Reporter's Statement of the Case 92 C. Cls. able delays, the plaintiffs were prevented from completing the contract by the date fixed for its completion as extended by change orders. 5. The contractor duly notified the contracting officer in writing of the cause of the delays within ten (10) days of the commencement thereof, as required by Article 9 of the contract. 6. Because of the delays in completion, liquidated damages were deducted from payments made to the plaintiff, computed at the agreed rate of $20.00 per calendar day, as follows: 7. A claim for a remission of the liquidated damages deducted was presented to the contracting officer who transmitted same to the General Accounting Office for settlement. Settlement was made by the General Accounting Office, allowing a remission of twenty-two (22) days on Item "A," seventy-seven (77) days on Item "B," one hundred and five (105) days on Item "C," and one hundred and nine (109) days on Item "D," making a total of three hundred and thirteen (313) days, which at $20.00 per day, amounted to $6,260.00. Payment of this amount was made by the General Accounting Office to the plaintiff. 8. After payment of $6,260 to the plaintiff in accordance with the settlement made by the General Accounting Office, there is still retained by the defendant $5,360, representing liquidated damages for delays which were deducted by the defendant from payments otherwise due plaintiff. The contracting officer determined that the delays in completing the contract were due to unforeseeable delays. 9. Before this suit was commenced, it was understood between Valley Construction Company and R. E. Cotton Company that any balance of deductions from payments 172 Opinion of the Court improperly withheld from plaintiff by defendant for liquidated damages under the contract was properly payable to the use-plaintiff, R. E. Cotton Company. The court decided that the plaintiff was entitled to recover. WHALEY, Chief Justice, delivered the opinion of the court: The facts in this case have been stipulated and show that the contracting officer found the delays for which liquidated damages were charged against the plaintiff were due to unforeseeable causes beyond the control and without the fault or negligence of the plaintiff. The sole question involved is one which is similar in all respects to that decided by the court in the case of Albina Marine Iron Works, Inc. v. The United States, 79 C. Cls. 714, 720, in which the court held: * What is an unforeseeable cause of delay is a question of fact and when the contracting officer made his decision that these causes were unforeseeable, that the contractor was not negligent and was without fault in respect to them, it was a final disposition of the matter. Neither fraud nor bad faith is alleged or proven. The court cannot go behind the decision of the contracting officer where the contract makes him. the final arbiter of the facts of the case unless there has been fraud or such gross error which, in effect, would imply bad faith. The cases in this court and the Supreme Court so holding are numerous. Kihlberg v. United States, 97 U. S. 398; United States v. Gleason, 175 U. S. 588; Penn Bridge Co. v. United States, 59 C. Cls. 892. See also Carroll v. United States, 76 C. Cls. 103, where all the cases are fully reviewed. The action of the Comptroller General in denying plaintiff the relief granted by the contracting officer was without warrant of law. See Sun Shipbuilding and Dry Dock Company v. The United States, 76 C. Cls. 154, 193. The retention of $5,360, as liquidated damages, by the defendant from moneys otherwise due the plaintiff being unwarranted, plaintiff is entitled to recover. It is so ordered.. LITTLETON, Judge; and GREEN, Judge, concur. WHITAKER, Judge, took no part in the decision of this case. Reporter's Statement of the Case 92 C. Cls. WHARTON E. LESTER V. THE UNITED STATES [No. 45021. Decided November 12, 1940] On the Proofs Gift tax; trusteeship.-Where plaintiff in 1938 transferred to his three daughters certain property, it is held that the evidence adduced establishes that the property so transferred was not held by plaintiff as in trust, of which the transfers were an accounting, but that said transfers on the contrary were gifts, and as such liable to the Federal gift tax. Same.-Where during his wife's lifetime and from the date of her death in 1918 until the first of 1930 plaintiff treated as his own all of the property which he had received from his wife, receiving the income on it, paying taxes on it, disposing of it, enjoying it and in all other respects treating it as his own, it is held that plaintiff's actions were wholly inconsistent with the idea that he held the property in trust. Same. Where, at different times, plaintiff transferred to his daughters certain money and property, which money and property were at plaintiff's direction in turn transferred to certain trusts established for that purpose for the benefit of said daughters, and where under the provisions of said trusts the right of revocation was conferred upon the plaintiff solely, and where said trusts were in fact severally revoked by plaintiff, and where the cash proceeds of said trusts and the income from the property were commingled with plaintiff's own funds; it is held that plaintiff's actions with respect to the corpus and the income were inconsistent with the obligations of a trustee relationship. The Reporter's statement of the case: Mr. Wharton E. Lester, pro se, for the plaintiff. Mrs. Elizabeth B. Davis, with whom was Mr. Assistant Attorney General Samuel O. Clark, Jr., for the defendant. Messrs. Robert N. Anderson and Fred K. Dyar were on the brief. The court made special findings of fact as follows: 1. Wharton E. Lester, the plaintiff, is a resident of the District of Columbia, engaged in the practice of law. He has three daughters, Ruth L. Buchanan, Edith L. Kinsolving, and Kathleen L. McGreer. 