Case ID: us-ct-cl_61/html/0373-01.html
Source: Caselaw Access Project
Author: {"author": "Graham, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

M. SAMUEL & SONS v. THE UNITED STATES
    [No. C-760.
    Decided December 7, 1925]
    
      On the Proofs
    
    
      Sale; “ as is, where is ”. — Where the Government sells surplus war supplies “ as is, where is,” the proposal therefor stating that “ quantities, descriptions, conditions, weights, analysis, etc.,” are not guaranteed and that no refund will be made on account of said supplies not coming up to expectations, and. they are open to inspection by prospective purchasers, and the Government acts in good faith, the purchaser can not maintain suit for breach of contract because the supplies delivered to it do not conform to those selected at random from the entire lot but not held out by the Government as samples.
    
      Same: failure to take delivery; forfeiture. — Plaintiff can not recover the value of purchased material which it does not remove as required by the contract, which the contract provides shall, if not removed within the time specified, be forfeited, and of which the Government thereafter makes other disposition.
    
      
      The Reporter's statement of the case:
    
      Mr. Morris D. Kopple for the plaintiff.
    
      Mr. Ralph C. Williamson, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The plaintiff was, during the transactions hereinafter set forth in these findings of fact, and still is, a corporation duly incorporated under the laws of the State of New York, engaged in the business of dealing in ferrous metals.
    II. On or about September 23, 1922, Capt. G. S. Lavin, of the Ordnance Department, United States Army, commanding the Toledo Ordnance Deserve Depot, located at Toledo, Ohio, issued a circular dated September 23, 1922, described as proposal No. 5, for sealed proposals for the purchase of shells and shell forgings, the bids to be opened on October 23, 1922, at 2 o’clock p. m. Lot No. 1 consisted of forgings and semifinished shells; lot No. 2, finished Stokes trench mortar shells, inert; lot No. 3, finished shells for cannon, inert. One of these proposals was mailed to plaintiff.
    III. The material parts of proposal No. 5 read as follows:
    “Proposal No. 5. * •* * The supplies offered for sale are in three lots as listed below and are located at the Toledo Ordnance Deserve Depot, Toledo, Ohio. Lot No. 1, forgings and semifinished shell. Lot No. 2, finished Stokes trench mortar shell, inert. Lot No. 3, finished shell for cannon, inert. * * * Lots Nos. 2 and 3 are offered ‘ as is, where is.’ The successful bidders on lots 2 and 3 will be required to remove their purchases within sixty calendar days of the award. If the purchasers of these supplies fail to remove them within the time specified, or fail to furnish shipping instructions within such time as will enable this depot to complete deliveries within the specified time, then such supplies not removed or for which shipping instructions shall not have been furnished will revert to the Government and the purchaser shall forfeit to the Government any deposits or payments made thereon. The Government, however, reserves the right to extend the specified time limits for the removal of any of this material, provided the purchaser has made a reasonable effort to remove same and is prevented from doing so for reasons over which he has no control, and provided further that the Government shall be the sole judge in the matter of what constitutes a reasonable effort or what causes are beyond the control of the purchaser. * * *
    “ On account of the reduced force at this establishment the Government can not undertake to do the loading of lots Nos. 2 and 3 for purchasers.
    “ The quantities, descriptions, conditions, weights, analysis, etc., of the supplies herein described are as accurate as circumstances permit, but are in no wise guaranteed by the Government, nor will any refund be made on account of any of the supplies not coming up to expectations. * * * All of this material is open to inspection by prospective bidders between the hours specified in paragraph 10 above (between the hours of 7.45 a. m. and 4.30 p. m. daily except Sundays), and they should avail themselves of the opportunity of inspection before submitting bids.
    “ In loading forgings more or less scale is of necessity lifted with the magnet. If cars are unloaded by hand at destination, this scale will be included in the light weight of the car at that point. Bidders should take this contingency into consideration in submitting their bids, as no claim for refund whose basis is the scale found in the car will be allowed.
    “ Such space as is available will be allotted the successful bidders on lots 2 and 3 for stripping bands and covers from shell included in their purchases. * * *
    “Particular attention is invited to the fact that none of the shell offered in this sale contains explosive of any kind, nor is there any explosive stored on the grounds of the T. O. D. There is, therefore, no extra hazard involved in the handling or transportation of any of this material.”
    (Proposal No. 5 is appended to plaintiff’s petition and is made part hereof by reference thereto.)
    IY. The description of lot No. 2 accompanying said proposal No. 5 reads as follows:
    “ 557,807. Stokes Trench Mortar Shell, 3" MK. Ill, Practice.
    “ 214. Stokes Trench Mortar Shell, Dummy, British.
    “ The body of each shell is of malleable iron weighing about 6% lbs., the booster-jacket and cartridge container are of steel, weighing together about one and one-quarter pounds, and the head-hole plug and bushing are die cast of white metal (supposedly 90 Pb and 10 Sb) weighing together about y3 lb. The assembled weight of each shell is eight and one-quarter pounds. The weights of the metals in the lot are:
    “ Malleable iron, about 1,666 gross tons; steel, about 800 gross tons; white metal, about 191,750 lbs.
    “ The weight of the lot is approximately 2,055 gross tons.”
    (The description of lot No. 2 is appended to plaintiff’s petition and is made part hereof by reference thereto.)
    Y. On October 24, 1922, the plaintiff’s bid was accepted as follows:
    “Sees: You have been awarded Lot No. 2 of Proposal No. 5 at the sale conducted at this depot October 23, 1922, at your bid of $16.77 per gross ton. You are informed that two thousand (2,000) Stokes trench mortar shell, 3" Mark III, Practice, have withdrawn from sale, leaving the amount awarded you 537,807 of that item.
    Total weight of lot, approx. 2,055 gr. ton
    Less amount withdrawn, “ 7 gr. ton
    Leaving balance of “ 2, 048 gr. ton
    @ $16.77 gross ton, amounts to $34,344.96, which amount we have deducted from your deposit check of $50,000.00 and placed to your credit. We are returning you herewith cashier’s check for $15,655.04, and release your purchase for shipment.
    “ As this depot is to be abandoned as soon as possible, it is requested you expedite your shipments, and remove material awarded at your earliest possible convenience.
    “ Very truly,
    “ G. S. LaviN,
    “ Oapt. Ord. Dept., Commanding.
    
