B-130604, FEB. 28, 1957

B-130604, FEB. 28, 1957

TO AAA MACHINERY AND EQUIPMENT COMPANY:

REFERENCE IS MADE TO LETTERS DATED JANUARY 21 AND 24, 1957, AND ENCLOSURE, FROM ULMER, BERNE, LARONGE, GLICKMAN AND CURTIS, REQUESTING, IN YOUR BEHALF, REVIEW OF SETTLEMENT DATED JANUARY 7, 1957, WHICH DISALLOWED YOUR CLAIM FOR $2,080, ALLEGED TO BE DUE AS A PARTIAL REFUND OF THE AMOUNT PAID FOR TRU-STEEL SHOT PURCHASED FROM THE CHICAGO ORDNANCE DISTRICT, DEPARTMENT OF THE ARMY, UNDER CONTRACT NO. 11-022-S-55-265, DATED MAY 10, 1955.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO PURCHASE FROM THE GOVERNMENT F.O.B. AMERICAN STEEL FOUNDRY, EAST CHICAGO, INDIANA, 206,000 POUNDS OF TRU-STEEL SHOT FOR $0.03479 PER POUND, OR A TOTAL AMOUNT OF $7,166.74. YOU ALLEGED THAT WHEN THE SHIPMENT ARRIVED AT DESTINATION IT CONTAINED 26 TONS OF CHILLED IRON SHOT, WHICH YOU LATER DISPOSED OF AT A LOSS TO YOU OF $2,080.

IT IS STATED IN THE LETTER OF JANUARY 21, 1957, THAT PRIOR TO THE TIME YOU PLACED YOUR BID, YOU SENT YOUR REPRESENTATIVE AND SHOP SUPERVISOR, STANLEY HAMELIC, TO INSPECT THE MATERIAL AND THAT THEY WERE FOUND TO BE EXACTLY AS ADVERTISED. ALSO, IT IS ALLEGED THAT THE GOVERNMENT AGENTS HAD INSTRUCTED THE CARTAGE COMPANY WHICH BAGS TO LOAD, AND THAT IN SO DOING THEY HAD, THROUGH INADVERTENCE, OR OTHERWISE, INCLUDED BAGS CONTAINING 26 TONS OF CHILLED IRON SHOT INSTEAD OF BAGS CONTAINING TRU-STEEL SHOT. IS CONTENDED THAT IN THE CIRCUMSTANCES THE DISCLAIMER OF WARRANTY CLAUSE OF THE CONTRACT IS NOT APPLICABLE HERE.

IN CONNECTION WITH THE ALLEGATION THAT MR. HAMELIC INSPECTED THE PROPERTY ON OR ABOUT JANUARY 31, 1955, THE ADMINISTRATIVE OFFICE HAS REPORTED THAT ALTHOUGH THE VISITOR'S REGISTER AT AMERICAN STEEL FOUNDRIES WAS CHECKED FOR THE PERIOD JANUARY 1, 1955, THROUGH MARCH 31, 1955, MR. HAMELIC'S NAME DOES NOT APPEAR THEREON. ALSO, IT IS REPORTED THAT MR. HAMELIC WOULD NOT BE PERMITTED TO ENTER THE PLANT WITHOUT REGISTERING. IT IS STATED IN THE LETTER OF JANUARY 21, 1957, THAT DOCUMENTARY EVIDENCE HAD BEEN SUBMITTED INDICATING MR. HAMELIC'S INSPECTION. THE ONLY EVIDENCE OF RECORD HERE IN SUPPORT OF THIS CONTENTION IS AN UNDATED PHOTOSTATIC COPY OF A CONDUCTOR'S CASH RECEIPT OF THE NEW YORK CENTRAL RAILWAY FROM DETROIT, MICHIGAN, TO HAMMOND, INDIANA. EVEN IF IT COULD BE SHOWN THAT THE RECEIPT WAS USED BY MR. HAMELIC ON THE ALLEGED DATE, THAT FACT CANNOT BE CONSIDERED SUFFICIENT EVIDENCE TO SUPPORT THE CONTENTION THAT HE INSPECTED THE MATERIAL AT THE TIME ALLEGED, ESPECIALLY, IN VIEW OF THE FACT THAT MR. HAMELIC'S NAME DOES NOT APPEAR ON THE VISITOR'S REGISTER AT AMERICAN STEEL FOUNDRIES.

