#### BRUCE M. BREWER AND T. BARTON JONES, PARTNERS AS BREWER & JONES, v. THE UNITED STATES.

[No. 34085.

Decided February 14, 1921.]

*On the Proofs.*

*Contract; ■ retained, percentages.*— Where certain percentages of the estimated cost of the work under a contract were retained by the United States in accordance with a provision of the specifications, to be paid to the contractor on final settlement, and the contract was annulled for sufficient cause, and a firm of subcontractors on part of the work enter into a contract with the United States to complete the work on which they were engaged, in accordance with the original specifications, that part of said retained percentages earned by said subcontractors, and afterwards withheld by the United States under the new contract as belonging to said contractors, should • have been paid to them on final settlement, after completion of the work, and they are entitled to recover for said amount.

*82Same; *parties.*— Where the ownership of a fund within the jurisdic- • tion of the court is in dispute, it is within the power of the court to bring in all interested parties in order to determine to whom the money should be paid.

*The Beporter’s*statement of the case:

*Mr. George B. Shields*for the plaintiffs. *King & Kmg*were on the briefs.

*Mr. Wm. D.*Harris, with whom was *Mr. Assistant Attorney General Frank*Davis, *jr.,*for the defendant.

The following are the facts of the case as found *by*the court:

I. On May 7, 1918, a contract was made and entered into by and between Bruce M. Brewer and T. Barton J ones, partners trading as Brewer & Jones, and the United States, represented by Lieut. Col. C. A. F. Flagler, Corps of Engineers, U. S. Army. A copy of said contract and the specifications attached thereto are attached to the petition, marked “ Exhibits A and B,” and are made a part hereof by reference. By the terms of the contract, Brewer and Jones were to complete Lock and Dam No. 2, Tombigbee River, Alabama, in accordance with the terms, conditions, and specifications of a contract between the United States and P. H. O’Brien, dated December 4,1907, and annulled by the United States on February 26, 1913, by the terms of which contract O’Brien had agreed to construct Locks and Dams Nos. 2 and 3, Tombig-bee River, Alabama. A copy of the said contract between the United States and O’Brien is attached hereto as Exhibit C to these findings, and made a part hereof. The specifications attached to the O’Brien contract were identical with Exhibit B hereof. The said supplemental contracts are immaterial to these findings.

The work on Lock and Dam No. 2 was satisfactorily completed by Brewer & J ones in December, 1914, and finally accepted by the Government. Lock and Dam No. 3 had been previously completed by the Government to its own satisfaction. There is no evidence that the United States paid more for the completion of Lock and Dam No. 3 than the contract price.

*83II. At the time the contract of May 7,1913, was made the work of constructing Lock and Dam No. 2 in accordance with the specifications of the original contract with O’Brien had been more than 50 per cent completed. Shortly after the work was commenced by O’Brien he employed the Southern Bridge Company as a subcontractor. The Southern Bridge Company after a short period abandoned the work, and P. H'. O’Brien then employed the plaintiffs as subcontractors on Lock and Dam No. 2. Because of the unsatisfactory work on Lock and Dam No. 3 the Government found it necessary to annul the contract with O’Brien, which contract embraced both locks and dams. The plaintiffs continued on the work until O’Brien’s contract was annulled. From the time the plaintiffs undertook the work they furnished all the money, labor, and material necessary for its continuance, and the United States paid the plaintiff Brewer, acting as attorney in fact for O’Brien, the money earned under the contract on the work on Lock and Dam No. 2. The work remaining to be done after the annulment of the contract consisted principally of excavation of the dams extending from the completed lock walls on one side of the river to the finished abutment of the other side; of building and placing the timber cribs composing the dam; of filling the cribs with stone; of placing certain required riprap on the banks and slopes and of other incidental finishing items.

III. The O’Brien contract and the Brewer & Jones contract of May 7, 1913, required that there be deducted and withheld from all payments up to 50 per cent of the estimated cost of the work a percentage of 10 per. cent, which retained percentage was to be paid as a part of the final payment for the work. Prior to the cancellation of the O’Brien contract deductions made in accordance with this requirement amounted to the sum of $17,508.75.

Brewer & Jones, the plaintiffs, earned while subcontractors and up to the time of the annulment of O’Brien’s contract, the sum of $11,991.86 of this $17,508.75, and when the plaintiffs entered into the contract with the United States the sum of $11,991.86, part of the retained percentage, had been earned by them for work done and materials furnished to the *84United States. After this contract of May 7, 1913, was entered into the plaintiffs inquired as to what amount of their retained percentages had been earned by them while working as subcontractors. They were informed by the United States officer in charge of the work that they had earned the sum of $11,991.86 in retained percentages withheld from payments for work done on Lock and Dam No. 2.

