B-145706, JUL. 11, 1961

B-145706, JUL. 11, 1961

TO AMERICAN NICKEL ALLOY MANUFACTURING CORP.:

REFERENCE IS MADE TO YOUR LETTER OF MAY 24, 1961, REQUESTING RECONSIDERATION OF DECISION OF MAY 16, 1961, WHICH SUSTAINED THE DISALLOWANCE OF YOUR CLAIM FOR $383.69, ALLEGED TO BE DUE AS A PARTIAL REFUND OF THE AMOUNT PAID FOR A QUANTITY OF SCRAP METAL PURCHASED FROM THE REDISTRIBUTION AND MARKETING DIVISION, SALES CONTRACTING BRANCH, KELLY AIR FORCE BASE, TEXAS, UNDER SALES CONTRACT NO. (41-608/S-61 563.

IN YOUR LETTER REQUESTING REVIEW YOU CONTEND THAT THE COURT CASES CITED BY US IN SUPPORT OF OUR DENIAL OF YOUR CLAIM ARE NOT APPLICABLE TO THE FACTS IN YOUR CASE. YOU STATE THAT THE IMPORTANT POINT WHICH YOU WOULD LIKE TO STRESS ONCE MORE IS THE FACT THAT THE SALES INVITATION ADVERTISED THE MATERIAL AS "HIGH TEMPERATURE ALLOY SCRAP, GROUP NO. 10 MONEL," WHEREAS "THE MATERIAL DELIVERED WAS NEITHER HIGH TEMPERATURE ALLOY SCRAP, NOR GROUP NO. 10 MATERIAL, NOR MONEL.' YOU ALSO STATE THAT THERE CAN CERTAINLY BE NO DOUBT THAT A MISTAKE OCCURRED IN CLASSIFYING THIS MATERIAL, REGARDLESS OF WHETHER IT WAS CAUSED BY NEGLIGENCE OR BY A LACK OF TECHNICAL KNOWLEDGE ON THE PART OF THE PERSON WHO PREPARED THE MATERIAL FOR SALE.

THE COURT CASES CITED BY US IN THE DECISION ARE APPLICABLE TO YOUR CASE FOR THE REASON THAT THE CONTRACTS CONSIDERED BY THE COURTS IN THOSE CASES CONTAINED CONTRACT STIPULATIONS SIMILAR TO THOSE CONTAINED IN YOUR CONTRACT.

WHILE ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION --- AND THIS APPEARS TO BE THE BASIS OF YOUR CLAIM--- NO SUCH WARRANTY, HOWEVER, MAY BE IMPLIED WHERE, AS HERE, THE SALES CONTRACT CONTAINS AN EXPRESS DISCLAIMER. MOREOVER, THE GOVERNMENT IN DISPOSING OF ITS SURPLUS PROPERTY IS NOT ENGAGED IN NORMAL TRADE AND FREQUENTLY IS NOT AWARE OF THE TRUE DESCRIPTION OF THE GOODS IT SELLS. LUMBRAZO V. WOODRUFF, 175 N.E. 525; UNITED STATES V. KELLY, 112 F.SUPP. 831; I. SHAPIRO AND COMPANY V. UNITED STATES, 66 CT.CL. 424; AND MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THESE CASES AND OTHERS CONCLUDE THAT UNDER SUCH PROVISION, IN THE ABSENCE OF BAD FAITH OR FRAUD, BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT ANY WARRANTIES WHATEVER. ALSO, THE COURTS HAVE HELD THAT AN EXPRESS DISCLAIMER OF WARRANTY AS USED IN SURPLUS PROPERTY SALES BY THE GOVERNMENT PRECLUDES A SUIT FOR DAMAGES ON THE THEORY OF MUTUAL MISTAKE. UNITED STATES V. HATHAWAY, 242 F.2D 897; AND AMERICAN SANITARY RAG COMPANY V. UNITED STATES, 142 CT.CL. 293.

