A-73780, B-5743, SEPTEMBER 23, 1941, 21 COMP. GEN. 244

A-73780, B-5743, SEPTEMBER 23, 1941, 21 COMP. GEN. 244

GENERAL ACCOUNTING OFFICE - CLAIM SETTLEMENTS - RIGHTS OF CLAIMANTS AS TO HEARING AND REVIEW SECTION 236, REVISED STATUTES, AS AMENDED, UNDER WHICH THE GENERAL ACCOUNTING OFFICE IS AUTHORIZED TO SETTLE AND ADJUST CLAIMS BY AND AGAINST THE UNITED STATES, DOES NOT PROVIDE FOR HEARINGS AND PRESCRIBES NO DEFINITE FORM OF PROCEDURE FOR THE PRESENTATION AND SETTLEMENT OF CLAIMS, AND, THEREFORE, WHERE REASONABLE NOTICE AND OPPORTUNITY TO BE HEARD WAS GIVEN A CLAIMANT WHOSE CLAIM AGAINST THE UNITED STATES WAS DENIED BY THIS OFFICE, THERE HAS BEEN NO DENIAL OF AN ADEQUATE HEARING SUCH AS IS CONTEMPLATED BY THE DUE-PROCESS CLAUSE OF THE FIFTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES. THERE IS NO STATUTE GIVING ANY PERSON A VESTED RIGHT TO HAVE A SETTLEMENT OF THE GENERAL ACCOUNTING OFFICE REVIEWED BY THE COMPTROLLER GENERAL OF THE UNITED STATES, AND WHERE A CLAIM AGAINST THE UNITED STATES HAS BEEN DISALLOWED BY THIS OFFICE AFTER CONSIDERATION UNDER THE AUTHORITY IN SECTION 236, REVISED STATUTES, AS AMENDED, THE REFUSAL OF THE COMPTROLLER GENERAL TO GRANT A REVIEW WAS NOT A DENIAL OF THE "DUE PROCESS OF LAW" CONTEMPLATED BY THE FIFTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES.

COMPTROLLER GENERAL WARREN TO TRUSCON STEEL CO., SEPTEMBER 23, 1941:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 20, 1941, REQUESTING FURTHER CONSIDERATION OF YOUR CLAIM OF $2,800, REPRESENTING LIQUIDATED DAMAGES DEDUCTED FOR DELAY IN DELIVERY OF A QUANTITY OF WIRE STAPLES TO THE WAR DEPARTMENT, UNITED STATES ENGINEER DEPOT, NEW ORLEANS, LA., UNDER CONTRACT NO. W-1096-ENG-3857, DATED MARCH 13, 1935.

UNDER THE TERMS OF THE CONTRACT YOU AGREED TO FURNISH AND DELIVER F.O.B. CARS YOUNGSTOWN, OHIO, FOR SHIPMENT ON GOVERNMENT BILLS OF LADING TO THE UNITED STATES ENGINEER DEPOT, NEW ORLEANS, LA., 22,000,000 GALVANIZED WIRE STAPLES IN ACCORDANCE WITH CONTRACT SPECIFICATIONS AT A PRICE OF $748 PER 1 MILLION STAPLES LESS COMMERCIAL FREIGHT FROM YOUR SHIPPING POINT TO DESTINATION. DELIVERIES WERE TO BE MADE AS STATED IN PARAGRAPH 2 OF THE CONTRACT SPECIFICATIONS, WHICH PARAGRAPH PROVIDED IN PERTINENT PART AS FOLLOWS:

2. COMMENCEMENT, PROSECUTION, DELIVERY AND COMPLETION.--- THE WORK SHALL BE COMMENCED AT SUCH TIME AS WILL ENABLE THE CONTRACTOR TO MAKE SHIPMENT AT LEAST AS RAPIDLY AS CALLED FOR IN THE SCHEDULE BELOW.

IN CASE OF FAILURE ON THE PART OF THE CONTRACTOR TO MAKE SHIPMENT AS RAPIDLY AS CALLED FOR IN THE SCHEDULE GIVEN BELOW AND AS AGREED UPON AS A PART OF THIS CONTRACT, THE CONTRACTOR SHALL PAY TO THE UNITED STATES AS LIQUIDATED DAMAGES AT THE RATE OF $50.00 FOR EACH CALENDAR DAY OR FRACTION THEREOF OF DELAY UNTIL ALL LOST TIME IS MADE UP AND SHIPMENTS ARE RESUMED IN ACCORDANCE WITH THE FOLLOWING SCHEDULE:

SCHEDULE OF SHIPMENTS

CALENDAR DAYS ELAPSED NUMBER OF STAPLES, TOTAL STAPLES DELIVERED TIME AFTER NOTICE TO

THIS SHIPMENT TO CARRIER TO DATE PROCEED

DAYS

2,000,000 2,000,000 7

3,000,000 5,000,000 14

4,000,000 9,000,000 21

4,000,000 13,000,000 28

4,000,000 17,000,000 35

5,000,000 22,000,000 42

NOTICE TO PROCEED WAS RECEIVED BY YOU ON MARCH 25, 1935, THEREBY FIXING APRIL 1, 1935, AS THE DATE ON WHICH THE FIRST SHIPMENT WAS TO BE MADE UNDER THE SCHEDULE CONTAINED IN PARAGRAPH 2 OF THE SPECIFICATIONS. HOWEVER, IT APPEARS THAT THE FIRST SHIPMENT OF STAPLES WAS NOT MADE UNTIL APRIL 15, OR AFTER A DELAY OF 14 DAYS, AND THAT THERE WERE DELAYS IN THE OTHER SHIPMENTS MADE UNDER THE CONTRACT, OR A TOTAL DELAY OF 53 DAYS. ACCORDINGLY, IN MAKING PAYMENTS TO YOU FOR THE MATERIAL, LIQUIDATED DAMAGES IN A TOTAL AMOUNT OF $2,650 WERE DEDUCTED BY THE DISBURSING OFFICER ON VOUCHERS NOS. 18491 AND 116 OF THE JUNE AND JULY 1935 ACCOUNTS, RESPECTIVELY, OF J. H. CARRUTH, MAJOR, CORPS OF ENGINEERS.

