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ian's liability to the ward,-at least, to the amount of its actual value. A transfer of negotiable paper before due in payment of a pre-existing debt constitutes the purchaser a bona fide holder. Shufeldt v. Pease, 16 Wis. 659; Kellogg v. Fancher, 23 Wis. 21,

99 Am. Dec. 96.

Crary, 206, 2 Fed. Rep. 41; Martineau v. McCollum, 3 Pinney, 455; 4 Am. & Eng. Enc. Law, 2d ed. p. 334. Duress which consists of threats of imprisonment of a husband or a child is a species of fraud, which renders the contract made under its influence voidable only, and not void. City Nat. Bank v. Kusworm, 91 Wis. 166. If it be simply a voidable contract, then it follows naturally that, when the contract consists of negotiable paper, the defense is cut off by transfer to a bona fide purchaser before maturity, in the same manner that other defenses upon the ground of fraud are cut off. The con

There is some conflict in the authorities upon the question whether the defense of duress by threats can be successfully urged against a bona fide holder for value of negotiable paper, but the better opinion and weight of authority is that such defense stands upon the same footing as other defenses which may be made as between the orig-clusion is that the plaintiff was entitled to a inal parties, but is cut off when the paper judgment of foreclosure notwithstanding the reaches the hands of a bona fide holder. Fair- duress. banks v. Snow, 145 Mass. 153; Farmers' & M. Bunk v. Butler, 48 Mich. 192; Clark v. Pease, 41 N. H. 414; Beals v. Neddo, 1 Mc

Judgment reversed, and action remanded, with directions to enter the usual judgment of foreclosure and sale.

UNITED STATES CIRCUIT COURT OF APPEALS, NINTH CIRCUIT.
Julia E. HOFFMAN, Exrx., etc., of Lee
Hoffman, Deceased,

บ.

John MCMULLEN.

(48 U. S. App. 596, 83 Fed. Rep. 372, 28 C. C. A. 178.)

1.

2.

An agreement between bidders for public work to pool their interests, procure the contract at the highest price possible, each having knowledge of the other's bid for that purpose, and divide the profits while representing themselves as rival bidders, is void so that in case the contract is procured in the name of one of them, the work done and the money paid to him, the others will have no standing in court to compel an accounting.

That a municipal corporation has accepted work done under a contract

let upon competitive bidding, and paid the price with knowledge of a partnership agree

ment between the bidders which enhanced the

contract price, will not entitle the partners to an account of the profits from one of their number who received the money on the ground that the municipality was not injured by the illegal partnership agreement.

3. A contract by intending bidders for public work to procure the contract for a price as high as possible and become partners in its execution is not, after

the work has been done, and the money paid

to one of them, within the rules that a con

tract will be enforced even if incidentally connected with an illegal transaction, provided it is supported by an independent consideration, and that after the illegal contract has been fully executed one party in possession of the gains will not be tolerated to interpose the objection that the business was in violation of law, so as to enable the other parties to compel an accounting.

(October 4, 1897.)

NOTE. AS to the effect of preventing or checking bids upon the validity of sales at auction, see note to Herndon v. Gibson (S. C.) 20 L. R. A. 545.

CROSS

ROSS-APPEALS from a decree of the Circuit Court of the United States for the District of Oregon in a suit to compel an accounting of alleged partnership transactions; defendant appealing from so much of the decree as sustained the partnership and directed the accounting, and plaintiff appeal. ing from so much as allowed the managing partner his salary and refused to allow interest and costs. Reversed on defendant's appeal. The facts are stated in the opinion.

On writ of certiorari from the Supreme Court of the United States the decision in See this case was affirmed May 22, 1899. McMullen v. Hoffman, 174 U. S. 639, 43 L. ed. 1117.

Messrs. Dolph, Mallory, & Simon, for appellant:

Any agreement which in its object or necessary operation tends to diminish competition for the obtainment of a public or quasipublic contract to the detriment of the public or those awarding the contract is void. Gibbs v. Smith, 115 Mass. 592.

