Case ID: us-ct-cl_11/html/0126-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Field", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE CORLISS COMPANY’S CASE.
    (10 Court of Claims R., 494; 91 U. S. R., 321.)
    The Corliss Steam-Engine Company, appellee, v. The United States, appellants.
    
      On the defendants Appeal.
    
    
      The claimant has two contracts with the Navy Department for the construction of the engines and maohinery of the Pompanoosuc. The Department decides not to complete the worlc. The claimant offers to retain the machinery, or to deliver it in its unfinished condition for $259,033.40, payable upon delivery. The■ 
      Department notifies the claimant to deliver, and, recognizing $259,068.40 as “ tlie balance in settlement of tlietwo contracts,” stating that, in consequence of limited appropriations, only one payment will he made on delivery, and that a certificate for the balance will he given. The claimant delivers the machinery, and receives a certificate for the whole amount. The Department subsequently requests that the certificate he retxirned; hut the claimant declines to return it, unless the machinery he first returned. Congress orders the Department not to pay the claim until there he deducted from the contract-price “ whatever sum it would have cost said company to have completed their said contract.” The claimmt brings its action for the balance agreed upon. Judgment for the claimant. The defendants appeal.
    
    I. The duty of the Secretary of the Navy, under the orders of the President and the legislation of Congress, extends to the construction of war-vessels ; and during the rebellion he was specially authorized by various acts of Congress to construct vessels for the prosecution of the war.
    II. Where the Secretary of the Navy may enter into contracts for the construction, armament, or equipment of a vessel of war, he may suspend the work contracted for if the public interests require its suspension; and, when he orders such suspension, he may agree with the contractor upon the compensation to be paid for the partial performance of the work.
    III. Where a settlement which may lawfully be made between a public officer and a contractor is made upon a full knowledge of all the facts, without concealment, misrepresentation, or fraud, it is equally binding upon the Government.
    
      The Reporters'1 statement of the case.
    The court below found the following facts:
    I. On tlie 26th of October, 1863, a contract in writing was entered into between the claimant and its sureties, parties of the first part, and the Chief of the Bureau of Steam-Engineering, Navy Department, acting in the name of the Secretary of the Navy, for and in behalf of the United States, party of the second part, whereby the parties of the first part covenanted and agreed to build and erect, at their expense and risk, in a secure and finished state, fit in every respect for sea-service, in the United States steamer Pompanoosuc, at the Charlestown navy-yard, all the machinery necessary to the propulsion of the same by a pair of geared screw-engines of 100 inches diameter of cylinder and a stroke of piston of 4 feet, together with boilers, containing, in the aggregate, 1,128 square feet of grate-surface and 28,300 square feet of heating-surface, together with all appurtenances, coal-bunkers, instruments, tools, and spare pieces that might be required for proper working, according to the usages of the naval service.
    II. On the 13th of November, 1863, a certain other contract in writing was entered into between the same parties, whereby the claimant and its sureties, parties of the first part, covenanted and agreed to build and erect, at their expense and risk, in a secure and finished state, fit in every respect for sea-service, in the United States steamer Illinois, all the machinery necessary to the propulsion of the same by a pair of back-acting engines of 60 inches diameter of cylinder and 3 feet stroke of piston, together with the boilers, containing 546 square feet of grate-surface and two superheating-apparatus, together with all appurtenances, coal-bunkers, instruments, tools, and spare pieces that might be required for proper working, according to the usages of the naval service.
    III. Each of said contracts contained, among others, the following stipulations:
    “The said parties of the first part further agree that the Secretary of the Navy shall have the right to appoint a person to superintend the construction of the machinery, who shall have power to inspect it at all times, and to peremptorily reject, in any stage of its progress, any materials or articles, or any piece or part, which he may consider defective, either in quality of material or of workmanship, or in propriety of detail; and that they will provide the said person suitable and convenient office-room, and afford him satisfactory facilities for superintending the work.
    “And the said parties of the first part do further agree that the said machinery, appurtenances, coal-bunkers, instruments, tools, and spare pieces, complete in all respects, and ready for continuous sea-service, shall be on board the vessel within twelve (12) months from the date of this contract, provided it be placed at their command within six (6) months from the date of this contract, unless prevented by the act of the Government, or by circumstances beyond the control of the parties of the first part; it being understood that by ‘circumstances beyond the control of the parties of the first part,’ is meant accidents by fire or water to the machinery on the premises of the parties of the first part, or while being erected in the vessel; but delays by persons furnishing the parties of the first part with stock or material, or caused by loss of castings or forgings condemned for any reason whatever, are not within the meaning of the phrase ‘circumstances beyond the control of the parties of the first part.’
    “And if the vessel be not placed at the command of the said parties of the first part within the six (6) months aforesaid from the date of this contract, they, the said parties of the first part, do further agree that, within six (6) months from the time that they shall be notified that the vessel is at their command, they will have completed the said machinery, appurtenances, coal-bunkers, and spare pieces, on board, in all respects ready for continuous sea-service, unless prevented by the act of the Government, or by circumstances beyond the control of the parties of the first part.
    “And it is further agreed and mutually understood that, in case the machinery shall not be completed ready for erection in the vessel at the expiration of the said six (6) months from date of contract, or shall not be fully completed iu the vessel ready for sea-service at the expiration of the said six (6) months after the said parties of the first part are notified that the vessel is at their command, the said party of the second part is authorized to take possession of said machinery, and complete it at the expense of the said parties of the first part.”
    IV. The claimant proceeded to construct the engines, boilers, and appurtenances called for by said contracts, and continued therein until stopped by the order from the Navy Department hereinafter set forth under Finding VI. All the work done by the claimant in and about said construction was done under the supervision of an inspector appointed by the Navy Department, who made to the Department detailed reports of the progress of the work; at first semi-monthly, and afterward monthly, beginning on the 15th of June, 1864, and ending on the 1st of March, 1869.
    V. On the 30th of March, 1869, the Secretary of the Navy ordered a board, consisting of Capt. J. H. Strong and Chief Engineers B. F. Garvin and Edward Fithian, to examine and estimate upon the unfinished machinery under contract at the several engine establishments, with a view to obtain a release from the contracts, if, in the opinion of the board, such a release would be for the interest of the Government.
    The board made a report on the 26th of Apiil, 1869, as follows:
    
