That's a hard call, most times a second hand sale is "where is as is" and the seller is under no obligation to do anything. Moral obligation doesn't mean much to some people.
On the other hand, if the seller was running the engine, and it hadn't seized, then as far as he knew the engine was in perfect running condition. Remember when you were a little kid playing with light switches and your mom said "that switch only has so many flips in it!", same kind of deal unfortunately. If most people had been running that engine and there were no problems they would think it was fine as well, to bad the seller didn't send it in to be checked before the sale, then there would be no issues.

I had a RAM750F that I had purchased from a well known jet modeller, the engine had been to Carlos a year or so before I bought it and it hadn't ran since, it was however on loan to a museum or school or something, not run, but there. I bought the engine as a freshly checked engine with new bearings. On the first run the rear bearing went on it. I was lucky, the seller felt bad about it and paid for the repair, but I never felt it was his responsibility.

I have a brand new never run PST1300R, sadly, I haven't ran it since I bought it and the warranty is up on that, I could sell it tomorrow and it could be a faulty engine. To my knowledge it should run perfectly, but you just never know, so if I were to sell it, the buyer COULD end up with an engine that blows up first run, unlikely, but it's just an example.

It could even have played out that you were available to go see the engine run before buying and the seller could have run it and all might have been perfectly fine, then the next time you run it, boom.

I had another RAM750 that I flew for a year or so, never had an issue, put it in a new jet, fired it up, and the compressor wheel came apart, destroyed the engine, previous to that I had listed it for sale, fortunately I pulled it to use in that jet. Would have been the same thing, that engine ran flawless for me, never a glitch, never crashed, never dropped, never dirty etc. But that run was it's time I guess.

Anytime I sell an engine, airplane, radio etc, I ask that the buyer check that it is all to their satisfaction before I "cash the check" so to speak, that way if there is a problem I might be out the product, but not actual cash. If a buyer waits 3 months, well, I wouldn't feel obligated to do much, I'd feel bad, but as I say, anything can happen anytime, as far as the seller may have known, that engine might have been running flawless before he sold it.

Just my 2 cents.