A-15037, SEPTEMBER 13, 1926, 6 COMP. GEN. 183

A-15037: Sep 13, 1926

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SALES - SURPLUS PROPERTY - REFUNDMENTS DISBURSING OFFICERS ARE NOT ENTITLED TO CREDIT IN THEIR ACCOUNTS FOR REFUNDS MADE TO PURCHASERS OF SURPLUS GOVERNMENT PROPERTY IN CASES WHERE THE PROPERTY WAS SOLD "AS IS" AND "WHERE IS" WITHOUT WARRANTY OR GUARANTY OF ANY KIND AND WAS OPEN TO INSPECTION PRIOR TO SALE IN ORDER THAT IT COULD BE EXAMINED BY PROSPECTIVE PURCHASERS. NOTWITHSTANDING SUCH REFUNDS MAY HAVE BEEN MADE BECAUSE OF THE FINDINGS OF A LOCAL BOARD OF SALES THAT SUCH PROPERTY WAS NOT MARKETABLE OR SALABLE. WHEREIN THERE WAS WITHHELD. " WAS. DURING WHICH TIME OPPORTUNITY WAS AFFORDED PROSPECTIVE BUYERS TO EXAMINE THE PROPERTY TO BE SOLD. FAILURE ON THEIR PART TO INSPECT ANY PROPERTY WAS NOT TO BE CONSIDERED AS GROUND FOR ANY CLAIM FOR ADJUSTMENT OR RESCISSION.

A-15037, SEPTEMBER 13, 1926, 6 COMP. GEN. 183

SALES - SURPLUS PROPERTY - REFUNDMENTS DISBURSING OFFICERS ARE NOT ENTITLED TO CREDIT IN THEIR ACCOUNTS FOR REFUNDS MADE TO PURCHASERS OF SURPLUS GOVERNMENT PROPERTY IN CASES WHERE THE PROPERTY WAS SOLD "AS IS" AND "WHERE IS" WITHOUT WARRANTY OR GUARANTY OF ANY KIND AND WAS OPEN TO INSPECTION PRIOR TO SALE IN ORDER THAT IT COULD BE EXAMINED BY PROSPECTIVE PURCHASERS, NOTWITHSTANDING SUCH REFUNDS MAY HAVE BEEN MADE BECAUSE OF THE FINDINGS OF A LOCAL BOARD OF SALES THAT SUCH PROPERTY WAS NOT MARKETABLE OR SALABLE, OR UPON THE ORDERS OF A SUPERIOR OFFICER.

DECISION BY ACTING COMPTROLLER GENERAL GINN, SEPTEMBER 13, 1926:

GUY E. MANNING, CAPTAIN, UNITED STATES ARMY, RETIRED, AND FORMER DISBURSING OFFICER, REQUESTED FEBRUARY 13, 1926, REVIEW OF SETTLEMENT NO. 0105250-W, DATED JANUARY 11, 1926, WHEREIN THERE WAS WITHHELD, FROM THE AMOUNT OF $483.12 ALLOWED HIM FOR LONGEVITY PAY, THE SUM OF $433 TO APPLY TO AN AMOUNT DISALLOWED IN HIS SPECIAL DEPOSIT ACCOUNTS FOR MARCH, 1922, ON ACCOUNT OF CERTAIN ERRONEOUS PAYMENTS MADE BY HIM AS SHOWN BY DIFFERENCE SHEET NO. 11, CERTIFICATE NO. M-220-W, DATED NOVEMBER 7, 1923. THE AMOUNT WITHHELD COVERS TWO PAYMENTS; ONE MADE ON VOUCHER 2 TO I. TOPPER FOR THE SUM OF $249 AND THE OTHER MADE ON VOUCHER 3 TO GINSBURG BROS. FOR THE SUM OF $184, AS REFUNDMENTS RECOMMENDED BY THE LOCAL BOARD OF SALES ON ACCOUNT OF CERTAIN ANTIFREEZE LIQUID PURCHASED AT AN AUCTION SALE OF SURPLUS PROPERTY HELD AT THE GENERAL RESERVE DEPOT, COLUMBUS, OHIO, DECEMBER 5, 1921, NOT BEING MARKETABLE.

