32 Reporter's Statement of the Case DOLLARS ($233.37) on account of full and final payment of amount alleged to be due for the construction of the courthouse at Columbia, South Carolina, for the Treasury Department, Procurement Division, under Contract No. T1PW-2094, dated April 30, 1935. 20-2716 Emergency Construction of Public Buildings, Act of June 19, 1934. Limitation 20-2716.256-$233.37. There has been disallowed the sum of $11,482.49, balance of the claim for $11,715.86, for the reasons as follows: Pursuant to Executive Order No. 6646, March 14, 1934, each bidder for a Government contract was required to submit with its bid a certificate that it was complying with and would continue to comply with each approved code of fair competition to which it was subject, and each contract was required to contain a provision to the effect that the contractor would comply with each approved code of competition to which it was subject. The contractor submitted such a certificate with its proposal to perform the advertised contract work for a stipulated price, and formally executed the contract containing the said provision as to code compliance. It is clear, therefore, that the bid price included the increased cost of code compliance, including the payment of minimum wages, and the agreement by the United States in the formal contract to pay such bid price was in consideration that the contractor would pay such minimum wages. The contractor's pay rolls show that it failed to comply with this contractual obligation and therefore, there was failure of consideration for the amount that the United States had agreed to pay for performance of the contract. Under such circumstances the United States was entitled to a reduction in the contract price to the extent there has thus been failure of consideration, for, obviously, the United States, and not the contractor, is entitled to any amount saved in the cost of performance of the work by noncompliance by a contractor with the terms of the contract. Therefore, the amount of $11,482.49, representing the difference between the wages which the contractor paid and those which it had agreed to pay by certificate acknowledging compliance with the code of its industry, is hereby disallowed. 12. A number of persons or firms who, prior to the decision in the Schechter case, supra, had submitted to plain Opinion of the Court 92 C. Cls. tiff bids and price quotations for work and material withdrew their bids and quotations, and plaintiff was compelled to obtain new bids and quotations which resulted in plaintiff having to pay additional or larger sums for certain work and material on this contract with defendant. 13. On October 5, 1937, plaintiff wrote the Comptroller General as follows: I am in receipt of your letter of September 18, 1937, with reference to the above certificate and claim number and also a check on the Treasurer of the United States dated September 29, 1937, in the amount of $233.37, which check is numbered 124,133. I now request permission from you to endorse and cash the above-named check, with the understanding on my part and acquiescence therein by you that in thus accepting this check I waive no rights to make further claim. against the Government under this contract. In reply the Comptroller advised that "The acceptance and cashing of the check referred to will not be regarded by this office as precluding further consideration here of your claim for the item of $11,482.49 which was disallowed in the said settlement of September 18, 1937, as representing the difference between the amount agreed to be paid as wages in the performance of the contract and the amount of wages actually paid in such performance in the event there should be submitted to this office sufficient basis for further consideration of said item." 14. The defendant did not cancel the contract for failure of the contractor to comply with the Reemployment Agreement nor with the Codes of Fair Competition to which he was subject at the time the contract was executed, nor failure to make open-market purchases; nor did the defendant have any work called for by the contract otherwise performed, nor did it by written notice or otherwise terminate the contractor's right to proceed with the work or any part thereof. The court decided that the plaintiff was entitled to recover. LITTLETON, Judge, delivered the opinion of the court: Before plaintiff was required to commence work under its contract of April 30, 1935, the National Industrial Re 32 Opinion of the Court covery Act was held invalid on May 27, 1935, in Schechter v. United States, 295 U. S. 495. Senate Joint Resolution #113, approved June 14, 1935, repealed the law relating to the codes, and on June 15 the President of the United States issued Executive Order 7076 forbidding "any person or agency acting under authority conferred by the President to approve or prescribe codes or to provide for the enforcement of such codes." Plaintiff commenced work under the contract on June 17, 1935, and completed the same, acceptable to defendant, on November 4, 1936. There was no provision in the contract or specifications authorizing any reduction from the lump-sum contract price of $253,920 for failure to pay the minimum