    “ (Signed) By A. A. Fish,
    “ Assistant. ”
    VI. Previous to the sale samples of the shells in lot No. 2 were on exhibition at the depot. The boxes containing these shells, three in each, were selected at random from different parts of the warehouses and were broken apart and the fragments exhibited. There were 15 or 20, and they were all malleable-iron shells. These samples were inspected by an agent of the plaintiff before it sent in its bid. The lot of shells purchased were open to inspection in the defendant’s warehouses and every facility was extended for their examination, but plaintiff does not appear to have examined this lot, which was packed in about 185,000 boxes. The said agent did, however, visit the warehouses where the shells were stored and saw all the boxes in order to get an idea as to the cost of opening them. When plaintiff’s agent inspected the shells no one appeared to represent the Government, and nothing was said about the samples. They were marked “ Lot No. 2,” the only means of identification.
    VII. The plaintiff sold the entire lot No. 2 as malleable iron shells stripped of white metal to Hickman, Williams & Co., of Chicago, shortly after their purchase from the Government for $20.22 per gross ton, f. o. b. cars at Toledo, Ohio. The plaintiff engaged a man to strip the white metal from the shells and to ship the shells and white metal. Hickman, Williams & Co. having given instructions to consign the shells to the National Malleable Castings Co., of Cicero, Ill., plaintiff loaded six cars of said shells and shipped them to said company. Upon receipt thereof it was ascertained that the lot contained a considerable number of steel shells, and the National Malleable Castings Co. rejected the shipment and gave notice thereof to plaintiff.
    The first car was received at Cicero, a suburb of Chicago, on November 24, 1922, the next on November 27, 1922, three on December 1, 1922, and the last one on December 5, 1922. The cars were not unloaded and were shipped to the plant of Hickman, Williams & Co. on December 9, 1922, after their rejection. At this time about 65 per cent of the shells had been broken up. After notice of the rejection of the shipments, the plaintiff sent its agent to Chicago to investir gate and if possible adjust the matter. On December 13, 1922, the same agent, Mr. Moskowitz, who had been with plaintiff for 20 years, and had acted for plaintiff during the entire transaction, visited Capt. G. S. Lavin, who sold the shells, and brought the matter to his attention. Captain Lavin informed him that the shells were described in his proposal for what they were thought to be, and that if plaintiff had not stripped all of the shells and shipped some of the steel shells he would not have required him to take the steel shells. It would have been impossible to have described the shells more accurately except by breaking open the 185,000 boxes. It afterwards developed that in some cases two of the three shells in a box were malleable iron practice shells and one was a steel service shell, or vice versa.
    
