
    JEAN SATTERLEE, ADM’X, ET AL., v. THE UNITED STATES.
    [Departmental 49.
    Decided January 14, 1895.]
    
      On the Proofs.
    
    A contractor agrees to remove 90,000 yards of material in the “Harlem, Biver improvement.” The time for the completion of the work is, at his request, extended. He is to he protected from the river hy cofferdams erected by him, but pursuant to plans and specifications prescribed by the defendants and under the supervision of their officers. An extraordinary flood causes the river to overflow the dam and destroys the contractor’s work. The cost of removing new matter and completing the work will greatly exceed the cost of the entire work. A new contract is then made exempting the contractor from finishing the work and allowing him full pay “for all work actually performed, under the said two contracts, including percentages,” but requiring him to remove the plant from the channel. The contractor does so.
    I. Percentages retained under a contract until the completion of the work, though declared by the contract to be forfeited in case of annulment, must be treated as penalty and not as liquidated damages. The retained percentages are to cover actual damages because of failure to perform.
    II. Increased cost thrown upon the defendants in consequence of extension of time allowed to the contractor is a proper subject for recoupment.
    III. Where a contractor is to erect cofferdams according to the plans of the defendants and under the supervision of their officers, which are for the protection of his work, and they are overthrown by an extraordinary storm, and the result is not due to the fault of either party, the defendants are not liable for the consequences.
    IV. When the performance of a contract is rendered impossible by natural causes, the contractor is absolved from the obligation to perform ; but if the natural causes only render the work much more difficult and expensive, he must perform.
    
      Y. An agreement between the engineer in charge, approved by the Secretary of War, and a contractor that he shall remove a destroyed plant from a public wort and be allowed to throw up his contract and be paid all moneys due for work performed, including retained percentages, if it be a settlement between a public officer and a contractor made upon a full knowledge of the facts, without concealment, misrepresentation, or fraud, is not ultra vires, but binding upon the Government.
    YI. Where the offi cers of the Government do not declare a forfeiture of a - contract, but tacitly acquiesce in the contractor’s abandonment,, it is an abandonment by the act and aequiesence of both parties, and in such case the law will not imply a forfeiture.
    
      The Reporters’ statement of the ease:
    The transmittal of the Secretary of the Treasury, pursuant to the Act March 3,1883 (22 Stat. L., 485), will be found in the opinion of the court. The following are the facts as found by the court:
    I. The claimants are the duly appointed administratrixes of John Satterlee, deceased.
    The decedent, on the 12th day of August, 1889, made a contract with the defendants to remove 90,000 cubic yards of material on the line of the “ Harlem River Improvement,” for which he was to receive certain prices, varying according to the character of the work, as shown by the terms of said contract, marked Exhibit A.
    On the 9th day of March, 1S91, decedent made another contract with the defendants, for additional work at the same place, as will be seen by Exhibit B.
    The time for the completion of the work was, at the request of the contractor, extended to June 1, 1893, within which it could have been performed. After the death of the contractor the work was prosecuted by claimants.
    II. The purpose of the excavation was the formation of a navigable channel by way of the Harlem River and Spuyten Duyvil Creek from the East River to the Harlem River. The plant of the contractor and the material to be removed were located in a canal connecting Harlem River and said creek, and were protected from the flow of water by cofferdams erected at the east and west ends thereof, under the plans and supervision of officers of the United States Army and agents of the defendants. The material was supplied and the work done by the contractor and claimants.
    
