A-77987, APRIL 13, 1937, 16 COMP. GEN. 918

A-77987: Apr 13, 1937

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DELIVERY TO A CARLOADING COMPANY IS NOT SUCH SHIPMENT AS WILL TOLL LIQUIDATED DAMAGES FOR DELAYS OF SAID COMPANY IN RELEASING THE SUPPLIES INVOLVED TO THE RAILROAD. AS SUNDAYS AND HOLIDAYS WERE NOT EXCLUDED IN DETERMINING THE PERIOD ALLOWED FOR SHIPMENT. THE CIRCUMSTANCE THAT THE LAST DAY OF THAT PERIOD FELL ON A SUNDAY IS NOT MATERIAL IN DETERMINING THE LIQUIDATED DAMAGES CHARGEABLE. ON A VALID AGREEMENT FOR LIQUIDATED DAMAGES THE MATTER OF WHETHER THERE WERE ACTUAL DAMAGES. IS NOT FOR CONSIDERATION. IS AS FOLLOWS: WE HAVE YOUR COMMUNICATION OF DECEMBER 11. THIS IS ON ACCOUNT OF CLAIM OF $444.00. WE NOTE THAT YOU HAVE DISALLOWED $105.00. THIS CHECK SHOULD HAVE BEEN RETURNED TO US WITH YOUR LAST REMITTANCE.

A-77987, APRIL 13, 1937, 16 COMP. GEN. 918

CONTRACTS - LIQUIDATED DAMAGES - DETERMINATION OF DELIVERY DATE INVOLVING SUNDAY AND MODE OF DELIVERY - EXTENSIONS OF TIME, PROOF OF DAMAGE, AND WAIVER OF VESTED RIGHTS WHERE THE CONTRACT AND PURCHASE ORDER PROVIDED FOR LIQUIDATED DAMAGES FOR EACH DAY OF DELAY IN SHIPMENT BEYOND A STIPULATED NUMBER OF DAYS AFTER RECEIPT OF ORDER, DELIVERY TO A CARLOADING COMPANY IS NOT SUCH SHIPMENT AS WILL TOLL LIQUIDATED DAMAGES FOR DELAYS OF SAID COMPANY IN RELEASING THE SUPPLIES INVOLVED TO THE RAILROAD, AND, AS SUNDAYS AND HOLIDAYS WERE NOT EXCLUDED IN DETERMINING THE PERIOD ALLOWED FOR SHIPMENT, THE CIRCUMSTANCE THAT THE LAST DAY OF THAT PERIOD FELL ON A SUNDAY IS NOT MATERIAL IN DETERMINING THE LIQUIDATED DAMAGES CHARGEABLE, THE SUPPLIES NOT HAVING BEEN TURNED OVER TO THE RAILROAD UNTIL THE FOLLOWING TUESDAY. A CONTRACTOR'S REQUEST TO WITHDRAW HIS BID AFTER ACCEPTANCE THEREOF CANNOT OPERATE TO EXTEND THE DELIVERY TIME FIXED BY THE CONTRACT, NOR MAY VESTED RIGHTS TO LIQUIDATED DAMAGES BE WAIVED BY GOVERNMENT OFFICERS. ON A VALID AGREEMENT FOR LIQUIDATED DAMAGES THE MATTER OF WHETHER THERE WERE ACTUAL DAMAGES, OR THE AMOUNT THEREOF, IS NOT FOR CONSIDERATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE MAREMONT AUTOMOTIVE PRODUCTS, INC., APRIL 13, 1937:

YOUR LETTER OF JANUARY 8, 1937, IS AS FOLLOWS:

WE HAVE YOUR COMMUNICATION OF DECEMBER 11, ENCLOSING REMITTANCE FOR $339.00 FOR WHICH WE THANK YOU. THIS IS ON ACCOUNT OF CLAIM OF $444.00, AND WE NOTE THAT YOU HAVE DISALLOWED $105.00.

FIRST, WE WANT TO CALL YOUR ATTENTION TO THE FACT THAT YOU DID NOT RETURN YOUR CHECK NO. 544372 DATED MAY 21, 1935, AND AMOUNTING TO $339.24, WHICH WE SENT BACK TO YOU WITH OUR LETTER OF APRIL 17, 1936. THIS CHECK SHOULD HAVE BEEN RETURNED TO US WITH YOUR LAST REMITTANCE.