THERE IS NO EVIDENCE IN THE RECORD OF WILLFUL MISREPRESENTATION OR OF BAD FAITH ON THE PART OF THE GOVERNMENT. IT DOES NOT APPEAR THAT THE OFFICER IN CHARGE OF THE SALE KNEW THAT THE MATERIAL WAS NOT AS DESCRIBED. THE DESCRIPTION IN THE BID INVITATION FOR ITEM 32 WAS BASED ON THE "BEST AVAILABLE INFORMATION," AS STATED IN THE INVITATION. THE MATERIAL WAS SOLD FOR WHAT THE GOVERNMENT THOUGHT IT TO BE. UNDER THE CONDITIONS OF THE SALE THE GOVERNMENT WAS ONLY OBLIGED TO ACT IN GOOD FAITH, AND THIS IT DID.

THE RECORD INDICATES THAT YOU FAILED TO INSPECT THE MATERIAL COVERED BY ITEM 32 PRIOR TO BIDDING, AS YOU WERE CAUTIONED TO DO. IN THAT CONNECTION, YOUR ATTENTION IS INVITED TO THE CASE OF PAXTON-MITCHELL COMPANY V. THE UNITED STATES, 172 F.SUPP. 463. IN THAT CASE THE CONTRACT OF SALE WAS FOR STEEL ON AN "AS IS, WHERE IS" BASIS. HOWEVER, THE STEEL SCRAPS WERE 49.7 PERCENT MALLEABLE IRON. STEEL AND MALLEABLE IRON ARE NOT DISTINGUISHABLE, ACCORDING TO THE AGREEMENT OF THE PARTIES IN THAT CASE, TO THE NAKED EYE. AFTER QUOTING ARTICLES 1 AND 2 OF THE GENERAL SALE TERMS AND CONDITIONS (BOTH IDENTICAL TO ARTICLE 1 AND 2 OF YOUR CONTRACT) THE COURT SAID:

"A BIDDER FAILS TO INSPECT AT HIS PERIL. HAD PLAINTIFF MADE AN INSPECTION BEFORE MAKING ITS BID, AS IT DID AFTERWARDS, IT COULD HAVE DISCOVERED THAT MUCH OF THE MATERIAL WAS MALLEABLE IRON. VISUAL INSPECTION WAS INEFFECTUAL, BUT MICROSCOPIC INSPECTION WAS EFFECTUAL, AS WAS ALSO CHEMICAL ANALYSIS. PLAINTIFF WAS REQUIRED TO MAKE THE SORT OF INSPECTION THAT WAS EFFECTUAL. IT MADE NONE, NOT EVEN A VISUAL INSPECTION. ITS FAILURE TO DO SO LEAVES IT NO ROOM TO COMPLAIN.'

THE PLAINTIFF'S PETITION IN THAT CASE WAS DISMISSED.

SEE, ALSO, KRUPP V. FEDERAL HOUSING ADMINISTRATION, 185 F.SUPP. 638, WHERE A PURCHASER OF GOVERNMENT PROPERTY WAS DENIED RELIEF FOR A LOSS CLAIMED BY REASON OF THE FACT THAT THE PROPERTY WAS DESCRIBED AS CONTAINING 100 GARAGES WHEN, IN FACT, IT CONTAINED ONLY 50 GARAGES. THE TERMS AND CONDITIONS OF THAT CONTRACT WERE SIMILAR TO THOSE HERE INVOLVED.

WITH RESPECT TO YOUR REQUEST FOR INFORMATION AS TO WHOM YOU MAY ADDRESS A FURTHER APPEAL, YOU ARE ADVISED THAT THE ACTION OF THIS OFFICE ON CLAIMS AGAINST THE UNITED STATES IS FINAL AND CONCLUSIVE ON THE EXECUTIVE BRANCH OF THE GOVERNMENT. HOWEVER, INDEPENDENTLY OF THE ACTION OF THIS OFFICE, THE COURT OF CLAIMS OF THE UNITED STATES HAS JURISDICTION TO CONSIDER AND DETERMINE CERTAIN CLAIMS AGAINST THE UNITED STATES IF FILED THERE "WITHIN SIX YEARS AFTER SUCH CLAIM FIRST ACCRUES.' 28 U.S.C. 2501. ALSO, THE DISTRICT COURTS OF THE UNITED STATES HAVE SIMILAR JURISDICTION.