While that of an officer de facto is one who may have exercised the duties of the office * * * "Under color of a known and valid appointment or election, but failed to conform to some precedent, requirement, or condition * * * (State v. Carroll, 38 Conn., 449; Norton v. Shelby Co., 118 U. S., 445, 446; Continental Trust Co. v. Toledo, St. L. & K. C. R. R. Co., 82 Fed Rep., 642, 650.) Ensign Goldman was nominated, confirmed, and commissioned as a lieutenant (junior grade), but he did not fulfill the condition precedent as to physical qualification prescribed by Congress in sections 1493 and 1502, Revised Statutes. This condition is not an unconstitutional limitation upon the appointing power nor directory merely, and without its fulfillment he could not be legally invested with the office of lieutenant (junior grade) or become a lieutenant (junior grade) de jure. The decision of May 23, 1913, is adhered to. A reopening is denied. Claimant further requests that he be allowed the pay of a lieutenant (junior grade) for periods from February 11 to March 24, 1911, and from January 27, 1912, to May 9, 1912. Upon inquiry of the auditor I am advised that he has made no settlement of his right to such pay for these periods. I am therefore now without jurisdiction to consider these items. PROVISION IN A CONTRACT FOR DEDUCTION OF LIQUIDATED DAMAGES FOR DELAY HELD TO BE A PROVISION FOR A PENALTY. A contract for delivery of metal work to the Lighthouse Establishment contained a provision for deduction of liquidated damages at the rate of $10 per day for each day's delay in completing deliveries: Held, That said provision, in failing to discriminate between a total failure and a partial failure in deliveries and, imposing the same rate of damage for either, must be construed as a provision for a penalty and enforceable only to the extent of the actual damage suffered by the Government on account of the delay. Decision by Comptroller Downey, July 16, 1913: The Milwaukee Structural Steel Co. appealed June 4, 1913, from the action of the Auditor for the State and Other Departments in disallowing, per certificate No. 7450 (M. S. & C.) dated May 29, 1913, in part, its claim for $860, a sum deducted from the contract price of certain metal work furnished to the Lighthouse Establishment by said company under informal contract of June 23, 1911, as liquidated damages for delay in the delivery of the materials covered by said contract. The auditor allowed $20 of the sum claimed and disallowed the balance in accordance with an advance decision of this office (rendered at the request of the Secretary of Commerce and Labor), dated March 12, 1912 (60 MS. Comp. Dec., 1168). Inasmuch as the main question raised by the appeal as presented is somewhat different from the questions that were considered when the case was before this office for advance decision, as will presently appear, the facts will be restated and the claim considered on its merits. By circular letter of June 1, 1911, proposals were invited for furnishing and delivering f. o. b. Milwaukee, Wis., as specified— 66 * * * Structural and cast metal work and other materials for a metal tower and for a fog-signal building for Kewaunee Pierhead Range Front Light Station, Wisconsin, as per plans and specifications herewith." In accordance with such invitation, and in response thereto, the Milwaukee Structural Steel Co., June 7, 1911, submitted a proposal to furnish and deliver 66* ** within 60 days from date of order therefor the articles or services (same as specified in circular) bid upon ❞— for $3,125, which proposal, being the lowest and best, was, with the prior sanction of the Secretary of Commerce and Labor, accepted June 23, 1911, and on same date an order was given for the materials proposed to be furnished. Such proposal and acceptance constitute the contract between the parties that is here in question, and by the terms thereof all the metal work and other materials covered thereby should have been delivered within 60 days from June 23, 1911, or by August 22, 1911. None of them were delivered by said date, however, and the last of them were not delivered until November 17, 1911, a delay of 86 days in completing the contract. The specifications, attached to and made a part of the proposal and acceptance, provided (pp. 8 and 9): "Delivery shall be made to the lighthouse depot, foot of Greenfield Avenue, Milwaukee, Wis., the materials unloaded and placed as directed on the depot grounds within twelve weeks (expressly changed to within 60 days' by the proposal and acceptance) from the date on which the order to proceed with the work is issued * * * "Should the contractor fail to complete the work in the time agreed upon in the contract a deduction will be made in the amount of ten dollars ($10) for each and every day, including Sundays and legal holidays, that the work remains uncompleted after the date required (agreed upon) for its completion. The said amount is hereby agreed upon as liquidated damages for the loss to the United States on account of all expenses due to the employment of officers. 42853°-VOL 20-14- -2 and other employees after the expiration of the time of completion and on account of the value of the operation of the lighthouse structures dependent thereon, and will be deducted from any money due the contractor under his contract." On completion of the work the contractor was paid in full therefor, less $860 (86 days, at $10 per day) retained as liquidated damages for the delay in completion. The contractor objected to this deduction and assigned numerous excuses for the delay, the whole of which, as contended, was due to causes beyond the contractor's control. It was ultimately determined that all but two days of said delay was due to causes for which the Government was not responsible (60 MS. Comp. Dec., 1168), and by the settlement appealed from, the auditor allowed a refund of $20, representing the deduction made for two days' delay for which the Government was responsible. In the advance decision of this case, hereinbefore referred to, it was assumed without question or consideration that the contract was one prividing for liquidated damages for all delays in completion of the undertaking which were not excusable under the contract terms, and the single question there considered was whether all or any part of a delay in such completion was excusable under the contract terms. No contention is now made that the contractor was not responsible for 84 days of the delay that occurred in the completion of deliveries, or that, under the contract terms, deliveries should not have been completed within 60 days as agreed (plus 2 days allowed as