AS TO THE DISALLOWED PORTION OF OUR CLAIM AMOUNTING TO $105.00, WE ASK YOU TO CONSIDER THE FOLLOWING:

1. YOU MENTION IN YOUR COMMUNICATION OF DECEMBER 11, 1936, THAT UNDER THE TERMS OF THE CONTRACT THE DUE DATE FOR COMPLETION OF THE ORDER WAS MARCH 3, 1935; THAT ACCORDING TO THE DUPLICATE BILL OF LADING THE SHIPMENT WAS RECEIVED BY THE CARRIER FROM THE NATIONAL CARLOADING COMPANY ON MARCH 5; THAT THERE WAS, THEREFORE, A DELAY OF TWO DAYS, WHICH BROUGHT THE LIQUIDATED DAMAGES TO $105.00. YOU EVIDENTLY DID NOT NOTICE THAT MARCH 3RD FELL ON A SUNDAY, WHICH MOVED THE DATE OF COMPLETION TO MARCH 4, SO THAT IN ANY EVENT THE DELAY, IF ANY, WAS ONLY ONE DAY AND THE MAXIMUM PENALTY BUT $52.50.

2. THE ALLEGED DELAY OF THIS ONE DAY IS ALSO TO BE WAIVED, BECAUSE OUR BILL OF LADING FROM THE NATIONAL CARLOADING COMPANY WAS DATED MARCH 4, AND AS SET FORTH IN OUR LETTER OF NOVEMBER 11, 1936, WE CONSIDERED THEM AS COMMON CARRIERS AND REGARDED DELIVERY TO THEM AS THE COMPLETION OF OUR CONTRACT. ONCE AGAIN REFERRING YOU TO OUR LETTER OF NOVEMBER 11, WE QUOTE THE FOLLOWING:

"OUR UNDERSTANDING, AND THAT OF OTHER SHIPPERS IN THIS TERRITORY IS, THAT THE FORWARDING COMPANIES ARE AGENTS OF THE RAILWAY AND AS SUCH ARE REGARDED AS COMMON CARRIERS. IF THERE IS ANY DOUBT AS TO THE STATUS OF FORWARDING COMPANIES AND THEIR STANDING AS COMMON CARRIERS IN THE EYES OF THE LAW, WE AS LAYMEN COULD NOT BE EXPECTED TO KNOW IT. HAD WE KNOWN THE POSSIBILITY OF SUCH A REGULATION, WE COULD HAVE JUST AS WELL DELIVERED THE MERCHANDISE DIRECT TO THE RAILWAY, AND WE FEEL THAT WE SHOULD NOT BE ASKED TO PAY ANY PENALTY ON THAT ACCOUNT.'

YOU DO NOT MENTION IN YOUR COMMUNICATION OF DECEMBER 11, THAT THE NATIONAL CARLOADING COMPANY ARE NOT COMMON CARRIERS, BUT WE HAVE THE OPINION OF A LEADING FIRM OF ATTORNEYS HERE, TO THE EFFECT THAT THE NATIONAL CARLOADING COMPANY AND OTHER SIMILAR FORWARDERS ARE COMMON CARRIERS.

3. ALSO THIS ALLEGED DELAY OF ONE DAY OUGHT TO BE WAIVED FOR THE REASON SET FORTH IN THE FIFTH PARAGRAPH OF OUR LETTER TO YOU OF NOVEMBER 11, 1936, IN WHICH WE CALLED YOUR ATTENTION TO THE FACT THAT OUR QUOTATION HAD BEEN WITHDRAWN BY WIRE PRIOR TO RECEIVING YOUR ORDER, AND ON FEBRUARY 25, WE RECEIVED A LETTER FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AT HOT SPRINGS, WRITTEN ON FEBRUARY 24, 1935 AND SIGNED BY WALTER B. DILLON, ACTING FOREST SUPERVISOR, READING AS FOLLOWS:

"REFERENCE IS MADE TO YOUR BID WHICH WAS OPENED FEBRUARY 19 AND ACCEPTED FEBRUARY 20, AND ALSO TO YOUR WIRE OF FEBRUARY 21. THIS MORNING, MR. SHIPP OF 555 INCORPORATED TELEPHONED ME IN REGARD TO THE ORDER ALSO.

"I REGRET TO ADVISE THAT INASMUCH AS THERE WAS NO APPARENT ERROR ON THE BID, THE DIFFERENCE BETWEEN YOUR BID AND THE NEXT HIGHEST BID BEING A VERY SMALL AMOUNT AS WELL AS THE FACT THAT THE ORDER WAS FULLY COMPLETED PRIOR TO RECEIPT OF YOUR WIRE, IT WILL BE IMPOSSIBLE FOR ME TO CANCEL YOUR BID, AND I MUST INSIST UPON SHIPMENT BEING MADE AS IN THE PROPOSAL.'

