B-144265, B-150181, FEB. 1, 1963

B-144265, B-150181, FEB. 1, 1963

TO ABRAHAM FISHBEIN, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 3 AND 7, 1963, REQUESTING RECONSIDERATION OF CERTAIN CLAIMS DIVISION DISALLOWANCES AND SUBSEQUENT SUSTAINING DECISIONS RELATIVE TO CLAIMS BY ALEX ZEEVE AND COMPANY, INC., FOR REFUNDS BECAUSE THE SURPLUS SALES INVITATIONS MISDESCRIBED MACHINERY THAT IT WAS AWARDED IN TWO CONTRACTS.

YOU STATE THAT THE CLAIMANT IN ONE CASE WAS AWARDED A SENSITIVE DRILL INSTEAD OF THE RADIAL DRILL DESCRIBED IN THE INVITATION AND IN ANOTHER CASE WAS AWARDED A SURFACE GRINDER INSTEAD OF THE CYLINDRICAL GRINDER DESCRIBED IN THE INVITATION. YOU CONTEND THAT THE MACHINES AWARDED ARE UTTERLY DIFFERENT FROM THE MACHINES ADVERTISED FOR SALE AND SUGGEST THAT THERE MUST HAVE BEEN BAD FAITH, FRAUD OR MISTAKE IN DESCRIPTION OR ELSE A SUBSEQUENT DELIBERATE SWITCH. IN THE EVENT IT IS DENIED THAT THE MACHINES ARE UTTERLY DIFFERENT OR THAT BAD FAITH, FRAUD, MISTAKE OR A SWITCH IS INVOLVED, YOU REQUEST THE OPPORTUNITY TO ESTABLISH THESE CIRCUMSTANCES AT A HEARING. FURTHER, YOU POINT OUT THAT IN ANOTHER CASE INVOLVING THE SAME CLAIMANT OUR CLAIMS DIVISION MADE A REFUND WHERE A CYLINDRICAL UNIVERSAL GRINDER WAS INCOMPLETE IN THAT A HEAD AND A TAIL STOCK WERE MISSING AND YOU SUGGEST THAT TO BE CONSISTENT WITH THAT SETTLEMENT A SIMILAR RESULT IS REQUIRED IN THE INSTANT CASES. STILL FURTHER, YOU STATE THAT THERE IS LEGAL AUTHORITY FOR RESCISSION WHEN THE ITEM IS DIFFERENT FROM THE ITEM DESCRIBED IN THE INVITATION. IN THAT CONNECTION, YOU SAY:

"* * * THUS, LUMBROZZO V. WOODRUFF (175 N.E. 525, 526, AND 527) HELD THAT "THE VENDEE CANNOT BE OBLIGED TO RECEIVE AND PAY FOR A DIFFERENT THING FROM THAT FOR WHICH HE CONTRACTED" * * * AND THAT "THE DISTINCTION BETWEEN A DESCRIPTION AMOUNTING TO A CONDITION IN THE CONTRACT OR AN ESSENTIAL PART OF THE ARTICLE SOLD, AND A WARRANTY, WAS QUITE IMPORTANT.' STANDARD V. U.S. (241 F2ND 677) TO WHICH YOU YOURSELF REFER (LETTER OF DECEMBER 18TH), THE COURT STATED AT P. 679: "OF COURSE, IF THE GOODS DELIVERED WERE NOT IN FACT THE GOODS CONTRACTED FOR, THE BUYER COULD NOT BE HELD LIABLE.' IN U.S. V. KOPLIN (24 F2ND 840, 841), THE COURT HELD: "GOODS TENDERED, WHICH CN DID NOT CORRESPOND TO THE DESCRIPTION OF THE CONTRACTS, MIGHT RIGHTLY BE REJECTED. WARRANTIES OF VARIOUS SORTS WERE EXCLUDED BY THE CATALOGUE TERMS OF SALE, BUT THIS IS NOT A MATTER OF WARRANTY BUT GOES TO THE IDENTIFICATION OF THE THING SOLD. * * * THE VENDEE CANNOT BE OBLIGED TO RECEIVE AND PAY FOR A THING DIFFERENT FROM THAT FOR WHICH HE CONTRACTED.' SAME EFFECT: HEDGER V. U.S. (52 F2ND 31); U.S. V. BLAKE (161 F.S. 76, 81); AMERICAN ELASTICS V. U.S. (187 F2ND 109, 113); WILLISTON ON CONTRACTS. RESTATEMENT OF THE LAW OF CONTRACTS. RESTATEMENT OF THE LAW OF RESTITUTION.' IN ADDITION, YOU QUESTION WHETHER THERE IS ANY AUTHORITY THAT HAS PRECLUDED RECOVERY BECAUSE OF THE "AS IS" CLAUSE WHEN THE MACHINE RECEIVED WAS ADMITTEDLY DIFFERENT FROM THE ONE DESCRIBED. ALSO, YOU SUGGEST THAT BECAUSE THERE ARE BROAD DIFFERENCES BETWEEN THE MACHINES ADVERTISED AND THOSE TENDERED, THERE IS A "RIDICULOUS DISCREPANCY" THAT WOULD PERMIT A REFUND TO BE MADE TO THE CLAIMANT.