Nor is it any answer to show that no injury has been done to the party selling.

Atcheson v. Mallon, 43 N. Y. 14, 3 Am. Rep. 678; Doolin v. Ward, 6 Johns. 194; Wilbur v. How, 8 Johns. 444; Woodworth v. Bennett, 43 N. Y. 273, 3 Am. Rep. 706; Holman v. Johnson, 1 Cowp. 343; Belding v. Pitkin, 2 Cai. 147; Breslin v. Brown, 24 Ohio St. 565, 15 Am. Rep. 627; Swan v. Chorpenning, 20 Cal. 182: Gulick v. Ward, 10 N. J. L. 107, 18 Am. Dec. 389; Weld v. Lancaster, 56 Me. 453; Hannah v. Fife, 27 Mich. 172; Hunter v. Pfeiffer, 108 Ind. 197; Sharp v. Wright, 35 Barb. 236; Buck v. Albee, 26 Vt. 184, 62 Am. Dec. 564; Scott v. Duffy, 14 Pa. 18; Providence Tool Co. v. Norris, 2 Wall. 45, 17 L. ed. 868; Jenkins v. Frink, 30 Cal. 586, 89 Am. Dec. 134; Wooton v. Hinkle, 20 Mo. 290; Noyes v. Day, 14 Vt. 384; Kelly v. Devlin, 58 How. Pr. 487;

Loyd v. Malone, 23 Ill. 43, 74 Am. Dec. 179; Woodruff v. Berry, 40 Ark. 251; Jones v. Caswell, 3 Johns. Cas. 29, 2 Am. Dec. 134; Thompson v. Davies, 13 Johns. 112.

The law looks to the general tendency of such contracts. The vice is the very nature of the contract, and it is condemned as belonging to a class which the law will not tolerate.

Richardson v. Crandall, 48 N. Y. 348; Atcheson v. Mallon, 43 N. Y. 147, 3 Am. Rep. 678; Swan v. Chorpenning, 20 Cal. 182; Weld v. Lancaster, 56 Me. 453; Hunter v. Pfeiffer, 108 Ind. 197; Buck v. Albee, 26 Vt. 184, 62 Am. Dec. 564; Greenhood, Pub. Pol. 178; Holladay v. Patterson, 5 Or. 177.

The question of the validity of a contract does not depend upon the circumstance whether it can be shown that the public has, in fact, suffered any detriment, but whether the contract is in its nature such as might have been injurious to the public.

Gibbs v. Smith, 115 Mass. 592; Engelman v. Skrainka, 14 Mo. App. 438; Woodruff v. Berry, 40 Ark. 251; 2 Pom. Eq. Jur. § 934; 2 Kent, Com. 11th ed. 466, 467.

The courts of justice will allow the objection that the consideration of the contract was immoral or illegal to be made by the guilty party to the contract; for the allowance is not for the sake of the party who raises the objection, but is grounded on the general principles of policy.

Hope v. Linden Park Blood Horse Asso. 58 N. J. L. 627.

The rule is the application of the maxim, Ex turpi causa non oritur actio.

Den, Wooden, v. Shotwell, 23 N. J. L. 474; Holman v. Johnson, 1 Cowp. 343; Marlatt v. Warwick, 19 N. J. Eq. 439: Nellis v. Clark, 20 Wend. 24; Fermor's Case, 3 Coke, 78a; Cadogan v. Kennett, 2 Cowp. 434; Smith v. Hubbs, 10 Me. 71; Cockshott v. Bennett, 2 T. R. 763; Clugas v. Panaluna, 4 T. R. 466: Wamell v. Reed, 5 T. R. 599; Bayley v. Taber, 5 Mass. 286, 4 Am. Dec. 57; Lynch v. Rosenthal, 144 Ind. 86, 31 L. R. A. 835; Leonard v. Poole, 114 N. Y. 371, 4 L. R. A. 728.