      “Navy-Yard, New York, April 26,1869.
    “Sir: In obedience to the order of the honorable Secretary of the Navy of the 30th of March, to examine and estimate upon the unfinished steam-machinery and tools now being constructed at different establishments, with a view of obtaining a release from the contracts, if, in our opinion, such a release .would be for the interest of the Government, we have respectfully to report:
    “The following is a list of the engines and the amounts due on contracts and reservations upon completion:
    Daniel McLeod, balance on reservation for one pair 60-inch by 36-inch engines. $30, 000 00
    John Roach, balance on reservation for three pairs 60-inch by 36-incli engines. 90,000 00
    Corliss Steam-Engine Company’s balance on contract for one pair 60-inch by 36-inch engines... 100, 000 00
    Extra bills on same. ..- 11,549 15
    Corliss Steam-Engine Company’s balance due on contract for one pair 100-iuch engines. 140, 000 00
    Extra bills on same. 7, 068 25
    378,617 40
    “In addition to this amount, there should be added, to complete the contracts, for extra work, in addition to that already charged, which would have to be done on the 100-iuch engines in the course of erection, which, in proportion to those already finished, would amount to twenty-five thousand dollars, ($25,000;) also an extra allowance for transportation to the Corliss Steam-Engine Company of fifteen thousand dollars ($15,000) for the 60-iuck by 30-inch engines, and thirty thousand dollars ($30,000) for the 100-inch engines; making a total of four hundred and forty-nine thousand and sixty-eight dollars and forty cents ($449,068.40) to complete the contracts.
    “ We estimate the cost to the contractors to complete the contracts to be the amount now due them, except upon the 60-inch by 36-inch engines at the Corliss Steam-Engine Company, which would cost about fifteen thousand dollars, ($15,000.)
    “ Should these contracts be completed as far as they can be, with a view to storing them in navy-yards, there would be a deduction on each of the 60-inch by 36-inch engines of about fifteen thousand dollars, ($15,000,) and upon the 100-inch engine of about fifty thousand dollars, ($50,000,) making a total reduction of one hundred and twenty-five thousand dollars, ($125,000,) leaving a balance, after deducting the cost of extra work in ■erecting the 100-ineh engine, of two hundred and ninety-nine thousand and sixty-eight dollars and forty cents ($299,068,40) to be paid by the Government for storing them.
    “ If the Department should decide to dispose of these engines in their present condition, we estimate as follows:
    “The 60-iuch by 36-inch engines, taking their weight as old material, should bring about thirty-seven thousand dollars, ($37,000.)
    “ We have received propositions from the different contractors, the best being from Mr. John Eoach, of the Morgan Iron-Works, in New York, who, being engaged in the marine-engine business, would be able at some future time to use some of the smaller detail parts, and he will allow forty thousand dollars ($40,000) for each of them, in addition to the balance due on reservation. We are of the opinion that forty-five thousand dollars ($45,000) could be obtained for each at the establishments in New York and Brooklyn, and for the one at the Corliss Steam-Engine Company’s establishment, being farther away from the market, thirty-five thousand dollars, ($35,000.) In the same proportion by weight, the 100-inch engines should be valued at eighty-two thousand dollars, ($82,000,) making a total of two hundred and ninety-seven thousand dollars ($297,000) paid back to the Government. This, added to the outlay required to complete the engines for storing, amounts to five hundred and ninety-six thousand and sixty-eight dollars and forty cents, ($596,068.40.)
    “From this amount must be deducted the balance due the Corliss Steam-Engine Company on contract for the 60-inch by 36-inch engine, and the amount of extra bills now pending, less the deduction to be made in case the 60-inch by 36-inch engine should be stored, amounting to one hundred and four thousand and sixty-eight dollars and forty cents, ($104,068.40,) leaving a balance of four hundred and ninety-two thousand dollars ($492,000) retained by the Government by disposing of the engines in their present condition.
    “ We have visited the establishments now having contracts for the building of tools, and respectfully state as follows:
    
      “ At the Providence Steam-Engine Company the tools are in various stages of progression. There are bolt-forging machines, with water-front forges, finished, to the amount of twenty-two-thousand eight hundred dollars, ($22,800.)
    “ There are six nut-forging machines, amounting to sixty thousand dollars, ($60,000,) that will require about eight thousand dollars ($8,000) to complete.
    “ There are other machines, amounting to nine thousand seven hundred and twenty-five dollars, ($9,725,) with the drawings-- and some of the patterns made, viz':
    One cast-iron emery-wheel stand. $975-
    One steam-engine for Charlestown navy-yard. 6,00fi
    One machine for making rivets and stay-bolts. 2, 750
    9, 725
    “ The whole amount of the contract is $92,525, upon which a payment has been made of $40,000. The contractor states that the bolt and nut forging machines are patented articles,, and, as he has the right to use them only in navy-yards, they would be of no use to him except as old material, and makes the following offér: He will allow for them $5,500, and deduct $8,000 for non-finishing for the machines having the drawings and some of the patterns made; he agrees to cancel the contract for 30 per cent, of the price named for them, making a deduction of $20,307.50. Notwithstanding the very small demand for this kind of tool of this size, and the difficulty in disposing, of them, even should the restrictions of the patent be removed,, we think a better settlement could be obtained upon the following basis, which we respectfully suggest:
    “ That he be allowed a profit of 30 per cent, upon the whole contract, and the amount expended on the tools, for which latter amount he shall allow the Government a percentage agreed upon, and retain the tools.
    “ Taking into consideration all the unfavorable circumstances, they should be worth 25 per cent, of tfie amount expended. The result would be as follows:
    Whole amount of contract .... $92,525 Ofi
    Profits at 30 per cent.. 27, 757 50
    Amount expended on tools. 49,960 00
    Twenty-five per cent, on amount expended. 12.490 00
    Payment received on contract. 40,000 Q0>
    “ This would make a deduction of $25,227.50.
    
