A-12638, JANUARY 28, 1926, 5 COMP. GEN. 545

A-12638: Jan 28, 1926

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SURPLUS PROPERTY - REFUNDS WHERE SURPLUS GOVERNMENT PROPERTY IS SOLD "AS IS" AND "WHERE IS" THE PURCHASER ASSUMES THE RISK OF THE PROPERTY NOT COMING UP TO THE SPECIFICATIONS AS TO QUALITY. DELIVERY TO THE PURCHASER OF AN ENTIRELY DIFFERENT CLASS OF COMMODITIES THAN THOSE PURCHASED IS NOT SUCH A COMPLIANCE WITH THE TERMS OF THE SALE AS TO PROHIBIT THE REFUND OF THE PURCHASE PRICE. WHEREIN CREDIT WAS DISALLOWED FOR THE SUM OF $37.50 PAID BY HIM TO C. IT APPEARS THAT CIRCULAR ADVERTISEMENT "MEDICAL AND HOSPITAL LIST NO. 9" WAS ISSUED WITHOUT DATE SOMETIME PRIOR TO MAY 16. BY THIS CIRCULAR BIDS WERE REQUESTED FOR CERTAIN HOSPITAL SUPPLIES AND DRUGS LISTED THEREIN. PROSPECTIVE BIDDERS WERE ADVISED THAT THE GOODS WERE OFFERED FOR SALE "AS IS" AND "WHERE IS" AND THAT UNDER NO CIRCUMSTANCES WOULD A REFUND OR AN ADJUSTMENT BE MADE ON ACCOUNT OF SUPPLIES NOT COMING UP TO THE STANDARD OF EXPECTATION.

A-12638, JANUARY 28, 1926, 5 COMP. GEN. 545

SALES, SURPLUS PROPERTY - REFUNDS WHERE SURPLUS GOVERNMENT PROPERTY IS SOLD "AS IS" AND "WHERE IS" THE PURCHASER ASSUMES THE RISK OF THE PROPERTY NOT COMING UP TO THE SPECIFICATIONS AS TO QUALITY, BUT DELIVERY TO THE PURCHASER OF AN ENTIRELY DIFFERENT CLASS OF COMMODITIES THAN THOSE PURCHASED IS NOT SUCH A COMPLIANCE WITH THE TERMS OF THE SALE AS TO PROHIBIT THE REFUND OF THE PURCHASE PRICE.

DECISION BY COMPTROLLER GENERAL MCCARL, JANUARY 28, 1926:

CAPT. M. T. LEGG, FINANCE DEPARTMENT, UNITED STATES ARMY, APPLIED DECEMBER 23, 1925, THROUGH THE CHIEF OF FINANCE FOR REVIEW OF SETTLEMENT M -1286-W, DATED MAY 22, 1925, WHEREIN CREDIT WAS DISALLOWED FOR THE SUM OF $37.50 PAID BY HIM TO C. S. LOMBARD BY CHECK NO. 2263, DATED MARCH 15, 1922, AS REFUND OF THE SUM RECEIVED FROM THE PAYEE FOR 50 BOTTLES OF COMPOUND CATHARTIC PILLS PURCHASED BY HIM FROM THE GOVERNMENT ON HIS BID DATED MAY 16, 1921.

IT APPEARS THAT CIRCULAR ADVERTISEMENT "MEDICAL AND HOSPITAL LIST NO. 9" WAS ISSUED WITHOUT DATE SOMETIME PRIOR TO MAY 16, 1921. BY THIS CIRCULAR BIDS WERE REQUESTED FOR CERTAIN HOSPITAL SUPPLIES AND DRUGS LISTED THEREIN, AMONG THE DRUGS SO LISTED BEING THOSE DESCRIBED AS FOLLOWS: ,PILULAE CATHARTIC COMPOSITUS * * * SPD NO. 19975-/1,000 IN BOT.) 2,650 BOT.' STORED AT THE ARMY MEDICAL SUPPLY DEPOT, SAN ANTONIO, TEX. PROSPECTIVE BIDDERS WERE ADVISED THAT THE GOODS WERE OFFERED FOR SALE "AS IS" AND "WHERE IS" AND THAT UNDER NO CIRCUMSTANCES WOULD A REFUND OR AN ADJUSTMENT BE MADE ON ACCOUNT OF SUPPLIES NOT COMING UP TO THE STANDARD OF EXPECTATION.