WE CONTEND THAT THE ORIGINAL ORDER WAS CANCELLED AND "REINSTATED" ON FEBRUARY 25, AND BELIEVE THAT WE HAVE A RIGHT TO CLAIM THAT THE 10-DAY PERIOD FOR DELIVERY SHOULD START WITH FEBRUARY 25, IN WHICH CASE THERE WOULD BE NO QUESTION AS TO OUR HAVING FULFILLED THE CONTRACT WITHIN THE SPECIFIED TIME.

4. AND FINALLY THE DELAY OF "ONE DAY"--- IF SUCH BE YOUR ULTIMATE INTERPRETATION--- IS NOT TO BE TAKEN NOTICE OF FOR THE REASON THAT IT DID NOT CAUSE THE GOVERNMENT THE SLIGHTEST LOSS OR INCONVENIENCE. CERTAINLY THE GOVERNMENT CAN SHOW A TAXPAYER THAT LITTLE CONSIDERATION.

TAKING ALL THE CIRCUMSTANCES INTO CONSIDERATION, THE FACT THAT MARCH 3, 1935 FELL ON A SUNDAY; THAT THE MERCHANDISE WAS DELIVERED TO THE NATIONAL CARLOADING COMPANY ON TIME; THAT FORWARDING COMPANIES HAVE NEVER BEEN PROVEN IN ANY COURT NOT TO BE COMMON CARRIERS, AND THE JUSTICE OF FIGURING THE DATE OF THIS ORDER FROM THE TIME OF RECEIVING THE DEPARTMENT LETTER OF FEBRUARY 24, WE BELIEVE THERE CAN BE NO QUESTION ABOUT OUR HAVING COMPLETED THE SHIPMENT IN AMPLE TIME. AND SO IN YOUR SPIRIT OF FAIRNESS IN HANDLING THIS CLAIM, WE FEEL CERTAIN YOU ARE GOING TO GIVE US FAVORABLE CONSIDERATION AND WILL ALLOW OUR CLAIM IN FULL.

WE UNDERSTAND ALSO, THAT IT IS THE PRACTICE OF THE GOVERNMENT TO PAY INTEREST AT 1/2 OF ONE PERCENT PER MONTH ON DEFERRED PAYMENTS. IF SO, AND IF YOU BELIEVE WE ARE ENTITLED TO INTEREST, WE WISH YOU WOULD TAKE IT INTO CONSIDERATION WHEN RECONSIDERING THIS ENTIRE SUBJECT MATTER.

BY YOUR PROPOSAL OF FEBRUARY 16, 1935, ACCEPTED FEBRUARY 20, 1935, YOU AGREED TO DELIVER CERTAIN AUTOMOBILE SPRINGS AND LEAVES TO THE UNITED STATES FOREST SERVICE AT HOT SPRINGS NATIONAL PARK, ARKANSAS, AND TO PAY LIQUIDATED DAMAGES AT THE RATE OF 25 CENTS A SPRING FOR EACH DAY OF DELAY IN DELIVERY "AT SHIPPING POINT OR AT DESTINATION.' YOUR BID STIPULATED THAT "WITHIN 10 DAYS AFTER RECEIPT OF ORDER, DELIVERY WILL BE MADE" WITHOUT SPECIFYING WHETHER SUCH DELIVERY WOULD BE MADE AT SHIPPING POINT OR DESTINATION WITHIN THE LIQUIDATED DAMAGE STIPULATION AND IN VIEW OF THE STATEMENT IN THE ORDER ACCEPTING YOUR BID DIRECTING YOU TO "SHIP" AS SOON AS POSSIBLE "NOT LATER THAN 10 DAYS AFTER RECEIPT OF ORDER," THERE WAS REMITTED IN SETTLEMENT OF DECEMBER 11, 1936, LIQUIDATED DAMAGES WHICH HAD BEEN DEDUCTED FROM THE CONTRACT PRICE FOR DELAY AFTER THE DATE OF ACTUAL SHIPMENT OF THE SUPPLIES FROM CHICAGO, ALTHOUGH BY YOUR CONTRACT YOU WERE REQUIRED TO MAKE DELIVERY AT HOT SPRINGS NATIONAL PARK, ARK. REMISSION OF LIQUIDATED DAMAGES FOR 2 DAYS' DELAY PRIOR TO SUCH SHIPMENT WAS DISALLOWED.