      “ The tools at the establishment of John Eoach are in various stages of progression. One lot, amounting to $69,931, are ■finished ready for delivery. Another, amounting to $226,614.67, are more than half completed, there being made for them the •drawings, patterns, and over eight hundred thousand pounds of iron and brass castings and wrought-iron forgings, and to complete them would cost about $72,000, and upon the remainder there have been expended $32,000.
    “ The whole contract amounts to $409,000, being about $24,000 more than is shown by schedule furnished by the Department. This increase is in consequence of alterations being made in size of some of the tools, after the coutract was made, by orders of the Bureau of Steam-Engineering, which was shown. A payment on account of $109,600 has been made. The contractor offers to cancel the contract on the following ■terms :
    “ That he should receive a profit of 25 per cent, on the whole •contract, and the amount expended on the tools, and let the Government take them as they are, or he will allow the Government 50 per cent, on the amount expended and retain them, viz:
    Whole amount of contract ...$409,'000 00
    Profits at 25 per cent.. 102,250 00
    Amount expended on tools at 25 per cent.. 182,409 25
    Fifty per cent, on amount expended . 91,204 61
    Payment received on contract. 109,500 00
    “This would leave a balance due the contractor of $84,504, •making a difference of about $215,000.
    “We are of the opinion that 25 per cent, would be a fair profit, which would reduce the amount due the contractor to about $71,000.
    “The tool at the Lowell Machine Company’s establishment is a horizontal boring-lathe, to swing 12 feet diameter, designed for boring cylinders. The contract-price is $15,000, upon which .a payment has been made of $7,500. We estimate that at the date of our visit it would cost about $1,500 to finish it. The contractor would make no proposition for canceling, the contractor stating that it was not a tool that he could sell.
    “The board are of opinion that cylinders of a diameter requiring a tool of this size should be bored in a perpendicular position and not horizontally, and consequently useless for the purpose for which it was intended. We therefore recommend it to be disposed of on the most advantageous terms that can be obtained.
    “The board, after a careful examination of the engines and tools now being constructed, and considering the probable wants, of the service, have come to the following conclusions, which are respectfully submitted:
    “There are seven pair of these 60-inch by 36-inch engines with boilers stored in the different navy-yards at present, which, sliould they be used, will perhaps be as many as the Government will require for some years to come.
    “There will doubtless be many improvements made in the-construction of steam-engines before they will be required,, which, combined with their objectionable features, make it reasonable to suppose that they will never be used. Engines can-now be built, as we are informed, developing the same power, the same speed guaranteed, taking up less room, and about one-third less in weight, for one hundred and fifty thousand dollars 5 and as prices are not likely to advance, we are of the opinion that the Government can at any future time have engines built of an improved design on advantageous terms.
    “These engines would be unsalable for the merchant-marine service, for the reasons that other plans are being adopted, and on account of their weight and the room they occupy, and for the reason that we are not aware that there is a steamship now being built in the United States that would require engines of' this size.
    “The same objections apply to'the 100-inch engines. To complete these engines for storing, and the labor of moving and taking care of them, would cost a larger amount of money, for which, perhaps, no return would ever be realized, as it will no doubt be to the best interest of the Government to encourage any new improvements there may be made. We are of the-opinion that it wpuld be for the best interest of the Government to dispose of them on the most advantageous terms offered ; and taking into consideration the condition of the market, their actual value as old material, and the cost of breaking up and transportation, we think better terms should be obtained from the contractors than from other parties.
    “With regard to the tools, we have to say they are tools off the first; class, being built on the most improved plans that could be obtained from the best establishments in Europe, and would be invaluable to the Government if the wants of the service required them ; but the navy-yard shops are now well supplied for doing any work that may be required for many years, and they would, therefore, particularly the larger class, remain comparatively idle. They would be unsalable, as they are mostly of a class and size that no private establishment in this country has any use for, particularly at the present time, and we dp not think that they would bring now 30 per cent, of their value if sold to other parties.
    “Should they all be finished and delivered, it would be difficult to find room for them im the present shops of the navy-yards. If the Department decides that these tools are not required, and desire to cancel the contracts, we think the contractors are disposed to deal upon favorable terms; and although there would be some losses sustained, we are of the opinion that in the end they would be overbalanced by purchasing such tools as may be required at any future time, as the market is falling. Any disposition the Department may desire to make can probably be made to a better advantage at the present time, as, owing to the present condition of business, the prices are likely to continue to decline.
    “ We are, very respectfully, your obedient servants,
    “J. H. STRONG,
    “ Captain United States Navy and President of Board.
    
    “BENJ. F. GARYIN,
    “ Chief Engineer.
    
    “EDWIN FITHIAN,
    “ Chief Engineer.
    
    “Hon. A. E. Boris,
    “ Secretary of the Navy, Washington, i>. C.n
    
    YI. On the 8th of May, 1869, the following letter was addressed by the chief of said bureau to the claimant:
    “Navy Department,
    “Bureau oe Steam-Engineering-,
    
      u May 8,1869.
    “Sir : The Department has decided not to complete the engines and boilers being constructed by you under contract with this bureau. No further progress will therefore be made with the work.
    “Respectfully,
    “J. W. KING,
    “ Chief of Bwreau.
    
    “George H. Corliss,
    “ Corliss Steam-Engine Company, Providence, B. I
    
    Yll. Ou the 14th of May, 1869, the claimant addressed the following letter to the Secretary of the Navy :
    “ WASHINGTON, D. C., May 14, 1869.
    “Sir: The undersigned, contractors for steam-machinery known as the 100-inch by 48-inch, and 60-inch by 36-inch, would respectfully represent that said machinery has for a long time been ready for erection upon the vessels designated by the contracts for the same, and that the said vessels have been in no proper condition to receive said machinery.
    “The two contracts amount to $730,000 for the 100-inch and $415,000 for the 60-inch, and we have our bills pending for extra work ordered by the Department, amounting to $19,068.40, making in all the sum of $1,164,068.40, upon which we have received $860,000, leaving a balance of $304,068.40, which we now propose to settle, and cancel the contracts, by taking back all the machinery constructed by us under the said contracts, ■and the sum of $150,000. Or we will deliver the machinery at the navy-yard in Charlestown in its present state of completion for $45,000 less than the price fixed upon by the contracts. Of this sum we deduct $15,000 on account of the 60-inch, and $30,000 on account of the 100-inch contracts. The two contracts amount to $415,000 plus $730,000=$1,145,000, upon which we have received $860,000, leaving $285,000 which would be due on completion.
    “ We have done extra work ordered by the Department, for which our bills are pending, amounting to $19,068.40; this added to the $285,000 due on contracts makes $304,068.40, from which we propose to deduct $45,000, as above stated; leaving $259,068.40, which will be due when the work is delivered at the navy-yard in Charlestown.
    “ All of which is respectfully submitted by the
    “CORLISS STEAM-ENGINE CO., “GEO. H. CORLISS, President.
    
