FOLEY MFG. CO. OF ILLINOIS v. SIERRA NEVADA LUMBER CO. OF UTAH, 172 F. 197

GROSSCUP, Circuit Judge, after stating the facts as above, delivered the opinion. Act Feb. 20, 1893, c. 146, 27 Stat. 468 (2 U. S. Comp.

St. 1901, p. 2522), provided: “That the Secretary of the Treasury ho, and he is hereby, authorized in his discretion to obtain plans, drawings, and specifications for the erection of public buildings for the United States, authorized by Congress to be erected under the supervision and direction of the Secretary of the Treasury and» the local supervision of the construction thereof by competition among architects, under such conditions as he may prescribe and to make payment for tho services of the architect whose plan may be selected out of the appropriations for the respective buildings: Provided, that not less than five architects shall be invited by the said secretary to compete for tho furnishing of such plans and specifications and the supervision of such construction; and provided further, that the general supervision of the work shall continue in the office of the Supervising Architect of the Treasury Department, the Supervising Architect to be the representative of the Government in all matters connected with the erection and completion of such buildings, the receipt of proposals, the award of contracts therefor, and the disbursement of moneys thereunder, and perform all the duties that now pertain to his office, except the preparation of drawings and specifications for such buildings and the local supervision of the construction thereof, the said drawings and specifications, however, to be subject at all tipies to modification and change relating to plan or arrangement of building and selection of material therefor as may be directed by the Secretary of the Treasury.” No question is made but that between white oak and red oak, as material for the finishing of a building such as the post office at Salt Lake City, there is a very substantial distinction; and no pretense is made that any substitution of red oak for white oak was ever submitted to, or ever approved by, any officer of the government above -the local inspector.

The sole attempt, at argument, to justify this departure from the specifications is that red oak “is as good” as white oak, and that subsequently, to the extent of one-half of the finishing provided, red oak went into the building without objection from the inspector. The government of the United States can act only through its lawfully empowered officials. . The power of such officials is to be found only in the laws of the United States, or such rules and regulations of the department and other superior officers, as are in pursuance of power conferred by law.

And until it is shown in some such law, or in some such rule or regulation, that a local inspector has power to change the specifications drawn by the supervising architect, and made the basis of a contract between the United States and the contractor, we are not at liberty to accept his conduct as evidence of such power. On the contrary, we must, until otherwise informed, treat such conduct as either a usurpation of power, or a violation of his duty — in either case leaving his act as one outside of hi§ authority.

That proposition settled, the rest of this case is readily disposed of; for if the substitution of red oak for white oak was unauthorized— the contract sued upon being- an executory contract entered into with reference to the specific contract between defendant in error and the government — there was no proof that tended to show that the failure of plaintiff in error to furnish the red oak entailed any loss or damage upon defendant in error under its obligations to the government; for how can defendant in error be heard to say that its contract to put into the building a white oak finishing is harmed by plaintiff in error’s failure to furnish it with red oak for such finishing.

We might stop here, reversing the case in consequence of what has already been said, and sending it back for a new trial; but we think we ought, in view of a new trial, to indicate our opinion upon the issue raised by the special plea, the proof to sustain which, offered by plaintiff in error, was ruled out on the trial below. The contract of defendant in error with the government, as already stated, was for the finishing of the building in quarter sawed white oak.

The building was an important government work, and to finish it in red oak without the consent of the proper officer of the .United State's, whether with or without the connivance of any inferior officer, would be a fraud on the government. Now any agfeement which is intended to defraud the government, even though it may not amount to a criminal conspiracy, is illegal and void. Woodstock Iron Co. v. Richmond & Danville Extension Co., 129 U. S. 643, 9 Sup. Ct. 402, 32 L. Ed. 819.

And if such agreement amount to criminal conspiracy to defraud the United States, all the parties thereto with knowledge, are guilty of an offense punishable with fine and imprisonment. Rev. St. U. S. § 5440 (U. S. Comp. St. 1901, p. 3676). The proof that was submitted, taken in connection with the circumstances, tended directly to show that a fraud upon the government was contemplated, and that plaintiff in error withdrew from its performance of its contract with defendant in error, to avoid becoming a party to such fraud.

And the facts, which such proof tended to establish, in our judgment of the law justified plaintiff in error in declining to execute the contract. It is not for us to say that the proof offered was not conclusive, or even convincing. It is enough, that together with the admitted circumstances, it raised a substantial issue of fact — an issue that ought to have been submitted to the jury. The judgment of the Circuit Court is reversed, and the case remanded with instructions to grant a new trial, and proceed further in accordance with this opinion.