code wages or the prevailing wages in the locality. The only penalty provided in the contract for failure to comply with such code, made and issued under the National Industrial Recovery Act, or to pay the prevailing wages, was that the United States should have the right to cancel the contract and make open market purchases or have the work called for performed at the expense of the contractor. No attempt was made or right claimed to cancel the contract because plaintiff, after it commenced work, paid the prevailing rate of wages rather than the invalidated code rate. Plaintiff is entitled to recover. Hood & Gross v. United States, 90 C. Cls. 258. In that case, which involved the failure of the contractor to pay the prevailing wage rate for certain employees during a portion of the time in performance of the contract, the court said: The defendant did not cancel the contract. Plaintiff completed the contract, complying with the decision of the Secretary of Labor from the time it was rendered. After the contract was completed the Comptroller General arbitrarily deducted from the final statement $766.05 on the ground the plaintiff could not benefit by his own wrongful act. There is no provision in the law nor is there a provision in plaintiff's contract permitting a deduction from the contract price by reason of failure to pay the prevailing wages in a locality. The action of the Comptroller General was unwarranted. Syllabus 92 C. Cls. See also Johnson v. Igleheart Bros., Inc., 95 Fed. (2d) 4; Continental Baking Co. v. Suckow Milling Co., 101 Fed. (2d) 337; The Ismert-Hincke Milling Company v. United States, 90 C. Cls. 27; Whitbeck, Receiver, v. United States, 77 C. Cls. 309, 333, 334, 336; 290 U. S. 671. Judgment will be entered in favor of plaintiff for $11,482.49. It is so ordered. GREEN, Judge; and WHALEY, Chief Justice, concur. WHITAKER, Judge, took no part in the decision of this case. HERBERT RIVINGTON PYNE ET AL., EXECUTORS [No. 44007. Decided October 7, 1940]* Income tax; deduction of attorney's fees in management of estate by executors and trustees.-Where residue of decedent's estate, consisting largely of corporation stocks, was left in trust to his sons and daughter as trustees, who were also executors, and where said trustees were persons of limited business experience; and where the attorney's services consisted chiefly in advising the executors as to the best means for conserving the estate and as to what investments to dispose of and what other investments to make, it is held that the attorney and executors were engaged in business, “in the business of conserving the estate and protecting its income," and that the fees paid by the estate to the attorney for such services were expenses deductible for for income-tax purposes. Same; attorney's fees.-Attorney's fees are ordinary and necessary expenses in carrying on a trade or business, and are deductible for income tax purposes. Same; definition of "business.”—-Under the income-tax decisions of the Supreme Court "business" has been defined as "that which occupies the time, attention, and labor of men for the purpose of a livelihood or profit," and whatever engages the time, atten tion, and labor of men in order to conserve what they have or to avoid loss is likewise a business. Vacated by the Supreme Court, April 28, 1941. 44 Reporter's Statement of the Case The Reporter's statement of the case: Mr. Allen G. Gartner for the plaintiff. Mrs. Elizabeth B. Davis, with whom was Mr. Assistant Attorney General Samuel O. Clark, Jr., for the defendant. Messrs. Robert N. Anderson and Fred K. Dyar were on the brief. The court made special findings of fact as follows: 1. Plaintiffs are the duly appointed and qualified executors under the will of Percy R. Pyne, who died August 22, 1929. Under the will the executors were authorized to sell the property in the estate, reinvest the proceeds, participate in the reorganization of corporations in which the decedent held an interest, collect the income from the property, distribute the corpus and income as provided in the will, and perform other duties. After the payment of specific bequests, the residue passed to trustees under the will in trust for the benefit of parties named in the will. Under this latter provision trusts were set up in 1935, at which time the residue passed to the trustees who were also the executors of the estate. The duties of the trustees were similar to those of the executors as outlined above. 2. Plaintiffs duly filed an estate tax return for the estate of decedent which showed a gross estate of $35,462,403.07, upon which an estate tax of $4,377,665.02 was assessed. $2,725,084.14 of this amount was paid on various dates. The remaining amount of $1,652,580.88 was abated. In determining the net estate subject to tax the Commissioner of Internal Revenue allowed a deduction for attorney's fees in the amount of $172,500. 3. December 21, 1931, a closing agreement with respect to final determination of estate tax liability of the decedent was duly approved by the Secretary of the Treasury. It read as follows: THIS AGREEMENT, made in duplicate under and in pursuance of Section 606 of the Revenue Act of 1928, by and between Grafton Howland Pyne, Herbert Riv |