    “ Hon. E. A. Borie,
    “ Secretary of the BavyP
    
    
      VIII.On the 20th of May, 1869, the following letter was addressed by the chief of said bureau to the claimant:
    “ Bureau of SteAM-Engineering, May 20,1869.
    “Sir : Your letter to the Department of the 14th instant, in relation to the settlement of your contracts for one pair 100-inch and one pair 60-inch engines, has been referred to this bureau.
    “ The Department has decided to have you deliver the 100-inch and 60-inch engines, boilers, and appurtenances at the Charlestown navy-yard, on the terms proposed in your letter of the 14th instant, viz: balance unpaid on the two contracts, including items for transportation to the Charlestown navy-yard, and items for extra material and labor authorized, is 4>304,068.40, less deduction in consideration of their not being finished and erected in the vessel, $46,000, leaving balance in settlement of the two contracts, $269,068.40.
    “ In consequence of the very limited appropriations of this bureau, only one payment will be made, and that'on delivery of the machinery, &c., at the Charlestown navy-yard; the balance cannot be paid until Congress makes further appropriation, but a certificate for the amount due will be given you.
    “ Very respectfully,
    “J. W. KING,
    “ Chief of Bureau.
    
    
      u Geo. H. Corliss,
    “ Corliss Steam-Engine Company, Providence, R. I.”
    
    IX. Up to the time of the correspondence set forth in the next preceding three findings, no vessel had been provided by the Navy Department for the reception of the aforesaid engines, boilers, and appurtenances.
    X. Ón the 20th of May,1869, the said chief of bureau ordered a chief engineer of the Navy to inform the bureau of the then present condition and progress in construction of the said engines, boilers, and appurtenances, and also what parts then remained uncompleted under the terms of the aforesaid contracts.
    In obedience to said order, the chief engineer, on the 26th of May, 1869, made a detailed report in reference to said engines, boilers, and appurtenances, whereby the Navy Department was fully and correctly informed of the then condition of each item thereof, whether completed, or unfinished, or not commenced.
    
      XI. When this report was made the boilers called for in the contracts were completed, with all valves attached, and the engines were about nine-tenths completed.
    XII. In accordance with the terms of the aforesaid letter of the said chief of bureau of May 20, 1869, the claimant proceeded to deliver the said engines, boilers, and appurtenances in their then condition, whether of forwardness or completeness, at the Charlestown navy-yard, and the delivery thereof was accomplished on or before November 13, 1869 ; and on the 15th of that month the commandant of said navy-yard transmitted to the Navy Department an inventory of all that was so delivered ; and the property so delivered has ever since remained in the possession of the Government, and no part of it has ever been returned or tendered by the Government to the claimant.
    XIII. On the 8th day of December, 1869, the said chief of bureau, by the authority of the Secretary of the Navy, signed and delivered to the claimant the paper set forth in claimant’s petition, in the words and figures following, to wit:
    “ Navy Department,
    “Bureau of Steam-Engineering-,
    “ December 8, 1869.
    “This certifies that the Corliss Steam-Engine Co., of Providence, R. I., having made in its letter of May 14, 1869, to the Navy Department an offer to settle and cancel the contract made by and between the Bureau of Steam-Engineering and the Corliss Steam-Engine Company, of October 26, 1863, and November 13,1863, for a pair of 100" x 48" engines, boilers, and appurtenances, and a pair of 60" x 36" engines, boilers, and appurtenances, on the following terms, viz: To deliver the engines, boilers, and appurtenances at the Charlestown navy-yard,-in their then unfinished condition, for the sum of two hundred fifty-nine thousand and sixty-eight dollars forty cents, ($259,068.40,) and the offer of the company having been accepted by the Bureau of Steam-Eugineering (by order of the Department) by the Bureau’s letter of May 20, 1869, and the engines, boilers, and appurtenances embraced in the two contracts above named having’been delivered at- the Charlestown navy-yard in an unfinished condition, as agreed upon between the Corliss Steam-Engine Company and the Bureau of Steam-Engineering, except five hundred and fifty-two (552) tubes, amounting to thirteen hundred eighty dollars forty cents, ($1,380.40,) which being deducted, entitles the Corliss Steam-Engine Company to the payment of the sum of two hundred fifty-seven thousand six hundred eighty-eight ($257,688.00) dollars, due on the first day of October last, and payment will be made when the United States Congress shall make the necessary appropriation for this bureau.
    “J. W. KING,
    “ Chief of Bureau.'”
    
    XIY. On the 10th of March, 1870, the said chief of bureau addressed the following letter to the claimant:
    “Navy Department,
    “Bureau of Steam-Engineering-,
    “ March 10,1870.
    “ Sir : A board having been ordered to examine your claims for payment under contracts made with this bureau, you are requested to return the certificate of indebtedness given under date of December 8, 1869.
    “ Respectfully,
    “J. W. KING,
    
      “ Chief of Bureau.
    
