OPINION.
Marquette:
The question for decision herein is whether the taxpayer should be permitted to value as of March 1, 1913, the properties bid in at the master's sale for the purpose of determining the gain or loss on a subsequent sale or disposition thereof. The facts upon which our decision must turn may be shortly stated. On February 28, 1913, pursuant to a decree of the United States District Court for the Northern District of Ohio, a special master offered for sale at public auction the properties in question and the bid of the taxpayer herein of $77,577.44 was the highest and best bid received. On March 7, 1913, the master filed with the court his report of sale and on March 24, 1913, the court confirmed the sale and directed the execution and delivery of the deed to the purchaser, which was done on that date.
The provisions of the Revenue Act of 1918 pertinent to this question are as follows:
Sec. 202(a) That for the purpose of ascertaining the gain derived or loss sustained from the sale or other disposition of property, real, personal, or mixed, the basis shall be—
(1) In the case of property acquired before March 1, 1913, the fair market price or value of such property as of that date; and
(2) In the case of property acquired on or after that date, the cost thereof.
The preliminary question therefore is whether under the disclosed facts the properties herein were acquired before March 1, 1913.
It is well settled that a judicial sale is not complete until it has been confirmed by the court under whose order it was made. Before confirmation, the successful bid is but an offer, the acceptance or rej'ection of which is within the sound legal discretion of the court and the acceptance is manifested by the order confirming the sale. Between the sale and the order of confirmation the bidder has no title (16 Ruling Case Law 81, and cases cited).
In Tennessee v. Quintard, 80 Fed. 829, the Circuit Court of Appeals of the Sixth Circuit said:
The cases, both Federal and State, fully establish the rule that Quintard's bid for the property at the special master's sale was only an offer to take the property at that price, and that acceptance or rejection of that offer was within the sound legal discretion of the court, to be exercised with due regard to the special circumstances of the case. The acceptance of his offer could only have been manifested by an order confirming the sale, and, until that was done, he acquired no title, and there was in his position at the time this petition was filed no element of an innocent purchaser.
The difference between a judicial sale and an execution sale must be kept in mind and this difference was clearly, set forth in In re Haywood Wagon Co., 219 Fed. 655, 659, as follows:
An execution sale is not a "judicial sale." The officer makes an execution sale under the authority of his writ and of the statute. The proceeding before us is one of a very different nature. In a judicial sale, such as the one complained of, the court is the vendor and the sale is by the court even though made through the instrumentality of a referee. The sale, in such a case as this, confers no right to the property sold until it has been confirmed by the court. It is the confirmation that makes the sale the act of the court. In an execution sale there is no report made to the court and no confirmation of the sale made by the court. The principles applicable to the one class of sales are not necessarily applicable to the other.
There is another rule of law with respect to j'udicial sales to the effect that upon confirmation thereof the deed executed pursuant thereto takes effect by relation as of the day of sale, and vests in the purchaser the right to intermediate rents (16 Ruling Case Law, 132; Jashenosky v. Volrath, 59 Oh. St. 540).
The taxpayer having title by relation as of February 28, 1913, the day of sale, the question is, does title by relation meet the requirements of the statute that the property must have been acquired before March 1,1913, in order that the fair market price or value as of that date may be used as the basis for determining gain or loss on the subsequent sales. The word acquired was undoubtedly used in the statute in its ordinary sense of " obtained as one's own " and we think it should be applied in that sense. On March 1, 1913, the taxpayer had no title and could have none until the sale was confirmed by the court. Upon confirmation and the execution and delivery of the deed it had title by relation as of February 28, 1913, but we do not think title by relation as of a particular date is equivalent to having acquired the property on that date. The property was not " obtained as its i own " prior to March 1, 1913, but only from the date of confirmation, and the fact that upon confirmation the title relates back to the sale does not meet the challenge of the statute.
We do not think the properties in question were acquired prior to March 1, 1913, within the meaning of the statute, and it therefore follows that the taxpayer should not be permitted to value them as of that date for the purpose of determining gain or loss upon a subsequent sale or disposition thereof.