IN CONNECTION WITH YOUR STATEMENT THAT THE GOVERNMENT AGENTS HAD INADVERTENTLY MIXED THE SHOT AFTER THE ALLEGED INSPECTION AND AT THE TIME OF SHIPMENT, ATTENTION IS INVITED TO A LETTER DATED MARCH 27, 1956, FROM THE CHIEF CLERK, AMERICAN STEEL FOUNDRIES TO THE CHICAGO ORDNANCE DISTRICT, IN PART, AS FOLLOWS:

"/J) NO CHANGES WERE MADE TO ANY PILE FROM THE TIME THE MATERIAL WAS SHOWN UNTIL IT WAS SHIPPED. THE AAA MACHINERY COMPANY MATERIAL WAS SHIPPED ON APRIL 1, 1955, AND THE OTHER MATERIAL WAS SHIPPED ON APRIL 6, 1955.

"/K,1) I PERSONALLY WENT TO THE AREA IN WHICH THE MATERIAL WAS STORED AND DIRECTED THE DON CARTAGE COMPANY AS TO WHICH MATERIAL WAS TO BE SHIPPED. I ALSO CHECKED DURING THE OPERATION AND AT THE END OF THE OPERATION TO BE SURE THAT THE PROPER PILES HAD BEEN SHIPPED. THERE WAS A REPRESENTATIVE FROM A.S.F. ON HAND AT ALL TIMES TO VERIFY THE QUANTITY SHIPPED.'

RELATIVE TO THE STATEMENT MADE IN THE LATTER OF JANUARY 21, 1957, THAT "GOVERNMENT INSPECTORS INDICATED TO THE CARTAGE COMPANY THE MATERIAL WHICH WAS TO BE LOADED" THE ADMINISTRATIVE REPORT HERE IS TO THE EFFECT THAT "NO GOVERNMENT REPRESENTATIVE WAS PRESENT DURING LOADING; HOWEVER, CONTRACTOR'S REPRESENTATIVE WITNESSED LOADING.'

THUS, THE EVIDENCE HERE SHOWS THAT YOU DID NOT INSPECT THE MATERIAL PRIOR TO BIDDING AND THAT THE SHOT SHIPPED WAS THE SAME AS THAT OFFERED FOR SALE. CONCEDING, HOWEVER, THAT AN INSPECTION WAS MADE, THE CONCLUSION TO BE REACHED IN THIS CASE MUST BE GOVERNED BY THE DISCLAIMER OF WARRANTY CLAUSE OF THE CONTRACT.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS, MADE A PART OF THE CONTRACT, PROVIDES THAT THE DESCRIPTION IS BASED UPON THE BEST AVAILABLE INFORMATION BUT THAT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, ASTO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE AND THAT NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED SINCE THIS IS NOT A SALE BY SAMPLE.

IT IS DIFFICULT TO PERCEIVE HOW CLEARER OR MORE EXPLICIT LANGUAGE COULD HAVE BEEN USED TO APPRISE ALL PROSPECTIVE BIDDERS THAT THEY WERE CONTRACTING FOR THE PURCHASE OF THE LIMITED MATERIAL AT THEIR OWN RISK. THE COURTS HAVE HELD REPEATEDLY THAT SUCH PROVISIONS CONSTITUTE AN EXPRESS DISCLAIMER OF WARRANTY AND THAT THE ELEMENT OF GOOD FAITH IS ALL THAT IS REQUIRED OF THE VENDOR. LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676. THOSE CASES, AND NUMEROUS OTHER CASES, CONCLUDE THAT UNDER SUCH CIRCUMSTANCES BUYERS HAVE NO RIGHT TO EXPECT, HAVE NOTICE NOT TO EXPECT, AND CONTRACT NOT TO EXPECT, ANY WARRANTIES WHATEVER.

SINCE THE EVIDENCE INDICATES THAT YOU FAILED TO TAKE ADVANTAGE OF THE OPPORTUNITY OFFERED YOU TO INSPECT, BUT PURCHASED THE SHOT WITHOUT DOING SO, YOU BOUGHT AT YOUR OWN RISK AND ARE NOT NOW ENTITLED TO THE RELIEF SOUGHT. SEE M. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373; BRODY V. UNITED STATES, 64 C.CLS. 538; SACHS MERCANTILE COMPANY, INC. V. UNITED STATES, 78 C.CLS. 801.

ACCORDINGLY, THE SETTLEMENT OF JANUARY 7, 1957, IS SUSTAINED.

WITH RESPECT TO YOUR REQUEST FOR ADVICE AS TO WHETHER AN APPEAL MAY BE MADE TO ANOTHER OFFICE, YOU ARE ADVISED THAT DECISIONS OF THE COMPTROLLER GENERAL OF THE UNITED STATES ARE BINDING UPON THE EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS OF THE GOVERNMENT. HOWEVER, YOUR ATTENTION IS INVITED GENERALLY TO 28 U.S.C. 1346 AND 1491, PERTAINING TO SUITS AGAINST THE UNITED STATES WHICH ARE COGNIZABLE IN THE DISTRICT COURTS AND THE COURT OF CLAIMS OF THE UNITED STATES.