B-166611, MAY 15, 1969

B-166611: May 15, 1969

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LUCE: THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 31. ITEM 111 WAS DESCRIBED IN THE SALE CATALOG AS "111. YOUR BID OF $700 WAS HIGH FOR ITEM 111. NOTICE OF AWARD WAS ISSUED. YOU ADVISED THE SALES OFFICER THAT YOU DID NOT WISH TO TAKE POSSESSION OF THE VEHICLE AND WERE STOPPING PAYMENT ON THE CHECK FOR THE PURCHASE PRICE. THE REASON FOR THIS ACTION WAS THAT YOU HAD BEEN REFUSED REGISTRATION OF THE VEHICLE BECAUSE THE TITLE WAS DEFECTIVE IN THAT THE VEHICLE. WAS ACTUALLY A 1964 DODGE. THE SALE WAS MADE ON A "AS IS WHERE IS" BASIS NOTWITHSTANDING THE CATALOG DESCRIPTION. ALSO IT IS CLEAR THAT THE DODGE VEHICLE WAS ACTUALLY A 1964. YOU CONTEST ANY ASSESSMENT OF LIQUIDATED DAMAGES ON THE BASES THAT AT NO TIME DID THE GOVERNMENT CONVEY VALID TITLE TO YOU WHICH WOULD ALLOW YOU TO DRIVE THE VEHICLE AND THAT THE CATALOG DESCRIPTION WAS NOT BASED UPON THE BEST INFORMATION AVAILABLE AS REQUIRED BY SECTION 2 OF THE SALES INVITATION.

B-166611, MAY 15, 1969

TO MR. E. E. LUCE:

THIS IS IN RESPONSE TO YOUR LETTER OF MARCH 31, 1969, REQUESTING THIS OFFICE TO RULE ON THE ASSESSMENT OF LIQUIDATED DAMAGES IN CONNECTION WITH YOUR PURCHASE OF A DODGE AUTOMOBILE UNDER AUCTION SALE NO. 10DPS-69-285.

ON MARCH 1, 1969, THE GENERAL SERVICES ADMINISTRATION, AUBURN REGIONAL OFFICE, HELD AN AUCTION SALE AT PORTLAND, OREGON, FOR THE SALE OF USED GOVERNMENT VEHICLES. ITEM 111 WAS DESCRIBED IN THE SALE CATALOG AS "111. SEDAN: 1965 DODGE-6, 2 DOOR, SERIAL NUMBER 7145178611 (G11 26274).' YOUR BID OF $700 WAS HIGH FOR ITEM 111, AND NOTICE OF AWARD WAS ISSUED. MARCH 3, 1969, YOU ADVISED THE SALES OFFICER THAT YOU DID NOT WISH TO TAKE POSSESSION OF THE VEHICLE AND WERE STOPPING PAYMENT ON THE CHECK FOR THE PURCHASE PRICE. ALSO YOU RETURNED THE NOTICE OF AWARD. OSTENSIBLY, THE REASON FOR THIS ACTION WAS THAT YOU HAD BEEN REFUSED REGISTRATION OF THE VEHICLE BECAUSE THE TITLE WAS DEFECTIVE IN THAT THE VEHICLE, SERIAL NUMBER 7145178611, WAS ACTUALLY A 1964 DODGE. AS A RESULT OF YOUR REFUSAL TO TAKE POSSESSION OF THE VEHICLE THE SALES OFFICER ADVISED THAT LIQUIDATED DAMAGES EQUALLING 20 PERCENT OF PURCHASE PRICE, OR $140, WOULD BE ASSESSED UNDER PARAGRAPH 7 OF THE CONTRACT FOR DEFAULT.

THIS SALES INVITATION CONTAINED THE STANDARD CONDITIONS AND, ALL PARTIES AGREE, THE SALE WAS MADE ON A "AS IS WHERE IS" BASIS NOTWITHSTANDING THE CATALOG DESCRIPTION. ALSO IT IS CLEAR THAT THE DODGE VEHICLE WAS ACTUALLY A 1964, NOT 1965, MODEL. THE MISDESCRIPTION RESULTED FROM A TYPOGRAPHICAL ERROR BY THE REPORTING AGENCY, BONNEVILLE POWER ADMINISTRATION. HOWEVER, YOU CONTEST ANY ASSESSMENT OF LIQUIDATED DAMAGES ON THE BASES THAT AT NO TIME DID THE GOVERNMENT CONVEY VALID TITLE TO YOU WHICH WOULD ALLOW YOU TO DRIVE THE VEHICLE AND THAT THE CATALOG DESCRIPTION WAS NOT BASED UPON THE BEST INFORMATION AVAILABLE AS REQUIRED BY SECTION 2 OF THE SALES INVITATION.