    “ George H. Corliss,
    “ Washington, I). CP
    
    XY. On the 11th of March, 1870, the claimant addressed to said chief of bureau the following letter :
    “The Arlington,
    “ Washington, D. C., March 11, 1870.
    “ Dear Sir : Referring to yours of the 10th instant, I beg leave respectfully to decline your request to return the certificate of indebtedness given under date of December 8, 1869. And I submit that a most reasonable condition to a re-opening of the question of my ‘claims for payment under contracts made with the bureau’ would be a ‘ return ’ of the engines, boilers, and appurtenances (weighing some fifteen hundred tons) from the navy-yard in Charlestown to the works of the Corliss Steam-' Engine Company, in Providence, in the same condition as they were when the arrangement of May, 1869, was consummated ‘ by order of the Department,’ whereby the original contracts for this machinery were canceled, and the terms of settlement for said machinery were all arranged, and since been fulfilled on the part of the Corliss Steam-Engine Company, as is fully and officially confirmed by said certificate.
    “Yours, &c.,
    “GEO. H. CORLISS,
    “ President Gorliss Steam-Engine Company.
    
    “ J. W. King, Esq.,
    “ Chief of Bureau of Steam-Engineering, Washington, E. C.”
    
    
      Mr. Solicitor-General Phillips for the United States, appellants :
    We assign for error the conclusion by the Court of Claims that the United States were so bound by the settlement contained in the certificate of December 8, 1869, that they could not show that the amount so certified exceeded what was, under the circumstances, really due to the claimants-. The fact that a certificate was giren to the claimants does not aid their case. The substance of that case is that the Secretary agreed, upon their transporting the engines to Charlestown, to pay them the amount claimed, and that thereupon they complied with the condition imposed. An oral agreement would have been quite as effective, for it seems certain that he had no power to issue any written evidence of debt by the United States that, by being written, would have a greater effect than if oral. (See The Floyd Acceptances, 7 Wall., 666.)
    The view which we take of this transaction is, that when the United States directed the claimants to stop work upon the engines, the latter became entitled to damages for such breach of contract, which damages were, within a measuring cost, ascertained by well-known principles of law, and that whatever might be true of the inconvenience of disturbing an arrangement varying from the truth by a small percentage only, yet where the court sees that the damages assessed exceed the true ■damages by the difference between #140,000 and $257,000 — i. e., more than 80 per cent. — such assessment becomes, as matter of law, invalid. Here the Court of Claims said that if the United States could have proved the assessment made in the report of November, 1869, to be the correct assessment, it would have been immaterial.
    
      To decide whether it would hare been immaterial we must consider what its effect would- hare been had it been shown. To have shown that, would hare been to show that the certificate had awarded the claimants 80 per cent, more than what was due to them. Would that hare been immaterial ? In this connection we submit further, that although in ascertaining damages in such cases an element of fact exists which would; put the assessment to some extent in the hands of a jury, yet that if in a case of mere breach of contract, involving no question of smart-money, a jury were to exceed the probable amount by 80 per cent., the court would feel itself called upon to rule the plaintiff to abate his recovery, or otherwise have the verdict set aside.
    In all this we assume, as we have a right to assume, that the United States could have shown to the satisfaction of the Court of Claims that the true damages in this case were $140,000, or thereabouts. If a jury would not have been allowed to assess such an amount against a defendant, we submit that it is not in the power of an officer of the United States to assess such a rate of damages against them. We admit in this part of the argument that the Secretary could pass upon the element of fact in such cases so far as to fix it within the limits that a jury might have done; but we submit that, beyond these limits, the error renders the settlement illegal, and remits the claimant to his right of suit in the Court of Claims.
    It must be remembered that in such cases the claimants may be bound by an arrangement which does not per se bind the United States; because the former are personally present,, assenting to the transaction, while the latter are dealing-through an agent of defined powers. If the United States choose to ratify any such arrangement, they can hold the other party bound, while, unless they do, the other party may not be able to enforce it as against them.
    Again, we submit that by the form of the certificate it appears that the claimants relied for satisfaction upon a fund to be appropriated by Congress, and so that the operation of the act of July 15,1870, is to the effect that no appropriation has been made except for the true damages arising under the rules applicable in all such cases. It is a narrow view of that act to read it as imposing a rule of payment upon the Secretary only. It clearly means that the United States refuse to pay according to the terms of the certificate.
    
      Whatever doubts might be urged in an ordinary case to the applicability of the above doctrines to assessments made by the Secretary, it seems that where, at its next session, Congress has repudiated a particular assessment of that sort, a court will not be disposed to enforce it.
    A full presentation of the defense of the United States requires us to suggest, farther, that in all cases where the interests of the public demand that a contract be broken and the other party left to recover such damages as the law awards, it is intended by our system that the matter shall be referred to the Court of Claims for settlement. The present is not a case in which the Secretary and the claimant agreed to substitute one contract for another while the latter remained unbroken. The order to cease work was made without a previous understanding with the contractors. Upon that order being given, the situation of the parties (as we submit) became such as virtually to refer-the matter at once to the tribunal devised by Congress to represent public justice in disputes about money between plaintiff and the United States. The Secretary is not an agent of the United States for matters of this sort and magnitude. At all events, by such intervention he cannot obstruct the processes of the Court of Claims, if it happens (as here) that, after all, the matter remains to be adjudicated there.
    If the Secretary actually discharges the amount which he has agreed to pay, nothing may remain tobe said about it; but if he be directed by Congress not to pay it, we submit that the matter naturally goes before the Court of Claims upon the original rights of the parties as they existed at the time when the cause of action arose. In short, his settlement is only preliminary to a payment by him; while, if the payment has to be made through the Court of Claims, they are to settle the terms without embarrassment by what had been done provisionally (as it were) by the Secretary.
    In conclusion, we ask the attention of the court to the fact that, under the promise made to them on the 20th of May, 1869, (afterwards embodied in the certificate,) the claimants were not induced to alter, and-did not alter, their conditions under the contract for the worse, or in any respect so as to be the foundation of a suggestion by them that the United States is bound by the arrangement because of considerations arising subsequent to the original contract. There is no consideration in what took place after the 20th of May to bind the United States for any amount beyond what they owed under the contract. The claimants suggest in their note of March 11, 1870, that the transportation of the engines to Charlestown was such consideration. But they were bound by the original contract so to transport them. That transportation was part of the value which the United States were to receive for their original promise to pay, and so could not be a ground for the promise by the Secretary to pay more than that. The arrangement between the Secretary and the claimants was one by which he waived a requirement of certain items in the original contract; transportation was one that he did not waive. Of course, a failure to waive that could form no consideration, for a new promise; so that, when the claimant demanded (March 11,1870) to be restored to the statu quo of their contract, they erred in specifying as an item therein a return of the engines.
    Nor could the alleged cancellation of the original contract, (which, whatever the claimants meant by that word in the note of March 11, 1870, is not found as a fact.) under the circumstances of this case, be such a consideration. The United States had a legal right (subject to the payment of damages) to stop further progress under the contract. It can hardly be said that a cancellation of the paper which evidenced what was to have been due to the claimants in case the contract had been executed could have then been material to the claimants, in view of all the admissions aud other evidence upon that point to be found in other official papers authorized by the Government, some of them on file in this case. If the paper had been really canceled, (which is not shown,) it had previously become very insignificant, and therefore its defacement cannot be pretended to be a consideration justifying the payment of more than $100,000 to the claimants. Indeed, the allusion to a cancellation is so indirect, and is so probably only metaphorical, that we are not sure that we ought to have combated a suggestion which, perhaps, has not been intended on the other side.
    
