B-91034, JANUARY 25, 1950, 29 COMP. GEN. 310

B-91034: Jan 25, 1950

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SALES - SURPLUS PROPERTY - REFUND FOR VARIANCE FROM CATALOG DESCRIPTION A PURCHASER OF SURPLUS PROPERTY CATALOGED FOR SALE BY THE GOVERNMENT ON AN "AS IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTIES. 1950: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 25. WHEREIN NO BALANCE WAS FOUND TO BE DUE YOU AS A RESULT OF THE PURCHASE OF A QUANTITY OF SURPLUS COUPLINGS FROM THE DEPARTMENT OF THE NAVY. THAT YOUR BID WAS ACCEPTED AS TO THESE LOTS. THAT AFTER RECEIPT OF THE COUPLINGS YOU ALLEGED THAT THEY WERE NOT THE CROUSE HINDS COUPLINGS OR COUPLINGS SIMILAR THERETO. THAT THE CLAIM WAS FORWARDED TO THE CLAIMS DIVISION OF THIS OFFICE FOR CONSIDERATION. WAS ISSUED WHICH YOU ARE NOW REQUESTING.

B-91034, JANUARY 25, 1950, 29 COMP. GEN. 310

SALES - SURPLUS PROPERTY - REFUND FOR VARIANCE FROM CATALOG DESCRIPTION A PURCHASER OF SURPLUS PROPERTY CATALOGED FOR SALE BY THE GOVERNMENT ON AN "AS IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTIES, HAVING FAILED TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT THE PROPERTY, MAY NOT BE REFUNDED THE PURCHASE PRICE BECAUSE OF ANY VARIANCE BETWEEN THE CATALOG DESCRIPTION AND THE QUALITY, CHARACTER, OR KIND OF PROPERTY DELIVERED. COMP. GEN. 545, OVERRULED.

COMPTROLLER GENERAL WARREN TO SAMUEL KASS, INC., JANUARY 25, 1950:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 25, 1949, FROM DAVID REICH, ATTORNEY AT LAW, IN YOUR BEHALF, REQUESTING A REVIEW OF SETTLEMENT NO. Z 126152, DATED NOVEMBER 2, 1949, WHEREIN NO BALANCE WAS FOUND TO BE DUE YOU AS A RESULT OF THE PURCHASE OF A QUANTITY OF SURPLUS COUPLINGS FROM THE DEPARTMENT OF THE NAVY, UNDER CONTRACT NO. N676S-4069, DATED MARCH 10, 1949.

A SUMMARY OF THE FACTS--- HERETOFORE RECITED IN THE SETTLEMENT AND SET FORTH IN CONSIDERABLE DETAIL IN MR. REICH'S LETTER OF NOVEMBER 25, 1949--- APPEARS TO SHOW THAT IN RESPONSE TO SALES CATALOG B-74-49 ISSUED BY THE NAVAL AIR TECHNICAL TRAINING CENTER, MEMPHIS, TENNESSEE, YOU SUBMITTED A BID DATED MARCH 4, 1949, OFFERING TO PURCHASE, AMONG OTHERS, LOTS 277 TO 285, INCLUSIVE, COVERING CERTAIN QUANTITIES OF EXPLOSION PROOF COUPLINGS AT THE PRICES INDICATED HEREIN; THAT YOUR BID WAS ACCEPTED AS TO THESE LOTS, IN ADDITION TO OTHERS, ON MARCH 10, 1949; THAT AFTER RECEIPT OF THE COUPLINGS YOU ALLEGED THAT THEY WERE NOT THE CROUSE HINDS COUPLINGS OR COUPLINGS SIMILAR THERETO, AS ADVERTISED, AND THEREFORE YOU MADE CLAIM FOR A REFUND OF THE PURCHASE PRICE; THAT THE CLAIM WAS FORWARDED TO THE CLAIMS DIVISION OF THIS OFFICE FOR CONSIDERATION; AND THAT THE SETTLEMENT OF NOVEMBER 2, 1949, WAS ISSUED WHICH YOU ARE NOW REQUESTING, THROUGH YOUR ATTORNEY, BE REVIEWED.

