Page images

Section 302 of the war risk insurance act, as amended by the act of December 24, 1919, 41 Stat., 374, specifically provided :

That any person who is now receiving a gratuity or pension under existing law shall not receive compensation under this Act unless he shall first surrender all claim to such gratuity or pension.

The question involved was answered in the negative by the Comptroller of the Treasury, 27 Comp Dec., 451; id., 829, and it is now accepted that compensation may not be obtained by the same person under the war risk insurance laws and injured civilian employees' compensation laws. The claimant was not entitled to receive compensation from the Employees' Compensation Commission while receiving compensation under the war risk insurance laws, and his claim for refund of deductions made from his war risk compensation by reason of the erroneous payments must be and is denied.



The authority in the act of March 4, 1921, 41 Stat., 1964, to provide additional

hospital facilities, including approach work, roads, and trackage facilities leading thereto, contemplates the opening or acquisition of roads through private property adjacent to the hospital site, and does not authorize the repair and maintenance of a public road upon the conveyance of legal title to the road to the United States conditioned upon the continued

use of the road by the general public. Comptroller General McCarl to the Secretary of the Treasury, November 9,


I have your letter of November 4, 1922, requesting decision whether the provisions of the act of March 4, 1921, 41 Stat., 1364, authorizing the Secretary of the Treasury to provide additional hospital facilities for persons who served in the World War, including approach work, roads, and trackage facilities leading thereto, authorize the Secretary to repair anu maintain a county road leading from the nearest railroad station to the approach to a hospital site at Tuskegee, Ala.

It is shown that the Government has acquired a right of way over private lands from the hospital site to the county road, that the county road is in disrepair, and that there appears to be no likelihood of its being repaired and maintained in fit condition for the uses of the hospital unless it can be properly repaired and maintained by the Government. The county officials have offered to convey this road and the bridges thereon to the Federal Government for the consideration of the Government maintaining them and leav. ing the road open for the use of the general public, but is not disposed to make any conveyance or agreement to allow the Government to close the road to the general public.

The authority to include in the hospital facilities to be procured approach work, roads, and trackage facilities conferred by the statute has relation to opening or acquiring roads through private property adjacent to the hospital site and does not authorize repair and maintenance by the Federal Government of a public road the repair and maintenance of which is a public matter to be cared for by local authorities and paid for from local funds.

The proposed conveyance of the road to the United States upon condition that it be left open as a public road would confer upon the United States no substantial right. In common with the general public, the Public Health Service has the right to pass over the road, and no other substantial right would pass under such a conveyance except the bare title to the land. Mere title to the land is not important. Under the proposed arrangement the United States would bind itself to repair and maintain a public county road for use of the general public, and thus would assume a function and duty belonging to the county.

You are accordingly advised that there is no authority of law for expenditure of Federal funds for the proposed repair and maintenance of this road.


The exhibition to a prospective purchaser of surplus war supplies of samples

taken from the bulk at his request does not constitute such a sale by sample as raises a warranty as to the quality of the entire lot, it not being conclusively shown that both the Government and the purchaser contracted

solely in reference to the samples or articles exhibited. Comptroller General McCarl to the Secretary of War, November 9, 1922.

By letter dated September 1, 1922, there was transmitted, with request for decision whether payment is authorized thereon from proceeds of sale of surplus Army supplies, certain papers pertaining to the claim of the Levinsohn-Koch Co. arising from a claimed damaged condition of a part of the underwear purchased by said company from the quartermaster department of the Army in March, 1920.

It appears that among the purchases made by claimant were two lots of underwear, one consisting of 120,000 pairs of drawers at $0.431 per pair and the other of 80,000 undershirts at $0.431 each. At the time these garments were purchased they were packed in bundles of 200 each, wrapped in paper, and bound with metal bands. Upon opening the bundles after delivery it was found that as a result of the packing some of the garments had become stained either from the paper or the metal bands. Claimant contends that because of these stains the goods could not be resold as "firsts” and claims a rebate on the purchase price, basing such claim upon an alleged breach of warranty as to condition of the goods at the time of sale.

The principles governing the use of proceeds of sale to make refunds to a purchaser on account of breach of warranty as to kind, quality, or condition of the goods sold have been announced by this office in former decisions and are to the effect that if it is clearly established that in the terms of sale there was an express or implied warranty as to the kind, quality, or condition of the goods sold and the goods delivered do not comply with the requirements of such warranty, the proceeds of sale may be used to make proper refunds to the purchaser. See decision of December 12, 1921, 1 Comp. Gen., 318; unpublished decision of December 17, 1921, on claim of William Iselin & Co.; and decision of January 18, 1922, 1 Comp. Gen., 375. Before any such refund is authorized, however, it must be shown conclusively that there was in the terms of sale a warranty or guaranty, either express or implied, as to kind, quality, or condition, that there was a breach thereof, and that actual damage resulted from such breach. 2 Comp. Gen., 55.

The question for consideration in the case here presented is whether under the terms of the sale to claimant there was on the part of the Government a warranty, express or implied, that the goods were free from stains or imperfections.