CLAIM FOR THE AMOUNT THUS DEDUCTED WAS MADE BY YOU ON SEPTEMBER 23, 1935, TO THE UNITED STATES ENGINEER OFFICE, NEW ORLEANS, LA., WHICH CLAIM WAS SUPPORTED BY A BRIEF IN WHICH THERE WERE SET FORTH IN DETAIL THE REASONS ON WHICH WAS BASED THE CONTENTION THAT THE AMOUNT DEDUCTED SHOULD BE REMITTED. FIRST, IT WAS STATED IN SAID BRIEF THAT THE FORMAL CONTRACT WAS NOT EXECUTED BY THE UNITED STATES UNTIL APRIL 11, 1935, AND THAT A COPY THEREOF WAS NOT RECEIVED BY YOU UNTIL APRIL 17, 1935. THEREFORE, IT WAS URGED THAT NO BINDING CONTRACT EXISTED UNTIL AT LEAST APRIL 11, 1935, AND, HENCE, THAT THERE WAS NO OBLIGATION ON YOUR PART TO COMMENCE PERFORMANCE OF THE CONTRACT UPON RECEIPT OF THE NOTICE TO PROCEED ON MARCH 25, 1935. SECONDLY, IT WAS CONTENDED BY YOU THAT THE CLAUSE OF THE CONTRACT PROVIDING FOR LIQUIDATED DAMAGES WAS NOT WITHIN THE CONTEMPLATION OF THE PARTIES AND THAT IT WAS NOT INTENDED THAT SUCH CLAUSE SHOULD BECOME EFFECTIVE. WITH RESPECT THERETO, YOU ALLEGED THAT THE LIQUIDATED-DAMAGE CLAUSE WOULD NOT BECOME OPERATIVE UNLESS TIME WAS OF THE ESSENCE OF THE CONTRACT AND THAT AT THE TIME THE CONTRACT WAS EXECUTED THE GOVERNMENT HAD A SUBSTANTIAL SUPPLY OF STAPLES IN STOCK IN ITS WAREHOUSE, AND THAT AT THE TIME IT WAS NOT CONTEMPLATED THAT THE UNITED STATES WOULD HAVE ANY USE FOR THE STAPLES PRIOR TO AUGUST 1, 1935. THIRDLY, YOU CONTENDED THAT, UPON YOUR FAILURE TO MAKE SHIPMENTS ON TIME, THE GOVERNMENT SHOULD HAVE TERMINATED YOUR RIGHT TO PROCEED AND SHOULD HAVE PURCHASED THE MATERIAL AGAINST YOUR ACCOUNT IN WHICH EVENT THE ONLY DAMAGE WOULD BE ANY EXCESS COST INCURRED BY THE GOVERNMENT. FINALLY, IT WAS CONTENDED THAT NO ACTUAL DAMAGES WERE SUFFERED BY THE UNITED STATES AS A RESULT OF THE DELAY IN DELIVERY OF THE STAPLES AND, CONSEQUENTLY, THAT THE APPLICATION OF THE LIQUIDATED DAMAGE CLAUSE RESULTED IN THE IMPOSITION OF A FORFEITURE AND PENALTY CONTRARY TO WELL-ESTABLISHED PRINCIPLES OF LAW AND EQUITY.

YOUR CLAIM AND THE VARIOUS CONTENTIONS SET FORTH IN YOUR BRIEF WERE CONSIDERED BY THE DISTRICT ENGINEER, THE AUTHORIZED REPRESENTATIVE OF THE CONTRACTING OFFICER, WHO TRANSMITTED THE CLAIM TO THE OFFICE OF THE CHIEF OF ENGINEERS BY LETTER OF OCTOBER 7, 1935, TOGETHER WITH A COMPLETE REPORT THEREON. WITH RESPECT TO THE CONTENTIONS MADE IN YOUR BRIEF, THE DISTRICT ENGINEER REPORTED AS FOLLOWS:

* * * THE DELAY IN FURNISHING CONTRACTOR AN EXECUTED COPY OF CONTRACT UNTIL APRIL 11, 1935, WAS DUE TO BONDEE OMITTING THE RATE AND AMOUNT OF PREMIUM IN PERFORMANCE BOND WHICH NECESSITATED RETURNING BOND TO SURETY FOR INSERTION OF THESE FIGURES IN THE DOCUMENT (SEE COPY OF LETTER DATED MARCH 26, 1935, ENCLOSED HEREWITH). BUT THIS SLIGHT DISCREPANCY AND THE DELAY IN FURNISHING CONTRACTOR WITH A COPY OF THE EXECUTED CONTRACT DID NOT BY ANY MANNER WHATEVER AFFECT THE STATUS OF THE CONTRACT HAVING BEEN EXECUTED AS OF MARCH 25, 1935, TELEGRAPHIC NOTICE OF WHICH CLAIMANT ACKNOWLEDGES HAVING RECEIVED. EXECUTED COPY OF CONTRACT WAS MAILED APRIL 11, 1935, TO CONTRACTOR'S NEW ORLEANS OFFICE IN COMPLIANCE WITH PERSONAL REQUEST OF A REPRESENTATIVE OF THAT OFFICE.

4. CONTRACTOR'S CONTENTION THAT TIME WAS NOT OF ESSENCE IN PERFORMANCE INASMUCH AS THE GOVERNMENT HAD ON HAND APRIL 11, 1935, THE DATE CONTRACT WAS EXECUTED, A SUFFICIENT QUANTITY OF STAPLES TO ENABLE IT TO OPERATE FOR A PERIOD OF TIME AFTER AUGUST 1, 1935, AND THAT THERE WAS NO REASON OR NECESSITY FOR ASSESSMENT OF LIQUIDATED DAMAGES PRIOR TO THAT DATE, IS NOT CONSIDERED A BASIS FOR JUST COMPLAINT SINCE PURPOSE OF INSERTING LIQUIDATED-DAMAGE CLAUSES IN CONTRACTS IS TO ASSURE DELIVERY OF MATERIALS SUFFICIENTLY IN ADVANCE OF ACTUAL REQUIREMENTS AND LIKEWISE TO AVOID THE NECESSITY ON THE PART OF THE UNITED STATES OF PROVING THE EXISTENCE OF ACTUAL DAMAGES UNDER SUCH CONDITIONS.

5. AS TO CONTRACTOR'S CONTENTION THAT THE UNITED STATES COULD HAVE CANCELLED THE CONTRACT AND PURCHASED THE MATERIAL ELSEWHERE IN AMPLE TIME TO MEET ITS REQUIREMENTS, AND IF THIS HAD BEEN DONE THE DAMAGES WOULD HAVE BEEN AT MOST THE DIFFERENCE BETWEEN THE AMOUNT THE GOVERNMENT CONTRACTED TO PAY CLAIMANT AND THE AMOUNT IT WOULD HAVE BEEN REQUIRED TO PAY ELSEWHERE, AND THAT THE DAMAGES WOULD HAVE BEEN DEFINITE RATHER THAN UNCERTAIN. TO TAKE THESE STEPS WOULD HAVE BEEN EQUAL TO PLACING CONTRACTOR IN INVOLUNTARY DEFAULT SINCE HE DID NOT AT ANY TIME DURING THE PERIOD OF THE CONTRACT COMPLAIN OF BEING UNABLE TO FULFILL DELIVERY REQUIREMENTS UNDER THE CONTRACT SPECIFICATIONS. HOWEVER, IF SUCH ACTION HAD BEEN TAKEN IT WOULD NOT HAVE MITIGATED THE OBLIGATIONS OF CONTRACTOR AS THE AWARD WOULD THEN HAVE TO BE MADE TO THE NEXT LOWEST BIDDER AT AN INCREASED COST PLUS ANY LIQUIDATED DAMAGES DUE TO DELAY BEYOND THE TIME FIXED FOR COMPLETION UNDER THE CONTRACT WITH TRUSCON STEEL COMPANY AND LIQUIDATED DAMAGES WOULD HAVE APPLIED JUST THE SAME.