IN THE REQUEST FOR REVIEW MR. REICH ADMITS THAT THE SUBJECT CONTRACT OF SALE WAS MADE ON AN "AS IS" BASIS, WITHOUT ANY WARRANTIES OR GUARANTIES WHATSOEVER, AND THAT BIDDERS WERE URGED TO INSPECT THE MATERIAL PRIOR TO THE SUBMISSION OF THEIR BIDS, BUT CONTENDS THAT EVEN UNDER SUCH CONDITIONS OF SALE THE GOVERNMENT MUST NEVERTHELESS SELL THE SAME MATERIAL IT ADVERTISES. BASICALLY, THIS CONTENTION APPEARS TO REPRESENT THE ENTIRE ISSUE PRESENTED BY MR. REICH AND NUMEROUS COURT CASES WERE CITED BY HIM IN SUPPORT THEREOF.

PARAGRAPH 2 OF THE TERMS AND CONDITIONS OF THE SUBJECT CONTRACT PROVIDES, IN PERTINENT PART, THAT:

ALL MATERIAL IS SOLD WITHOUT ANY WARRANTIES OR GUARANTIES WHATSOEVER, EXPRESS OR IMPLIED. THE DESCRIPTION IN EACH LOT (AND ANY STATEMENTS, ORAL OR WRITTEN, WITH RESPECT TO THE MATERIAL HERETOFORE MADE) ARE STATEMENTS OF OPINION ONLY, * * * AND ARE NEITHER BINDING ON THE GOVERNMENT NOR CONFER ANY RIGHTS TO THE PURCHASER UNLESS THE PURCHASER HAS INSPECTED THE MATERIAL * * *. THE PURCHASER AGREES THAT IT HAS HAD AMPLE OPPORTUNITY TO INSPECT THE MATERIAL. * * *

ORDINARILY IN THE SALE OF PERSONAL PROPERTY BY DESCRIPTION, THERE IS AN IMPLIED WARRANTY THAT THE PROPERTY WILL CORRESPOND WITH THE DESCRIPTION; BUT WHERE THERE IS AN EXPRESS DISCLAIMER OF WARRANTY--- AS IN THE INSTANT CASE--- NO SUCH WARRANTY MAY BE IMPLIED FROM THE DESCRIPTION OF THE PROPERTY SOLD, AS THE DISCLAIMER OF WARRANTY EXTENDS TO AND INCLUDES THE DESCRIPTION. SEE, IN THAT CONNECTION, LUMBRAZO V. WOODRUFF, 175 N.E. 525; W. E. HEDGER COMPANY V. UNITED STATES, 52 F.2D 31, CERTIORARI DENIED 284 U.S. 676; TRIAD CORPORATION V. UNITED STATES, 63 C.1CLS. 151; AND I. SHAPIRO AND COMPANY V. UNITED STATES, 66 C.1CLS. 424.

MOREOVER, NO INSPECTION OF THE COUPLINGS WAS MADE BY YOU PRIOR TO THE SUBMISSION OF YOUR BID. IN THIS CONNECTION, THE LAW IS CLEAR THAT WHERE SURPLUS MATERIALS ARE OFFERED FOR SALE BY THE GOVERNMENT ON AN "AS IS" BASIS WITHOUT WARRANTY OR GUARANTY OF ANY KIND, A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT CANNOT SUBSEQUENTLY RECOVER ON THE GROUNDS THAT THE MATERIALS ARE OF AN INFERIOR QUALITY. SEE M. SAMUEL AND SONS V. UNITED STATES, 61 C.CLS. 373; TRIAD CORPORATION V. UNITED STATES, 63 C.CLS. 151; S. BRODY V. UNITED STATES, 64 C.CLS. 538; SILBERSTEIN AND SON V. UNITED STATES, 69 C.CLS. 412; SACHS MERCANTILE CO. V. UNITED STATES, 78 C.CLS. 801; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; MOTTRAM V. UNITED STATES, 271 U.S. 5; MAGUIRE AND CO. V. UNITED STATES, 273 U.S. 67. THUS, IN TRIAD CORPORATION V. UNITED STATES, SUPRA, THE COURT SAID:

* * * THE PLAINTIFF WAS THUS NOTIFIED BEFORE THE SALE THAT IF IT BID AND PURCHASED THE LOT OF MATERIAL IT COULD NOT CLAIM ANY ALLOWANCE ON ACCOUNT OF DEFICIENCY IN QUALITY, CHARACTER, OR KIND OF MATERIAL SOLD AND DELIVERED.