At the time of the annulment of the contract of O’Brien the officer, Col. Flagler, in charge of the work, expressed himself as satisfied with the progress made by the plaintiffs on the work of construction of Lock and Darn No. 2, and that he considered, making a contract with them for its completion. The plaintiffs at that time called attention to the retained percentages which they had already earned, and Col. Flagler in a telegram.to the Chief of Engineers U. S. Army, stated that he would recommend a contract “ arranged to include percentages already earned by Brewer & Jones.” The work of Building Lock and Dam No. 2 was more than 50 per cent completed at the date of the plaintiff’s contract, and no additional deductions of retained percentages were made from moneys earned by the plaintiffs after the date of their contract.

All vouchers in favor of the plaintiffs after the date of their contract, except the final one, showed the retained percentages witheld by the United States under the O’Brien contract. The final estimate omitted all reference to or showing of retained percentages previously withheld. The plaintiffs were not then nor have they yet been paid the amount earned by them and witheld as aforesaid; nor has the United States paid to anyone the said retained percentages, although $11,991.86 of the same were earned by the plaintiffs.

IV. At the plaintiff’s request, and without special agreement as to what would be charged therefor, the United States furnished plaintiffs with an 8-inch suction dredge, with the labor necessary for its operation, for doing certain necessary dredging work from June 19 to September 3,1914, inclusive. The plaintiffs paid all operating costs and charges of the dredge. The United States deducted and withheld from moneys earned by the plaintiffs at the rate of $375 per month for the rental of the dredge, amounting in all to $942.50. The *85dredge was of a value of $10,000. The plaintiffs waived the 10 days’ notice in writing provided for in article 3 of the contract. The dredge was not furnished to the plaintiffs under paragraph 70 of the specifications; and a rental of $375 per month was a fair rental value for this dredge.

Y. During the course of the work the plaintiffs were required to and did excavate from the bed of the river above the dam a quantity of sand and gravel amounting to 756.9 cubic yards for use as back fill above the dam, the material being barged from the place where excavated to the point where placed. This material was hauled less than 1,000 feet from the point where it was obtained to the point where it was placed. This material was paid for at the rates paid for common excavation, pursuant to paragraph 30 of the specifications, which was 40 cents per cubic yard. The river bed at the point from which this excavation was made was of an elevation lower than the elevation of the lock floors. If entitled to be paid at the rate prescribed for foundation excavation, they would be allowed 60 cents additional per cubic yard, or $454.14 in excess of what they have received.

VI. The contracting officer estimated the riprap placed on the work as 12 inches thick and paid for it by the cubic yard in place based on such estimate. The contracting officer did not require, either verbally or in writing, riprap to be placed 15 inches thick. The plaintiffs used stone which was most convenient for them, and made no protest at the time the work was done. Some of the riprap was of a 15-inch thickness, and some of it of a less thiclmess, and some of it more. If entitled to be paid for 15-inch riprap, the plaintiffs should receive the sum of $4,042.88 in excess of what they have received.

Hat, Judge,

delivered the opinion of the court:

This is a suit brought by Brewer & Jones, the plaintiffs, to recover from the United States certain sums of money which they claim are owing to them under a contract entered into by them with the United States on May 7,1913.

On May 7,1913, the plaintiffs entered into a contract with the United States whereby they agreed to complete the work, then partially finished, on Lock and Dam No. 2, Tombigbee *86River, Alabama. Before this contract was entered into one P. H. O’Brien had a contract with the United States providing for the construction of Lock and Dam No. 2, and Lock and Dam No. 3, Tombigbee River, Alabama. The work on these locks and dams was not satisfactory to the Government. Particularly was this true as to the work on Lock and Dam No. 3; the work on Lock and Dam No. 2 was being done by Brewer & Jones, and was satisfactory to the Government, but because of the unsatisfactory work on Lock and Dam No. 3 the Government found it necessary to annul the contract with O’Brien, which contract embraced both locks and dams. At the time the contract with O’Brien was annulled the work of constructing Lock and Dam No. 2 was more than fifty per cent completed. The contract with Brewer & Jones provided that the work of constructing Lock and Dam No. 2 should be done in accordance with the specifications of the original contract with O’Brien, and the specifications of the original contract were set out in full in the contract made with Brewer & Jones.

One specification of the original contract provided that there should be deducted and withheld from all payments up to 50 per cent of the estimated cost of the work, a percentage of 10 per cent-, which retained percentage was to be paid as a part of the final payment for the work. This specification was also a part of the Brewer & Jones contract.