UNDER DATE OF OCTOBER 18, 1935, THE OFFICE OF THE CHIEF OF ENGINEERS FORWARDED THE CLAIM TO THIS OFFICE FOR SETTLEMENT AND, AFTER CONSIDERATION OF THE MATTER HERE, THE CLAIM WAS DISALLOWED BY SETTLEMENT OF THIS OFFICE DATED MAY 5, 1936. SAID SETTLEMENT IS AS FOLLOWS:

YOUR CLAIM NO. 1058773 (9) FOR REFUND OF $2,650 REPRESENTING LIQUIDATED DAMAGES DEDUCTED FROM VOUCHERS NOS. 18491 AND 116, JUNE AND JULY 1935 ACCOUNTS, RESPECTIVELY, OF J. H. CARRUTH, MAJOR, CORPS TO ENGINEERS, U.S.A., BECAUSE OF DELAY IN THE DELIVERY OF 22,000,000 STAPLES TO THE WAR DEPARTMENT, U.S. ENGINEER OFFICE, NEW ORLEANS, LOUISIANA, UNDER CONTRACT NO. W-1096-ENG-3857, DATED MARCH 13, 1935, HAS BEEN CAREFULLY EXAMINED AND IT IS FOUND THAT NO PART THEREOF MAY BE ALLOWED FOR THE REASONS HEREINAFTER STATED.

THE CONTRACT PROVIDED IN PARAGRAPH 2 OF THE SPECIFICATIONS THAT DELIVERY WAS TO BEGIN WITHIN 7 DAYS AFTER NOTICE TO PROCEED, SAID NOTICE HAVING BEEN TELEGRAPHED TO YOU BY THE DISTRICT ENGINEER MARCH 25, 1935, THEREBY ESTABLISHING APRIL 1, 1935, AS THE DATE UPON WHICH YOU WERE TO MAKE THE FIRST DELIVERY. DELIVERIES WERE TO BE MADE IN ACCORDANCE WITH THE SCHEDULE OF SHIPMENTS APPEARING IN THE AFORESAID PARAGRAPH IN THE SPECIFICATIONS AND, IN THE EVENT OF THE FAILURE OF THE CONTRACTOR TO MAKE DELIVERIES AS REQUIRED, LIQUIDATED DAMAGES IN THE SUM OF $50 PER DAY FOR EACH CALENDAR DAY OR FRACTION THEREOF WERE TO BE PAID BY THE CONTRACTOR UNTIL ALL LOST TIME WAS MADE UP AND SHIPMENTS WERE RESUMED IN ACCORDANCE WITH SAID SCHEDULE.

IT APPEARS THAT AT NO TIME WERE DELIVERIES MADE IN THE QUANTITIES AND ON THE DATES REQUIRED BY THE SCHEDULE OF SHIPMENTS, NOR WAS THE TIME LOST IN MAKING DELIVERIES MADE UP, NOR WERE SHIPMENTS RESUMED IN ACCORDANCE WITH SAID SCHEDULE, THEREFORE, IN VIEW OF THE PROVISIONS OF THE CONTRACT, THERE SHOULD HAVE BEEN DEDUCTED A TOTAL OF $2,800 LIQUIDATED DAMAGES FOR 56 DAYS' DELAY INSTEAD OF $2,650 LIQUIDATED DAMAGES FOR 53 DAYS' DELAY, RESULTING IN AN OVERPAYMENT TO YOU IN THE SUM OF $150 SINCE FINAL DELIVERY WAS NOT EFFECTED UNTIL MAY 27, 1935.

THE CONTENTION CONTAINED IN YOUR " STATEMENT OF OBJECTIONS TO DEDUCTION FOR LIQUIDATED DAMAGES * * *" THAT THERE WAS NO VALID AND BINDING CONTRACT UNTIL RECEIPT BY YOU OF THE EXECUTED CONTRACT ON APRIL 17, 1935, BEARS NO WEIGHT AS IT APPEARS THAT THE DELAY IN FURNISHING AN EXECUTED COPY TO YOU WAS DUE TO YOUR OMISSION OF THE RATE AND AMOUNT OF PREMIUM OF THE PERFORMANCE BOND FROM THE CONTRACT. THE CONTRACT WAS SENT TO YOUR OFFICE AT NEW ORLEANS, LOUISIANA, ON APRIL 11, 1935, AND WAS RECEIVED AT YOUR PLANT IN YOUNGSTOWN, OHIO, APRIL 17, 1935. ON MARCH 25, 1935, YOU WERE ADVISED BY TELEGRAM TO PROCEED WITH THE PERFORMANCE OF THE CONTRACT. APRIL 15, 1935, YOU MADE THE FIRST DELIVERY COMPRISING 8,010,000 STAPLES. THIS ACT OF ITSELF NEGATES YOUR CONTENTION AS NO DOUBT CAN EXIST THAT YOU DID NOT ADMIT THE EXISTENCE OF A VALID BINDING AGREEMENT. FURTHERMORE, YOU RETURNED THE CONTRACT SIGNED BY YOU ON MARCH 21, 1935, WHICH DEED WAS SUFFICIENT TO BIND YOU. SEE UNITED STATES OF AMERICA V. NEW YORK AND PORTO RICO STEAMSHIP COMPANY, 239 U.S. 88.

YOUR STATEMENT THAT A LIQUIDATED-DAMAGE CLAUSE SUCH AS IS CONTAINED IN SPECIFICATIONS WOULD NOT BE OPERATIVE UNLESS TIME WAS OF THE ESSENCE IN THE PERFORMANCE IS WITHOUT MERIT INASMUCH AS THE VERY TERMS OF DELIVERY TO WHICH YOU ASSENTED BY BECOMING A PARTY TO THE CONTRACT EVIDENCE THE GOVERNMENT'S NEED FOR THE ARTICLES WHICH YOU CONTRACTED TO DELIVER, AND WHEN IN THE EVENT OF DELAY ACTUAL DAMAGES CANNOT BE EVALUATED THE NECESSITY OF PROVING SAID ACTUAL DAMAGES IS AVOIDED BY THE INCLUSION OF THE LIQUIDATED-DAMAGE CLAUSE CONTAINED IN THE PRESENT CONTRACT. THEREFORE, THE CONTENTION THAT THE UNITED STATES SUFFERED NO DAMAGES THROUGH DELAY IN THE COMPLETION OF THE CONTRACT REQUIRES NO FURTHER CONSIDERATION AS IT HAS BEEN REPEATEDLY HELD THAT UNDER A LIQUIDATED- DAMAGE CLAUSE IN A CONTRACT THE UNITED STATES IS NOT REQUIRED TO SHOW ACTUAL DAMAGE. SEE UNITED STATES V. BETHLEHEM STEEL COMPANY, 205 U.S. 105, FOUNDRY AND MACHINE COMPANY V. THE UNITED STATES, 44 CT.CLS. 178, 19 COMP. DEC. 278, 26 ID. 424.