      III. On tbe 21st day of April, 1893, while the work was in progress and substantially completed (there being about 1,000 yards under first contract and 4,000 under second), a storm of unusual violence, accompanied by a heavy rainfall and by a tide of extraordinary height, caused a simultaneous breaking of the waters of the Harlem Eiver and said creek over the top of each of the cofferdams, whereby a destruction of the dams ensued, filling the canal with water to the depth of 18 feet, submerging the plant, machinery, and tools of the decedent, and submerging the remaining material to be removed. In consequence of the overflow caused by the destruction of the dams the further prosecution of the work was made much more difficult, increasing the expense of the cost of excavation in a ratio from about one to five. In consequence of the inundation the execution of the contract upon the basis of compensation on which the contract was made became impracticable.
    IY. The dams were destroyed and overflowed, filling said canal, because they were not erected of sufficient height to withstand the flood caused by the storm of April 21,1893. The dams were erected by decedent under and in pursuance of jilans and specifications furnished by the engineer in charge, and it does not appear that decedent or claimants objected to such plans and specifications, or that they furnished any plan or specification for the consideration and adoption of the engineer of the United States. Both parties assumed and believed that the dams would be sufficient for the protection of the work, and were reasonably sufficient against the ordinary dangers incident to a rise in the waters.
    There remains unpaid upon the contracts, for labor performed, the sum of $11,098, being the amount of the retained percentage under the agreements.
    In consequence of the extensions of the contracts, made at the request of the decedent, the defendants have incurred and have been subjected to an additional expense of engineering and inspection in the sum of $3,383.83.
    Y. In consequence of the storm and destruction of the dams the claimants abandoned the prosecution of said work, and in consequence of such abandonment the claimants and Col. G. L. Gillespie, Corps of Engineers of the United States Army, made an agreement, wliicb is annexed as Exhibit C, which was ' approved by the Chief of Engineers and the Secretary of War, in which, among other things, it is provided:
    “Therefore it is hereby mutually covenanted and agreed that the parties of the second part, or their legal representatives, having removed, approximately, the total quantities of the material contemplated by the two contracts before mentioned, shall be exempt from the obligation contained in the specifications attached to said contracts which requires the formation of a channel 350 feet wide and 18 feet deep, mean low water, between the dams inclosing the working pit, and shall be held to have practically completed the said contracts, and to be entitled to payment in full for all work actually performed under the said two contracts, including percentages withheld from all previous payments, deductions being made •for the additional expenses incurred by the United States for engineering and inspection during the period covered by the several extensions of the said contracts: Provided, hoioever, Thatpayment to the parties of the second part under this agreement shall not be made until after the said parties of the second part shall have removed the plant from the improved channel: And provided further, That said payment, when made, shall be a final and complete settlement between the parties to the said contract in regard to all matters pertaining to said contracts.”
    The claimants removed their plant and machinery from said canal, where it had been submerged by the storm. The defendants, since the making of said agreement, have relet the excavation of the remaining portion of decedent’s work, at a cost of nearly fivefold. No formal annulment of said contracts of 1889 and 1891 have been made by the defendants. On the 5th day of July, in consequence of the condition of the work as incident to said storm, claimants notified the officers of the defendants in charge of the execution of the work and the Secretary of War that they would not proceed in the execution and performance of the same. While the claimants declined to finish the work, they proposed that if they were allowed additional and adequate compensation for the remainder they would perform the same. Neither the Secretary of War nor the officers of the defendants in charge of the work made any reply to said communication. On the 10th of July, 1893, the claimants said, in a letter to the Secretary of War:
    “We were in no manner at fault either in the construction •or maintenance of the dam, but nevertheless every piece of machinery in the excavation and all our property between the dams was at risk and tbeir safety depended on the dams constructed by the United States and under the care of the engineer officers. By the breaking of the dams all this property has been heavily damaged, and, while we believe we are justly entitled to be paid for this great loss, rather than be [blank] in settlement or to conflict with opinion of the United States authorities, we are willing to accept the terms of settlement recommended by Colonel Gillispie, the engineer officer in charge.”
    
      Mr. John C. Chaney, for the claimants:
    The first question of law which presents itself is to determine the effect of this agreement and whether it is founded upon valuable consideration, for it is claimed by the Government and by its able counsel here that this contract can not stand, because it is unsupported by any consideration. If this contract is found to be supported by valuable consideration, it will doubtless be conceded that the money and the retained percentages earned under the Satterlee contracts should be paid to the claimants.
    If it is true, as agreed to by both parties, that the terms of the two contracts have been approximately performed by the Satterlees, then the latter can not be held to be in default, and their right to immediate payment of earnings and retained percentages due can not be questioned. It is not proposed to go into a discussion of how far the Government is bound in law by admissions of such a character as these by its duly authorized officers, but it will be maintained that they are valuable in that they furnish to court and counsel the solemn judgment of men of ability and ripe experience, whose zeal for the service of the defendant has been marked by years of faithful and intelligent effort; that the claimants had practically performed their obligations under said contracts, and that all of the work thereunder had been approximately done.
    We shall not insist that the removal of their plant from the working pit, where it laid submerged, at great expense to themselves, would, standing unaided by other considerations, be such a consideration as to leave said supplementary contract free from the objection of nudum pactum,; but we will insist that if by the fault of the defendant that plant was submerged, then the burden of removal of said plant would be ample consideration to support it.
    
      The cofferdams were built by tbe claimants, without compensation, with material which came from the excavation and materials furnished by the defendant and upon a plan furnished by defendants alone. It is true that the claimants, if not satisfied with the plan proposed, were at liberty to make one of their own, which would, if it met the approval of the engineer in charge, be adopted. And thus, whether made by one or the other, the plan was ultimately that of the defendant. It is easy to infer that any contractor, if he ever saw this provision of the specifications, which is very doubtful, would have deferred his judgment to those who had for years made such matters a study and for years of their lives had become familiar with the waters which were to be held by those dams. The contractor, Satterlee, was therefore fully justified in relying with confidence upon this plan and that he would be absolutely secure from danger to his life, the lives of his men, and his property, because of any failure of the dams, either from insufficient strength, or from being overtopped and destroyed by water from the high tide in conjunction with a great storm, as it finally was.
    That the cause of the failure of the dams was from the flow of the water simultaneously over the crest of each of them through the combined power of a great storm and high tide, which caused the water to rise above said dams, is conclusively shown from the report of Assistant Engineer Doerflinger to Colonel Gillespie of date of April 29, 1893. From that report we learn that each of the dams were overtopped by the flood and high tide at about the same instant of time. It is plain, then, had those, dams been built of sufficient height that all the material would have been removed from the new channel before the expiration of the claimants’ contract, which was June 1,1893. The fault was with tbe engineer who made the plan. He did not make the dams high enough. He wished, doubtless, to avoid cost and stretch his appropriation as far as it could possibly go. As to his being in default, we are not alone in this view. We quote from the indorsement of Acting Secretary of War, General Grant, date of July 11,1893.
    
