#### S. BRODY v. THE UNITED STATES

[No. E-66.

Decided February 20, 1928]

*On the Proofs*

*Sale of supplies; inspection; sale*“ *as is.”*— Where supplies are sold by the Government under a proposal inviting inspection prior . to opening of bids and stipulating that they are sold “ as is,” and *539that no refund or adjustment will “be entertained on account of supplies not coming up to the standard of expectations,” and there is no evidence of bad faith on the part of the Government, a purchaser who mates no inspection can not recover damages because some of the supplies were defective or deteriorated, but having bid upon a certain quantity and made payment therefor he is entitled to recover the purchase price on a shortage in delivery.

*The Reporter's*statement of the case:

*Messrs. Frank L. Match*and *Don F. Reed*for the plaintiff. *Messrs. George V. A. McGloskey*and *Victor Mouse*were on the brief.

*Mr. Meber M.*Rice, with whom was *Mr. Assistant Attorney General Merman J. Golloioay,*for the defendant. *Mr. J oseph Menry Gohen*was on the briefs.

The court made special findings of fact, as follows:

I. The plaintiff is a resident of the city of New York, in the State of New York, and has been for many years and now is engaged in the burlap bag business, having his principal place of business at 147-149 Hudson Street, New York City.

II. On September 30, 1919, the office ,of the Zone Supply Officer of the War Department at No. 560 Jackson Avenue, Long Island City, New York, issued Circular Proposal No. 358, as follows:

“ Sealed proposals, in duplicate, subject to the usual conditions, will be received at this office until the time specified below, at which time and place they will be opened in the presence of bidders who attend for the sale of grain *&*bread bagfs, the Government reserving the right to accept or reject any or all bids or any part thereof.

“ Proposals for any part or all of supplies mentioned will be received.

“ Supplies or material will, when sold, be delivered f. o. b. Port Kearny, N. J., by the Government. Award will be made on receipt of necessary authorization.

“At least twenty per cent (20%) of the entire amount of the bid in the form of a certified check, payable to ‘Zone Finance Officer,’ or legal tender, shall accompany this bid as a guarantee of good faith that the specifications of this contract will be fulfilled. Purchaser must make payment in *540full before supplies or material are delivered and removal mu(st be made within forty-eight (48) hours from date of award.

“ For the information and guidance of prospective bidders and all concerned: Material will be sold ‘as is.’ No guarantee against deterioration in transit in case of interstate or local shipments of food or other products is given. The Government will assume no responsibility after award has been made, and under no consideration will a refund or adjustment be entertained on account of supplies not coming up to the ¡standard of expectations.

“ Inspection of supplies or material is invited and must be accomplished prior to opening of bids, as no allowance can be made under terms of this sale on account of same not being as represented.

“ The receipt of this circular entitles bearer to inspect articles enumerated hereon without additional identification and will be recognized as such by the officer in charge.

“ Proposals will be signed by the bidder, enclosed in a sealed envelope, postage fully prepaid, addressed to the undersigned, marked ‘ Proposals for the sale of grain & bread bags, to be opened 11.00 a. m., October 9th, 1919.’

“ J. M. CaesoN,

“ Colonel, *Quartermaster*Corps,

*“ Zone Supply 0 fleer.*

*“*PROPOSAL

“(Place) 286 South St., N. Y. C. (Date) Oct. 9/19.

' (Include street address)

“ In accordance with the above advertisement, the undersigned proposes to purchase the supplies or materials listed below at the pricey specified.

(Sgd.) S. Brody. (Sgd.) S. Brody.

(Firnf name, if any) (Signature of bidder)

Bales Quantity more or less Unit price 1,811 83 452,750 12,500 $0.0930 pernea, bag. .101 per ea. bag. Article and description Grain bags, 18 x 36" Bread bags, 30 x 36"

“ Note. — The above bags are classed as ‘ perfect,’ being in good condition. The bread bags are made of light-weight burlap, the grain bags of burlap of heavier weight. Samples of both may be seen at Ford Bldg., 560 Jackson Ave., L. I. City, N. Y.’’

*541III. The plaintiff sent a representative to examine the samples of the grain bags at the Ford Building, 560 Jackson Avenue, Long Island City, New York, and after the samples had been inspected and found to measure up to the proposal, submitted bids on the form in the circular proposal for: Grain bags, 18 x 36", 1,811 bales, 452,750 bags, $0.0930 per ea. bag; bread bags, 30 x 36", 83 bales, 12,500 bags, $0,101 per ea. bag and accompanied the same with certified checks for $7,000.00 and $370.20. The bids were received and opened at the New York supply depot on October 9, 1919, and on the 13th day of October, 1919, an award, in writing, was made to the plaintiff for “ 352,750 each grain bags 18 x 36" at $0.0930 each.”

