real Estate Board); (2) fill in the price bid, the ten percent deposit on that price, and the balance to be paid at closing; and (3) sign both copies of the agreement in the spaces designated for Buyer in the signature block. Finally, a bidder was to deliver the completed agreements with a certified check for the deposit no later than 1:00 P.M., November 30, 1984, at the office of the executors of the will, Harry F. Rice and Lloyd B. Waring.

The Hunts executed the prescribed dance step faithfully. Their bid was $1,200,000. Lesser bids of $1,180,000 and $1,176,000 were tendered by others. Rice, who pulled the laboring oar for the executors so far as real property of the estate was concerned, received the sealed bids in an outer office and retired with his lawyer to an inner chamber to examine them. Waring, the coexecutor, was elsewhere.

Concerning the manner in which the executors proposed to deal with bids, the invitation to bid had the following to say:

"The sealed bids will be opened at 1:00 P.M. on November 30th [1984]. At that time, all bids will be considered but we reserve the right to reject any and all offers and to conduct further negotiations after offers have been received with any Offeror, without the necessity of further notice to other Offerors and to accept any offer which, in our sole judgment, we deem to be in the best interests of the Estate, whether or not such offer is in the highest dollar amount.

If an offer is acceptable to us, both copies of the Purchase and Sale Agreement will be executed by us and one such fully executed copy will be mailed or delivered to the successful bidder no later than Tuesday, December 4, 1984.

The bids and certified deposit checks of all unsuccessful bidders will be mailed or returned to them on Tuesday, December 4, 1984."

After some twenty minutes, Rice and his lawyer emerged and Rice, turning to Mrs. Hunt, said: "Congratulations, you've bought the farm." ³ To the rest of the persons in the room, Rice pronounced, "Mrs. Hunt is the high bidder with a bid of $1.2 million." Jean and Nicholas Vinios, disappointed bidders (they were the lowest of the three), gallantly congratulated Mrs. Hunt. Rice returned to the Vinioses their bid package, including their certified check. By messenger, Rice returned to a third bidder his bid kit, including deposit check. Gesturing with the Hunt papers, Rice said, "I have to keep this." He retained, promptly endorsed, and deposited the Hunts' certified deposit checks (there were two checks, totalling $120,000) to the account of the estate of Amelia Peabody.

In further conversation with Mrs. Hunt, Rice suggested an appointment to discuss the purchase of personal property on Mill Farm (agricultural machinery, tools, and furnishings). To that end, later in the afternoon of the bid opening, Rice notified the housekeeper at the Mill Farm that the Hunts had been the successful bidders.

November 30, 1984, the bid opening day, was a Friday. On the following Monday, Rice, at his office, affixed his signature on one of the two signed counterparts of the purchase and sale agreement which the Hunts had tendered with their bid. Rice then passed the document to his coexecutor Waring, who also signed it. With an appended note that said, "For Buyers," Rice delivered the executed copy to counsel for a last review and, thereafter, delivery to the Hunts. Monday was December 3rd, and delivery of an executed copy "to the successful bidder" had been promised for December 4th in the invitation to bid.

Later on December 3, 1984, Rice received a letter from new counsel ⁴ for the Vinioses addressed to the executors. Enclosed with the letter were purchase and sale agreements conforming to the bid kit model and signed by the Vinioses. The price filled in on the agreement was $1,225,000, thus raising the previous Vinios bid by $49,000, and offering to trump the Hunt bid by $25,000. Certified checks for the required deposit were included. The accompanying transmittal letter said: "Mr. Vinios does not feel that the bidding procedures were such as to assure that the best interests of the estate would be advanced."

The executors and their counsel huddled. Rather than delivering an executed purchase and sale agreement, the executors' counsel delivered a letter stating that, "The Executors ... have rejected all bids on the subject property. The Executors will be in touch with you before long with regard to the sale of Mill Farm." The letter attempted to return the Hunts' deposit, a tender which they rejected. Rather, the Hunts brought an action for declaratory relief and specific performance. The appeal is from a judgment declaring that the executors are legally bound to convey Mill Farm to the Hunts and ordering the executors to do so. ⁵

1. Manifestation of acceptance. It is possible to conduct an auction sale "without reserve," i.e., to declare that the property up for sale shall go to the highest bidder. The terms of sale in such a case will have been published and the only variable for the seller to consider is the amount of the bid. See Curtis v. Aspinwall, 114 Mass. 187, 191-192 (1873); Weinstein v. Green, 347 Mass. 580, 582, 199 N.E.2d 310 (1964); Restatement (Second) of Contracts § 28(1)(b) (1979); 1 Williston, Contracts § 29 (3d ed. 1957). That, however, is not the auction method which the executors chose in this case. They elected to invite bids, each of which would constitute an offer which the executors, as sellers, were at liberty to accept or reject. Weinstein v. Green, 347 Mass. at 582, 199 N.E.2d 310. Restatement (Second) of Contracts § 28(1)(a). See 1 Corbin, Contracts § 24 (1963). By reserving the right to reject any and all offers, the executors did no more than make express what the structure of their invitation to bid signified as matter of law, that they were conducting an auction "with reserve." See Restatement (Second) of Contracts § 28 comment b. Each of the bidders and the seller were entitled to withdraw until the seller signified acceptance of a bid. See Outpost Cafe, Inc. v. Fairhaven Sav. Bank, 3 Mass.App.Ct. 1, 3, 322 N.E.2d 183 (1975); 1 Corbin, Contracts § 108. See also G.L. c. 106, § 2-328.

The trial judge correctly concluded that the executors manifested their acceptance of the Hunt offer at the bid opening and reinforced their manifestations of acceptance thereafter. Acceptance may be manifested by conduct or words, or a combination of the two which are reasonable in the circumstances. Restatement (Second) of Contracts § 30; Farnsworth, Contracts § 3.13 (1982). See also G.L. c. 106, §§ 2-204 and 206. The content of the conduct or words should include: (1) an expression of commitment; (2) which is unconditional, i.e., does not vary the terms of the offer; and (3) which is not conditioned on a further step. Farnsworth, supra. What we examine are the parties' overt acts. See Hotchkiss v. National City Bank, 200 F 287, 293 (S.D.N.Y.1911) (L. Hand, J.), affd., 201 F. 664 (2d Cir.1912), affd., 231 U.S. 50, 34 S.Ct. 20, 58 L.Ed. 115 (1913); Holmes, The Common Law 307 (1881).

There was no absence of expression of commitment. By the terms of their invitation for bids, the executors had declared that offers would be considered at the time of the opening. ⁶ Rice did so. To be sure, the executors had reserved the right to reject all the bids or to embark on a course of negotiations with any of the three offerors. That Rice did not do. He did not, upon returning from his perusal of the bids, announce that they would be further considered or that the executors would negotiate with one of the offerors. Rather he pronounced the Hunts as the winners. "Congratulations, you bought the farm." ⁷ In addition he banked the Hunts' deposit, suggested to Mrs. Hunt that she might want to buy equipment and furnishings, and, pointedly, returned to the other bidders their papers and deposit checks.

As to the terms of the purchase, there was no doubt or attempt to vary. Those terms had been spelled out in meticulous detail by the sellers. All the offeror had to do was name the price. See Conway Sav. Bank v. Vinick, 287 Mass. 448, 453, 192 N.E. 81 (1934). Compare those cases recently reviewed in Goren v. Royal Invs.,...