      “ Upon more careful investigation I am not satisfied that the last indorsement hereon, made June 20,1893, does not do justice between the parties. That indorsement proceeded upon the belief that the contractor was wholly responsible for the destruction of tbe dam. It is now believed tbat tbe contract does not justify tbat belief.
    “The building of tbe dam was a part of tbe contract of August 12, 1889, and it was built according to tbe plan, specifications, and directions of the Government. It might bave been bigber and stronger bad tbe Government so planned or required it. Had it been built higher or stronger it would have been done at tbe expense of tbe Government, tbe contractor would bave received pay under tbe contract according to tbe material furnished and tbe worlc done. There is no apparent reason why tbe contractor should bave desired to avoid tbe expense in building tbe dam. * * * It is true tbat tbe specifications provided that tbe contractor might present for adoption bis own plans for tbe dam, but be bad a right to believe tbat plans presented by tbe Government were sufficient, and to accept and act upon them. Tbat tbe dam did not withstand tbe unusual storm of April 21,1893, is not tbe fault of tbe contractor.”
    Under this contract tbe contractor, Satterlee,bore tbe relation of servant to tbe defendant, and tbe mutual obligations of master and servant were sustained throughout tbe prosecution of tbe entire work. All of tbe work and material excavated was to be performed under tbe direction of tbe defendant, both as-to tbe manner of the performance of tbe same and tbe result to be accomplished.
    In tbe Singer Manvfacturing Oompany v. Balm (132 U. S., 518) it is held tbat the relation of master and servant exists whenever tbe employer retains tbe right to direct tbe manner in which tbe business shall be done, as well as tbe results to be accomplished; or in other words, not only what shall be done but bow it shall be done.
    In Shearman and Redfield on Negligence, section 105, the learned authors say :
    “If be (tbe contractor) submits himself to tbe direction of bis employer as to tbe details of tbe work fulfilling bis wishes, not merely as to tbe result, but as to tbe means by which tbe result is to be attained, tbe contractor becomes a servant in respect of tbat work. He may be contractor as to part of tbe service and a servant as to part.”
    Tbe contractor in this case being tbe servant of tbe defendant, was bound to be cared for by tbe master who is tbe defendant in this case. It was tbe duty of tbe defendant to furnish a safe place for tbe contractor and bis men to work in, and for tbe property needed to carry on bis work, and bis failure to do so resulting in damages to tbe claimant makes bim liable therefor.
    In Steioart v. Philadelphia, Wilmington and Baltimore It. It. Go. (17 Atlantic, 679, Delaware Case) it is held an employer impliedly engages to make tbe services of tbe employees a reasonably safe one. * * * He shall provide a safe place for tbe employee to work at or upon.
    In Bennett v. Syndicate Iron Company (39 Minn., 264) and Anderson v. Bennett (16 Oregon, 515) tbe court held that it is tbe general duty of a master to exercise care, to prevent the exposure of bis servant to unnecessary and unreasonable risks, and be must use reasonable diligence in seeing that tbe place where tbe service is to be performed is safe for that purpose.
    In Maddox v. Chesapeake and Ohio B. B. Co. (28 W. Ya., 610, report) tbe court say:
    “ It is a well-established general proposition that under tbe common law in America tbe master is liable to bis servant for any neglect of tbe master’s duty, whether committed by tbe master himself or by one to whom be has delegated' bis au-. thority.”
    In Pike v. Chicago and Alton B. It. Co. (41 Fed. Reporter, 95) tbe court say:
    “An employer can not escape liabilities, even to an employee, for tbe nonperformance or neglect of performance of tbe duty which be owes to an employee, merely by intrusting its performance to some other employee or agent. If an injury occurs to an employee by reason of tbe dangerous nature of the place where be is at work, without any negligence on bis part contributing to tbe injury, tbe employer is responsible for tbe damages sustained by bim.” (Nadan v. White River Lumber Co., 43 N. W. Reporter, 1135; Nichols v. Brush and I). Mfg. Co., 53 Hun., 137, 25 N. Y. S. R., 717; Cullen v. Norton, 29 N. Y. S. R., 700; Smithy. Peninsular Car Works, 60 Mich., 501.)
    In Consolidated Ice Co. v. Keifer (26 Ill. Ap., 466) it is held a master is liable for injury to a servant by tbe breaking of an insufficient support of a heavy tank in a building in which be is working.
    It is quite plain to us from these authorities that tbe Government would be held responsible for all damages sustained by tbe petitioners on account of tbe failure of said cofferdams.
    