ON MAY 16, 1921, C. S. LOMBARD SUBMITTED A BID OF 75 CENTS PER BOTTLE FOR 50 BOTTLES OF THE PILLS DESCRIBED, WHICH BID WAS ACCEPTED ON JUNE 13, 1921, AND UPON PAYMENT OF THE BID PRICE SHIPMENT WAS MADE OF 50 BOTTLES OF COMPOUND CARTHARTIC TABLETS INSTEAD OF THE PILLS FOR WHICH THE PURCHASER HAD SUBMITTED HIS BID. ON DELIVERY OF THE SHIPMENT TO HIM, THE PURCHASER PROTESTED THAT THE ARTICLES SHIPPED HIM WERE TABLETS AND NOT PILLS AND, ALLEGING THAT HE HAD NO USE FOR THE TABLETS, THEY BEING ENTIRELY DIFFERENT ARTICLES FROM THE PILLS PURCHASED, REQUESTED INSTRUCTIONS AS TO THE DISPOSITION TO BE MADE OF THEM. HE WAS ADVISED BY LETTER DATED SEPTEMBER 15, 1921, TO SEND THE TABLETS TO THE BOSTON GENERAL INTERMEDIATE DEPOT WHEN THE PURCHASE PRICE WOULD BE RETURNED TO HIM. THE TABLETS WERE RETURNED AS DIRECTED AND REFUND OF THE PURCHASE PRICE MADE BY CAPTAIN LEGG AS HEREINBEFORE STATED. SUBSEQUENTLY, THE TABLETS RETURNED WERE SOLD IN A LOT WITH OTHER DRUGS, THE AMOUNT OF $910 BEING RECEIVED FOR THE LOT. WHEN THE ACCOUNTS OF CAPTAIN LEGG, COVERING THE PERIOD DURING WHICH THIS PAYMENT WAS MADE, WERE AUDITED CREDIT FOR THE PAYMENT WAS DISALLOWED ON THE GROUND THAT THE GOODS WERE SOLD THE PURCHASER "AS IS" AND "WHERE IS" AND THAT THERE WAS NO AUTHORITY FOR THE REFUND OF ANY PART OF THE PURCHASE PRICE.

IN APPLYING FOR REVIEW IT IS CONTENDED THAT THE RESCISSION OF THE SALE AND THE DIRECTION OF THE SURGEON GENERAL TO REFUND THE PURCHASE PRICE WAS A LAWFUL EXERCISE OF DISCRETION VESTED IN AN ADMINISTRATIVE OFFICER. THIS CONTENTION IS UNTENABLE. SECTION 26, REVISED STATUTES, AS AMENDED BY THE ACT OF JUNE 10, 1921, 42 STAT. 24, VESTS IN THE GENERAL ACCOUNTING OFFICE THE AUTHORITY TO SETTLE AND ADJUST ALL CLAIMS AND DEMANDS BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT AND ALL ACCOUNTS WHATEVER IN WHICH THE UNITED STATES IS CONCERNED EITHER AS A DEBTOR OR CREDITOR, AND NO ACT OF AN ADMINISTRATIVE OFFICER CAN DEPRIVE IT OF THIS AUTHORITY.

WHERE SALES ARE MADE "AS IS" AND "WHERE IS" THE PURCHASER ASSUMES THE RISK OF THE GOODS BOUGHT NOT COMING UP TO HIS EXPECTATIONS AS TO QUALITY, BUT DELIVERY BY THE SELLER OF AN ENTIRELY DIFFERENT CLASS OF COMMODITIES FROM THOSE BOUGHT IS NOT SUCH A COMPLIANCE WITH THE TERMS OF SALE AS TO ENTITLE THE SELLER TO RETAIN THE PURCHASE PRICE.

THE SALE WAS CONSUMMATED BY NEGOTIATION--- THAT IS, BY PROPOSAL AND ACCEPTANCE--- AND UPON THE FACTS APPEARING IT IS EVIDENT THAT THERE WAS NO DELIVERY OF THE ARTICLES PURCHASED BY MR. LOMBARD AND HE WAS ENTITLED TO REFUND OF THE AMOUNT PAID BY HIM FOR SUCH ARTICLES. UPON REVIEW THE SETTLEMENT IS REVISED AND THE SUM OF $37.50 IS CERTIFIED FOR CREDIT IN CAPTAIN LEGG'S ACCOUNTS.