WE MUST REJECT THE ARGUMENT THAT THE DESCRIPTION WAS NOT BASED ON THE BEST AVAILABLE EVIDENCE. IN THIS INSTANCE THE SALES OFFICER WAS UNAWARE THAT THE VEHICLE WAS OTHER THAN AS DESCRIBED IN THE CATALOG. RATHER, THE SALES OFFICER BASED THE DESCRIPTION ON THE BEST AND SOLE INFORMATION AVAILABLE TO HIM, THAT FURNISHED BY THE REPORTING AGENCY. IN SURPLUS SALES THE OFFICIALS OF THE GOVERNMENT ARE REQUIRED ONLY TO ACT IN GOOD FAITH, WHICH THE SALES OFFICER DID. SEE LIPSHITZ AND COHEN V UNITED STATES, 269 U.S. 90, 92; AND LUMBRAZO V WOODRUFF, 175 N.E. 525, AND UNITED STATES V SABIN METALS CORPORATION, 151 F.SUPP. 683. THE CATALOG DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION FROM THE TURN-IN DOCUMENTS. SEE 41 COMP. GEN. 185.

THE SECOND BASIS FOR THE NOT ASSESSING LIQUIDATED DAMAGES INVOLVES THE TITLE TO THE VEHICLE. MR. LUCE CONTENDS THAT THE TITLE ISSUED WAS DEFECTIVE AND THEREFORE HE COULD NOT BE IN DEFAULT FOR FAILURE TO TAKE POSSESSION OF THE VEHICLE. PARAGRAPH 5, TITLE, SALE OF GOVERNMENT PROPERTY, GENERAL SALE TERMS AND CONDITIONS, OF THE CONTRACT PROVIDES IN PART:

"UNLESS OTHERWISE SPECIFIED IN THE INVITATION, TITLE TO ITEMS OF PROPERTY SOLD HEREUNDER SHALL VEST IN THE PURCHASER AS AND WHEN FULL AND FINAL PAYMENT IS MADE * * *. ON ALL MOTOR VEHICLES AND MOTOR PROPELLED OR MOTOR- DRAWN EQUIPMENT REQUIRING LICENSING, A CERTIFICATE OF RELEASE, STANDARD FORM 97 (OR A STATE CERTIFICATE OF TITLE IF SUCH A CERTIFICATE OF TITLE HAS BEEN ISSUED TO THE GOVERNMENT), WILL BE FURNISHED FOR EACH VEHICLE AND PIECE OF EQUIPMENT.' UNDER THAT CLAUSE IT IS CLEAR THAT TITLE PASSES TO THE PURCHASER UPON PAYMENT AND IS NOT DEPENDENT UPON SOME FURTHER ACT BY THE GOVERNMENT. WHILE THE GOVERNMENT IS REQUIRED TO ISSUE A CERTIFICATE OF RELEASE, STANDARD FORM 97, THE PASSING OF TITLE IS NOT DEPENDENT UPON THAT ACT. THEREFORE, THE ERROR IN THE CERTIFICATE OF RELEASE AND THE SUBSEQUENT FAILURE TO OBTAIN OREGON REGISTRATION AND LICENSE DOES NOT VOID THE SALES CONTRACT. IN A "AS IS WHERE IS" TYPE SALE THE GOVERNMENT HAS EXPRESSLY DISCLAIMED ANY WARRANTIES INCLUDING ANY GUARANTY THAT THE ARTICLE BEING SOLD IS SUITABLE FOR THE ORIGINALLY INTENDED PURPOSE OR THAT PURPOSE USED FOR NORMALLY. SEE TRIAD CORPORATION V UNITED STATES, 63 CT. CL. 151, 155. AS A PRACTICAL MATTER, THE CONTRACTING OFFICER IN THIS CASE, WHEN ADVISED OF THE PROBLEM, OFFERED TO FURNISH A CORRECTED RELEASE CERTIFICATE SO THAT YOU COULD HAVE REGISTERED THE VEHICLE IN OREGON. HOWEVER, IT IS REPORTED THAT YOU REFUSED THE OFFER. PRESUMABLY THE OFFER STILL HOLDS. THEREFORE, WE DO NOT BELIEVE YOUR INABILITY TO REGISTER THE VEHICLE IN OREGON BECAUSE OF THE ERROR IN THE STANDARD FORM 97 ORIGINALLY ISSUED CAN BE REGARDED AS A SUBSTANTIAL BASIS, IN LAW OR EQUITY, FOR RESCINDING THE SALE.

ACCORDINGLY, THE LIQUIDATED DAMAGES LEGALLY MUST BE ASSESSED FOR YOUR DEFAULT, UNLESS THE SALES CONTRACT IS PERFORMED.