      VIII. In the six carloads of shells shipped to Chicago for Hickman, Williams & Co. there were 78 gross tons of steel shells; the balance was malleable iron shells. The malleable iron shells were sold to said company f. o. b. cars at Toledo for $20.22 per gross ton; the freight to Chicago, $3.78, was paid by Hickman, Williams & Co., the Chicago price for such shells at that time being $24 per gross ton. The steel shells were sold to that company for $17.40 per gross ton at Toledo, 63 cents more than the cost ($16.77) and $2.82 less than the selling price of malleable iron shells. The plaintiff paid the freight on the steel shells, $3.78 per gross ton, to Chicago, amounting for 78 tons to $294.84; one-half the demurrage charges, $117.50; freight and switching charges from the National Malleable Castings Co.’s plant to Hickman, Williams & Co.’s plant and back, $429.19, a total of $841.53. The total difference between the selling price of the 78 gross tons of steel shells and the selling price of the same weight of malleable iron shells was $219.96.
    IX. The balance of the steel shells in lot No. 2, 420 gross tons, was sold to the Luntz Iron & Steel Co., of Canton, Ohio, January 4, 1923, f. o. b. cars at Toledo, Ohio, for $18.35 per gross ton, $1.58 more per gross ton than the cost and $1.87 per gross ton less than the selling price of the malleable iron shells at Toledo. The total difference between the selling price of the 420 tons of steel shells and the selling price of the same weight of malleable iron shells was $785.40. The 420 tons of steel shells after the sale to the Luntz Iron & Steel Co. were loaded for shipment by a contractor named Fred Weise, employed by plaintiff. The additional amount paid to him for this work is not satisfactorily shown.
    X. The malleable iron shells in lot No. 2 contained one-third of a pound of white metal each, the steel shells in said lot No. 2 contained one-fifth of a pound of white metal each, a shortage of two-fifteenths of a pound for each shell, and this shortage in 140,840 steel shells in lot No. 2 would be 18,778 pounds, which at $5.05, the market value per hundredweight, would amount to $948.29.
    XI. An agent of plaintiff, one Herman D. Moskowitz, made two trips to Chicago, consuming six days, between December 1 and 12, 1922, to investigate and look after the adjustment of the sale of shells in lot No. 2 to Hickman, Williams & Co. The amount of the expenses of this agent has not been satisfactorily shown.
    The court- decided that plaintiff was not entitled to recover.
   Graham, Judge,

delivered the opinion of the court:

This is a suit for damages for alleged breach of contract in the sale by the War Department on behalf of defendant of certain shells. Plaintiff claims that it did not get what it purchased and thereby suffered a loss.

The Government on September 23, 1922, sent to plaintiff and others a circular proposal covering the sale of certain surplus materials and supplies in the form of shells and shell forgings located at the Toledo Ordnance Depot. The material was separated into three lots and numbered 1, 2, and 3, each lot being separately and briefly and generally-described in the proposal. The plaintiff, after inspection, bid on lot No. 2, and its bid was accepted. It paid in full for the material and received and accepted lot No. 2, on which it bid, i. e., 555,807 shells in 185,000 boxes. There were three shells to a box.

It was evident that the representatives of the Government making the sale did not know accurately what was in these boxes except that they contained shells. With the material stored in 185,000 boxes it would not be expected that it would take the risk of selling without reservation as to the contents of each box. Defendant’s representative before the sale, as was customary at these sales, took certain shells at random from a dozen or more boxes, broke them up, and displayed the pieces on a table in the office of the officer making the sale for the information of bidders. They were not displayed as samples.

Before bidding, plaintiff’s representative examined a shell and made a partial inspection of the material so far as it was possible, stored as it was in boxes. After its bid had been accepted and it had paid the whole amount of the bid it gave directions to deliver the material to its agent, who received it and broke up the shells, and began shipping them to third parties, as directed by plaintiff. After 65 per cent of the shells had been unboxed and broken up and 6 carloads had been shipped from the premises to a third party, plaintiff claimed that some of the shells were steel, not malleable iron shells, and did not contain the amount of white metal stated in the proposal. On December 13, plaintiff complained of this situation to the officer conducting the sale, and made some suggestion's about rescinding the sale and leaving the material on the premises. The officer refused to consider a rescission of the sale, and pointed out the fact that the material accepted by plaintiff had been changed in form by stripping it and shipping part thereof. Plaintiff on January 5, 1923, sold and removed the steel shells and the remainder of the material, except the boxing in which the shells were encased.

The Government acted in good faith, and there is no charge or proof of bad faith. It was not its purpose to mislead prospective purchasers, and the material was described and sold for what the Government really believed it to be. The plaintiff knew that the Government was not engaged in the business of manufacturing this material of of buying and selling it. The material was stored in the form in which it had been shipped to the Toledo Ordnance Depot, and as it was carried on the records of the office of that depot. Plaintiff examined the material as it was stored, and it must have been evident that it was in the condition in which it had been received.