Shortly after the work was commenced by O’Brien he employed the Southern Bridge Company as a subcontractor on Lock and Dam No. 2, but this company soon abandoned the work. The plaintiffs were then employed by O’Brien as subcontractors on the work of constructing Lock and Dam No. 2. The plaintiffs continued on this work until O’Brien’s contract was annulled. From the time the plaintiffs undertook the work they furnished all the money, labor and material necessary for its continuance, and the United States paid to the plaintiff Brewer, acting as attorney in fact for O’Brien, the money earned under the contract on the work on Lock and Dam No. 2.

Prior to the cancellation of the O’Brien contract, in accordance with the requirement that 10 per cent of the estimated cost of the work should be deducted and withheld *87from all payments, deductions amounting to the sum of $17,508.75 had been withheld. After this contract of May 7, 1913 was entered into Brewer & Jones inquired as to what amount of these deductions had been earned by them while working as subcontractors. They were informed by the United States officer in charge of the work that they had earned the sum of $11,991.86 in retained percentages withheld from payments for work done on Lock and Dam No. 2. It thus appears that when the plaintiffs entered into the contract of May 7, 1913 with the United States they had already earned the aforesaid sum of $11,991.86, and this sum they expected to receive and had a right to expect to receive when they should have completed their contract and final payment was made.

At the time of the cancellation of the contract with O’Brien the officer, Col. Flagler, in charge of the work, expressed himself as satisfied with the progress made by Brewer *&*Jones on the work of construction of Lock and Dam No. 2, and that he considered making a contract with them for its completion. Brewer & Jones at that time called attention to the retained percentages which they had already earned, and Col. Flagler in a telegram to the Chief of Engineers stated that he would recommend a contract *“*arranged to include percentages already earned by Brewer & Jones.” After further negotiations a contract was forwarded to Brewer & Jones on April 1, 1913, which contract they refused to execute because the same did not provide for taking care of the retained percentages which they had already earned, and because it also contained a provision by which the Government would retain percentages on future work amounting to $8,000. A contract was finally prepared by the Government which the plaintiffs executed, and which they understood would not preclude them from receiving the retained percentages already earned by them when the work was completed. They were confirmed in this understanding when no additional deductions of retained percentages were made during the progress of their work under their contract and when all vouchers in favor of the plaintiffs after the date of their contract showed the retained percentages withheld by the United States. This was shown on every *88monthly voucher during the progress of the work except the final estimate, which omitted all reference to the retained percentages.

This sum of $11,991.86 was earned by Brewer & Jones. It is not claimed that it belongs to the United States, but on the contrary it must be admitted that it is money earned by Brewer & Jones, and that the United States has received its value in labor and material. It seems to the court under all the circumstances that Brewer & Jones are entitled to a judgment for the retained percentages earned by them.

It appears that the work on Lock and Dam No. 3 was completed to the satisfaction of the Government. From which it is to be inferred that the completion of that work did not cost the United States more than the contract price of the work, and therefore the retained percentages withheld by them did not belong to them, but did belong to the contractors. The United States, so far as the record discloses, has made no claim to this money. If the United States had expended more money in the completion of the O’Brien contract than the contract price, it is not conceivable that counsel would have overlooked that fact, so necessary to the defense in this case. The money does not belong to the United States, they make no claim to it, and they should not be put in the attitude of claiming money to which they are not entitled.

It may be said that some equities may exist between Brewer & Jones and O’Brien as to these retained percentages. We do not think from the evidence that such is the case; but if it were, it is within the power of the court to bring in parties interested, and the fund in dispute being under its jurisdiction, determine to whom it should be paid, but in this case it is not necessary, as the facts show that Brewer & Jones are the owners of the fund. *The Globe Works*v. *United*States, 45 C. Cls., 497, 506.

The provisions in the specifications of the contract defining common excavation and foundation excavation are: “Foundation excavation shall include the removal of all material, of whatever nature, below the elevation of the lock floor of the main lock chamber.” This excavation was to be paid for at the rate of $1 per cubic yard, while common *89excavation was to be paid for at the rate of 40 cents per cubic yard. The plaintiffs, during the progress of the work, excavated 756.9 cubic yards of material below the elevation of the lock floor and were only paid 40 cents per cubic yard therefor, and therefore should be allowed an additional 60 cents per cubic yard for the 756.9 cubic yards of material so excavated, viz, the sum of $454.14. The plaintiffs in their petition state that if they are allowed the retained percentages they make no claim for advances on timber, culling timber, advances on stone, and sheathing felt; the court has therefore made no findings as to these items. In the reply brief of the plaintiffs it is conceded that Findings X and XI asked for by the plaintiffs, dealing with excavation not measured or paid for, and excess stone ordered, may be discarded.

Judgment is awarded the plaintiffs under Findings III and Y in the sum of $12,446. The other items claimed by plaintiffs are disallowed, and the petition as to them is dismissed. It is so ordered.

Graham, *Judge;*Downey, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.