WITH REGARD TO YOUR CONTENTION THAT INASMUCH AS NO ACTUAL DAMAGE WAS SUFFERED BY THE UNITED STATES BY REASON OF THE DELAY IN SHIPMENT BY YOU THE APPLICATION OF THE LIQUIDATED-DAMAGE CLAUSE RESULTED IN THE IMPOSITION OF A FORFEITURE AND PENALTY, IT, TOO, MUST BE HELD WITHOUT SUBSTANCE AS IT IS CONSISTENTLY HELD IN THE DOCTRINE OF LIQUIDATED DAMAGES AND PENALTIES THAT PARTIES MAY, IN A CASE WHERE DAMAGES ARE OF AN UNCERTAIN NATURE, ESTIMATE AND AGREE UPON A MEASURE OF DAMAGES WHICH MAY BE SUSTAINED FROM THE BREACH OF AN AGREEMENT. THE PRINCIPLE THAT THE INTENTION OF THE PARTIES IS TO BE ASCERTAINED BY A PROPER CONSTRUCTION OF THE AGREEMENT MADE BETWEEN THEM, AND THAT WHETHER A PARTICULAR STIPULATION TO PAY A SUM OF MONEY IS TO BE TREATED AS A PENALTY, OR AS AN AGREED AMOUNT OF DAMAGES, IS TO BE DETERMINED BY THE CONTRACT, AND THE INTENTION OF THE PARTIES THERETO. AS YOU AGREED TO THE TERMS CONTAINED IN THE CONTRACT YOU CANNOT NOW BE ALLOWED TO ARGUE THAT THE TERMS ARE INEQUITABLE. SEE SUN PRINTING AND PUBLISHING ASSOCIATION V. MOORE, 183 U.S. 642. I THEREFORE CERTIFY THAT NO BALANCE IS FOUND DUE YOU FROM THE UNITED STATES.

WITH REGARD TO THE OVERPAYMENT OF $150, REPRESENTING LIQUIDATED DAMAGES FOR 3 DAYS' DELAY, IT IS REQUESTED THAT YOU FORWARD TO THIS OFFICE BY CHECK, BANK DRAFT, OR POSTAL MONEY ORDERS MADE PAYABLE TO " THE UNITED STATES," THE SUM OF $150 IN ORDER THAT FURTHER ACTION TO ENFORCE COLLECTION MAY NOT BE NECESSARY.

AS THE ADDITIONAL SUM OF $150 FOUND TO BE DUE TO THE UNITED STATES AS LIQUIDATED DAMAGES IN THE SETTLEMENT OF MAY 5, 1936, WAS NOT REMITTED BY YOU, SAID SUM SUBSEQUENTLY WAS WITHHELD FROM AMOUNTS OTHERWISE DUE YOU UNDER CONTRACT NO. W-425-ENG-61 AND WAS APPLIED IN LIQUIDATION OF THE INDEBTEDNESS BY SETTLEMENTS OF THIS OFFICE NOS. 0419122 AND 0427429, DATED SEPTEMBER 11, AND NOVEMBER 13, 1936, RESPECTIVELY. BY LETTER OF JUNE 23, 1939, YOU PROTESTED THE COLLECTION OF THE $150 BY SET-OFF AGAINST AMOUNTS OTHERWISE DUE TO YOU ON THE GROUND THAT THE TRANSACTION UNDER WHICH THIS AMOUNT BECAME DUE TO YOU WAS SEPARATE AND DISTINCT FROM THAT UNDER WHICH THE LIQUIDATED DAMAGES AROSE. ALSO, YOU STATED THAT THE CLAIM OF THE GOVERNMENT FOR THE ADDITIONAL LIQUIDATED DAMAGES UNDER CONTRACT NO. W-1096 -ENG-3857, STILL WAS UNSETTLED. ACCORDINGLY, YOU REQUESTED THAT THE FACTS SURROUNDING THE TWO CLAIMS BE REVIEWED. PURSUANT TO YOUR REQUEST THE CLAIMS WERE REVIEWED AND FORMER COMPTROLLER GENERAL FRED H. BROWN, IN DECISION TO YOU DATED SEPTEMBER 15, 1939, HELD THAT THE ASSESSMENT OF LIQUIDATED DAMAGES UNDER CONTRACT NO. W-1096-ENG-3857 WAS CORRECT, AND THAT THE COLLECTION OF THE ADDITIONAL SUM OF $150 DUE TO THE UNITED STATES WAS PROPER. THE SAID DECISION OF SEPTEMBER 15, 1939, CONSTITUTED A FINAL ADJUDICATION OF THE MATTER INSOFAR AS THE GENERAL ACCOUNTING OFFICE IS CONCERNED.

ABOUT 19 MONTHS THEREAFTER THERE WAS RECEIVED YOUR LETTER OF JUNE 22, 1941, IN WHICH YOU REQUESTED REVIEW OF THE SETTLEMENT OF MAY 5, 1936, SUPRA. HOWEVER, THE REQUEST FOR REVIEW WAS DENIED FOR THE REASON THAT THE RECORDS SHOWED THAT THE CLAIM HAD BEEN CONSIDERED FULLY BY FORMER COMPTROLLER GENERAL BROWN AND THAT NO AUTHORITY EXISTED FOR THE REVIEW BY ME OF THE ACTION TAKEN.

YOUR LETTER OF AUGUST 20, 1941, REQUESTING FURTHER CONSIDERATION OF THE MATTER, IS AS FOLLOWS:

I HAVE THE HONOR TO ACKNOWLEDGE RECEIPT OF YOUR LETTER OF AUGUST 19TH, 1941, IN THE ABOVE-ENTITLED CLAIM, AS FOLLOWS:

"REFERENCE IS MADE TO YOUR LETTER OF JUNE 22, 1941, REQUESTING REVIEW OF SETTLEMENT, DATED MAY 5, 1936, WHICH DISALLOWED THE CLAIM OF THE TRUSCON STEEL COMPANY, YOUNGSTOWN, OHIO, IN THE AMOUNT OF $2,650, FOR REMISSION OF LIQUIDATED DAMAGES DEDUCTED FROM PAYMENTS UNDER CONTRACT NO. W-1096-ENG- 3857, DATED MARCH 13, 1935, COVERING DELIVERY OF 22 MILLION GALVANIZED WIRE STAPLES TO THE U.S. ENGINEER DEPOT, NEW ORLEANS, LOUISIANA.

"THE RECORDS OF THIS OFFICE SHOW THAT AT THE TIME THE CLAIM WAS FILED THE CLAIMANT ALLEGED THAT THE APPLICATION OF THE LIQUIDATED DAMAGE CLAUSE RESULTED IN THE IMPOSITION OF A FORFEITURE OF PENALTY; THAT THE MATTER WAS CONSIDERED UNDER THE PERSONAL SUPERVISION OF COMPTROLLER GENERAL MCCARL, WHO INSTRUCTED THE CLAIMS DIVISION OF THIS OFFICE TO DISALLOW THE CLAIM AND CHARGE THE CONTRACTOR WITH $150 AS LIQUIDATED DAMAGES ACCRUED BUT NOT DEDUCTED ON DISBURSING OFFICERS' VOUCHERS; AND THAT, FOLLOWING THE COLLECTION OF THE SUM OF $150 BY OFFSET AND THE RECEIPT OF A PROTEST OF SUCH ACTION FROM THE CLAIMANT, COMPTROLLER GENERAL BROWN, UNDER DATE OF SEPTEMBER 15, 1939, ADVISED CLAIMANT THAT SUCH ACTION WAS AUTHORIZED BY LAW.

"SINCE THE MATTER APPEARS TO HAVE BEEN FULLY CONSIDERED BY MY PREDECESSORS IN OFFICE, AND, SINCE YOU HAVE SUBMITTED NO NEW MATERIAL EVIDENCE WHICH WOULD APPEAR TO JUSTIFY ANY MODIFICATION OF THE CONCLUSION HERETOFORE REACHED, YOUR REQUEST FOR REVIEW MUST BE, AND IS, DENIED. SEE 16 COMP. GEN. 51; ID. 118.'