ALL SURPLUS PROPERTY TO BE SOLD AT THE AUCTION SALE IN QUESTION, INCLUDING 20,830 GALLONS OF ,ANTIFREEZE LIQUID, GOOD," WAS, UNDER THE CONDITIONS AND TERMS OF SALE, OPEN FOR INSPECTION FOR A PERIOD OF ONE WEEK PRIOR TO SALE, DURING WHICH TIME OPPORTUNITY WAS AFFORDED PROSPECTIVE BUYERS TO EXAMINE THE PROPERTY TO BE SOLD, AND FAILURE ON THEIR PART TO INSPECT ANY PROPERTY WAS NOT TO BE CONSIDERED AS GROUND FOR ANY CLAIM FOR ADJUSTMENT OR RESCISSION, AND SUCH INSPECTION WAS SPECIALLY URGED OWING TO THE FACT THAT NO CLAIMS OF ANY NATURE WHATSOEVER WERE TO BE ENTERTAINED BY THE GOVERNMENT SHOULD THE PROPERTY BOUGHT AT THE SALE NOT COME UP TO THE EXPECTATIONS OF THE PURCHASERS IN ANY PARTICULAR. FURTHERMORE, PROSPECTIVE PURCHASERS WERE SPECIFICALLY ADVISED THAT ALL PROPERTY WOULD BE SOLD "AS IS" AND "WHERE IS" WITHOUT WARRANTY OR GUARANTY AS TO QUALITY, CHARACTER, CONDITION, SIZE, WEIGHT, OR KIND, OR THAT THE SAME WAS IN CONDITION OR FIT TO BE USED FOR THE PURPOSE FOR WHICH IT WAS ORIGINALLY INTENDED, AND THAT NO CLAIMS FOR ANY ALLOWANCES UPON ANY OF THE AFORESAID GROUNDS WOULD BE CONSIDERED AFTER THE PROPERTY WAS KNOCKED DOWN TO A BIDDER BY THE AUCTIONEER.

IT APPEARS FROM THE RECORD THAT I. TOPPER PURCHASED AT SAID SALE 830 GALLONS OF ANTIFREEZE LIQUID AT $0.30 PER GALLON, FOR WHICH HE PAID THE FULL CONSIDERATION OF $249, AND THAT GINSBURG BROS. PURCHASED 5,000GALLONS FROM THE SAME LOT OF ANTIFREEZE LIQUID AT (0.20 PER GALLON AND 4,000 GALLONS AT $0.21 PER GALLON, PAYING THEREFOR ONLY 10 PERCENT OF THE TOTAL PURCHASE PRICE OF $1,840, OR $184. THE AMOUNTS SO PAID, TO WIT, $249 AND $184, WERE REFUNDED THE RESPECTIVE PURCHASERS UPON THE FINDING OF A LOCAL BOARD OF SALES THAT EACH CONTAINER BORE A POSTER STATING THAT "THIS MATERIAL NOT FOR USE IN CARS HAVING ALUMINUM WATER MANIFOLD OR ALUMINUM PUMP," AND THE RECOMMENDATION THAT THE CLAIMS OF THE PURCHASERS BE ALLOWED IN VIEW OF THE FACT THAT THE PRODUCT WAS NOT MARKETABLE OR SALABLE.

THE CONDITIONS AND TERMS OF SALE AS PRINTED IN THE CATALOGUE OF SALE WERE CONTROLLING IN THE MATTER AS THEY WERE FORMULATED AND PROMULGATED BY THE SECRETARY OF WAR, OR AT HIS DIRECTION, IN ACCORDANCE WITH THE AUTHORITY CONFERRED BY THE ACT OF JULY 9, 1918, 40 STAT. 850, AND WERE BINDING ON ALL SUBORDINATE OFFICERS OF THE WAR DEPARTMENT. THE LOCAL BOARD OF SALES DID NOT HAVE AND COULD NOT HAVE HAD, ANY LEGAL AUTHORITY TO MAKE AN ADJUSTMENT AND SETTLEMENT OF THE CLAIMS OF THE PURCHASERS IN THESE CASES, FOR THE AUTHORITY TO ADJUST AND SETTLE ALL CLAIMS AND ACCOUNTS WHATEVER IN WHICH THE UNITED STATES IS CONCERNED EITHER AS DEBTOR OR CREDITOR IS CONFERRED ON THE GENERAL ACCOUNTING OFFICE BY SECTION 305 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, AMENDING SECTION 236 OF THE REVISED STATUTES, AND THE ADOPTION BY THE FINANCE OFFICER OF THE RECOMMENDATIONS OF THE LOCAL BOARD OF SALES, THEREFORE, WAS NOT BINDING NOR CONCLUSIVE IN THE MATTER, AND CAN SERVE AS NO PROTECTION TO THE DISBURSING OFFICER WHO MADE PAYMENT PURSUANT THERETO.

