Miami Aviation Service v. Greyhound Leasing & Financial Corp., and Greycas, Inc.
Docket: 87-6046
Court: Court of Appeals for the Eleventh Circuit; September 30, 1988; Federal Appellate Court
The case involves an appeal by Miami Aviation Service against Greyhound Leasing Financial Corp. and Greycas, Inc. concerning the auction of an aircraft and two engines. The auction was publicly advertised by Greyhound, stating that it would be to the highest bidder without a minimum bid requirement. Miami Aviation bid one million dollars, but Greyhound subsequently bid 3.3 million dollars and successfully acquired the items. The central legal issue is whether the auction was conducted "without reserve" as defined under the Uniform Commercial Code (UCC), specifically Section 2-328, which differentiates between auctions "with reserve" and "without reserve." In a "with reserve" auction, goods can be withdrawn by the auctioneer until the sale is completed, while in a "without reserve" auction, items cannot be withdrawn once bidding has commenced unless no bids are received. The court found that the terms "no minimum bid" and "sale to the highest bidder" used by the auctioneer did not explicitly indicate a "without reserve" auction. It ruled that the phrase "to the highest bidder" is standard for all auctions and does not affect the reserve status. Additionally, statements made by a Greyhound official prior to the auction were deemed irrelevant since only the statements made at the commencement of bidding are pertinent to the auction's reserve status. Since no explicit declaration of a "without reserve" auction was made at that time, the court concluded the auction was "with reserve," allowing Greyhound to place a bid. The court affirmed the lower court's ruling, thus upholding Greyhound's right to bid on the aircraft and engines.