      The existing contract for the removal of the two sections east and west of the section to which these specifications refer, requires the contractor in terms, during the continuance of his work, to maintain and repair the cofferdams at the easterly and westerly limits of the cut at Dyckman’s meadow. On the completion of these contracts (the first of which expires December 31,1890, and the second on June 30,1891), the maintenance of these dams will devolve upon the contractor under these specifications, who will be required to keep the dams in a state of efficiency and to remove at his own expense whatever water may come into the canal chamber from the time he assumes control until the completion of the excavation Of the section of cut to be made under these specifications; no allowance for extra work in keeping canal free of water will be made at any time.
    These provisions were doubtless intended to free the agents of the Government of that care of the lives and property of the contractors which the law has always imposed upon the master or employer with respect to those who serve him or are in his employ. It is a well-established rule of law that stipulations of this character can not be enforced because contrary to good conscience and public policy. The courts in the different States and also in the United States Supreme Court, have promulgated this rule and recognize its authority all over the land. New York and Georgia appear to be the only States which seem to sustain such contracts.
    The following authorities are relied upon in support of this proposition:
    In Railroad Company v. Loolmood (17 Wall., 357) it is held a common carrier can not lawfully stipulate for exemption from responsibility when such exemption is not just and reasonable in the eye of the law. It is not just and reasonable in the eye of the law for a common carrier to stipulate for exemption from responsibility for the negligence for himself or his servants. In this case Justice Bradley, after analyzing the New York authorities which hold a contrary doctrine at page 368, quotes Judge Davis upon the operations of the New York rule, who said:
    “ The fruits of this rule are already gathered in increasing accidents through the decreasing care and vigilance on the part of these corporations, and they will continue to be reaped until a just sense of public policy shall lead to legislative restriction upon the power to make this kind of contracts.”
    In Lake Shore and Michigan Southern R. R. Go. v. Spangler (44 Ohio State, 471) it was held that it is not competent for a railroad company to stipulate with its employees at the time and as a part of their contract óf employment that liability for negligence shall not attach to it. This was an action by a brakeman for injuries for negligence of a conductor.
    In Liverpool and G. TV. Steam Co. v. Phoenix Ins. Go. (129 IT. S., 397) the court held that an express stipulation by any common carrier for hire in a contract of carriage that he should be exempt from liability for losses caused by the negligence of himself or his servants is unreasonable and contrary to public policy and consequently void.
    A contract between a carrier and shipper of stock limiting the carrier’s liability in the case of a total loss of stock by the carrier’s negligence to a certain price per head less than the full value of the stock is invalid. (Southern Pacific R. R. Go. v. Maddox, 75 Texas, 300; Loan v. St. Louis, Keokuk and Northwestern R. R. Go., 38 Mo., Ap. 408.)
    In Louisville and N. W. Go. v. Wynn (88 Tenn., 320) it was held that an animal worth $800, shipped under contract limiting recovery to $100, if lost through the carrier’s negligence, its full value may be recovered where no value is fixed upon it as a basis for freight charges or otherwise.
    In Louisville, Neio Albany and Chicago Ry. Go. v. Fayler (126 Ind., 126) it is held that the right of a carrier to limit his common-law liability by special contract does not extend to acts which result from his negligence or the negligence of his employees.
    In Boehl v. Chicago, Milwaukee and St. P. Ry. Go. (44 Minn., 191) it is held a carrier can not limit his liability for his own negligence by contract either as to the right or the amount of recovery.
    It may be claimed that the rule we insist upon applies solely to common carriers, but the authority above quoted in the case of Lake Shore and Michigan Southern R. R. Go. v. Spangler (44 Ohio State, 471), is a case in point where the fact of the duties of a common carrier is not alone the reason for applying this rule. The chief reason there given is that to allow the operation of snob a contract would tend to relax that care and vigilance the law requires at the hands of the employer, and is, therefore, void on the grounds of public policy. Certainly these stipulations by the Government officers, hid away as they were in certain plans and specifications, and which were doubtless never seen by Satterlee or anyone else who did the work, should come within the operation of this wise rule. It was known to the Government officers who sought to have this work- done that it was attended with danger, and to permit them to relieve themselves of the ordinary duty of vigilance and care which, if omitted, would amount to negligence on their part, would be fraught with as much danger in principle as if the employer were a common carrier. We venture the assertion, and without fear of successful contradiction, that nowhere in this or any other country can there be found such contracts as are prepared by the Engineer Department, and we may say by all Government officers. They are ingenious almost to the point of deviltry in seeking to make their contracts lop-sided in favor of the Government; in fact, the ingenuity of these officers in this regard is such that their.manifest unfairness is a matter of unfavorable comment with every member of our honorable profession, and if they can interpose such stipulations as these off in some obscure paper entirely separated from the contract itself, whereby they can gain immunity from their own negligence, then, indeed, will their already inequitable contracts become so burdensome and obnoxious that the Government will not be able to secure the employment of honest and self-respecting men, and these contracts will only be sought after by men without character and conscience. By such a policy the Government would necessarily be injured, and the public would suffer as a consequence.
    If the execution of this contract between the claimants and the Government has the effect to injure, inconvenience, or damage the claimants, as it necessarily would if they are bound to complete the excavation of said rock, this, in our opinion, would raise a consideration to support said supplementary agreement if none existed before. In Tulare v. Clifton (20 Atlantic, 1086, a New Jersey case) it was held, to give a sufficient consideration to support a promise, it must be either such as deprived a person to whom the promise was made of the right which he before possessed, or else conferred upon the other party a benefit which he could not otherwise have had.
    3. It is respectfully suggested that the supplementary contract of August 8,1893, is under seal and that the question of the consideration of a contract of that bind can not be raised.
    But suppose the stipulations of the contracts above quoted are such as can be enforced, counsel for Government may claim with some show of logic that the supplementary contract is void for want of consideration for the reason that no damages resulted to them by reason of said storm for which the Gov- ■ eminent can be held liable, and consequently the provision of the supplementary contract which makes it a final and complete settlement between the parties in regard to all matters pertaining to their former contracts does not have the effect to relinquish to the Government any claim for damages claimants may have against it and thus form a measure of consideration supporting said agreement. Should the court take this view our contention will be that our clients are entitled to the payment of the money earned and retained percentages in the hands of the defendant independent of that contract.
    The reason for this is obvious, it seems to us; it is conceded that the destruction of the dams and its consequences was through the fault of the defendant in not making the dams of sufficient height to withstand those floods. Now it is an admitted fact that the contractor could not have completed the remaining work to be done under those contracts under the conditions existing after said storm without very great and ruinous loss to himself. This condition of affairs was brought about through no fault of his, but wholly through the fault of the defendant. It certainly can not be claimed with any show of reason that the claimants were obliged to continue the work upon said contra,cts under such circumstances. If we are right in this proposition it can not be claimed that the Government should have the right to deduct anything from the moneys in its hands due the claimants for former work under said contracts.
    In Gilbert and Building Mfg. Go. v. Butler (5 N. Eng., 573, a Massachusetts case) it was held that the plaintiff may recover for work and material furnished at the dissolution of a contract where he was prevented from full performance by defendant’s fault.
    