AT THE OUTSET WE MUST EXPLAIN THAT OUR OFFICE DOES NOT HOLD FORMAL HEARINGS AND THAT OUR DECISIONS ARE BASED STRICTLY UPON CONSIDERATION OF EVIDENCE THAT IS FURNISHED THROUGH WRITTEN STATEMENTS FROM THE ADMINISTRATIVE AGENCIES OF THE GOVERNMENT AND THE CLAIMANTS INVOLVED. REVIEW OF THAT EVIDENCE SHOWS THAT A DRILL PRESS WAS ADVERTISED IN ONE SURPLUS SALE INVITATION AND A GRINDING MACHINE IN ANOTHER. WHILE IT IS CONCEDED THAT THESE KINDS OF MACHINES WERE TENDERED TO THE CLAIMANT, IT IS CONTENDED THAT THERE WERE EXTENSIVE DIFFERENCES FROM THE MACHINES ADVERTISED SO THAT THE CLAIMANT SHOULD NOT BE REQUIRED TO ACCEPT THEM. HOWEVER, WHILE YOU CAN SHOW THAT THERE ARE EXTENSIVE DIFFERENCES IN THE MACHINES, THE FACT REMAINS THAT THOSE DIFFERENCES WOULD NOT BE MATERIAL, SINCE THE MACHINES TENDERED ADMITTEDLY MET THE GENERAL DESCRIPTIONS IN THAT THEY WERE A DRILL PRESS AND A GRINDING MACHINE AND THE OTHER SPECIFICS THAT WERE INCLUDED IN THE DESCRIPTIONS WERE MERELY DESCRIPTIVE TERMS REPUDIATED BY THE DISCLAIMER OF WARRANTY CLAUSE. DADOURIAN EXPORT CORP. V. UNITED STATES, 291 F.2D 178.

