Case ID: us-ct-cl_63/html/0151-01.html
Source: Caselaw Access Project
Author: {"author": "Geaham:, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

TRIAD CORPORATION v. THE UNITED STATES
    [No. D-289.
    Decided February 14, 1927]
    
      On the Proofs
    
    
      Sale of surplus supplies “as is”; inspection as a condition of sale; failure to inspect. — Where in a sale of surplus supplies plaintiff receives used saddles instead of saddles advertised as unused, and the conditions of the sale are that the property is “ sold ‘ as is ’ * * * without warranty or guaranty as to quality, character, condition, size, weight, or kind,” and that failure of the purchaser to inspect will not be considered a ground for adjustment or rescission, and plaintiff was given opportunity to make such inspection but did not make it, the plaintiff can not recover.
    
      Same; see. SU/h R. S. — Section 3744, Revised Statutes, requiring the Secretary of War to reduce his contracts to writing, subscribed to by the contracting parties, applies to contracts of sale of surplus property, and the United States is not bound by a contract of sale not in such form.
    
      The Reporter’s statement of the case:
    
      Mr. Benjamin B. Pettus for the plaintiff. Mr. Edward F. Oolladay, Golladay, Glijford c& Pettus and McManus, Ernst c& Ernst were on the brief.
    
      Mr. Joseph Henry Oohen, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant. Mr. Dan M. Jachson was on the brief.
    The court made special findings of fact, as follows:
    I. The plaintiff, the Triad Corporation, is a corporation duly organized under the laws of the State of New York, with its principal place of business in the Borough of Manhattan, in the city and State of New York.
    II. The following facts were stipulated between the attorneys for the respective parties:
    On the 15th day of December, 1922, at Philadelphia, Pennsylvania, there was offered for sale at auction by the Quartermaster’s Department, United States Army, certain articles consisting of surplus war materials.
    At said sale the plaintiff bid upon and purchased the following articles described in the catalogue of said sale at page 27 thereof, under lot 132, in these terms:
    469 E-14161 saddles, McClellan, size 11, unused_ 382 ea.
    470 E-14162 saddles, McClellan, size 11%, unused_ 690 ea.
    471 E-14161 saddles, McClellan, size 12, unused_ 510 ea.
    The bid of plaintiff for such saddles was $4.60 per saddle and the total number of saddles purchased was 1,582, but only 1,576 saddles were delivered.
    
      The total amount paid for said saddles by the plaintiff was $7,277.20, less $27.60 allowance for the six undelivered saddles, making the net purchase price $7,249.60.
    The saddles described in the catalogue of said sale under lot No. 132, and which were bid upon and purchased by and delivered to plaintiff, were not wholly unused saddles, but 1,300 of the said saddles had been used and reconditioned; the remaining 276 saddles delivered to this plaintiff were new and unused.
    On or about the 3d day of March, 1923, the plaintiff presented its claim to the quartermaster, intermediate depot, 21st Street and Oregon Avenue, Philadelphia, Pennsylvania, claiming that 1,300 of the saddles purchased and received as aforesaid had been used and reconditioned and were not unused saddles, as stated in the catalogue of said auction sale. The matter was referred to the Director of Sales of the 'War Department, Washington, D. C., and the said office rejected the claim of plaintiff.
    III. Said saddles were advertised and offered for sale in a catalogue designated “ Surplus property sale, at Quartermaster Intermediate Depot, Philadelphia, Pa.,” and listed and described therein as “ Lot No. 132, items 469, E-14161 saddles, McClellan, size 11, unused, 382 ea.; 470 E-14162 saddles, McClellan, size 11%, unused, 690 ea.; 471 E-14161 saddles, McClellan, size 12, unused, 510 ea.”
    IV. The sample saddle exhibited at the public sale at which plaintiff purchased the 1,576 saddles was an unused saddle. It is shown that plaintiff knew that prospective bidders and purchasers at sales of this kind were permitted and expected to examine the property before bidding on and purchasing same.
    V. Plaintiff was familiar with the terms “ as is,” “ where is,” and the inspection and warranty clauses appearing in the catalogue or advertising pamphlet, and knew that a copy thereof was placed in the hands of each prospective bidder and purchaser at the sale.
    VI. The value of the 1,300 used and reconditioned saddles was about 50 per cent of the amount plaintiff bid and paid for the saddles it purchased.
    