      This rule is so elementary that it apj)ears to us unnecessary to cite further authority.
    Jl/r. SaiimelA. Putnam (with whom was Mr. Assistant Attorney- ■ General Dodge) for the defendants.
    It is not claimed that the Government has done anything by which the contractor has been rendered unable to complete the contract, or that the Government has in any way failed to perform its part of the contract, but simply that, by reason of the storm of April 21,1893, the work has been put in such condition, through no fault of the Government, that the contractor can not finish it without great loss. If it is true that to remove the remaining material will cost more than the contract price, this loss should certainly not fall upon the Government, but upon the contractor, as one of the burdens which he assumed when he executed the contract. The pretended consideration moving from the contractor in this agreement is that he shall accept the money as full payment of his claim and shall remove his plant from the work. The first of these is no consideration, because, under the most liberal construction of the contract, he could not possibly get more, and the second is no consideration, because the plant is his and the duty of removing it is his. If the Government had refused to allow him to remove it, he would have probably sued for his rights, and certainly could have done so if he chose.
    In other words, the contractor gave up nothing and the Government gained nothing by this agreement, and the Government, on its part, gave up the right to have the remaining material removed at contract price. If the Secretary of War or the head of any other Executive Department of the Government can at pleasure surrender without consideration the valuable rights of the Government, he may give away without price any other property of the Government in his keeping, and there is no limit to the power which he may exercise over it. If this view obtains, it will in future be worse than useless for the Government to observe the formalities of entering into a contract before it has work done. The Government will be bound by the terms of the contract, and the contractor will only be bound by the pleasure of the Executive Department under whose supervision the work is done.
    
      If I am correct in my assumirtion that tbe agreement for final settlement above discussed is void, then tbe parties must be bound by tbe terms of tbe original contracts, and tbe Government, while not entitled to retain tbe amount claimed in tbis suit as a forfeit under tbe terms of tbe contracts, is entitled to retain and offset against any demand of claimant so much of it as may be necessary to pay whatever sum in excess of tbe contract price it may cost tbe Government to complete the work contemplated in tbe said contracts.
    Tbe statement of tbe War Department shows that tbe value at contract price of tbe work done by claimant for which be has received no pay and tbe retained percentages amount to $11,098.18, and that tbe engineering and inspecting expenses, which claimants admit should be a credit on tbis, is $3,383.83, or a balance of $7,712.35.
    There is nothing in tbe papers to show bow much more than contract price it will cost to remove tbe remaining material, and tbe court can not therefore, upon tbe case as now presented, make any finding as to tbe amount that should be retained as damages; but doubtless when tbe court has stated tbe principal tbe War Department will settle tbe amount without further difficulty.
    After tbe submission of tbis case upon original briefs and oral argument, tbe court remanded it for printed briefs upon tbe following questions:
    “First. Do tbe facts establish tbe fact that tbe parties of tbe first part agree that the parties of tbe second part might abandon the work before, and independent of, the alleged contract?”
    Tbe only person who could possibly agree on tbe part of tbe United States that claimant should be allowed to abandon tbe work was tbe Secretary of War. There is nothing in tbe record to show that any subordinate officer ever contemplated making such agreement without first having received tbe approval of tbe Secretary. Tbe Secretary at first refused to give that approval, but upon reconsideration gave it, and instructed that a contract be drawn and executed, which was done, and is tbe alleged contract here inquired about. It may be true that Colonel Gillespie and tbe entire Engineer Department favored such a settlement, but it does not follow that they attempted to usurp tbe power of the Secretary, and, in fact, they did not. The only agreement that was made upon the subject was the alleged contract here inquired about.
    