delay chargeable to the Government). In lieu of such contentions, however, it is now urged that the contract was not one that provided for liquidated damages at the rate of $10 per day for each day's delay in the completion of the contract undertaking and that the provision, quoted supra, which purports so to provide is, considering the subject matter of the contract and the nature of the contract undertaking, to be construed as a provision for a penalty for delays and hence enforceable only to the extent of any actual provable damages sustained by the Government by reason of the contractor's delay. As grounds for such contentions, it is urged that the subject matter of the contract was of a severable character; that the contract was not for the erection complete of a single structure, but was merely for the furnishing of materials, of many kinds and classes, which it was expected later to utilize in building such structure; that the contemplated structure itself was to consist of different parts, i. e., foundation, tower, and fog-signal sections, a delay in the delivery of the materials for the second and third of which could have in no wise delayed the erection, by the Government, of the first and second; and that, considering these circumstances and the fact that many materials of varying value, like beams, frames, ladders, doors, bolts, nuts, etc., were to be delivered, for a failure to deliver one or all of which the contractor would alike have been in default, the provision quoted supra, if enforced, would impose the same measure of damages for a partial breach, however inconsequential, as for a complete failure or breach. In other words, it is urged that the nature of the undertaking was such that the same measure of damages could not have resulted from a partial failure to deliver all the materials within the time agreed as from an entire failure, and that in failing to discriminate between a partial and a complete failure or to apportion the agreed damages to the extent of the breach, the contract shows on its face that there was no real liquidation of the damages that would result from a delay and that the provision purporting so to provide was inserted merely as in terrorem and not as the result of any real agreement as to the damages consequent from possible delays. It is well settled that where a contract provides for the completion or delivery of two or more distinct things, of individual utility, within a specified time, and fixes upon a sum as liquidated damages for each day's delay in the full completion of the contract undertaking, regardless of whether the delay may relate to the delivery of one or all of the separable articles contracted for, the so-called provision for liquidated damages will be construed as a provision for a penalty, and will be enforced only to the extent of any actual damages caused by the delay (see 43 MS. Comp. Dec., 1297, Dec. 18, 1907; 19 Comp. Dec., 20, and authorities cited at length in said decisions). And a careful perusal of the specifications governing the work covered by the contract before me leaves little, if any, room for doubt that the nature of the contract undertaking here involved was such as to bring it squarely within the scope of the principle of law just stated. The contract was not for a completed utility, but for the delivery of various and sundry items of materials, of varying values and importance, that were designed for erection into such an utility. And these materials, though not delivered by the date agreed upon for final delivery of all the materials covered by the contract, were delivered in the order required and needed by the Government, i. e., the foundation materials were delivered on September 9, 1911, the materials for the tower on November 2 and 3, 1911, and those for the fog-signal superstructure on November 16 and 17, 1911, so that erection of the work by the Government could not have been so delayed or the consequent damages so great from a failure to deliver what was last required and delivered as from what was first required and delivered. On the reasoning set forth at some length in a case very similar in all essential respects heretofore considered by this office (19) Comp. Dec., 20), I conclude that the contract here in question was not one which provided for liquidated damages for delay in the completion thereof but for a penalty, and that the provision purporting so to provide is accordingly enforceable only to the extent of any actual damages sustained by the Government by reason of the delay that occurred. The Secretary of Commerce reports that the Government sustained an actual damage of $275 from the contractor's delay of 84 days in the completion of said contract, and this sum only should have been deducted from the contract price. On this revision, therefore, claimant will be allowed $565 in addition to the $20 allowed by the auditor, or $585 in all. I find and certify a difference of $565 accordingly. USE OF PROCEEDS OF SALE OF WASTE PAPER. The proceeds of sale of waste paper can not be used to purchase machinery or appliances for the handling and preparation thereof for sale. Comptroller Downey to the Public Printer, July 17, 1913: I have your letter of July 10, 1913, as follows: "In accordance with plan No. 1, as it appears in Senate Document 1105, Sixty-second Congress, third session, relative to the collection, handling, and disposition of waste paper in the Government service, the Government Printing Office is now collecting, hauling, assorting, baling, and disposing of the various grades at considerable expense to the appropriation for public printing and binding unless the expense incurred may properly be deducted from the proceeds of such sale and the net proceeds only deposited into the Treasury. I therefore respectfully request your decision regarding the course authorized by the act of June 8, 1896 (29 Stat., 268), indicating whether the following items of expense may be regarded as a proper charge against the sale of the classes of old material, condemned stores, supplies, or other public property: 1. Canvas bags for collecting old material, etc. (waste paper), from the 4. Automobile (drayage) truck for hauling the old material, etc. (waste 000 000 000 000 5. Additional scale for weighing old material, etc. (waste paper), received from the several executive departments and independent establishments_ 000 6. Necessary labor for collecting, hauling, assorting, and baling old material, condemned stores, supplies, or other public property of any kind. 000 7. Percentage for overhead charge to cover expense for supervision, weighing, accounting, etc., in lieu of auctioneer's fees_____ 000 |