In an action upon a void contract, the defendant may prove illegality or fraud which renders it void, although the plaintiff may not disclose the infirmity in making a prima

facie case.

McMullen wholly failed to make good his agreement to furnish funds at a time when it appeared that the enterprise was liable to fail for want of them.

Hoffman, on the 16th of September, 1893, dissolved the copartnership, and refused thereafter to recognize McMullen as a partner, and proceeded to complete the work on his own account.

If a partnership be without any definite period any partner may withdraw at a moment's notice, when he pleases, and dissolve the partnership.

3 Kent, Com. 11th ed. 60, *53, 55; 2 Lindley, Partn. 571; Skinner v. Tinker, 34 Barb. 333; McElvey v. Lewis, 76 N. Y. 373; Fletcher v. Reed, 131 Mass. 312; Blake v. Sweeting, 121 Ill. 67; Walker v. Whipple,

58 Mich. 476; Solomon v. Kirkwood, 55 Mich. 256; Slemmer's Appeal, 58 Pa. 168, 98 Am. Dec. 255; Carlton v. Cummins, 51 Ind. 478; Lawrence v. Robinson, 4 Colo. 567; Pine v. Ormsbee, 2 Abb. Pr. N. S. 375; Berry v. Folkes, 60 Miss. 576; Whiting v. Leakin, 66 Md. 255; Blaker v. Sands, 29 Kan. 551; Mason v. Connell, 1 Whart. 381; Sweeney v. Neely, 53 Mich. 421; Skinner v. Dayton, 19 Johns. 513, 10 Am. Dec. 286; Miller v. Brigham, 50 Cal. 615; Bank v. Carrollton R. Co. 11 Wall. 624; Fourth Nat. Bank v. New Orleans & C. R. Co. 20 L. ed. 82; Marquand v. New York Mfg. Co. 17 Johns. 525; Berry v. Folkes, 60 Miss. 576; Gaty v. Tyler, 33 Mo. App. 494; Blake v. Dorgan, 1 G. Greene, 537; Kinloch v. Hamlin, 2 Hill, Eq. 19, 27 Am. Dec. 441.

Messrs. William A. Maury, R. Percy Wright, and L. B. Cox, for appellee:

The contract of March 6, 1893, established the relationship of partners between Hoffman and petitioner, and out of this relationship and not out of the partnership agreement, grew the rights which petitioner is seeking to enforce in this suit.

After the partnership has once been launched, if a controversy arises between the partners, the cause of action grows out of and rests upon the partnership relation; and if a claim to property is involved, it is the property right of the partner, growing out of the partnership relation, although the extent of the right may be defined by the contract, which gives him his standing in court.

Lindley, Partn. 2d Am. ed. 2; Mechem, Elements of Partnership, 3; 1 Bates, Partn. § 78; Pollock, Digest of Partnership, § 1; Parsons, Partn. 4th ed. § 6, note d; Story, Partn. § 1; Cox v. Hickman, 8 H. L. Cas. 268. A partner who receives money or other property on behalf of a partnership owes substantially the same duty as an agent owes to his principal, viz., to account for and deliver the money or property received. 1 Lindley, Partn. 2d Am. ed. *107, 108; Planters' Bank v. Union Bank, 16 Wall. 483, 21 L. ed. 473.

The underlying principle in Brooks v. Martin and cognate cases is, that the plaintiff in each of them had a property interest in the subject of the suit and a right to require the defendant to respond to his demand, growing out of the relationship between the parties; and the plaintiff's right to recover could not be defeated by showing that he had participated in some illegal transaction which had been consummated before the subject of the controversy came into

existence.

Sharp v. Taylor, 2 Phill. Ch. 801; Brooks v. Martin, 2 Wall. 70, 17 L. ed. 732; McBlair v. Gibbes, 17 How. 232, 237, 15 L. ed.