176 Reporter's Statement of the Case 2. About 1903 plaintiff's wife gave him about $10,000 in order to enable him to establish financial credit for himself. By March 28, 1918, the date of her death, she had given plaintiff additional property of a value of about $43,000. She died intestate leaving to plaintiff an estate valued at $6,900, making a total amount given him during her lifetime and at her death of about $60,000. Sometime prior to these several transfers to plaintiff, but subsequent to the first gift of $10,000, plaintiff suggested to her that she make a will leaving her property to her children, but she declined to do so, saying that she would depend upon the plaintiff to see to it that her property went to her children. Plaintiff agreed that he would do so, both as to the property subsequently to be transferred and that already transferred. 3. From the date of his wife's death until January 1929 plaintiff handled all the property received from his wife as his own, receiving, using, and enjoying the income therefrom, mingling it and the corpus with his own property, and paying income taxes on the income derived therefrom. By January 14, 1930 the plaintiff had accumulated a total of $44,845.30 in the National Permanent Building Association to the credit of his three daughters. On that date he computed that the total amount received from his wife, plus interest thereon since her death, amounted to $105,154.70. This amount he added to the savings of his three daughters, which he withdrew from the National Permanent Building Association, and gave to each of them one-third of the total, or $50,000 each. Contemporaneously therewith each of plaintiff's three daughters, at plaintiff's direction, executed an irrevocable trust to the National Savings and Trust Company, each conveying to it the $50,000 received from her father. Each trust provided that the trustee should pay the income thereof to plaintiff for life, and, after plaintiff's death, to the settlor for her life, and after her death that the corpus of the trust should be distributed to such of the issue of the settlor as she should by her last will and testament appoint, or failing to make such appointment, that the income therefrom should be paid to the settlor's issue until Reporter's Statement of the Case 92 C. Cls. they severally arrived at fixed ages, and that at that time the corpus should be distributed to them. Paragraph 3 of each trust contained the following provision: And to the end that the grantor's said father shall and may be provided for as he may in his sole judgment consider necessary or advisable, said trustee is hereby authorized and directed to pay and deliver unto grantor's said father, Wharton E. Lester, any part or all of the corpus of the trust fund, upon his request or requests in writing, anything to the contrary herein notwithstanding, such request or requests to state that such payments are to be made out of the corpus of the trust fund, and the receipt of said Wharton E. Lester for each of the payments so made to him shall be a full receipt and acquittance to said trustee. 4. On or about November 30, 1931, an officer of the National Savings and Trust Company advised plaintiff that under the terms of the trusts the corpus was subject to execution for the settlor's debts. To prevent this plaintiff, purporting to act under the authority vested in him by paragraph 3 of the trust quoted above, requested the trustee to deliver the corpus of the estate to him. This was done, and immediately thereafter the plaintiff executed three trusts to the same National Savings and Trust Company, trustee, one for the benefit of each of his daughters, and all of the same tenor and effect as the three trusts previously executed by his daughters. In each of these trusts the plaintiff reserved the right of revocation. 5. On October 1, 1934, plaintiff had become dissatisfied with the manner in which the trustee had handled the trust estates and on that day he revoked them and demanded and received from the trustee the assets in each trust. Of the amount so paid to him $45,550 was in cash, and the balance in notes of the Trust Company, in which the trust funds had been invested. 6. In 1935 plaintiff transferred to his three daughters, absolutely, approximately $85,000, and in each of the next two years he transferred to them $5,000 each. In 1938 he transferred to them property of a total value of $53,895.00. On this last transfer the Commissioner of Internal Revenue assessed a gift tax of $65.58, which, together with interest |