      Mr, Assistant Attorney-General Simons also for the appellants :
    We contend, in the first place, that the Court of Claims misapprehended the legal effect of the alleged agreement of the Navy Department, in construing it as intended to bind and as binding the United States absolutely to payment of the amount specified.
    That the Department never intended to bind the United States by its action appears, we submit, by the plain reading of the letter of acceptance and of the certificate of December, in each of which payment is declared to be conditional on a subsequent appropriation by Congress of the requisite amount. The claimants were notified that the Department had no means of payment, and that payment would not be made until Congress should provide the means. The Department could not, and of course did not, engage that Congress would, within a certain time or at any time, make the appropriation. Can anything be plainer than that, under an agreement so conditioned, no right to demand the sum therein specified and no right of action therefor could accrue to the claimants until the appropriation should be made1?
    But if the conditional nature of the agreement does not appear to the court so clear on its face as it seems to us, there remains the argument, which seems conclusive, that it is only as conditional that the alleged agreement can (jscape the objection that it is void for want of authority in the Department to make it.
    The power of the Secretary of the Navy and his subordinates to bind the United States by their agreement is subject to certain statutory limitations which they cannot exceed, and which all persons dealing with them as contracting agents are bound to know and regard.
    The solicitude of Congress on this point was early manifested, and its measures of precaution and restriction have never been relaxed, but always augmented and made more stringent. (See Eev. Stat. U. S., title, Public Contracts, pp. 738-743.)
    In 1820, (§ 6, act May 1,3 Stat., 568,) certain heads of Executive Departments, including the Secretary of the Navy, were prohibited from making any contract (other than for subsistence and clothing of the Army and Navy) except undfer a law authorizing the same, or under an appropriation adequate to its fulfillment.
    This was extended to all contracting agents by § 10, act March 2,1861, 12 Stats., 220, (Eev. Stats., §3732.)
    Even the form of contracts was carefully regulated and prescribed under penal sanction by an act of June 2,1862,12 Stats., 411, Eev. Stats., § 3744, &c.
    The defendant’s position, in view, especially, of the statutory prohibition cited, is, that since the alleged contract of the Navy Department was not “ under a law authorizing, the same,” nor u under an appropriation adequate to its fulfillment,” the transaction can have no force or effect except such as might be given to it by a subsequent authorization by law, or by a subsequent adequate appropriation for its fulfillment; that as the Secretary of the Navy had no power, in the face of this statute, to make his agreement absolute, it is not to be presumed that he had any such intent, but rather (as the terms of his communications indicate) that his action was intended to be subject to ratification by that authority which could adopt it and make it effective; and that since such ratification has been hitherto refused by Congress, no right of action against the United States has accrued to the claimants on the alleged contract, and the court below erred in sustaining the action thereon as being an absolute agreement.
    On March 3, 1871, Congress passed the usual appropriation act for the naval service for the year ending June 30, 1872, containing the following provision: l( Bureau of Steam-Engineering. For repairs and preservation of machinery, boilers, labor in navy-yards, coal, transportation, materials, and stores, one million dollars: Provided, That no money appropriated by this act shall be expended on account of naval engines contracted for during the war.” (16 Stat. L., p. 531.)
    The same proviso was attached to the appropriation act of May 23, 1872, for the naval service for the year ending June 30,
    1873, at the end of the first section of the act. (17 Stat. L., p. 154.) It was again repeated in the act of March 3,1873, making appropriation for the naval service for the year ending June 30,
    1874. (17 Stat. L., p. 556.) On March 26, 1873, the claimants filed their petition in this suit in the Court of Claims, and it does not appear that Congress thereafter acted in the premises.
    It appears, therefore, that Congress not only never ratified the conditional agreement in question, but by special enactment, five times repeated, has refused its assent, and has also, in the Act July 15, 1870, (16 Stat. L., p. 325,) recorded its determination to authorize no settlement by the Navy Department except in accordance with the liability for damages fixed by law, on rescission of contracts of the nature of those with claimants.
    The question is whether, under such circumstances, this court is prepared to follow the Court of Claims in holding that~6he agreement was intended to bind the United States to absolute payment of the sum which we contend was only conditionally fixed as the basis of settlement, subject to approval of that authority which alone can appropriate the public money.
    In United, States v. Ames, (1 Wood & Min., 89,) an executive officer had undertaken to submit a matter of controversy between the United States and an individual to arbitration, who thereupon claimed the award as binding the United States. The court held the want of authority a decisive objection, saying: “ All judicial power is, by the Constitution, vested in the Supreme Court and such inferior courts as Congress may from time to time ordain and establish. (Constitution, art. 3, § 1.) No Department nor officer has a right to vest any of it elsewhere ; and it has been questioned even if Congress can vest it in any tribunals not organized by itself.” * # # “ Such submissions and awards are sometimes useful, as they may be afterward accepted and voluntarily enforced by the proper authority, as a guide to what is supposed to be nearly right and safe; but I can see no legal ground on which their execution can- be compelled by a court of law.” And see Fx parte Randolph, 2 Brock-enbrough, 479.
    In LovetVs Case, (9 N. & H., 494,) the court said: “ But the case at bar is entirely a claim for unliquidated damages .for breach of contract, for the relation of landlord and tenant, however formed, rests on contract, and we think that neither the War Department uor the Secretary of War were authorized to finally adjudicate the claim and conclude the parties to it.”
    See also, in general, on the power of executive agents to bind the United States by their acts or agreements, The United States v. Nicoll, 1 Paine, 646; Lee v. Monroe, 7 Cranch, 572; the Floyd, Acceptances, 7 Wall., 666.
    