132, 134: Planters' Bank v. Union Bank, 16 Wall. 483, 21 L. ed. 473: Union R. Co. v. Durant, 95 U. S. 576, 24 L. ed. 391; Burke v. Flood, 6 Sawy. 220; Western U. Teleg. Co. v. Union P. R. Co. 1 McCrary, 418; Wann v. Kelly, 2 McCrary, 628; Lewin, Tr. 68; Hall v. Corcoran, 107 Mass. 251; Woodman v. Hubbard, 25 N. H. 67, 7 Am. Dec. 310.

If respondent's contention as to the char-es, which shall result therefrom. And it is acter of the verbal agreement between Hoff- further hereby agreed that, if either of the man and petitioner which antedated the parties hereto shall get a contract for doing bidding were true, the matters set up by or to do any other part of the work let or to her cannot avail as a defense, for the rea- be let by said committee for bringing Bull son that the stipulations which she contends Run water to Portland, the profits and losses were entered into were divisible, and the le- thereof shall in the same manner be shared gal part of the agreement would stand alone. and borne by said parties equally, share and Oregon Steam Nav. Co. v. Winsor, 20 share alike." Wall. 64, 22 L. ed. 315, Pickering v. Ilfracombe R. Co. L. R. 3 C. P. 250; Bank of Australasia v. Breillat, 6 Moore, P. C. C. 201.

It was the respondent who brought into the case the matters which the court of appeals found to be fatal to the petitioner's right of recovery.

Welch v. Wesson, 6 Gray, 505; Armstrong v. American Exch. Nat. Bank, 133 U. S. 433, 33 L. ed. 747; Swan v. Scott, 11 Serg. & R. 155.

Hawley, District Judge, delivered the opinion of the court:

The contract awarded on defendant's bid was formally entered into by the water committee, of the one part, and by the defendant in the name of Hoffman & Bates, of the other. The contract proved to be a profitable one, the profits thereunder amounting to nearly $140,000. Hoffman refused to account to McMullen for any part of these profits, upon the ground that the bids made by them tended, under the circumstances, to lessen competition, and operated as a fraud upon the city, and could not be enforced in equity, and upon the further ground that McMullen wholly failed to comply with the contract between the parties, and refused to perform the conditions upon which the defendant's agreement to share the earnings of the contract with the complainant was made.

The whole transaction grows out of the enterprise undertaken by the city of Portland to conduct the water of Bull Run river some 30 miles to the city. The water was to be conveyed through steel pipes, and had to be conducted across streams which required the construction of bridges, and expensive and permanent works had to be erected at Bull Run river, where the water was diverted from the river to the pipe. The construction of this work was placed by the legislature in the hands of a committee composed of fifteen persons, who managed the business for the city. This committee decid

This is a suit in equity brought by John McMullen against Lee Hoffman for an accounting for the profits earned on a contract to construct a pipe line by which the city of Portland is supplied with water. Pending the suit, Lee Hoffman died, and the suit was revived against Julia E. Hoffman, executrix of the last will and testament of Lee Hoffman, deceased. The water committee representing the city of Portland having advertised for bids to construct the line, the original parties hereto entered into an agreement by which the defendant, Hoffman, bid for the work, in the name of Hoffman & Bates. The plaintiff, McMullen, with the knowledge and concurrence of the defendant, made a separate bid in the name of the San Francisco Bridge Company, a company controlled by him. This bid was some $49.000 higher than the bid of the defendant. The contracted to let this work at a public letting to the having been awarded to the defendant, a written agreement of partnership was entered into by the parties for the execution of the contract to be entered into by the defendant with the city, which agreement reads as follows:

lowest bidder, and to that end the work was divided into the following general classes: (1) Head works; (2) bridges; (3) wrought-iron plates; (4) steel conduit from head works to Mt. Tabor; (5) manufacturing and laying wrought-iron or steel pipes "This agreement, made and entered into from head works to Mt. Tabor; (6) steel by and between Lee Hoffman, of Portland. plates for pipe; (7) conduits from head Oregon, doing business under the name of works to Mt. Tabor, of cast iron; (8) castHoffman & Bates, party of the first part, and iron pipe for Mt. Tabor to City Park and John McMullen, of San Francisco, Califor- (9) submerged pipes.-and separate bids innia, party of the second part, witnesseth: vited for each. The letting was the ordinary That whereas, said Hoffman and Bates have, public letting upon sealed proposals. Hoffwith the assistance of said McMullen, at a man and McMullen each undertook to secure recent bidding on the work of manufacturing contracts to do this work, or some portion and laying steel pipe from Mount Tabor of it, by bidding for it, in response to the to the head works of the Bull Run water invitation of the water committee. Bids for system for Portland, submitted the low- each of the following items were according est bid for said work, and expect to en-ly submitted by them to the water commit

ter into a contract with the water commit

tee of the city of Portland for doing such work, the contract having been awarded to said Hoffman and Bates on said bid: It is now hereby agreed that said Hoffman and said McMullen shall and will share in said contract equally, each to furnish and pay one half of the expenses of executing the same, and each to receive one half of the profits, or bear and pay one half of the loss

tee, Hoffman bidding in the name of Hoffman & Bates, and McMullen bidding in thename of the San Francisco Bridge Company: Head works: Hoffman & Bates, $17,800;: San Francisco Bridge Company, $16,550. Bridges: Hoffman & Bates, $33,562.94; San Francisco Bridge Company, $31,993. Steel conduit from head works to Mt. Tabor: Hoffman & Bates, $359,278; San Francisco.

Bridge Company, $348,781. Conduit from head works to Mt. Tabor, of steel or wrought iron, making and laying pipe: Hoffman & Bates, $465,722; San Francisco Bridge Company, $514,775.

McMullen submitted a bid in the name of the San Francisco Bridge Company for the submerged pipe of $97,340. For this work Hoffman did not bid. They agreed in advance upon what items of the work they should bid, upon what their respective bids should be, and upon what portion the bid of the San Francisco Bridge Company should be cheapest. There was also an understanding between them, as to some portions of the work, that the lowest bid should be withdrawn in the event that there were no other outside bids lower than those of Hoffman & Bates. In other words, they were to pool their bids, and so arrange matters that the highest bid, as between themselves, should, if possible, be accepted, and they would divide the proceeds of the contract. Suggestions were freely made as to the propriety of taking in other bidders, and also the secretary of the committee, so that honest bids might be withheld, and others ascertained, by fraudulent and improper means. The following extract from a letter written by McMullen to Hoffman fairly illustrates the means they proposed to use to accomplish the object they had in view:

"I do not want to let go on that submerged pipe; want to get the job. I think we can make $25,000 on that job, but we must pool it. To do this, we will have to let the secretary, Frank T. Dodge, in, and, if any bids come without personal representatives, have him not receive them until after the letting, and then return them unopened; and we will gather in everybody that is personally represented. Don't think there are many."

The circuit court, upon final hearing, rendered a decree in favor of McMullen for $52,241.18, and one half of the assets, consisting of plant and tools, furniture, and camp fixtures, of the cost value of $7,857.36, and a disallowed claim against the city of Portland for $16,961.25. From this decree Hoffman appeals. There is also a cross-appeal taken by McMullen from the decree of the court allowing Hoffman a salary of $1,000 per month, and from the refusal of the court to allow him interest on the money found due and refusal to allow him costs. The appeal of Hoffman will first be considered.

The contention of appellant is that the manner in which the parties hereto presented their bids, and sought thereby to procure contracts from the committee, was illegal. It is not seriously denied that the city of Portland could have successfully defended any action that might have been brought against it by the contractors, Hoffman & Bates, upon the ground that the contract was secured by illegal means. It did not do 80. It payed the money to Hoffman. The question here presented is: Can the defendant avail himself of this defense? The authorities answer this question in the af

firmative. It is true that the objection that a contract was immoral or illegal as between plaintiff and defendant sounds at all times very ill in the mouth of the defendant. But it is not for his sake that the objection is ever allowed. The refusal of courts to enforce such contracts is always founded on general principles of public policy, which the defendant may take advantage of, contrary to the real justice of the case, as between the parties plaintiff and defendant. It is the duty of all courts to keep their eye steadily upon the interests of the public, and when they find an action is founded upon a claim which is injurious to the public, and which has a bad tendency, to give no countenance or assistance to it in foro civili.