It is shown conclusively that there was no formal contract of sale. The goods were advertised for sale in a printed catalogue, schedule, or list published some time prior to February 20, 1920, in which it was stated that informal bids on the merchandise advertised would be accepted at any of the offices named therein until 3 p. m., February 20, 1920, and it appears that claimant was on the Government's mailing list for such advertisements. Claimant did submit a bid prior to February 20, 1920, and said bid was formally accepted March 5, 1920. If the advertisement, informal proposal, and formal acceptance constitute the sale agreement in this case, then there can be no doubt that there was no warranty as to the condition of the goods, because the printed advertisement expressly stipulated that each lot offered is identified by a number and that “goods are sold 'as is' at the storage point."

That the Government regarded this sale as a sale under and in accordance with the terms set forth in the advertisement is evidenced by the fact that in the formal acceptance, the material sold is described and identified by specific reference to the advertisement and the item numbers therein.

The only evidence presented in the papers transmitted with your submission tending to indicate that the sale was not made in accordance with the advertisement is an affidavit executed July 31, 1922, more than two years after the sale was made, by Christopher Koch, treasurer of the claimant company, to the effect that he was not shown nor was his attention called to the printed list or advertisement nor to any of the terms or conditions of such list or advertisement at any time prior to July 24, 1922. Said affidavit is also to the effect that affiant inquired at the Inland Warehouse, Philadelphia, Pa., where the goods now in question were stored, whether the Government had any underwear for sale; that he was advised that the Government was offering for sale a large quantity of new summer undershirts and drawers and was shown a few samples; that a further inspection was made of a large number of shirts and drawers in the stock room; that he was informed by a clerk in the warehouse that the underwear being offered for sale was all new and in accordance with the samples shown; that he asked to inspect the original bales from which he would be supplied and was informed that this was not the custom and that it would take a long time and entail great trouble; that he insisted upon compliance with his request and thereupon was shown merchandise taken from 20 of the many thousand bundles stored there; that these 20 bundles were opened by splitting the end of the burlap and garments were pulled out promiscuously and shown to him; that the garments thus shown were unstained; and that he was told by the clerk that the merchandise on which the company bid would be strictly in accordance with the samples shown.

Assuming that the facts relative to this sale were as indicated by the affidavit submitted by claimant, the transaction could not be regarded as a sale by sample in the legal sense such as would carry with it an implied warranty as to quality and condition and as would remove the sale from the operation of the rule of caveat emptor.

In Tiffany on Sales, second edition, page 263, the rule with respect to such transactions is announced as follows:

It is not to be assumed that every sale where a sample is shown is a sale by sample; for the seller may show a sample and refuse to sell by it, requiring the buyer to inspect the bulk and to form his own judgment, or the buyer may decline to rely on the sample and require an express warranty. It must appear that it was a term of the contract, express or implied, that the sale was by sample.

To constitute a sale by sample in the legal sense of that term it must appear that the parties contracted solely in reference to the sample or article exhibited and that both mutually understood that they were dealing with the sample with an understanding that the bulk was to be like it. Wood v. Michaud, 63 Minn. 478.

The reason for the implication of warranty is that there is no opportunity for personal examination of the bulk.

And if the purchaser could examine the goods purchased the fact that such examination would occupy time and be attended by labor and inconveniences would not relieve him from the risk as to the condition of the

goods or make the seller liable as under a sale by sample. Barnard v. Kellogg, 10 Wall. 383.

In Williston on Contracts, section 1004, the principle is stated as follows:

It must not be assumed that in every case where a sample is shown a warranty of this sort arises. Thus the seller may take a sample of the goods, being himself ignorant as to their quality, and may represeut to the buyer merely that the sample which he exhibited was fairly taken from the bulk. If this representation is true and the seller neither represents nor promises that the goods shall be equal to the sample, he would not be liable if the bulk proved, in parts, not to be up to the sample. Whether a seller who exbibits a sample does represent that the bulk is like the sample, or merely that the sample was honestly and properly taken, and that the buyer must take his own risk as to the bulk, is a question of fact in each case.

The papers accompanying your submission do not establish that any authorized agent or representative of the Government did warrant or represent to claimant that the bulk of the goods sold was identical in quality or condition with the samples seen and examined by claimant's representative. Claimant must be presumed to have known that the underwear which the Government was offering for sale had been purchased for use of the Army and was surplus stock in storage. Its representative went to the warehouse in which the goods were stored, saw the goods were packed in bales, wrapped with paper and bound with metal bands, and opened and examined some of the bales.

After a careful examination of all papers accompanying your submission, I must hold that the evidence presented does not establish that the sale was by sample, in the legal sense of the term, or that the Government made any representation equivalent to a warranty that the garments were free from stains.

The question submitted is answered in the negative.


A discharge by purchase granted an enlisted man of the Army under authority

of the act of June 16. 1890, 26 Stat., 158, is a discharge for the soldier's own convenience and he is not entitled thereon to travel allowance; nor can the purchase price, once paid on a proper application for such discharge, be refunded on allegation that the particular soldier was entitled to a dis

charge on surgeon's certificate of disability. Decision by Comptroller General McCarl, November 9, 1922.

Paul G. Hampp, formerly private first class, Finance Department, requested, September 12, 1922, review of settlement No. W-147110, dated July 8, 1922, disallowing his claim for travel pay from Camp Lewis, Wash., to Barberton, Ohio, and refund of the sum of $120 paid for his discharge February 7, 1922, contending that he should not have been required to purchase his discharge, but should have been discharged on a surgeon's certificate of disability.

« PreviousContinue »