      Mr. Joseph Casey for the appellees:
    The act for the re-organization of the Navy Department, approved July 5, 1862, (12 Stat. L., p. 510, § 1,) establishes “ a Bureau of Steam-Engineering.” “ The Secretary of the Navy shall assign and distribute among the said bureaus such of the duties of the Navy Department as he shall judge to be expedient and proper; and all of the duties of said bureaus shall be performed under the authority of the Secretary of the Navy, and their orders shall be considered as emanating from him, and shall have full force and effect as such.” (§ 4.)
    Had the Secretary power to make this compromise ?
    This must depend either on his general powers as Secretary, or on some special power conferred in the premises.
    The act of April 30, 1798, § 1, 1 Stats., 553, provides:
    “There shall bean Executive Department, under the denomination of the Department of the Navy, the chief officer of which shall be called the Secretary of the Navy, whose duty it shall be to execute such orders as he shall receive from the President of the United States, relative to the procurement of naval stores and materials, and the construction, armament, equipment, and employment of vessels of war, as well as all other matters connected with the naval establishment of the United States.”
    These duties, in most instances, are executive, and involve judgment and discretion, and are not subject in those instances to either judicial control or review. (Decatur v. Paulding,-14 Peters, 515 ; Brashear v. Mason, 6 How., 92; United States v. Guthrie, 17 How., 304; Evocarte De G-root, 6 Wall., 497.)
    The President exercises his various executive duties and functions principally through the Departments, and they are deemed his acts. (United States v. Eliason, 16 Peters, 291; Wilcox v. Jackson, 13 Peters, 498; United States v. Cutter, 2 Curt., 617; Williams v. United States, 1 How., 290.)
    The contracts under which this contest arose came clearly within the general powers, “the construction, arhiament, and equipment of vessels of war.”
    If he had the right to make the contract, why not a right, with consent of the contractor, to rescind it?
    The Act July 24,1861, (12 Stats.,- 272,) increased during the rebellion the power of the Secretary of the Navy, and conferred upon him almost unlimited discretion in the purchase, construction, and equipment of ships of war:
    “ That for and during the present insurrection the Secretary of the Navy shall be, and he is hereby, authorized to hire, purchase, or contract for such vessels as may be necessary for the temporary increase of tbe Navy of the United States, andJie is also hereby authorized to furnish any vessel or vessels which may be purchased or contracted for, with such ordnance, ordnance-stores, and munitions of war as may be necessary to enable such vessel or vessels to render the most efficient service,w &e.
    So the appropriations made by Congress during the war, of vast sums, were made in the most comprehensive and general terms and conferred the largest and widest discretion. The position assumed is that the Secretary of the Navy had' no power or authority to make the settlement and compromise, and that his act in this regard does not bind the United States. That is, that the Secretary of the, Navy, under the law, had full power to make these contracts according to his own unrestricted judgment and discretion; that he could increase, alter, suspend, or extend them at his own will. It is not denied he could wholly stop work under them ; that he could do everything else but determine what was the state of the account between the United States and the contractor. It is true the Navy Department alone furnished the full, necessary, detailed, information to make such a settlement and adjustment. There was neither matter of fact nor of law in dispute between it and the contractor. They were perfectly agreed as to the amount of work done, and the prices agreed upon under the contract. They were agreed that it was for the interest of the United States; that no more expense should be incurred for work theu entirely useless.
    If the Government seeks to rescind this agreement, it could only do so by putting the claimants in statu quo. That involves: 1st. The restoration of the contracts given up and canceled; 2d. The return of the machinery delivered over to the United States; 3d. The payment of interest and damages for the loss and delay. (Penn v. Lord Baltimore, 1 Yesey, sen., 444; Union Banlc of Georgetown v. Geary, 5 Peters, 115; Chitty on Contracts, 9th Am. ed., 42, and notes.)
    A compromise or settlement, like an award, must bind both or neither. If the claimant was concluded, so were the United States. This court says, in Gordon v. The United States, (7 Wall., p. 195,) “An arbitrament and award which concludes one party only is certainly an anomaly in the law.” A settlement and compromise which should be obligatory on one party to it, and not on the other, would be equally anomalous.
    
      Another position assumed is that upon suspension of the work, before completion of the contracts, it became such an unliquidated matter that it was taken out of the power of the Secretary and became a matter for adjudication by tbe Court of Claims. I know of no law or authority which supports such a postulate. In every such case, under the Act June 25, 1868, (15 Stats., p. 75,) the head of a Department may, at his discretion, send any case before him, involving disputed facts or controverted questions of law, to the Court of Claims. That he has a choice of doing so or not shows that he may determine the matter for himself. Besides, this case involved neither disputed facts nor controverted questions of law ; and, as I think I have clearly shown in the former part of this brief, the compromise and settlement was clearly within the prescribed powers of the Secretary of the Navy.
    The action of Congress in directing a re-examination of the case, and the deduction of what sum it would have cost to complete the contracts, can have no bearing on the judicial aspects of the case. It may have furnished a rule to the Secretary, but does not bind the claimauts or the courts.
    The stating of the account alters the nature of the debt, and is in the nature of a new promise or undertaking. (See 2 Green. Ev., §§ 126, 127, and 129; 1 Chitty’s PL, p. 391.)
    It is an admission made oy a party authorized by law that so much was due to claimant. (See opinion of Att’y-Gen’l Bates, 10 Op., p. 62; Kelly v. Crawford, 5 Wall., p. 790.)
    An award made by an arbitrator, where there is no submission-bond, may be recovered under this count. (1 Ohitty’s PL, p. 391; 1 Esp., p. 94; Tidd’s Prac., 9th ed., p. 834; 5 Tenn. Bep., p. 5.)
    To open such an account, fraud or mistake must be shown. Wilcochs v. Phillips, 1 Wall., jr., pp. 66, 47; Martin v. Aclcer, 1 Bl. & JEL, p. 279; Perhins v. Kart, 11 Wheat., p. 237 ; Conrad v. Nicoll, 4 Peters, p. 295; Harden v. Cordon, 2 Mass., p. 541; see, also, Chi tty on Contracts, p. 566, et seq.)
    