In dealing with illegal contracts, courts do not and cannot look alone to those who are parties to the illegal transaction. The law regards the welfare of society as paramount, and in enforcing the law, courts will not impair its efficacy or cripple its operations by considerations affecting the interests of those who are particeps criminis. The principle of public policy is this: Ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon immoral or illegal acts. If, from the plaintiff's own showing or otherwise, the cause of action appears to arise ex turpi causa, or out of a transgression of a positive law of the country, then the court says he has no right to be assisted. It is upon that ground that the court goes; not for the sake of the defendant, but because it will not lend its aid to such a plaintiff. So, if the plaintiff and defendant were to change sides, and the defendant were bringing his action against the plaintiff, the latter would have the advantage of it; for, where both are equally at fault, potior est conditio defendentis. Bartle v. Nutt, 4 Pet. 184, 189, 7 L. ed. 825, 827; Providence Tool Co. v. Norris, 2 Wall. 45, 54, 17 L. ed. 868, 870; McCausland v. Ralston, 12 Nev. 195, 206, 28 Am. Rep. 781 et seq., and authorities there cited; Western U. Teleg. Co. v. Union P. R. Co. 1 McCrary, 418, 427, 3 Fed. Rep. 1; Buck v. Albee, 26 Vt. 184, 62 Am. Dec. 564; Hannah v. Fife, 27 Mich. 172, 181; Den, Wooden, v. Shotwell, 23 N. J. L. 465; Price v. Polluck, 37 N. J. L. 44; Belding v. Pitkin, 2 Cai. 147; Leonard v. Poole, 114 N. Y. 371, 379, 4 L. R. A. 728; Hope v. Linden Park Blood Horse Asso. 58 N. J. L. 627.

In Bartle v. Nutt the court said: "The law leaves the parties to such a contract as it found them. If either has sustained a loss by the bad faith of a particeps criminis, it is but a just infliction for premeditated and deeply practised fraud, which, when detected, deprives him of anticipated profits, or subjects him to unexpected losses. He must not expect that a judicial tribunal will degrade itself by an exertion of its powers, by shifting the loss from the one to the other, or to equalize the benefits or burdens which may have resulted by the violation of every principle of morals and of laws."

A contract to prevent competition and bid.

aing for public work is contrary to public policy, and cannot be enforced. The rule is universal that agreements which, in their necessary operation upon the action of the parties, tend to restrain their natural rivalry and competition, and thus to result in the disadvantage of the public or third parties, are against the principle of sound public policy and are void. Gulick v. Ward, 10 N. J. L. 102, 18 Am. Dec. 389; Swan v. Chorpenning, 20 Cal. 182, 185; Hannah v. Fife, 27 Mich. 172, 180; Weld v. Lancaster, 56 Me. 453, 457; Noyes v. Day, 14 Vt. 384; Gibbs v. Smith, 115 Mass. 592; Doolin v. Ward, 6 Johns. 194; Wilbur v. How, 8 Johns. 444; Thompson v. Davies, 13 Johns. 112; Kelly v. Devlin, 58 How. Pr. 487; Atcheson v. Mallon, 43 N. Y. 147, 3 Am. Rep. 678; Hunter v. Pfeiffer, 108 Ind. 197, 200; King v. Winants, 71 N. C. 469, 474, 17 Am. Rep. 11; Durfee v. Moran, 57 Mo. 374, 379; Lawnin v. Bradley, 13 Mo. App. 361; Engelman v. Skrainka, 14 Mo. App. 438; Woodruff v. Berry, 40 Ark. 252, 267; Hyer v. Richmond Traction Co. 42 U. S. App. 522, 80 Fed. Rep. 839, 844, 26 C. C. A. 175.