THE PLAINTIFF DID NOT TAKE ADVANTAGE OF ITS RIGHT TO INSPECT BUT BOUGHT THE LOT WITHOUT INSPECTING IT.

UNDER THE TERMS OF THE CATALOGUE IT IS DIFFICULT TO PERCEIVE HOW THE GOVERNMENT COULD HAVE GIVEN PURCHASERS MORE SPECIFIC WARNING THAN IT DID, THAT THEY BOUGHT AT THEIR RISK WHAT MATERIAL IT HAD AND WAS OFFERING FOR SALE; THAT IF A PURCHASER WISHED TO PROTECT HIMSELF HE COULD DO SO BY INSPECTION, FULL OPPORTUNITIES FOR WHICH WERE OFFERED, AND THAT IF HE FAILED TO INSPECT AND RECEIVED SOMETHING OTHER THAN WHAT HE THOUGHT HE WAS BUYING HE COULD HAVE NO REDRESS AND COULD NOT CLAIM ALLOWANCES BY REASON THEREOF. MORE THAN THAT, HE WAS DISTINCTLY TOLD THAT FAILURE TO INSPECT WOULD NOT BE CONSIDERED AS A GROUND FOR ADJUSTMENT. IF PLAINTIFF NEGLECTED TO EMBRACE THE OPPORTUNITY OFFERED IT TO INSPECT AND PURCHASED THE PROPERTY WITHOUT DOING SO, WITH NOTICE THAT IT BOUGHT AT ITS OWN RISK, IT CREATED BY ITS OWN NEGLIGENCE THE SITUATION FROM WHICH IT NOW SEEKS RELIEF.

WITH RESPECT TO THE CASE OF ELLIS V. UNITED STATES, 68 C.CLS. 11, CITED BY MR. REICH IN SUPPORT OF HIS CONTENTION, THE FACTS APPEAR TO DIFFER MATERIALLY FROM THOSE INVOLVED IN THE INSTANT MATTER. IN THAT CASE MATERIAL THAT HAD NEVER BEEN SEGREGATED WAS ADVERTISED FOR SALE AS BEING IN SEVERAL DISTINCT LOTS. IN OTHER WORDS, THERE WAS ADVERTISED SOMETHING NOT IN EXISTENCE, NAMELY, A SEGREGATED LOT OF MATERIAL; WHEREAS HERE, THERE WERE COUPLINGS IN EXISTENCE AND AVAILABLE FOR INSPECTION.

MOREOVER, THE COUPLINGS HERE INVOLVED WERE DESCRIBED NOT AS CROUSE HINDS COUPLINGS, BUT MERELY AS SIMILAR TO THAT PARTICULAR MANUFACTURER'S COUPLING; THE ADMINISTRATIVE OFFICE STILL MAINTAINS THAT DESCRIPTION TO BE FAIR AND REPRESENTATIVE; EVEN IF THE DESCRIPTION USED WAS NOT ENTIRELY ACCURATE, AS ALLEGED BY YOU, AT LEAST IT WAS PREPARED IN GOOD FAITH; YOU WERE ON NOTICE OF THE FACT THAT THE DESCRIPTION WAS MERELY AN OPINION; AND AN OPPORTUNITY WAS AFFORDED YOU TO INSPECT THE COUPLINGS PRIOR TO THE SUBMISSION OF YOUR BID BUT SUCH INSPECTION WAS NOT MADE BY YOU.

UNDER THE CIRCUMSTANCES, THERE APPEARS TO BE NO LEGAL BASIS UPON WHICH THE CLAIM FOR REFUND OF THE PURCHASE PRICE MAY BE ALLOWED. ACCORDINGLY, THE SETTLEMENT OF NOVEMBER 2, 1949, DISALLOWING YOUR CLAIM, IS SUSTAINED. CERTAIN VIEWS EXPRESSED IN 5 COMP. GEN. 545, ALSO CITED BY MR. REICH, QUITE OBVIOUSLY ARE NOT IN ACCORD WITH MANY CASES SUBSEQUENTLY DECIDED BY THIS OFFICE AND TO THAT EXTENT SAID DECISION MAY BE REGARDED AS OVERRULED.