WE DID NOT KNOW UNTIL THE ABOVE-QUOTED LETTER WAS RECEIVED THAT THIS CLAIM HAD BEEN CONSIDERED BY COMPTROLLER GENERAL MCCARL WHO SIGNED AN INTEROFFICE MEMORANDUM DIRECTING THE CLAIMS DIVISION OF YOUR OFFICE TO CHARGE THE CONTRACTOR WITH $2,800 AS LIQUIDATED DAMAGES FOR DELAYS IN COMPLETING THE CONTRACT OF MARCH 13, 1935, AND WE INSIST THE ACTION SO TAKEN DOES NOT PRECLUDE YOU FROM REVIEWING THE SETTLEMENT AND CORRECTING IT FOR ERROR OF LAW. THE CERTIFICATE OF SETTLEMENT ITSELF PROVIDES FOR REVIEW OF THE SETTLEMENT AND THE REGULATIONS PUBLISHED IN 1 COMP. GEN. 775, 776, PRESCRIBE THE PROCEDURE FOR REVIEWS AND THERE IS RESERVED IN SAID REGULATIONS THE RIGHT OF THE COMPTROLLER GENERAL TO REVIEW A SETTLEMENT AT ANY TIME, UPON THE PRESENTATION OF PROPER FACTS IN A PARTICULAR CASE. THE FACT WHICH WE HAVE PRESENTED IN THIS CASE IS, THAT THE SETTLEMENT IS ERRONEOUS FOR FAILURE TO FOLLOW BOTH THE DECISIONS OF YOUR OFFICE AND OF THE COURTS.

AN INTEROFFICE MEMORANDUM IN A PARTICULAR CASE, SIGNED BY THE COMPTROLLER GENERAL, IS NOT SUCH A SETTLEMENT AS THE CLAIMANT MAY APPEAL FROM, PARTICULARLY WHEN THE CLAIMANT HAS NO NOTICE THEREOF AND THE CONSTITUTION ITSELF, IN THE FIFTH AMENDMENT, PROVIDES THAT PRIVATE PROPERTY MAY NOT BE TAKEN FOR PUBLIC USE, WITHOUT DUE PROCESS OF LAW.

THE $2,800 IN THIS CASE WAS AND IS THE PRIVATE PROPERTY OF THE TRUSCON STEEL COMPANY AND REPRESENTS A PART OF THE CONTRACT PRICE FOR MATERIAL DELIVERED UNDER CONTRACTS WITH THE UNITED STATES. AMONG THE ELEMENTS OF "DUE PROCESS OF LAW" WITHIN THE TERMS OF THE CONSTITUTION OF THE UNITED STATES, IS THE RIGHT TO BE HEARD. IN WASHINGTON EX REL OREGON RIVER AND NAVIGATION COMPANY V. FAIRCHILD, 224 U.S. 510, IT IS HELD THAT THE HEARING WHICH MUST PRECEDE THE TAKING OF PRIVATE PROPERTY IS NOT A MERE FORM BUT THE OWNER MUST HAVE THE RIGHT TO SECURE AND PRESENT EVIDENCE MATERIAL TO THE ISSUE UNDER INVESTIGATION, MUST BE GIVEN THE OPPORTUNITY BY PROOF AND ARGUMENT TO CONTROVERT THE CLAIM ASSERTED AGAINST IT BEFORE A TRIBUNAL, BOUND NOT ONLY TO LISTEN, BUT TO GIVE LEGAL EFFECT TO WHAT HAS BEEN ESTABLISHED.

FURTHER IN INTERSTATE COMMERCE COMMISSION V. LOUISVILLE AND NASHVILLE RAILROAD COMPANY, 227 U.S. 88, IT IS HELD THAT THERE IS NO DUE PROCESS EVEN IN A HEARING WHERE THE OWNER DOES NOT KNOW WHAT EVIDENCE IS OFFERED OR CONSIDERED AND IS NOT GIVEN AN OPPORTUNITY TO TEST, EXPLAIN OR REFUTE. THE SUPREME COURT OF THE UNITED STATES THRICE REVERSED THE CASE OF MORGAN V. UNITED STATES IN 298 U.S. 468, 304 U.S. 1 AND 307 U.S. 183, BECAUSE A FULL AND FAIR HEARING WAS NOT ACCORDED IN THAT CASE.

WE REPEAT THAT YOUR OFFICE HAS, IN EFFECT, TAKEN $2,800 OF THE MONEY AND PROPERTY OF THE TRUSCON STEEL COMPANY AND THAT COMPANY HAS NOT HAD ANY HEARING WHATEVER WITH RESPECT THERETO, EXCEPT POSSIBLY AS TO THE ITEM OF $150 WHICH WAS CONSIDERED BY FORMER COMPTROLLER GENERAL BROWN ON SEPTEMBER 15, 1939, THOUGH HE APPARENTLY GROUNDED HIS ACTION ON THE PRIOR INTEROFFICE MEMORANDUM, WHOSE DATE HAS NOT BEEN GIVEN IN THE ABOVE QUOTED LETTER, SIGNED BY FORMER COMPTROLLER GENERAL MCCARL. IN OTHER WORDS THE LETTER OF JUNE 22ND, 1941, APPEARS TO HAVE BEEN THE FIRST REQUEST OF THE TRUSCON STEEL COMPANY FOR A HEARING AS TO AT LEAST $2,650 DEDUCTED FROM AMOUNTS OTHERWISE DUE THE COMPANY AND IN THE ABOVE QUOTED LETTER OF AUGUST 19TH, 1941, YOU HAVE REFUSED SUCH A HEARING ON THE MERITS BECAUSE OF THE INTEROFFICE MEMO BY COMPTROLLER GENERAL MCCARL, AS TO WHICH THE COMPANY HAD NO NOTICE UNTIL THE ABOVE QUOTED LETTER. IT IS SUBMITTED THAT IN THE INTEREST OF JUSTICE, THIS COMPANY IS NOW ENTITLED TO A FULL AND FAIR HEARING BY YOU AND UPON SUCH A HEARING YOU WOULD UNDOUBTEDLY FOLLOW THE ESTABLISHED DECISIONS OF YOUR OFFICE, THAT IT IS ILLEGAL FOR THE DEPARTMENTS OF THE GOVERNMENT TO PRESCRIBE THE SAME RATE OF LIQUIDATED DAMAGES FOR DELAY IN DELIVERY OF A FEW STAPLES AS FOR DELAY IN DELIVERY OF 22 MILLION STAPLES; THAT IS THE DECISION IN 16 COMP. GEN. 548, 551, AS WELL AS THE COURT DECISIONS REFERRED TO THEREIN AND NUMEROUS OTHER UNPRINTED DECISIONS OF YOUR OFFICE.