      “ Second. Is the alleged contract of August 9,1893, a mere settlement between the parties'?”
    The alleged contract provides that the United States shall pay claimant full original contract price for such work as he may have done at that time, and releases him from the obligation of performing the balance of the work contemplated by the original contract. The claimant, on his part, was to move his plant from the works. The alleged contract did not contemplate the prosecution of any further work for the United States by claimant. It did not create any new relation between the parties, but merely severed an old one. It was an agreement to rescind an executory, and at that time partly executed, contract and established the basis of such rescission. It was, then, a mere settlement between the parties.
    
      “ Third. As a matter of fact, did the parties of the second part decline and refuse to prosecute the work after the storm of April 21,1893, and before the making of the alleged contract of August 9,1893?”
    This question is affirmatively answered by letter of Den-niston of July 5,1893. In this letter Denniston positively .declined to prosecute the work further under the terms of the original contract. His offer to make other terms is immaterial to this question.
    “Fourth. Is the alleged contract of August 9,1893, binding upon the United States'?”
    In my original brief, in discussing the fifth question of the Secretary of the Treasury to the court, I have discussed this question as fully as I’ know how to do. I have not been able to find an adjudicated case which seems applicable to this one; but it seems to me to rest upon very simple principles. Whatever the form of the contract or agreement, the substance is that the United States surrenders the right to have the work completed at original contract prices — in this case a very valuable right — and gets nothing whatever in return for it. That a head of an Executive Department has no authority or power to bind the United States by such an agreement seems to me to rest upon a most elementary principle of public policy. If it is held that a head of a Department may release acontraetor with the United States from any of the requirements of his contract, without some benefit thereby moving to the United States, it may as well be held that such head of a Department may at pleasure give away any of the property of the Government which may happen to be under his official control.
    “Fifth. Were the parties of the second part discharged from the fulfillineut of the contracts by the conditions incident to the storm of April, 18931 ”
    The only theory that I can thiuk of under which this question can be answered in the affirmative is that the storm made it impossible to take out the remaining material and complete the work. That this was not impossible is evidenced by the fact that the material has since been taken out of the canal, and it is only contended by claimant that it was impossible for him to take it out at a cost which would be profitable. In other words, when his contract becomes unprofitable to him he asks the United States to relieve him of it and carry the burden which he had contracted to carry. Of course, I have made this argument so far upon the theory that the United States was not at fault in allowing the dams to break, although claimant is now asserting that they were.
    Much evidence has been taken since the case was remanded, none of which, in my opinion, changes the character of the case as at first presented. Witnesses for claimant testify that claimant, for the purpose of getting rid of the material taken out of the canal'pit, proposed to dump it on top of the dam, and that he was prevented from doing this by defendant’s agents because it would increase the cost of removing the dam when the canal was finally thrown open. Witnesses for the defendants, on the contrary, testify that claimant was never prevented from putting suitable material on the dam, and that he was only stopped when he proposed to put bowlders and unsuitable material upon the dam.
    Whatever the facts may be I do not think they are material to a proper adjudication of this case. It is not contended that claimant wanted to build the dam higher because he thought it was insufficient, bat only because he wished to get rid of his surplus material. This evidence, then, does not disturb my original theory of the case, that both parties, exercising tbeir best judgment, built dams winch they considered safe, and neither party was to blame for this mistake of judgment. Of course, if the defendant’s agents thought the dam was already high enough they were justified in not putting the United States to greater expense in removing it by allowing it to be built higher.
    By the contract the dams were to be the result of joint discretion of both parties to the contract, but claimant con-. tends that as a matter of fact the engineer officers of the United States so acted as to give him no control of the matter. Even if this were true there is not a shadow of evidence in the case that shows that anyone did believe or had reason to believe that the dams were not ample protection for the work. If, then, the officers of the United States acted according to their best judgment they can not be said to have been careless or negligent, and the dams can not be said to have breached because of any fault of the United States. Of course, no party can by contract protect himself against his own negligence, but there is no rule of law against his protecting himself by contract against his bad judgment, and that is what the United States has done in this case. My contention, then, is that the accident happened without the fault of either party, and that after it the duty still devolved upon claimant to finish the work at whatever cost. It was against such accidents as this that the United States sought to protect themselves by the original contract, and it was the risk of them that claimant assumed.
   Weldon, J.,

delivered the opinion of the court.

The subject-matter of this claim was referred by the Honorable Secretary of the Treasury, in the following communication:

“Treasury Department,
“Office op the Secretary,
“ Washington, D. 0., Febrwwry 9, 1894.
The Honorable the Chief Justice
and Judges of the Court of Claims :
“As recommended by the Second Comptroller of the Treasury in his letter of the Gth instant, which is herewith transmitted, I have the honor to refer to your honorable court, pursuant to the provisions of the act of March 3, 1883 (22 Stat. L., 485), the claim of the administrators of the estate of John Satterlee, deceased, for work performed on the Harlem River improvement, New York, under contracts dated August 12, 1889, and March 9,1891, or either of them, or under ‘a certain decision of the Acting Secretary of War, made on or about July 11, 1893,’ and for percentages retained from payments made under said contracts, the Second Comptroller having certified that said claim involves controverted questions of fact and law, and that the decision of the court will furnish a precedent for the future action of the accounting officers.
“All the papers, documents, and proofs pertaining to the claim are herewith transmitted, and the questions of fact and law submitted by the Second Comptroller for your decision are stated as follows:
“First. Whether the sums due and the percentages retained under either or both of the contracts of August 12,1889, and March 9,1891, have at any time become forfeited to the United States; and if so, whether as liquidated damages or as unliqui-dated damages, and in what amount..
“Second. Whether the claimants are indebted to the United States on account of additional expenses incurred by it tor engineering and inspection during the period covered by the several extensions of the contracts of August 12, 1889, and March 9, 1891; and if so, in what amount.
“ Third. Whether the claimants are entitled to recover damages on account of the breaking of either or both of the two dams inclosing the working pit and the consequent filling of the cofferdam with water and submerging the plant used on the work on or about April 21,1893, or any other account; and if so, in what amount.
“ Fourth. Whether under either or both of the contracts of August 12, 1889, and March 9, 1891, the United States is entitled to retain or to recover any amount or amounts as damages on account of the noncompletion of said contract or contracts on or before June 1, 1893; and if so, in what amount.
“ Fifth. Whether the claimants are entitled to recover anything under or by virtue of the indorsement of the Acting Secretary of War dated July 11,1893; and if so, in what amount.
“ Respectfully, yours,
“ W. E. Curtis,
Acting Secretary.”

As stated in the letter of transmittal, this claim comes within the jurisdiction of the court under the second section of the act entitled “ An act to afford assistance and relief to Congress and the Executive Departments in the investigation of claims and demands against the Government,” March 3,1883 (22 Stat. L., p. 485):

“ Sec. 2. That when a claim or matter is pending in any of the Executive Departments which may involve controverted questions of fact or law, tbe bead of sucb Department may transmit the same, with the vouchers, papers, proofs, and documents pertaining thereto, to said court, and the same shall be there proceeded in under such rules as the court may adopt.
“ When the facts and conclusions of law shall have been found, the court shall not enter judgment thereon, but shall report its findings and opinions to the Department by which it was transmitted for its guidance and action.”

The first and fourth questions propounded in the communication embrace substantially the same inquiry, and will be answered together.

As to the second question, the court finds that in consequence of the extension of the time within which the work was completed, made at the instance of the contractor, the increased cost to the United States by the additional expense of engineering and inspection is the sum of $3,383.83, for which the claimants are liable, and is a proper claim for recoupment from money otherwise due the claimants under said agreements.

In answer to the third inquiry, the court determines that the claimants are not entitled to recover damages because of the insufficiency of the dams to withstand the storm of the 21st of April. Neither party can complain as against the other, for the reason that in the adoption of the plans, specifications, and execution of the work they both exercised reasonable care, caution, and judgment, and the result was not due to the fault of either.

The amount of retained percentage is $11,098, which, being diminished by the sum for which claimants are responsible because of the additional costs of engineering and inspection, leaves a balance of $7,714.17. The completion of the work was not physically nor practically impossible, as it was finally completed under another agreement, but at an expense wholly disproportionate to the compensation agreed to be paid the decedent.

The first, fourth, and fifth questions embrace the issue of the controversy as shown by the facts.

The substance of the first inquiry is whether the retained per cent has become forfeited to the United States as liquidated damages. This court has held, in Kennedy's Case (24 C. Cls. R., 123), that “the 10 per cent reserved until completion of work, though declared forfeited by the agreement in the case of an annulment, must be treated as a penalty and not as liquidated damages.” In that case will be found a collection and discussion of the authorities upon the distinction between penalty and .liquidated damages. The 10 per cent being a penalty and not liquidated damages, a failure to perform the contract does not necessarily involve the forfeiture of the retained per cent; but it might be retained by way of recoupment to pay the actual damages to which the party had been subjected because of the failure to perform the agreement.

By the fourth question we are called upon to decide whether the storm of April 21,1893, discharged the claimants from a full and complete performance of the contract, so as to entitle them to recover for the work already performed as represented by the retained per cent; in other words, are the United States entitled to retain the 10 per cent and to recover whatever they may have been damaged beyond that amount because of the failure of the claimants to perform fully their agreements. The facts do not show that the completion of the agreements became physically impossible; but upon the contrary show that the United States did complete the work at a very much increased expense. This case presents the question, whether an increased expense and cost of performance to the extent of fivefold will relieve the claimants from further performance, so as to enable them to recover for the labor actually performed, less the expense of engineering, as shown by finding iv. The fact that the performance of the contract, because of the breaking of the dams became more difficult even to the extent of fivefold did not in the opinion of the court exonerate the claimants from a full and substantial performance of the agreements.

When the performance of a contract becomes impossible by the laws of nature, the party is absolved from his obligation to perform; but if by an intervention of those laws it becomes much more difficult to perform, the condition, because of such intervention, will not justify the party upon whom rests the obligation of performance in refusing to comply with the requirements of the contract. The destruction of the dams and the incident condition of the work were no doubt the result of an “irresistible cause of loss” and if they had made it impossible (in the reasonable view of that term) for the claimants to perform, the law would have discharged them from all liability.