Do the facts and circumstances of this case bring it within this general rule? Can this case, consistently with the reasoning of the authorities, be excepted from it? Does it infringe in any manner upon any principle of public policy? It is argued by appellee that the bidding was not illegal, because the proof shows that McMullen and Hoffman were jointly interested in the bid, and that the law allows two or more persons to combine together for the purpose of making one bid. This is true where no fradulent purpose is involved. An honest co-operation between two or more persons to accomplish an object which neither could gain if acting alone in his individual capacity is not within the rule, although, in a certain sense and to a limited degree, such co-operation might have a tendency to lessen competition. There may be a competition that saves as well as a competition that kills. The amount of work to be performed, the necessity of obtaining means to properly carry on the contract, the responsibility of the parties, their ability to complete the work, etc., are matters which are liable to make it absolutely necessary for rival contractors to combine their forces and unite together, not only in order to secure the contract, but to enable them, if it is obtained, to complete it without financial embarrassments or other difficulties which are liable to arise in cases of individual responsibility. There is no valid objection to such voluntary combinations if the joint action of the parties is done honestly and in good faith. In all contracts secured in such a manner the courts should never hesitate to protect parties in their agreements with each other, and compel them to comply with the terms thereof. It is only where the facts and circumstances surrounding the case clearly show that illegal means or improper and deceptive influences and methods were used to procure the contract that the maxim In pari delicto applies.

In Atcheson v. Mallon, 43 N. Y. 147, 151, 3 Am. Rep. 678, the court said: "A joint proposal, the result of honest co-operation, though it might prevent the rivalry of the parties, and thus lessen competition, is not an act forbidden by public policy. Joint adventures are allowed. They are public and avowed, and not secret. The risk as well as the profit is joint and openly assumed. The public may obtain, at least, the benefit of the joint responsibility, and of the joint ability to do the service. The public agents know, then, all that there is in the transaction, and can more justly estimate the motives of the bidders, and weigh the merits of the bid."

In Gibbs v. Smith, 115 Mass. 592, the court, in drawing the line of distinction in an analogous case, said: "An agreement between two or more persons that one shall bid for the benefit of all upon property about to be sold at public auction, which they desire to purchase together, either because they propose to hold it together, or afterwards to divide it into such parts as they wish individually to hold, neither desiring the whole, or for any similar honest or reasonable purpose, is legal in its character, and will be enforced; but such agreement, if made for the purpose of preventing competition and reducing the price of the property to be sold below its fair value, is against public policy, and in fraud of the just rights of the party offering it, and therefore illegal." See also Lawnin v. Bradley, 13 Mo. App. 361; Cocks v. Izard, 7 Wall. 559, 19 L. ed. 275.

The fraud, if any, in the present case, was in withholding the truth,-in fraudulently representing and holding themselves out to the committee and to the public as rival bidders, when in fact they were not. The learned judge who tried this case, in his opinion upon the exceptions to the defendant's answer, said: "When the parties presented themselves as competitors for the work, they were guilty of a fraud. The tendency of what was thus done was to cause the water committee to believe that the bid of defendant was a favorable one for the city. Moreover, plaintiff's pretended bid had the effect of a representation to the committee that, in plaintiff's opinion, the work could not be profitably done for less than a figure $35,000 higher than that bid by defendant, although, as a matter of fact, plaintiff believed such work could be done, and, except for the collusive agreement with defendant, would have offered to do it, for an amount $75,000 less than that at which the contract was let. Upon all the cases cited or to be found, and in any view of the case consistent with public policy and the principles of equity, there can be no relief in such a case." McMullan v. Hoffman, 69 Fed. Rep. 509, 518.

Upon the final hearing, he came to the conclusion that his former opinion was erroneous, and held that the contract and agreement of the parties were valid as between themselves. McMullen v. Hoffman, 75 Fed. Rep. 547.

This case, in principle, cannot, in our opinion, be distinguished from Atcheson v. Mal

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