YOUR SUGGESTION THAT THERE MUST HAVE BEEN BAD FAITH, FRAUD OR MISTAKE IN THE DESCRIPTION OR ELSE A SUBSEQUENT DELIBERATE SWITCH OF MACHINES IS NOT SUPPORTED BY THE RECORD. WITH RESPECT TO THE DRILL PRESS, ALL PERTINENT INFORMATION, SUCH AS WOULD BE FOUND ON MANUFACTURERS' PLATES AND ON OTHER PLACES ON THE MACHINE, WAS OBLITERATED SO THAT THE PROPERTY DISPOSAL OFFICER WAS UNABLE TO VERIFY THE STOCK NUMBER AND PRICE STATED IN THE TURN -IN DOCUMENT THAT ACCOMPANIED THE MACHINE WHEN IT WAS RETIRED IN 1959, WITH THE RESULT THAT THE INFORMATION THAT WAS INCLUDED IN THE SALES INVITATION WAS LIMITED TO RESEARCH BASED UPON THE DATA INCLUDED IN THE TURN-IN DOCUMENT. AS TO THE GRINDING MACHINE, THE INFORMATION CONCERNING IT THAT WAS INCLUDED IN THE SALES INFORMATION WAS LIKEWISE BASED UPON INFORMATION IN THE RECORD TURNED IN TO THE DISPOSAL OFFICER WHO HAS STATED THAT HE AND HIS ASSISTANTS LACKED KNOWLEDGE THAT THE MACHINE WAS ANYTHING OTHER THAN IT WAS REPRESENTED TO BE, AND THAT THEY WERE UNABLE TO TELL THE DIFFERENCE BETWEEN THE MACHINE DESCRIBED IN THE RECORD AND THE MACHINE ITSELF. IN BOTH CIRCUMSTANCES, THE DESCRIPTION IN THE INVITATION WAS DERIVED FROM INFORMATION FURNISHED IN THE DISPOSAL RECORDS AND IT WAS NOT KNOWN AT THE TIME OF THE SALES THAT THE MACHINES WERE NOT AS DESCRIBED. THE MACHINES WERE SOLD FOR WHAT THEY WERE THOUGHT TO BE, AND THERE IS NOTHING OTHERWISE IN THE RECORD TO INDICATE THAT THE GOVERNMENT AGENTS ACTED OTHER THAN IN GOOD FAITH THROUGHOUT THE SALES TRANSACTIONS. IN THE CIRCUMSTANCES, IT DOES NOT SEEM POSSIBLE THAT YOU COULD SUBSTANTIATE THE CHARGE OF BAD FAITH YOU HAVE MADE; HOWEVER, IF YOU HAVE ANY SPECIFIC EVIDENCE THAT ESTABLISHES SUCH BAD FAITH, WE WILL CONSIDER IT.

CONCERNING YOUR STATEMENT THAT OUR TREATMENT OF THE IMMEDIATE CASES IS INCONSISTENT WITH THE SETTLEMENT OF THE CASE WHEREIN THE CLAIMANT RECEIVED AN INCOMPLETE MACHINE, WE HAVE REVIEWED THE FILE IN THAT CASE AND HAVE FOUND THAT WHILE THE PAYMENT VOUCHER BEARS THE BRIEF CAVEAT,"MACHINE SOLD WAS INCOMPLETE," THE REASON A REFUND OF THE CLAIMANT'S DEPOSIT WAS AUTHORIZED WAS THAT THE DESCRIPTION WAS NOT BASED ON THE BEST AVAILABLE INFORMATION IN VIEW OF THE EXISTENCE OF INFORMATION AT THE TIME THE INVITATION WAS BEING PREPARED THAT THE PARTS WERE MISSING. IN CONTRAST, IN THE IMMEDIATE CASES, THERE IS NOT OF RECORD ANY EVIDENCE THAT THE DESCRIPTION WAS BASED ON ANYTHING BUT THE BEST AVAILABLE INFORMATION.

THE COURT CASES YOU RELY UPON FOR THE CLAIMANT'S RELIEF ARE READILY DISTINGUISHABLE. THE STATEMENT YOU QUOTE FROM THE LUMBRAZO CASE WAS DICTA IN THE DECISION, THE COURT SPECIFICALLY DECIDING THAT UNDER A DISCLAIMER OF WARRANTY CLAUSE IN THE CONTRACT THAT "WE GIVE NO WARRANTY, EXPRESS OR IMPLIED, AS TO DESCRIPTION, QUALITY, PRODUCTIVENESS, OR ANY OTHER MATTER, OF ANY SEEDS SENT OUT, AND WILL BE IN NO WAY RESPONSIBLE FOR THE CROP," THE VENDOR NEITHER WARRANTED THE PRODUCTIVENESS OF THE SEEDS NOR THAT THEY WERE JAPANESE ONION SETS.