“ It is a settled rule of law that where a party by Ms own contract absolutely engages to do an act, or creates a duty or charge upon himself, he is bound to make it good, notwithstanding any accident or other contingency not foreseen by or within the control of the party, unless its performance is rendered impossible by the act of God or of the law or of the obligee.” (Cobb v. Harman, 23 N. Y., 150.) “It must be an impossibility, not difficulty, that will excuse the performance of a contract.” (Huling v. Craig, Addison, R. 516.)

Inconvenience and increased trouble and expense in the performance of an agreement will not exonerate and discharge from duty. (52 Penn. State, 356.)

In the discussion of the grounds on which a party will be relieved from the obligation of his contract, Story says:

“This-rule does not extend to contracts founded upon difficult, improbable, or contingent considerations, for it is the duty of a promisor well to weigh the difficulty or improbability of his consideration before he binds himself to perform it, and the law will not help him to avoid duties which he has deliberately imposed upon himself so long as they are possible.” (Story on Contracts, sec. 463.)

If the law casts a duty upon a party, the performance will be excused if by the act of God it becomes impossible; but if a party engages to do something and fails to provide against, -contingencies the nonperformance is not excused by a contingency not foreseen and which by its consequence increases the cost and difficulty of performance. (Chitty, Contr., 272; 7 Mass., 325; 13 Mass., 94; Chicago R. R. Co. v. Sawyer, 69 Ills., 285; Am. Rep., 613.)

The fifth question presents the most difficult matter of inquiry. We have been much impressed with the very able opinion of the Judge-Advocate-General, in which he holds that the contract made on the 9th day of August, 1893, between Colonel Gillespie and the claimants and approved by the Secretary of War is ultra vires. If that theory of the law be correct the claimants are without legal merit, and the defendants are discharged from all liability to account for any part of the 10 per cent, having paid much more than the amount retained for the completion of the work beyond the price agreed to be paid the decedent. The executive officers of the Government in the discharge of their respective duties deal exclusively with the legal obligations and duties of tbe Government. They are special agents whose authority is limited by law to a discharge of specific duties.

It is insisted by the counsel for the claimants that the contract made on the 9th day of August, 1893, is what it purports to be, “ a final and complete settlement between the parties,” that it was within the power of the Secretary of War to make such settlement, and that as a settlement it is founded upon a sufficient consideration, and is therefore binding on both parties; while the counsel for the defendants insist, that conceding the right to make that kind of an agreement upon the part of the Secretary of War, the agreement is invalid for want of a sufficient consideration upon the part of the defendants. The consideration expressed upon the part of the claimants as moving to the Government was that they should remove from the improved channel their plant; and that the agreement should be a final and complete settlement in regard to all matters pertaining to said contracts. It may be true, as insisted by the defendants, that it was the duty of the claimants to remove the plant by the obligations of the original agreements, and that their agreeing to do so in the contract of August 9,1893, would not constitute a consideration for a new agreement upon the part of the defendants to waive or release any of their rights because of a failure to perform upon the part of claimants.

If we concede the right of the Secretary to compromise or settle the compensation of the claimants upon the failure to fully perform, it is difficult to see upon what theory of law the contract of August 9, 1893, is not conclusive upon the parties. There is no claim or pretense that there was any misrepresentation or fraud, or that either party acted without a full knowledge of all the facts upon which the contract is founded.

In Corliss Company’s Case (91 U. S., 321) the Supreme Court decided “ when 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 interest requires the suspension; he may agree with the contractor for the compensation to be paid for the partial performance of the work. 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 facts show, that so far from the officers of the United States declaring a forfeiture of the contract because of the refusal of the claimant to proceed with the work after the storm of April, they tacitly acquiesced in the abandonment in not objecting to the claimants’ failure to proceed. If the further prosecution of the work was abandoned by the act and acquiescence of both parties, and nothing was said at the time as to payment for work already done, the law would presume that for such work payment was to be made. The law abhors forfeitures and will not presume one as against the legal effect of the acts of the parties. A power of forfeiture must be strictly construed. (Williams’s Case, 26 C. Cls. R., 132.) “The case of Croft v. Lumly (6 H. L., 672) rests oh the disinclination of courts to enforce forfeiture and the right of a party paying money to have it applied as he directs.” (Cape Ann Granite Case, 26 C. Cls. R., 1.)

Whatever may have been the rights of claimants under the contracts as applicable to the condition incident to the storm of April, and however much they may have misconstrued the law in their own favor on the question of their right to damages, they believed, from the tenor of their communication to the Secretary of War, that they were entitled to damages against the United States. That claim entered into the consideration which they offered to the defendants in the settlement, and by contract “0” it is assumed to be a consideration moving to the defendants.

Settlements are favored and when made without fraud or misunderstanding become in law the most binding obligations of personal undertaking.

The Supreme Court said in the Corliss Case (91U. S., 322-3):

“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, can not be judicially maintained, it would seem that no settlement by any contractor with the Government could be considered as a finality against the Government.
“When a settlement in such, 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 can not be disregarded by the Government without restoring to the contractor the property surrendered as a condition of its execution.”

In answer to the fifth question it is the opinion and conclusion of the court that claimants are entitled to be paid the sum of $7,714.17.

The findings and opinion will be transmitted to the Treasury Department in accordance with the requirement of the statute.  