Swan v. Chorpenning

Cope, J. delivered the opinion of the Court—Field, C. J. concurring. This is an appeal from an order granting a new trial. The plaintiff is the appellant, and the result of our examination of the case is adverse to the maintenance of the action. The suit is upon an agreement entered into in fraud of the policy of the Government in respect to the mode of providing for the transportation of the mails. Contracts for that purpose are required to be awarded to the lowest bidder, and any agreement tending to deprive the Government of the advantage of competition in the bidding is unlawful and void. In this case, the Government advertised for proposals for carrying the mails between the city of Placerville and Carson Valley, and the plaintiff put in a bid for the contract. The agreement in suit stipulated for the withdrawal of this bid, and by its terms made a compliance in that respect necessary before an action could be maintained upon it. The effect was to deprive the Gov185 eminent of a bidder, and we have no hesitancy in declaring that an agreement based upon such a consideration cannot be enforced. The principle involved was laid down and elaborately discussed by the Supreme Court of New Jersey, in the case of Gulick v. Ward (5 Hals. 87). There a person had been induced by the promise of a sum of money to refrain from bidding, and the suit was brought to recover the amount. The Chief Justice, who delivered the principal opinion, after referring to the Act of Congress requiring publication, etc., proceeded to say: “The policy of the provision contained in the Act of Congress requiring this procedure by the Postmaster General, in thus publicly inviting proposals, is to enlarge the number of offers, to increase the competition among persons disposed to contract, and thereby not only to secure to the United States faithful and capable carriers, but to procure the performance of this important public service in the best manner, and upon fair, just and reasonable terms. The principle is the same as requires a Sheriff or executor to give public notice of the sale he is about to make, or induces an individual publicly to announce the vendue of his property. Now an arrangement which shall diminsh the number of competitors, lessen the number of proposals, or induce any one or more to abandon his intention of making an offer to contract, is most evidently in direct contravention of the policy of the Act of Congress, and tends to defraud, or perhaps it may be broadly asserted, does at all times actually defraud the United States. It defeats the policy of the statute, for it destroys competition and precludes the advantages which inevitably result from it.” The Court held that the consideration for the promise was illegal, and that the plaintiff was not entitled to recover. We see no difference in principle between the question in that case and the one now presented, and the cases clearly fall within the same category. In respect to the consideration, it is impossible to distinguish them, for an agreement not to bid and an agreement to withdraw a bid already put in, are certainly obnoxious to the same legal objections. It is contended, that the particular circumstances of this case relieve the transaction of its illegal character; but we take a different Anew of these circumstances. The purpose for which the bid Avas to be AvithdraAm we do not consider material, nor do we regard as import186 ant the fact that the withdrawal resulted in no actual injury tó the Government. The agreement was entered into for the accomplishment of a project of which the Government was ignorant, and whether or not the withdrawal would be detrimental, was a matter of conjecture only. The Government was not consulted, and so far as appears, the Department intrusted with the management of these affairs neither knew of the agreement nor assented to the withdrawal. The object was to induce the Government to abandon its design of contracting for the route proposed, and to obtain a contract covering the same route, but extending to other points. The motive was one of personal interest, and if the Government had chosen to adhere to its original plan, the withdrawal would necessarily have been prejudicial. The agreement to withdraw was undoubtedly injurious in its tendency, and the policy contravened by it is only to he satisfied by declaring its invalidity. It appearing that the plaintiff has no cause of action, the case is remanded to the Court below, with instructions to dismiss the suit. On petition for rehearing—Per Cope, J., Field, C. J. concurring. The petition for a rehearing in the case must be denied; but as the counsel for the appellant thinks that the complaint can be amended so as to avoid the objection upon which we directed a dismissal of the suit, we shall modify our judgment in that respect. The judgment will he so modified as merely to affirm the order appealed from, and the Court below, before proceeding to retry the case, may allow such amendments to the complaint as shall appear to be proper, in view of the o}finion expressed by us upon the validity of the contract as set forth in the complaint as it now stands. Petition denied, and judgment modified as above stated.