THE COURT IN THE STANDARD MAGNESIUM CASE, WHICH INCIDENTALLY HELD THE VENDEE TO THE SALE, CITED UNITED STATES V. KOPLIN AS AUTHORITY FOR THE STATEMENT YOU QUOTED. THE KOPLIN CASE INVOLVED THE SALE OF UNASCERTAINABLE GOODS AND NOT SPECIFIC, SEPARATE IDENTIFIABLE ARTICLES AS HERE. THEREFORE, WE DO NOT BELIEVE THAT THE DOCTRINE OF THE KOPLIN CASE IS APPLICABLE TO THE SITUATION UNDER CONSIDERATION.

THE COURT IN THE HEDGER CASE HELD THE VENDEE COULD NOT RECOVER DAMAGES ON THE PURCHASE OF A TUG WITHOUT AN ENGINE EVEN THOUGH THE DESCRIPTION OF THE TUG DID NOT INDICATE THAT THE TUG HAD NO ENGINE. THE COURT SPECIFICALLY STATED THEREIN THAT IT DID NOT CONSIDER WHETHER THE CONTRACT COULD BE RESCINDED.

THE BLAKE CASE IS ALSO DISTINGUISHABLE. THAT IS A CASE WHERE THE PURCHASER INSPECTED THE PROPERTY AND THEREAFTER THERE WAS A SUBSTANTIAL MATERIAL CHANGE AFTER THE INSPECTION. RELIEF WAS ACCORDED THERE BECAUSE THE PROPERTY DELIVERED DID NOT CONFORM TO THE PROPERTY INSPECTED.

AS TO THE AMERICAN ELASTICS CASE, IT WAS HELD THAT WHERE THE SURPLUS SALES CONTRACT DESCRIBED THE ARTICLE AS A HEAD HARNESS AND THE SHIPMENT CONTAINED A FOREIGN MATERIAL WHICH DID NOT CONFORM TO THE DESCRIPTION, THE PURCHASER ACTED WITHIN ITS RIGHTS IN REJECTING THE SHIPMENT. HOWEVER, IT DOES NOT APPEAR FROM THE REPORT OF THE CASE THAT THE FOREIGN MATERIAL WAS A TYPE OF HEAD HARNESS, WHEREAS IN THE CLAIMANT'S CASES A DRILL PRESS AND A GRINDING MACHINE WERE ADVERTISED AND THOSE TYPES OF MACHINES WERE DELIVERED.

YOU DO NOT REFER TO ANY SPECIFIC SECTIONS IN THE TREATISES YOU CITE, AND THEREFORE WE ARE NOT COMMENTING UPON THOSE CITATIONS.

IN ANSWER TO YOUR QUESTION WHETHER THERE IS ANY AUTHORITY THAT WAS PRECLUDED RECOVERY BECAUSE OF THE DISCLAIMER OF WARRANTY CLAUSE WHERE THE MACHINE RECEIVED WAS ADMITTEDLY DIFFERENT FROM THE ONE DESCRIBED, WE REFER YOU TO THE DADOURIAN CASE, SUPRA, AS BEING CLOSELY ANALOGOUS, SINCE IN THAT CASE THE COURT HELD THAT THE PURCHASER AT A SURPLUS SALE OF MANILA CARGO NETS SOLD UNDER DISCLAIMER OF WARRANTY WAS NOT ENTITLED TO RESCISSION OR TO ANY PRICE ADJUSTMENT WHEN THE NETS WERE NEITHER MANILA NOR CARGO NETS.

FINALLY, SINCE, UNDER THE INVITATIONS INVOLVED, A DRILL PRESS AND A GRINDING MACHINE WERE SOLD AND THE RESPECTIVE MACHINES WERE TENDERED TO THE CLAIMANT, ALBEIT THE MACHINES DIFFER IN SOME RESPECTS FROM THEIR DESCRIPTIONS IN THE INVITATIONS, THE MACHINES TENDERED ARE THE SAME KIND THAT ARE DESCRIBED IN THE INVITATION SO THAT THIS IS NOT A "CASE OF ORDERING APPLES AND GETTING RANGES" OR OF A "RIDICULOUS DISCREPANCY.'

IN THE CIRCUMSTANCES, WE SEE NO BASIS FOR A DEPARTURE FROM THE CONCLUSION PREVIOUSLY REACHED IN THIS CASE.