Massachusetts Agencies

Alternate Bids


In 146 Dundas Corp. v. Chemical Bank, 400 Mass. 588, 511 N.E.2d 520 (1987) the Supreme Judicial Court announced the rule that the second highest bidder would be entitled to purchase the property at a foreclosure sale if the highest bidder defaulted. The decision, however, was based upon the fact that this arrangement had been announced at the sale.

"States which have considered the problem generally conclude that, in mortgage foreclosure sales, if the highest bidder fails to pay, the trustee of the property may declare that the next highest bidder may purchase the property, may resell the property promptly, or may readvertise the sale for another day. See Watson v. Vafides, 212 So.2d 358, 361-362 (Fla.Dist.Ct.App.1968); Stone v. Stone, 176 S.W.2d 464, 467 (Mo.1944); Davis v. Hess, 103 Mo. 31, 37, 15 S.W. 324 (1890). In a case remarkably similar to the instant case, Jameson v. Kimbrough, 209 Tenn. 519, 526, 354 S.W.2d 458 (1962), the Supreme Court of Tennessee explained that the sale to the second highest bidder "did not amount to a private sale but was a sale then and there when all parties were present." The court concluded, "[a]s long as the announcement [that, if the highest bidder defaulted, the second highest bidder could purchase the property] was made ... it would not be necessary for the Trustee to again cry or readvertise the property and ask for bids when he has made this statement to all those present." Id. at 528, 354 S.W.2d 458.

The ability of a subsequent bidder to acquire the title must be a fact announced at the sale in order to come within the rule in 146 Dundas Corp