THE STATUTE OF LIMITATIONS HAS RUN AGAINST THE PRESENTATION OF $2,650 OF THIS CLAIM TO THE COURT OF CLAIMS AND UNLESS YOU WILL GRANT RELIEF IN THIS CASE, THE COMPANY WILL BE COMPELLED EITHER TO APPLY TO THE CONGRESS FOR THE PASSAGE OF A PRIVATE RELIEF BILL OR TO INSTITUTE APPROPRIATE PROCEEDINGS TO TEST OUT THE QUESTION WHETHER YOUR OFFICE HAS THE RIGHT TO WITHHOLD THE PRIVATE PROPERTY OF THE COMPANY WITHOUT GRANTING A FULL AND FAIR HEARING AND GIVING "LEGAL EFFECT TO WHAT HAS BEEN ESTABLISHED.'

WITH REFERENCE TO YOUR CONTENTION TO THE EFFECT THAT YOU HAVE NOT BEEN GRANTED A FULL HEARING IN THE SETTLEMENT OF YOUR CLAIM, WHICH YOU ALLEGE IS ERRONEOUS, AND THAT THE REFUSAL TO REVIEW AND CORRECT SAID SETTLEMENT CONSTITUTES A TAKING OF YOUR PROPERTY WITHOUT DUE PROCESS OF LAW IN VIOLATION OF THE FIFTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES, IT MAY BE SAID THAT THE CLAIM WAS CONSIDERED BY THIS OFFICE PURSUANT TO THE PROVISIONS OF SECTION 236 OF THE REVISED STATUTES, AS AMENDED BY SECTION 305 OF THE ACT OF JUNE 10, 1921, 42 STAT. 24, WHICH PROVIDES AS FOLLOWS:

ALL CLAIMS AND DEMANDS WHATEVER BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT, AND ALL ACCOUNTS WHATEVER IN WHICH THE GOVERNMENT OF THE UNITED STATES IS CONCERNED, EITHER AS DEBTOR OR CREDITOR, SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE.

SAID ACT DOES NOT PRESCRIBE THAT ANY DEFINITE FORM OF PROCEDURE IS TO BE FOLLOWED IN THE SETTLEMENT OF CLAIMS PRESENTED TO THIS OFFICE. THERE IS NO DESIGNATION AS TO THE MANNER IN WHICH THE CLAIMS ARE TO BE PRESENTED, THE MANNER OF HEARING WHICH IS TO BE HAD ON SAID CLAIMS, OR THE FORM OF DECISION WHICH A SETTLEMENT OF THIS OFFICE IS TO TAKE. MOREOVER, THERE IS NO PROVISION IN THE ACT, OR IN ANY OTHER STATUTE, FOR THE REVIEW OF SETTLEMENTS OF THIS OFFICE--- BUT, OF COURSE, THE REFUSAL OF THIS OFFICE TO ALLOW A CLAIM SUCH AS THE ONE HERE INVOLVED DOES NOT IN ANY WAY AFFECT THE RIGHT OF THE CLAIMANT TO HAVE HIS RIGHTS IN THE MATTER JUDICIALLY DETERMINED BY ANY COURT HAVING JURISDICTION OVER SUCH CLAIMS.

FURTHERMORE, EVEN IF THE DISALLOWANCE OF A CLAIM FOR AN AMOUNT WITHHELD BY AN ADMINISTRATIVE OFFICE AS LIQUIDATED DAMAGES UNDER A CONTRACT COULD BE REGARDED AS A DEPRIVING OF PROPERTY WITHIN THE MEANING OF THE FIFTH AMENDMENT TO THE CONSTITUTION, IT IS SETTLED THAT NO PARTICULAR FORM OF PROCEDURE, EITHER IN A JUDICIAL OR AN ADMINISTRATIVE PROCEEDING, IS NECESSARY TO CONSTITUTE DUE PROCESS OF LAW UNDER THE CONSTITUTION. DAVIDSON V. NEW ORLEANS, 96 U.S. 97, 102. "THE FIFTH AMENDMENT GUARANTEES NO PARTICULAR FORM OF PROCEDURE; IT PROTECTS SUBSTANTIAL RIGHTS.' NATIONAL LABOR RELATIONS BOARD V. MACKAY RADIO AND TELEGRAPH COMPANY, 304 U.S. 333, 351. ALSO, SEE DOHANY V. ROGERS, 281 U.S. 362, 369, IN WHICH THE SUPREME COURT OF THE UNITED STATES CONSIDERED DUE PROCESS OF LAW UNDER THE FOURTEENTH AMENDMENT, WHICH IS SIMILAR TO THE FIFTH AMENDMENT EXCEPT THAT IT CONSTITUTES A RESTRICTION ON THE POWERS OF THE VARIOUS STATES. THERE THE COURT STATED THAT---

THE DUE PROCESS CLAUSE DOES NOT GUARANTEE TO THE CITIZEN OF A STATE ANY PARTICULAR FORM OR METHOD OF STATE PROCEDURE. UNDER IT HE MAY NEITHER CLAIM A RIGHT TO TRIAL BY JURY NOR A RIGHT OF APPEAL. ITS REQUIREMENTS ARE SATISFIED IF HE HAS REASONABLE NOTICE AND REASONABLE OPPORTUNITY TO BE HEARD AND TO PRESENT HIS CLAIM OR DEFENSE, DUE REGARD BEING HAD TO THE NATURE OF THE PROCEEDING AND THE CHARACTER OF THE RIGHTS WHICH MAY BE AFFECTED BY IT. REETZ V. MICHIGAN, 188 U.S. 505, 508; HURWITZ V. NORTH, 271 U.S. 40; BAUMAN V. ROSS, 167 U.S. 548, 593; BACKUS V. UNION DEPOT CO., SUPRA, P. 569.

WITH RESPECT TO THE SETTLEMENT OF YOUR CLAIM THE RECORD SHOWS, AS OUTLINED ABOVE IN DETAIL, THAT WHEN THE LIQUIDATED DAMAGES WERE DEDUCTED BY THE DISBURSING OFFICER IN MAKING PAYMENT UNDER THE CONTRACT YOU WERE ADVISED OF SUCH FACT AND THE REASONS THEREFOR, NAMELY, THAT THE DAMAGES WERE DEDUCTED BECAUSE OF YOUR FAILURE TO HAVE MADE SHIPMENTS IN ACCORDANCE WITH THE SCHEDULE CONTAINED IN PARAGRAPH 2 OF THE SPECIFICATIONS OF THE CONTRACT. THEREUPON, YOU PRESENTED A CLAIM FOR THE AMOUNT SO DEDUCTED AND YOU FILED A BRIEF IN WHICH YOU SET FORTH VARIOUS ARGUMENTS IN SUPPORT OF YOUR CONTENTION THAT THE LIQUIDATED DAMAGES WERE NOT PROPER FOR DEDUCTION. THE CLAIM AND THE ARGUMENTS SUBMITTED IN SUPPORT THEREOF WERE CONSIDERED BY THE PROPER ADMINISTRATIVE OFFICIALS OF THE WAR DEPARTMENT AND BY THIS OFFICE. IN THE SETTLEMENT OF THIS OFFICE DATED MAY 5, 1936, DISALLOWING YOUR CLAIM, YOU WERE FULLY ADVISED OF THE REASONS FOR SUCH ACTION. THEREFORE, IT IS APPARENT THAT UNDER THE CIRCUMSTANCES YOU WERE AFFORDED REASONABLE NOTICE AND REASONABLE OPPORTUNITY TO BE HEARD UPON YOUR CLAIM.