The plaintiff’s contention, as stated in its petition,' is as follows:

“ 6. That the United States breached its said contract with the plaintiff herein in that the shells delivered to the plaintiff herein were not all /Stokes trench mortar shells, 3" MK III, and were not all of malleable iron, and did not contain head-hole plug and bushing of white metal, weighing together about one-third (%) pound; in that approximately twenty-five per centum (25 %) of all the shells delivered were not of the same kind as the one shown to the plaintiff herein at or about the time and place of purchase; in that the shells delivered were not in accordance with the statements, warranties and representations made by the United States as appears from said proposal and contract; and in that the United States failed to deliver to the plaintiff the wooden casings included in the purchase of the material referred to.”

The plaintiff’s contention is that this was a sale by sample. A perusal of the proposal, and the condition and form of the material, the lack of accurate knowledge upon the part of the Government as to what was contained in the 185,000 boxes — in fact, all the circumstances of the sale plainly indicate that it was not intended to be a sale by sample, and the facts found show that it was not. It is not readily apparent how the defendant could have described the material and the conditions and circumstances of the sale more accurately than it did in the proposal. The proposal gave the plaintiff as full and fair warning as any reasonable person could ask for of how the defendant was selling this material*

The proposal stated that the number of shells was 551,807. Before the bid was accepted 2,000 of these shells were withdrawn with plaintiff’s knowledge. The plaintiff received the balance. It also stated that the amount of material in lot No. 2 was as follows:

“Malleable iron, about 1,666 gross tons; steel, about 300 gross tons; white metal, about 191,750 lbs.

“ The weight of the lot is approximately 2,055 gross tons.”

It stated that the shells were packed in “ wood containers, * * * three shells to the box.” At the end of this description is the following language: “ For lot No. 2, ‘ As is, where is,’-dollars per gross ton.” The plaintiff’s bid was by the ton; that is, $16.77 “ per gross ton.”

This description alone would have been sufficient to put plaintiff on notice that there was no guaranty as to the character or the amount of the material. It was visited with knowledge of the meaning of the expression “ as is, where is.” It means that the seller sells without guaranty as to the amount or condition of the material; that he sells what may be found in the lot; that he does not profess to know accurately himself the amount or character of the material, and that the purchaser must take his chances on what he will get. Lipshitz & Cohen v. United States, 269 U.S. 90, decided November 16, 1925.

This would seem to have been sufficient notice to have relieved the Government from any responsibility for discrepancies that might develop after delivery of the material ; but, as if to give the prospective purchasers the fullest warning of the conditions under which they purchased, the proposal contained the following statement:

“ The quantities, descriptions, conditions, weights, analysis, etc., of the supplies herein described are as accurate as circumstances permit, but are in no wise guaranteed by the Government, nor will any refund be made on account ox any of the- supplies not ooming up to expectations.”

Here was a further warning that plaintiff was buying at its own risk; that it was bidding in the dark; that if it bid and paid for the material and the goods delivered to it did not come up to its expectations it would have no relief and could not claim or expect to have its money refunded.

This is sufficient to dispose of plaintiff’s case. If this conclusion needed strengthening, it could be found in the conduct of plaintiff in breaking up the greater part of the material and shipping a good part of it to third parties before making any complaint, and afterwards shipping the remainder.

As to the principles controlling see Lipshitz & Cohen v. United States, supra; Maguire v. United States, 59 C. Cls. 515; Hummel v. United States, 58 C. Cls. 489, 494.

There is one other feature of the case. The proposal stated that the boxes and material would become the property of the purchaser. It required plaintiff to remove all of the material, which included the boxing, within sixty days, and provided that for failure within that time to give shipping instructions or remove the material all the material not removed would be forfeited to the Government. In the acceptance of plaintiff’s bid it was stated that the depot was soon to be abandoned and plaintiff was urged to remove the material as soon as possible. Plaintiff failed to remove the boxing within sixty days or give shipping instructions, though often urged to do so, and thereafter the Government disposed of the boxing left upon the premises. Under these circumstances plaintiff is not entitled to a recovery for the value of the boxing material.

In the light of the foregoing conclusions it does not seem .necessary to go into the question of whether plaintiff has shown a contract sufficiently formal to comply with the requirements of section 3744 of the Revised Statutes. Erie. Coal & Coke Corporation v. United States, 266 U.S. 518, and Lipshitz & Cohen v. United States, supra.

The petition should be dismissed, and it is so ordered.

Hay, Judge; Downey, Judge; Booth, Judge; and Campbell, Chief Justice, concur.