    If this be a settlement or compromise, then a statute attempting to impair or annul it would be unconstitutional and void. (Cooley on Const. Lim., pp. 284-294; Steamship Compcmy v. Joliffe, 2 Wall., p. 450; Smith’s Com. on Const. Law, §§ 149, 366, 368, 375, et seq.; Cooley’s Const. Lim., pp. 362, 364, and notes; 90pin.of Attorneys-General, p. 206; Twenty per cent. Cases, 
      20 Wall., p. 179; Cooley on Const. Lim., p. 284, and the numerous authorities there cited; Id., 290, 291, 362 and note 3; Christ Church v. Philadelphia, 24 How., p. 300 ,• Salt Company v. Bast Saginaw, 13 Wall., p. 373; Bice v. Railroad, 1 Black, p. 358 ; State of Pennsylvania v. Wheeling Bridge Company, 18 How., p. 431; Terret v. Taylor, 9 Cranch, pp. 50, 51; Pawlet v. Cla/rh, Id., p. 292; United States v. Klein, 13 Wall., p. 144; 2 Sto. on Const., § 1790; Steamship Company v. Joliffe, 2 Wall., p. 450.)
   Mr. Justice Field

delivered the opinion of the court.

This case comes before us on appeal from the Court of Claims, and involves a consideration of the validity and binding character of a settlement, made between the Secretary of the Navy and the claimant, for work performed by the latter upon contracts with the Navy Department. There is no dispute about the facts of the case; they are fully and clearly stated in the findings of the Court of Claims. And it would seem that there ought not to be any dispute as to the law applicable to them. The validity of the contracts is not questioned. The work upon them was done under the supervision of an inspector of the Navy Department, and no complaint is made of the manner in which it was done. When in 1869 the Department, upon the recommendation of a board of officers of the Navy, appointed by it, suspended the further progress of the work under the contracts, the claimant made a written proposition, in the alternative, either to take all the machinery and receive $150,000, or to deliver it in its then incomplete condition at the navy-yard at Charlestown, for $259,068, payable on delivery there. The Department accepted the latter proposition, recognizing the amount specified as .the balance due on settlement of the contracts, stating, however, that, in consequence of the very limited appropriations, only a partial payment would be made on delivery of the machinery at the Charlestown navy-yard, and that the balance could not be paid until Congress should make a further appropriation, but that a certificate for the amount due would be given to the claimant.

The machinery was accordingly delivered at the navy-yard, with the exception of a few articles, for which a deduction from the amount of the settlement was allowed, and the certificate stipulated was given to the claimant. Previous to this, however, the Chief Engineer of the Navy, under direction of the Department, examined the machinery and made a detailed report, by which the Department was fully informed of its condition, the progress made in its construction, and what remained to be done for its completion under the contracts. There is no allegation or suggestion that the claimant was guilty of any fraud, concealment, or misrepresentation on the subject, but, on the contrary, it is clear that every fact was known to both parties, and that the whole transaction, as stated by the court below, was unaffected by any taint or infirmity. If such a settlement, as the Chief-Justice of the Court of Claims very justly observes, accompanied by the giving up by one, and the taking possession by the other, of the property involved, cannot be judicially maintained, it would seem that no settlement by any contractor with the Government could be considered a finality against the Government.

The duty of the Secretary of the Navy, by the Act April 30, 1798, (1 Stat. L., p. 553,) creating the Navy Department, extends, under the orders of the President, to “ the procurement of naval stores and materials, and the construction, armament, equipment, and employment of vessels of war, as well as all other matters connected with the naval establishment of the United States.” The power of the President in such cases is, of course, limited by the legislation of Congress. That legislation existing, the discharge of the duty devolving upon the Secretary necessarily requires him to enter into numerous contracts for the public service, and' the power to suspend work contracted for, whether in the construction, armament, or equipment of vessels of war, when from any cause the public interest requires such suspension, must necessarily rest with him. As in making the original contracts he must agree upon the compensation to be made for their entire performance, it would seem that when those contracts are suspended by him he must be equally authorized to agree upon the compensation for their partial performance. Contracts for the armament and equipment of vessels of war may, and generally do, require numerous modifications in the progress of the work, where that work requires years for its completion. With the improvements constantly made iu ship-building and steam-machinery and in arms, some parts originally contracted for may have to be abandoned and other parts substituted, and it would be of serious detriment to the public service if the power of the head of the Navy Department did not extend to providing for all such possible contingencies, by modification or suspension of the contracts and settlement with the contractors.

When a settlement in such a case is made upon a full knowledge of all the facts, without concealment, misrepresentation, or fraud, it must be equally binding upon the Government as upon the contractor. At least such a settlement cannot be disregarded by the Government without restoring to the contractor the property surrendered as a condition of its execution.

But aside from this general authority of the Secretary of the Navy, under the orders of the President, he was, during the rebellion, specially authorized and required by acts of Congress, either in direct terms or by specific appropriations for that purpose, to construct, arm, equip, and employ such vessels of war as might be needed for the efficient prosecution of the war. In the discharge of this duty he made the original contracts with the claimant. The completion of the machinery contracted for having become unnecessary, from the termination of the war, the Secretary, in the exercise of his judgment, under the advice of a board of naval officers, suspended the work. Under these circumstances we are of opinion that he was authorized to agree with the claimant upon the compensation for the partial performance, and that the settlement thus made is binding upon the Government.

Decree affirmed.