B-111482, OCTOBER 14, 1952, 32 COMP. GEN. 181

B-111482, OCTOBER 14, 1952, 32 COMP. GEN. 181

SALES - SURPLUS PROPERTY - PURCHASER'S DUTY TO INSPECT WHERE SURPLUS GOVERNMENT PROPERTY IS OFFERED FOR SALE ON AN "AS IS" "WHERE IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTY IT IS THE DUTY OF THE PURCHASER TO MAKE AN INSPECTION OF SUFFICIENT ADEQUACY TO PROTECT HIS INTERESTS, SO THAT A PURCHASER WHO MADE AN EXTERIOR INSPECTION OF A SURPLUS PORTABLE HOUSING UNIT WHICH DID NOT DISCLOSE THAT THE INTERIOR OF THE UNIT HAD BEEN DAMAGED BY FIRE IS NOT ENTITLED TO A PRICE ADJUSTMENT FOR SUCH DAMAGE.

COMPTROLLER GENERAL WARREN TO RICHARD D. MCCARTHY, OCTOBER 14, 1952:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 1, 1952, REQUESTING REVIEW OF SETTLEMENT DATED JULY 18, 1952, WHICH DISALLOWED YOUR CLAIM FOR $125 FOR RESTORING A MOBILE HOUSE UNIT PURCHASED FROM THE HOUSING AND HOME FINANCE AGENCY, PUBLIC HOUSING ADMINISTRATION, WASHINGTON, D.C., UNDER CONTRACT NO. (49104) D-153P, DATED MARCH 24, 1950, AFTER IT HAD BEEN DAMAGED BY FIRE.

IT APPEARS THAT IN RESPONSE TO THE INVITATION, ISSUED BY THE HOUSING AND HOME FINANCE AGENCY, WASHINGTON, D.C., YOU SUBMITTED A BID OFFERING TO PURCHASE ONE MOBILE HOUSE UNIT FOR $390. YOUR BID WAS ACCEPTED BY THE UNITED STATES ON MARCH 24, 1950. YOU ALLEGED THAT WHEN YOU TOOK POSSESSION OF THE UNIT ON MARCH 24, 1950, YOU FOUND AT LEAST 8 WINDOWS BROKEN OUT, THE HOUSE WIDE OPEN; THAT OBVIOUSLY A FIRE HAD TAKEN PLACE WITHIN THE BACK OF THE HOUSE LEAVING MUCH DEBRIS AND DAMAGE; THAT THE SINK WAS RIPPED OUT AND MISSING; AND THAT THE COOKING STOVE AND AN OIL STOVE WERE MISSING. ALSO, YOU STATE THAT YOU DETERMINED FROM THE POLICE AND FIRE RECORDS THAT A FIRE HAD OCCURRED IN THE PREMISES AT 7 P.M., MARCH 18, 1950. YOU THEREFORE MADE CLAIM IN THE AMOUNT OF $125 FOR THE DAMAGED CONDITION IN WHICH THE HOUSE WAS RECEIVED, WHICH CLAIM WAS DISALLOWED BY SETTLEMENT DATED JULY 18, 1952, FOR THE REASONS STATED THEREIN.

YOUR BASIC CONTENTIONS IN SUPPORT OF YOUR REQUEST FOR REVIEW OF THE SETTLEMENT APPEAR TO BE THAT AT THE TIME YOU MADE THE INSPECTION OF THE UNIT INVOLVED NO ONE FROM THE " NATIONAL CAPITAL HOUSING AUTHORITY" WAS AVAILABLE; THAT THE HOUSE WAS SECURELY BOARDED; THAT IT WAS IMPOSSIBLE TO MAKE AN INSPECTION OF THE INTERIOR OF THE HOUSE; AND THAT SINCE ONLY AN EXTERIOR INSPECTION WAS SSIBLE,"THE RULE OF CAVEAT EMPTOR HAS NO APPLICATION TO THESE FACTS.'

THE INVITATION TO BID ADVISED THE PROSPECTIVE BUYERS THAT THE CONDITION OF THE MOBILE HOUSE UNITS VARIED FROM POOR TO GOOD; THAT SOME KITCHEN AND SPACE HEATING EQUIPMENT WAS MISSING. ALSO, THE BUYERS WERE URGED TO INSPECT EACH UNIT CAREFULLY BEFORE PLACING A BID. THIS FACT, IN ITSELF, WOULD APPEAR TO REQUIRE A MORE DETAILED INSPECTION OF THE PROPERTY THAN WOULD BE EXPECTED IN THE SALE OF OTHER THAN USED PROPERTY. THEREFORE, IF YOU DID NOT MAKE THE INSPECTION IN SUCH A MANNER AS WOULD REASONABLY BE EXPECTED TO INSURE THE PROTECTION OF YOUR INTERESTS, IT DOES NOT FOLLOW THAT ANY RESPONSIBILITY WOULD ATTACH TO THE GOVERNMENT AS A RESULT OF SUCH FAULTY INSPECTION. YOU ADMIT THAT YOU INSPECTED THE PROPERTY AFTER THE FIRE HAD OCCURRED IN THE PREMISES. IF A MORE THOROUGH INSPECTION HAD BEEN MADE BY YOU, THERE CAN BE NO DOUBT THAT YOU WOULD HAVE DISCOVERED AT THAT TIME THE ALLEGED CONDITION OF THE UNIT.

FURTHERMORE, THE HOUSE WAS SOLD ON AN "AS IS" "WHERE IS" BASIS. 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 THIS 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. THE LAW IS WELL SETTLED THAT IN SALES OF PERSONAL PROPERTY, IN THE ABSENCE OF AN EXPRESS WARRANTY, AND WHERE THE SELLER IS GUILTY OF NO FRAUD, AND IS NEITHER THE MANUFACTURER NOR GROWER OF THE ARTICLE HE SELLS, THE MAXIM OF CAVEAT EMPTOR APPLIES. SEE BARNARD V. KELLOGG, 10 WALL. 383. ..END :