Webster v. French

11 Ill. 254
CourtIllinois Supreme Court
DecidedDecember 15, 1849
StatusPublished
Cited by36 cases

This text of 11 Ill. 254 (Webster v. French) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Webster v. French, 11 Ill. 254 (Ill. 1849).

Opinion

Opinion by Mr. Justice Catón :

On the 12th of February, 1849, the General Assembly passed a law authorizing the Governor to sell the Quincy House, belonging to the state. The second section of that act required the Governor to advertise the property, stating the terms and conditions of the sale. The third section provided that the property should be sold for state indebtedness, one-third to be paid down, and the balance in one and two years; and that, for the two last instalments, notes should be given, with sureties to be approved by the Governor. The fourth section says : “ The Governor shall receive written sealed bids for said property, from all persons, until the first day of July, A. D. 1849, at which time all the bids received, shall be opened and compared by the Governor, in presence of the Secretary of State and Treasurer; who shall then declare the highest responsible bidder to be the purchaser of said property, who shall, upon the payment of the first instalment, receive a certificate of purchase, which shall entitle him or his assigns to a deed for said property upon the payment of the other two instalments.” The fifth section authorizes the Governor “in his official capacity,” to convey by deed, &c.

In obedience to this act, the Governor advertised the property for sale, and on the 30th of June, the complainants filed their sealed proposal, offering $21,100 for the. property, which was the highest specific bid made, although several for less amounts were filed. On the same day the defendants, Ash & Diller, filed a sealed proposal to give for the property “the sum of six hundred and one dollars over and above the highest bid of the highest responsible bidder.” Henry Root & Co., on the next day, filed a similar proposal, offering “ five hundred dollars more than any bid made.” The first day of July being Sunday, the bids were not opened till the next day, when the complainants attended, and offered to pay the amount of the first instalment upon their bid, and to execute their note, with sureties to be approved by the Governor, according to the terms of the act, but the Governor informed them that he would not receive said payment and note, because he had determined to accept the proposal of Ash & Diller. On the next day the complainants made a formal tender of the first instalment and note, which was in like manner refused. The proposal of Ash & Diller, which was accepted by the Governor, was computed at the sum of $22,201. The complainants in their bill set forth these facts, and also aver, that some days after, Ash & Diller tendered the said first instalment and note, with sufficient sureties, to the Governor, who took charge of the same for safe keeping, but refused to give a final decision as to the legal effect of this tender. The bill also charged that the defendant, Johnson was in some way interested in the bid of Ash & Diller.

The bill further shows that it is, and for a long time has been, an established custom of the post office department, and other departments of the United States government, and others, individuals and corporations, who habitually have made, and do make contracts upon written sealed bids, to reject such proposals as those of Ash & Diller, and of Root & Co., as not fair, bona fide and valid bids.

As to Root & Co., the bill was taken for confessed. The other defendants filed a demurrer, which was pro forma sustained, and the bill dismissed. Previous to the order sustaining the demurrer, there is in the record an agreement of the parties, showing that since the bill was filed, the Governor has conveyed the premises to Ash & Diller, and that they have conveyed to Johnson. Although the agreement does not stipulate that these facts shall be considered as if presented by a supplemental bill, yet the case has been here argued by the counsel on both sides as if such were the state of the record, and so, for the purposes of the present decision, has it been considered by this Court.

From the barrenness of the books upon questions arising upon this sort of secret or sealed bidding, we may reasonably infer that till recently, at least, this has not been a very common mode of making sales or entering into contracts. At the present time, however, this mode of selling property is very common, and contracts for the construction of public works are almost universally made in this way, as well as a vast variety of other contracts, both by the general government and state authorities. The practical operation of this mode of doing business, has so recommended it to the favor of the public, that it has already become thoroughly incorporated into our business habits, and hence the question before us becomes one of peculiar importance.

Where sales are made upon secret bids, or sealed proposals, it is in fact but another mode of selling by auction, and in this, as well as in sales by open bids, anything which prevents fair Competition, or tends to give one party an unfair advantage over another, must be discountenanced by the Courts. The same rules of morality, fairness, and justice must govern in the one case as in the other.

The only case referred to or found, which is supposed to have any similarity to this, is Williams vs. Stewart, 3 Merrivale, 471; and what is said by Lord Eldon there, on this question, it is admitted, is but dictum; for he professedly went out of his way to express an opinion on this point, while he decided that he had no jurisdiction of the case made. There, commissioners were authorized to sell certain land tax to the highest bidder, and they were required by an act of parliament to post a notice of the first bid received, for fourteen days on the church door, and in case no other offer was made in that time, exceeding the first offer by at least one per cent., they were authorized to close with the first offer. But in case an offer was made exceeding the first by at least one per cent., they were required to sell to the person offering the highest price. One of the commissioners made an offer which was posted on the church door. Then the complainant, Williams, offered sixty per cent, more than that offer, and Isted offered “ one per cent, above the offer of any other person,” and the Lord Chancellor expresses the opinion that this bid was binding on Isted. The act in that case did not say whether the bids should be secret or public, nor does the bill show but that all the bids were in fact public. This statement is sufficient to show that neither the law nor the bidding under it were like those in the case before us. Here the law expressly required all the bids to be under seal, which could not be opened till the bidding was closed. The bidding in this case, therefore, was in the strictest sense secret, and must be governed by rules reasonably adapted to such a proceeding.

In the case above referred to the Chancellor says that sales where one bidder does not know what another has offered, are denominated candlestick biddings in the north of England, where it was never doubted that a bid of one per cent, more than any other offer, was binding on the bidder. If we are to understand from this that it was also binding on the seller, the most that can be said for it is, that in the north of England custom had sanctioned this kind of offer. In this country, where this kind of secret bidding has become so common, we learn from this bill that custom has adopted a different rule, and all such bids are rejected as void.

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Bluebook (online)
11 Ill. 254, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webster-v-french-ill-1849.