THE ARGUMENT ADVANCED TO THE EFFECT THAT HAD THE DISBURSING OFFICER REFUSED TO MAKE THE REFUND HE WOULD HAVE BEEN GUILTY OF DISOBEDIENCE OF ORDERS AND SUBJECT TO COURT-MARTIAL PUNISHMENT, AND OFFERED BY WAY OF EXTENUATION FOR MAKING THE PAYMENTS HERE IN QUESTION, IS UNTENABLE. WITH REFERENCE TO A SIMILAR CONTENTION A FORMER COMPTROLLER OF THE TREASURY, IN DECISION OF DECEMBER 10, 1900, 7 COMP. DEC. 268, 271, SAID:

* * * ONE OF THE MAIN PRINCIPLES OF PUBLIC ACCOUNTING IS TO HOLD DISBURSING OFFICERS RESPONSIBLE FOR THE LEGALITY OF THEIR PAYMENTS. THE SECRETARY OF WAR, UNDER HIS AUTHORITY TO MAKE REGULATIONS NOT IN CONFLICT OR INCONSISTENT WITH LAW, CAN AUTHORIZE CREDITS TO DISBURSING OFFICERS FOR ILLEGAL PAYMENTS IT WOULD BE UTTERLY SUBVERSIVE OF AND NOT IN AID OF OR IN HARMONY WITH LAW. WHENEVER CONGRESS HAS DESIRED TO RELIEVE DISBURSING OFFICERS FROM LIABILITY FOR PAYMENTS MADE ON THE AUTHORITY OF OTHERS IT HAS HAD NO DIFFICULTY IN FINDING LANGUAGE TO EXPRESS THAT INTENT. EXAMPLES OF THIS WILL BE FOUND IN SECTIONS 285 AND 846, REVISED STATUTES: ACT OF MARCH 3, 1897 (20 STAT., 208). UNDER PARAGRAPH 6 OF SECTION 8, ACT OF JULY 31, 1894 (28 STAT., 208). UNDER THE LAST-MENTIONED ACT GENERAL PROVISION HAS BEEN MADE BY WHICH DISBURSING OFFICERS CAN AVOID RESPONSIBILITY BY APPLYING TO THE COMPTROLLER OF THE TREASURY (NOW COMPTROLLER GENERAL) FOR AN ADVANCE DECISION IN CASES WHERE THEY MAY HAVE DOUBTS. * * *

THE PAYMENTS HERE INVOLVED WERE NOT MADE PURSUANT TO ORDERS ISSUED UNDER SECTION 285 OR 846, REVISED STATUTES, OR THE ACT OF MARCH 3, 1879, CITED. NUMEROUS DECISIONS OF THIS OFFICE HAVE POINTED OUT THE DUTY OF DISBURSING OFFICERS, FOR THEIR OWN PROTECTION AS WELL AS FOR THE PROTECTION OF THE INTERESTS OF THE GOVERNMENT, TO SUBMIT ALL MATTERS PENDING BEFORE THEM FOR PAYMENT WHICH INVOLVE DOUBTFUL QUESTIONS OF LAW OR FACTS TO THIS OFFICE EITHER FOR DECISION IN ADVANCE OF PAYMENT OR FOR DIRECT SETTLEMENT, AND THE FAILURE TO COMPLY WITH THE LAW AND DECISIONS PERTAINING TO SUCH MATTERS CAN NOT OPERATE TO EXCUSE AN OFFICER FOR MAKING PAYMENTS NOT LEGALLY AUTHORIZED.

WITH REFERENCE TO THE MERITS OF THE CLAIMS ON ACCOUNT OF WHICH THE PAYMENTS WERE MADE IT IS APPARENT THAT THE PURCHASERS DID NOT INSPECT THE PROPERTY PURCHASED BY THEM, AS THEY WERE SPECIFICALLY ADMONISHED TO DO, FOR HAD THEY DONE SO THE POSTER ON EACH CONTAINER CONVEYING THE INFORMATION THAT THE ANTIFREEZE LIQUID COULD NOT BE USED IN CARS CONTAINING ALUMINUM PARTS IN THE COOLING SYSTEM WOULD HAVE BEEN DISCOVERED BEFORE THE PROPERTY WAS PURCHASED; AND AS THE SALES WERE MADE "AS IS" AND "WHERE IS" WITHOUT WARRANTY OR GUARANTY AS TO KIND, QUALITY, OR CONDITION, IT MUST BE HELD THAT THE REFUNDMENT OF AMOUNTS PAID BY THEM ON THEIR PURCHASES OF ANTIFREEZE LIQUID WAS NOT AUTHORIZED UNDER THE CONDITIONS AND TERMS OF THE CATALOGUE OF SALE.

THE WITHHOLDING FROM AN AMOUNT DUE THE DISBURSING OFFICER FOR LONGEVITY PAY OF AN AMOUNT SUFFICIENT TO REIMBURSE THE UNITED STATES FOR THE ILLEGAL EXPENDITURES WAS PROPER. 1 COMP. GEN. 605; 2 ID. 579; 3 ID. 771; 4 ID. 858. SECTION 1766, REVISED STATUTES.

UPON REVIEW THE SETTLEMENT IS SUSTAINED. PROPER STEPS WILL BE TAKEN TO ADJUST THE APPROPRIATIONS INVOLVED IN THE TRANSACTION, AND THE CHECK TRANSMITTED WITH REQUEST FOR REVIEW WILL BE RETURNED TO CLAIMANT.