IY. Plaintiff was acquainted with the conditions at Port Kearny, New Jersey, where the supplies were stored, having been there on several occasions when other articles were purchased by him, but did not inspect or attempt to inspect the grain bags stored at this place.

Y. Within a fortnight thereafter, the plaintiff paid the full amount of his bid, namely, $32,805.75, and the defendant delivered and the plaintiff accepted the number of bales.

YI. The plaintiff immediately sold at least 125,000 of the bags at 17% cents each, and delivery was made from the salvage base to the purchaser. The bags were rejected ,by the purchaser because of weak seams, but were subsequently accepted after being reconditioned by the plaintiff. The plaintiff received from the sale of a portion of the bags approximately $39,325.00.

VII. Thereafter, on November 4, 1919, plaintiff filed with the commanding officer in charge of the salvage base, Long Island City, New York, a complajnt alleging a failure of consideration in that the bales did not contain the requisite number of bags; many of the bags were short in .length as advertised; many had weak seams and many were so worthless, through deterioration, as to amount to “ scrap.”

YIII. The plaintiff carried the entire number of bales to his warehouse, unbaled, counted, and examined the bags as to number, size, and condition, and found that there were 5,522 bags short in the number delivered and the number purchased; 21,165 bags practically without value through *542deterioration; 141,100 bags short in length; and that 281,000 were weak in the seams.

IX. Following the complaint, the supply depot sent representatives (a sergeant and civilian employee) to the warehouse of plaintiff to make an inspection of the bags for quantity, size, and condition. These representatives examined only five bales and found some ran over and others under in the number of bags in each bale, and many short in size, but did not examine the condition of the bags for weak seams and deterioration.

X. Plaintiff filed a claim with the Zone Supply Officer, Salvage Division, for $7,297.42, which was disallowed on December 15th, 1919.

On March 20, 1920, a claim was filed with the Assistant Director of Finance, Accounts, and Settlements, Munitions Building, Washington, D. C., and referred to the Auditor for the War Department, who disallowed the claim on March 25,1920. A notice of appeal was filed with the Comptroller of the Treasury from the ruling of the Auditor for the War Department disallowing the claim, and the appeal was disallowed.

The court decided that plaintiff was entitled to recover, in part.

Graham, Judge,

delivered the opinion of the court:

This case grows out of the sale of surplus Government property. The questions involved have been passed upon several times by this court, as well as by the Supreme Court.

The Government on September 30, 1919, sent out a circular proposal for bids for the purchase of certain lots of grain and bread bags. The bags were in bales at Port Kearny, N. J. The sale took place at Long Island City.

The proposal contained provisions similar to or identical with those in other cases decided by this court *(Triad Corporation*v. *United*States, 63 C. Cls. 151; *Samuel & Sons*v. *United*States, 61 C. Cls. 373, 380; *Lipshitz & Cohen*v. *United States,*269 U. S. 90, 92), among others, that the inspection of supplies or material was invited and that the *543inspection should be made before the opening of the bids as thereafter no allowance would be made' under the terms of the sale on account of material not being as represented; that the sale was “ as is ”; that the Government assumed no responsibility after award, and under no consideration would a claim for refund or readjustment be entertained on account of supplies not coming up to the standard of expectations.

The plaintiff bid upon a certain quantity of bags and received and paid for the same in full according to his bid. Several weeks after the delivery of the bags and after he had sold a portion of them, he filed a complaint with the officer in command at Long Island City to the effect that the number of bags delivered was less than the number purchased, that some of them were short in length, some had to be resewed, and some were valueless on account of deterioration.

Clearly, under the proposal and the decisions cited, there can be no recovery except as to the shortage in the number of bags delivered to plaintiff. The sale was “ as is,” an opportunity was given for inspection, and notice was given that no allowance would be made on account of materials not being as represented.

Plaintiff did not attempt to inspect the goods at Port Kearny where they were deposited, although the proposal invited inspection. By disposing of a portion of the goods he waived the alleged breach and put himself in a position where he was not able to return the goods and ask for a rescission of the contract. See *Herman H. Panama*v. *United*States, 63 C. Cls. 283, and cases there cited.

This was a sale of a quantity of bags without guaranty or warranty as to their condition. There is no evidence of bad faith on the part of the Government. The material was sold for what the Government believed it to be. See *Triad Corporation ease, supra.*In thes.e sales the Secretary of War was authorized to sell only what the Government had. *Mottram*v. *United*States, 59 C. Cls. 302, 271 U. S. 15, 19, and Hummel, trustee, v. *United*States, 58 C. Cls. 489, 494.

It appears from the findings that the number of bags delivered to plaintiff was 5,522 less than the number he purchased, and he should be allowed the purchase price of $0,093 *544for each bag, or $513.55. It is so ordered. See *Shanhouse Sons, Inc.,*v. *United States,*61 C. Cls. 840.

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