YOU NOW URGE THAT THE LIQUIDATED DAMAGES ASSESSED FOR THE 2 DAYS' DELAY IN SHIPMENT, ALSO, SHOULD BE REMITTED BECAUSE YOU CONSIGNED THE SUPPLIES TO THE NATIONAL CARLOADING CO. ON MARCH 4, 1935, THE FIRST BUSINESS DAY FOLLOWING THE CONTRACT DELIVERY DATE, MARCH 3, 1935, WHICH FELL ON A SUNDAY. THE RECORD SHOWS THAT THE SAID NATIONAL CARLOADING CO., A FORWARDING AGENT, DID NOT RELEASE THE SUPPLIES TO THE RAILROAD COMPANY AT CHICAGO FOR SHIPMENT UNTIL MARCH 5, 1935, BUT YOUR POSITION AS TO THIS IS THAT THE FORWARDING COMPANY WAS ITSELF A CARRIER AND, THEREFORE, THAT DELIVERY TO IT WAS SUFFICIENT TO TOLL LIQUIDATED DAMAGES.

VIEWING THE CONTRACT IN ITS MOST FAVORABLE LIGHT FOR YOU IT REQUIRED YOU TO "SHIP" THE SUPPLIES WITHIN 10 DAYS, AND WHILE, UNDER CERTAIN CONDITIONS, A FORWARDING AGENT IS "AS TO A PERSON WITH WHOM HE CONTRACTS FOR THE DELIVERY OF THE GOODS, A COMMON CARRIER AND LIABLE AS SUCH," 10 CORPUS JURIS 50, IT IS CLEAR THAT IN THIS CASE THE FORWARDING COMPANY WAS YOUR AGENT, AND AS BETWEEN YOU AND THE GOVERNMENT YOU WERE RESPONSIBLE FOR THE DELAYS OF SUCH AGENT. THE CONTRACT REQUIRED YOU TO SHIP THE SUPPLIES WITHIN 10 DAYS OR PAY LIQUIDATED DAMAGES FOR DELAY AND THE DELIVERY BY YOU TO A CARLOADING COMPANY WHICH MIGHT HAVE DELAYED SEVERAL DAYS IN RELEASING THE SUPPLIES TO A RAILROAD COMPANY FOR ACTUAL SHIPMENT FROM CHICAGO, WAS NOT A SHIPMENT WITHIN THE MEANING OF THE CONTRACT PROVISIONS FIXING YOUR LIABILITY FOR LIQUIDATED DAMAGES FOR DELAY. THE 10-DAY PERIOD ALLOWED FOR SHIPMENT DID NOT EXCLUDE SUNDAYS AND HOLIDAYS AND THE CIRCUMSTANCE THAT THE LAST DAY FELL ON SUNDAY IS NOT MATERIAL IN VIEW OF THE FACT THAT ACTUAL SHIPMENT WAS NOT MADE UNTIL THE FOLLOWING TUESDAY.

RESPECTING THE OTHER POINTS RAISED IN YOUR LETTER YOU ARE ADVISED THAT YOUR REQUEST TO WITHDRAW YOUR BID AFTER IT HAD BEEN ACCEPTED COULD NOT OPERATE TO EXTEND THE DELIVERY TIME FIXED BY THE CONTRACT, AND THAT THE RIGHT TO LIQUIDATED DAMAGES THEREUNDER HAVING VESTED IN THE UNITED STATES, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO WAIVE SUCH RIGHT. PACIFIC HARDWARE CO. V. UNITED STATES, 49 CT.CLS. 327, 335, 337; BAUSCH AND LOMB OPTICAL CO. V. UNITED STATES, 78 ID. 584, 607. IT IS SETTLED THAT ON A VALID AGREEMENT FOR LIQUIDATED DAMAGES THE MATTER OF WHETHER THERE WERE ACTUAL DAMAGES OR THE AMOUNT THEREOF IS NOT FOR CONSIDERATION. SUN PRINTING AND PUBLISHING ASSOCIATION V. MOORE, 183 U.S. 642; 5 COMP. GEN. 750. THERE IS NO AUTHORITY FOR THE ALLOWANCE OF INTEREST ON CLAIMS OF THIS CHARACTER.

ACCORDINGLY, UPON REVIEW, THE SETTLEMENT OF YOUR CLAIM FOR REMISSION OF LIQUIDATED DAMAGES MUST BE, AND IS, SUSTAINED.

RESPECTING YOUR INQUIRY AS TO CHECK NO. 544372, DATED MAY 21, 1935, FOR $339.24, YOU ARE ADVISED THAT THE AMOUNT OF SAID CHECK WAS ALLOWED YOU BY A SEPARATE SETTLEMENT UNDER DATE OF DECEMBER 11, 1936, BECAUSE SUCH CHECK BEING MORE THAN ONE FULL FISCAL YEAR OLD WAS NO LONGER PAYABLE AT THE TREASURY. IF THE NEW CHECK FOR THE AMOUNT ALLOWED UNDER THE SAID SEPARATE SETTLEMENT HAS NOT YET BEEN RECEIVED BY YOU THIS OFFICE SHOULD BE SO ADVISED.