THE CASES CITED IN YOUR LETTER OF AUGUST 20, INVOLVED STATUTES IN WHICH CONGRESS EXPRESSLY PROVIDED FOR A "FULL HEARING.' IN THE CASE OF MORGAN V. UNITED STATES, 304 U.S. 1, 18, CHIEF JUSTICE HUGHES STATED THAT UNDER A STATUTE PROVIDING FOR A "FULL HEARING" SUCH HEARING EMBRACED NOT ONLY THE RIGHT TO PRESENT EVIDENCE BUT, ALSO, A REASONABLE OPPORTUNITY TO KNOW THE CLAIMS OF THE OPPOSING PARTY AND TO MEET THEM. EXAMINATION OF THE RECORD IN THE INSTANT CASE REVEALS THAT THE REQUIREMENTS FOR A "FULL HEARING" AS THUS SET FORTH BY THE SUPREME COURT OF THE UNITED STATES WERE COMPLIED WITH IN THE SETTLEMENT OF YOUR CLAIM EVEN THOUGH NO SUCH "FULL HEARING" WAS REQUIRED BY ANY STATUTE APPLICABLE THERETO. IN OTHER WORDS, YOU WERE NOTIFIED OF THE REASON WHY THE LIQUIDATED DAMAGES WERE DEDUCTED AND YOU WERE AFFORDED AMPLE OPPORTUNITY TO PRESENT, AND YOU DID PRESENT, COMPLETE AND DETAILED ARGUMENTS AS TO WHY YOU DEEMED THE POSITION OF THE GOVERNMENT WAS ERRONEOUS. YOUR CLAIM AND THE ARGUMENTS IN SUPPORT THEREOF WERE CONSIDERED AND APPRAISED BOTH BY THE ADMINISTRATIVE OFFICE AND BY THIS OFFICE BEFORE THE SETTLEMENT OF MAY 5, 1936, WAS ISSUED. HENCE, IT APPEARS THAT YOUR CLAIM WAS DISALLOWED ONLY AFTER YOU WERE AFFORDED AN ADEQUATE HEARING SUCH AS CONTEMPLATED BY THE DUE-PROCESS CLAUSE OF THE FIFTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES AS CONSTRUED BY DECISIONS OF THE SUPREME COURT OF THE UNITED STATES. WITH REFERENCE TO YOUR CONTENTION THAT YOU ARE ENTITLED TO A REVIEW BY THE COMPTROLLER GENERAL OF THE UNITED STATES, OF THE SETTLEMENT OF MAY 5, 1936, AND THAT MY REFUSAL TO GRANT SUCH REVIEW IS A DENIAL OF DUE PROCESS OF LAW, YOUR ATTENTION IS INVITED TO THE FACT THAT, AS HEREINBEFORE SHOWN, YOUR CLAIM WAS CONSIDERED BY THIS OFFICE UNDER AUTHORITY OF SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF JUNE 10, 1921, SUPRA, WHICH PROVIDES THAT ALL CLAIMS AND DEMANDS BY THE GOVERNMENT OF THE UNITED STATES OR AGAINST IT SHALL BE SETTLED AND ADJUSTED IN THE GENERAL ACCOUNTING OFFICE, AND THERE IS NOTHING IN SAID ACT, OR IN ANY OTHER STATUTE, PROVIDING THAT SETTLEMENTS OF CLAIMS BY THE GENERAL ACCOUNTING OFFICE ARE TO BE REVIEWED BY THE COMPTROLLER GENERAL OF THE UNITED STATES. MOREOVER, WHILE UNDER SECTION 8 OF THE ACT OF JULY 31, 1894, 28 STAT. 207, A CLAIMANT HAD A RIGHT OF APPEAL FROM A SETTLEMENT BY AN AUDITOR TO THE COMPTROLLER OF THE TREASURY, IT IS PROVIDED EXPRESSLY IN SECTION 304 OF THE ACT OF JUNE 10, 1921, SUPRA, THAT THE REVIEW BY THE COMPTROLLER GENERAL OF SETTLEMENTS MADE BY THE SIX AUDITORS SHOULD BE DISCONTINUED EXCEPT AS TO SETTLEMENTS MADE BEFORE JULY 1, 1921. ACCORDINGLY, WHILE THE COMPTROLLER GENERAL CAN, AND UNDER SOME CIRCUMSTANCES DOES, REVIEW SETTLEMENTS OF THE GENERAL ACCOUNTING OFFICE, SUCH ACTION IS NOT REQUIRED OR SPECIFICALLY PROVIDED FOR BY LAW, AND THERE IS NO STATUTE GIVING ANY PERSON A VESTED RIGHT TO HAVE A SETTLEMENT OF THE GENERAL ACCOUNTING OFFICE REVIEWED BY THE COMPTROLLER GENERAL OF THE UNITED STATES.

FURTHERMORE, APART FROM STATUTORY PROVISIONS, YOU HAVE NO VESTED RIGHT UNDER THE FIFTH AMENDMENT TO THE CONSTITUTION TO A REVIEW BY ME PERSONALLY, AS AN ESSENTIAL ELEMENT OF DUE PROCESS OF LAW, OF THE SETTLEMENT HERE INVOLVED. THE RULE IS WELL ESTABLISHED THAT THE UNITED STATES MAY NOT BE SUED WITHOUT ITS CONSENT. SEE SCHILLINGER V. UNITED STATES, 155 U.S. 163; ICKES V. FOX, 300 U.S. 82, 96, AND MUNRO V. UNITED STATES, 303 U.S. 36. "* * * CONSENT TO SUE THE UNITED STATES IS A PRIVILEGE ACCORDED; NOT THE GRANT OF A PROPERTY RIGHT PROTECTED BY THE FIFTH AMENDMENT.' LYNCH V. UNITED STATES, 292 U.S. 571, 581. THEREFORE, IN GRANTING TO AN INDIVIDUAL PERMISSION TO PRESENT A CLAIM OR TO FILE A SUIT AGAINST IT, THE UNITED STATES MAY PRESCRIBE THE MANNER AND EXTENT TO WHICH THE RIGHT IS TO BE EXERCISED. MUNRO V. UNITED STATES, SUPRA, AT PAGE 41. SEE, LUCKENBACH STEAMSHIP COMPANY V. UNITED STATES, 272 U.S. 533, 536, WHEREIN THE COURT STATED IN PERTINENT PART AS FOLLOWS:

THE PRESENTATION OF THE CASE ON BEHALF OF THE CLAIMANT HAS PROCEEDED ON THE ASSUMPTION THAT OUR POWER TO REVIEW IS AS BROAD AS THE POWER OF THE COURT OF CLAIMS TO HEAR AND DETERMINE IN THE FIRST INSTANCE, AND THAT SUCH A REVIEW IF NOT OTHERWISE PROVIDED FOR IS VOUCHSAFED BY THE DUE PROCESS OF LAW CLAUSE OF THE FIFTH AMENDMENT. BUT THE ASSUMPTION IS A MISTAKEN ONE. THE COURT OF CLAIMS IS A SPECIAL TRIBUNAL ESTABLISHED TO HEAR AND DETERMINE SUITS AGAINST THE UNITED STATES ON CLAIMS OF SPECIFIED CLASSES. EXCEPT AS CONGRESS HAS CONSENTED, THERE IS NO RIGHT TO BRING THESE SUITS AGAINST THE UNITED STATES, AND THEREFORE THE RIGHT ARISING FROM THE CONSENT IS SUBJECT TO SUCH RESTRICTIONS AS CONGRESS HAS IMPOSED. MCELRATH V. UNITED STATES, 102 U.S. 426, 440. * * * AND, APART FROM THE NATURE OF THESE SUITS, THE WELL SETTLED RULE APPLIES THAT AN APPELLATE REVIEW IS NOT ESSENTIAL TO DUE PROCESS OF LAW, BUT IS A MATTER OF GRACE. MCKANE V. DURSTON, 153U.S. 684, 687; ANDREWS V. SWARTZ, 156 U.S. 272, 275; KOHL V. LEHLBACK, 160 U.S. 293, 297, 299; REETZ V. MICHIGAN, 188 U.S. 505, 508; THE FRANCIS WRIGHT, 105 U.S. 381, 386; MONTANA COMPANY V. ST. LOUIS MINING AND MILLING COMPANY, 152 U.S. 160, 171.