      VIL The following provisions appear on pages 3 and 4 of the catalogue:
    “ Samples of all property listed for sale in this catalogue will be open for inspection in the auction room at the Quartermaster Intermediate Depot, Philadelphia, Pa., beginning Friday, December 8th, 1922, and daily thereafter (Sunday excepted) to date of sale, between the hours of 9 a. m. and 3 p. m., during which time prospective buyers will have an opportunity to inspect said property.
    “ In addition to the inspection of samples, guides will be furnished at the point of storage of the property to direct prospective buyers to the actual location of the property.
    “ No inspection of the property will be permitted during the sale.
    “ Failure on the part of any purchaser to inspect any property will not be considered as ground for any claim for adjustment or rescission.
    “All property listed in this catalogue at said auction will be sold * as is ’ and ‘where is ’ without warranty or guaranty as to quality, character, condition, size, weight, or kind, or that the same is in condition or fit to be used for the purpose for which it was originally intended, and no claims for any allowances upon any of the grounds aforesaid will be considered after the property is knocked down to a bidder by the auctioneer.
    “ No representative of the Government is authorized to make any statement or representation as to quality, character, condition, size, weight, or kind of any property offered at this sale, and any representation or statement made by any representative of the Government concerning any such property will not be binding on the Government or considered as grounds for any claim for adjustment or rescission of any sale.”
    VIII. Defendant has filed a counterclaim for the sum of $6,191.78, to which formal answer has been filed. There is no proof of the counterclaim in the record.
    IX. There is no proof or suggestion of bad faith upon the part of the defendant.
    The court decided that plaintiff was not entitled to recover.
   Geaham:, Judge,

delivered the opinion of the court:

By an act of Congress the Secretary of War was authorized to dispose of at public auction, surplus property belonging to the Government. Pursuant to this authority certain property held at an intermediate depot in Philadelphia was advertised for sale in a catalogue designated “ Surplus Property Sale, at Quartermaster Intermediate Depot, Phila., Pa.,” wherein there was listed and described a lot of McClellan saddles.

On December 15, 1922, at a public sale of these saddles the plaintiff bid upon and purchased 1,582 saddles at $4.60 each, and paid for the same, and there were delivered to him 1,576 saddles, leaving sis undelivered, the value of which was afterwards refunded on the basis of the purchase price.

The Government acted in good faith. There is no proof or suggestion to the contrary.

It was known that the Government was not in the business of manufacturing and selling saddles. It was simply selling surplus material which it had purchased and could not use. The Secretary of War had authority to sell only what the Government had. In this case he sold a “ lot ” of saddles, and plaintiff bid for and bought the lot subject to the terms and conditions of the sale. There was delivered to it and it received what it purchased. See Fred E. Hummel, trustee, v. United States, 58 C. Cls. 489, 494.

This was not a case of sale by sample. The catalogue containing the conditions of the contract stated where the goods were located, when they could be inspected, and that guides would be furnished to direct prospective purchasers to the location of the property for the purpose of inspection. It further provided:

“ Failure on the part of any purchaser to inspect any property will not be considered as ground for any claim for adjustment or rescission.”

The property listed in the catalogue, it was stated, was sold “ ‘as is ’ and ‘ where is,’ without warranty or guaranty as to quality, character, condition, size, weight, or kind, or that the same is in condition or fit to be used for the purpose for which it was originally intended, and no claims for any allowances upon any of the grounds aforesaid will be considered after the property is knocked down to a bidder by the auctioneer.”

This is not a claim for shortage in quantity. It is a claim based upon the difference between the quality, character, or kind of material received and that advertised; that is, that the saddles were not “ unused ” but used saddles which had been reconditioned — the very situation which the statement just quoted from the Government’s catalogue was intended to meet. 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.

Under the conditions of the sale the Government was only obliged to act in good faith, and this it did. The material was sold for what the Government believed it to be. The plaintiff can not recover. See M. Samuels & Sons, Inc., v. United States, 61 C. Cls. 373, 380; Lipshitz & Cohen v. United States, 269 U. S. 90, 92; Mottram v. United States, 271 U. S. 15; Maguire & Co. v. United States, 273 U. S. 67.

The foregoing conclusion disposes of the plaintiff’s case, but there is another ground which precludes a recovery. The alleged contract relied upon does not comply with the provisions of section 3744 of the Revised Statutes. In the case of Erie Coal Corp. v. United States, 266 U. S. 518, 521, the court said:

“Moreover, sec. 3744, Revised Statutes, required the Secretary of War to cause every contract made by him, or by officers under him appointed to make contracts, ‘to be reduced to writing, and signed by the contracting parties with their names at the end thereof.’ The act of July 11, 1919, authorizing the Secretary to sell surplus war supplies, is not inconsistent with that section and does not repeal or modify it. There is no reason why it should not apply to contracts made in pursuance of the later act. It must be held that, because of the failure to make and sign a written contract as required by sec. 8744, the United States was not bound.”

See also Srere Brothers & Co. v. United States, 60 C. Cls. 994, 999.

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

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