THEREFORE, SINCE THE CONGRESS HAS NOT PROVIDED BY STATUTE THAT SETTLEMENTS OF THE GENERAL ACCOUNTING OFFICE ON CLAIMS PRESENTED TO IT SHALL BE REVIEWED BY THE COMPTROLLER GENERAL OF THE UNITED STATES, THERE IS NO BASIS FOR YOUR CONTENTION THAT SUCH REVIEW IS NECESSARY IN ORDER TO INSURE DUE PROCESS OF LAW.

ALSO, IT IS STATED IN YOUR LETTER OF AUGUST 20, THAT THERE HAS BEEN NO REVIEW BY A COMPTROLLER GENERAL OF THE ACTION TAKEN IN THE SETTLEMENTS OF THE CLAIMS DIVISION IN THE MATTER EXCEPT AS TO THE ITEM OF $150 WHICH WAS FOUND TO BE DUE AS ADDITIONAL LIQUIDATED DAMAGES IN THE SETTLEMENT OF MAY 5, 1936, AND WHICH WAS COLLECTED BY SET-OFF IN THE SETTLEMENT OF NOVEMBER 13, 1936. HOWEVER, IN YOUR LETTER OF JUNE 23, 1939, PROTESTING THE COLLECTION OF THE ITEM OF $150 BY SET-OFF YOU SPECIFICALLY REQUESTED REVIEW OF "* * * THE ACTUAL FACTS SURROUNDING THESE TWO CLAIMS.' ITALICS SUPPLIED.) PURSUANT TO SUCH REQUEST THE MATTER WAS REVIEWED BY FORMER COMPTROLLER GENERAL BROWN WHO, IN A DECISION OF SEPTEMBER 15, 1939, TO YOU, SUSTAINED THE ACTION THERETOFORE TAKEN COLLECTING THE ADDITIONAL AMOUNT AS LIQUIDATED DAMAGES, WHICH NECESSARILY INVOLVED A DETERMINATION THAT THE PREVIOUS DISALLOWANCE OF THE CLAIM FOR THE AMOUNT OF $2,800 WITHHELD AS LIQUIDATED DAMAGES WAS CORRECT. THEREFORE, IT APPEARS THAT THERE WAS, PRIOR TO YOUR LETTER OF JUNE 22, 1941, A FINAL SETTLEMENT OF THE MATTER BY A FORMER COMPTROLLER GENERAL. ACCORDINGLY, AS YOU WERE ADVISED IN MY DECISION OF AUGUST 19, 1941, THE CLAIM HAVING BEEN FINALLY DISPOSED OF BY MY PREDECESSOR IN OFFICE THERE IS NO AUTHORITY TO REVERSE OR REVISE HIS ACTION. SEE 16 COMP. GEN. 51, 118, AND CASES CITED THEREIN.

FURTHERMORE, EVEN IF I HAD JURISDICTION TO CONSIDER THE MATTER, I COULD NOT AGREE WITH YOUR CONTENTION THAT BECAUSE THE LIQUIDATED DAMAGES PROVIDED FOR UNDER THE CONTRACT BEARS NO REASONABLE RELATION TO THE ACTUAL DAMAGES WHICH WERE INCURRED BY THE GOVERNMENT THE PROVISION IS FOR A PENALTY AND NOT LIQUIDATED DAMAGES.

PARAGRAPH 2 OF THE SPECIFICATIONS STIPULATED THAT SHIPMENTS OF THE STAPLES WERE TO BE MADE IN ACCORDANCE WITH THE SCHEDULE CONTAINED THEREIN, AND THAT IN THE EVENT OF YOUR FAILURE TO MAKE SHIPMENTS IN ACCORDANCE WITH SUCH SCHEDULE, LIQUIDATED DAMAGES WERE TO BE CHARGED AT THE RATE OF $50 PER DAY UNTIL LOST TIME WAS MADE UP AND SHIPMENTS WERE RESUMED IN ACCORDANCE WITH THE SCHEDULE. IN OTHER WORDS, AT THE TIME THE CONTRACT WAS EXECUTED IT WAS AGREED THAT THE DAMAGES TO THE GOVERNMENT WOULD BE $50 PER DAY IF SHIPMENTS WERE NOT MADE AS PROVIDED AND IT CANNOT NOW BE ASSUMED THAT IT WAS IMPOSSIBLE FOR THE GOVERNMENT TO HAVE SUSTAINED SUCH DAMAGE BECAUSE A PART OF THE SHIPMENTS ONLY WERE DELAYED. THE STAPLES WERE TO BE USED BY THE GOVERNMENT IN CONNECTION WITH CONSTRUCTION WORK AND IT IS ENTIRELY POSSIBLE THAT AT THE TIME THE CONTRACT WAS EXECUTED THE GOVERNMENT CONTEMPLATED THAT DELAY IN SHIPMENT OF A PART OF THE STAPLES WOULD RESULT IN THE SAME DAMAGE AS IF ALL WERE DELAYED. HOWEVER, BE THAT AS IT MAY, IT IS WELL SETTLED THAT A PROVISION FOR LIQUIDATED DAMAGES IS FOR ENFORCEMENT ACCORDING TO ITS TERMS WITHOUT THE NECESSITY OF EXAMINING INTO THE QUESTION OF ACTUAL DAMAGES. SEE IN RE OUTFITTERS OPERATING REALTY CO., 69 F./2D) 90, AND CASES CITED THEREIN. SEE, ALSO, FRICK CO. V. RUBEL CORPORATION, 62 F./2D) 765 (C.C.A.2D), HOLDING THAT WHERE A CONTRACT FIXED LIQUIDATED DAMAGES FOR A BREACH, THE DISTRICT COURT PROPERLY EXCLUDED AS IMMATERIAL CERTAIN EVIDENCE HAD BEEN OFFERED TO PROVE THAT THE ACTUAL LOSS CAUSED BY THE BREACH WAS INFINITESIMALLY SMALL AS COMPARED WITH THE STIPULATED LIQUIDATED DAMAGES, AND PROPERLY DIRECTED A VERDICT FOR THE AMOUNT OF LIQUIDATED DAMAGES AGREED UPON IN THE CONTRACT, IRRESPECTIVE OF THE AMOUNT OF ACTUAL DAMAGES.