Case ID: us-ct-cl_20/html/0142-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SAMUEL C. BOEHM ET AL. v. THE UNITED STATES.
    [No. 12980.
    Decided February 9, 1885.]
    
      On Demurrer.
    
    The defendants set up by way of counter-claim (1) a judgment in their favor against two of three members of a firm, (2) a distinct cause of action on which they have brought a previous suit, still pending, in a United States district court.
    I. The United States cannot set off or plead by way of counter-claim in this court, against a firm consisting of three partners, a judgment against two of them.
    II. The United States may elect whether to prosecute a cause of action in another suit pending in another court, or to set it up as a counterclaim in this court; but the other party cannot be vexed twice in the same matter, and where the Attorney-General elects to prosecute in one jurisdiction, proceedings in the other must be discontinued or suspended.
    
      The Reporters' statement of the case:
    The claimants, a partnership consisting of three members, brought this action for a debt due to the firm. The defendants set up by way of counter-claim a judgment recovered against two of the claimants, with allegations as to their individual interests in the cause of action. To this the claimants demurred.
    The defendants also set up by way of counter-claim a bond given by the claimants to the internal revenue officers, with allegations of breach. (See the same case,post.) To this counterclaim the defendants filed a replication alleging the pendency of a prior action on the same bond in a United States district court. To this replication the defendants demurred.
    
      Mr. George A. King and ilir. William B. King for the claimants :
    The principle that a debt due by one of the parties plaintiff in a joint action cannot be set off by the defendant is unquali-fiedly laid down in 2 Smith’s Leading Cases, 7th Am. ed., 320. See also Archer v. Dunn, 2 W. and S., 327, and Johnson v. Kentr 9 Ind., 252, where the same principle is maintained. We believe, indeed, that no case to the contrary can be cited. Schrei-ner v. United States, 6 C. Cls. R., 359, was not a case of set-off,, and has no application.
    It must be admitted that while the authorities are conflict- • ing on the question whether the pendency of another suit for the same cause of action is a defense to an action subsequently commenced, the weight of authority is that the pendency of such a suit in a foreign jurisdiction constitutes no defense. {Stanton v. Fmbry, 93 U. S. R., 548.) The principle, however, is equally if not better settled that the pendency of a prior suit in some other court within the same jurisdiction is good cause of abatement in a subsequent suit. (Watson v. Jones, 13 Wall., 679; 2 Parsons on Contracts, 725.)
    It is well settled that a circuit court of the United States is not a foreign court as far as regards any State that includes its-district. (Smith v. Atlantic Mutual Fire Ins. Go.,- 22 N. H., 21; Chamberlain v. Fekert, 2 Biss., 124.)
    The Court of Claims is not a local court of the District of Columbia or of any part of the Union, but a national tribunal, having jurisdiction over the southern district of New York and throughout the whole United States. {Jones v. United States, 1 C. Cls. R., 383, 398, 399.)
    The government has made its election of tribunals, and must be bound thereby. {Banlcin v. Harper, 4 Ind., 585; Sherwood v. Hammond, 4 Blackf., 504.)
    
      Mr. George L. Douglass (with whom was the Assistant Attorney-General) opposed.
    Undoubtedly the general rule, both in law and equity, is that only debts strictly mutual and due in the same right can be made the subject of set-off (Story Eq., 1437; Chitty Oont., 741). This rule is one of convenience, necessitated by the generally unsettled condition of partnership affairs, the unascer-tained relations of the partners to each other, and to their creditors, and the resulting impossibility of doing justice where a partnership is plaintiff or defendant, by allowing the set-off of anything but strictly mutual debts without a previous settlement of the partnership^ affairs. The rule has a basis in practical reason. But when the reason fails the rule sometimes fails also; and. to this general rule, in furtherance of justice, certain exceptions have been recognized. I submit that if the exigencies of justice ever demanded such an exception, they demand it in this case.
    The matter, I admit, is not free from difficulty, yet the courts have in some cases varied the rule when such a strict adherence to it might, as in this case, work a substantial injustice. I do not find any case which presented exactly this issue, but, as showing certain exceptions which have been admitted, I refer to 70 Pa., 81; 9 S. and R., 08; -2 W. and S., 301; 1 Ginn. Rep., 438; JSx parte Edwards, 1 Atk., 100; Waterman on Set-Off, 210 to 219 and notes. In Schreiner’s Case (0 O. Gis. B., 302) the opinion of this court seems to imply that if the court had been in full possession of such facts as appear in this case the claim of the partners might have been severed and treated accordingly.
   Nott, J.,

delivered the opinion of the court:

This case presents two questions.

The first is whether, in an action brought against the United States by a firm consisting of three partners, the United States, as defendants, can set off or plead by way of counter-claim a judgment previously recovered against two of them. The second is whether the United States can bring an action against a man in a district court, and subsequently, while that action is still pending and undetermined, set up the same matter by way of counter-claim against the same party in an action in this court.

As to the first question, it manifestly resolves itself into one of judicial power. In a court of. law such a demand is as distinct from such a judgment debt as if the judgment debtors were distinct persons and strangers to the present action.

In a court of equity the requisite relief probably might be given. Considered simply as a matter of legal right, the law is undoubtedly that which was laid down by Chief Justice Gibson in Archer v. Dunn (2 Watts & Serg., 361):

“Defendants may undoubtedly set off the cross-demand of one of them, and thus, with the assent of all, pay their joint debt with his several property, for, as was held in Stewart v. Coulton (12 Serg. & Rawle, 252), no one can be hurt by it; but there is no instance of a set-off of a debt due by one of several plaintiffs, because that would enable the defendant to pay his debts to the prejudice of the others. The point is too clear for elucidation, and it was, besides, directly decided by this court in Henderson v. Lewis (9 Serg. & Rawle, 379).”

Under the Petitions of Right Act, 1860 (23 and 24 Vict., c. 34), the creditor of the crown is assured of all the remedies of the common law for lands occupied, for goods withheld, for property talien, for contracts broken; and under it he may take defaults, recover costs and interest, and seek relief in courts either of law or equity. (Brown’s Case, 6 C. Cls. R., 171.) When the Act 3d March, 1863 (12 Stat. L., 765), reconstituting this court, was passed, it was supposed that the purpose of Congress in carrying out the obligations of the Constitution was as liberal as the purpose of Parliament in discharging the honorary obligations of the crown. The statute did not designate the jurisdiction as that of either law or equity, and no reason existed for calling the court a court of law more than for calling it a court of equity. Moreover, the statute used the word “ decree ” (section 5), as well as the word “judgment,” and to members of this court there seemed to be no reason why the court should not award an equitable remedy where the due administration of justice required equitable relief. But the Supreme Court held in Alire’s Case (6 Wall., 575) that this court was without equity jurisdiction; and more recently, in Langford’s Oase (101 U. S. R., 341), that the jurisdictional term of the statute, “ any contract expressed or implied,” must be restricted to actions known at common law as ex contractu.

The court has frequently had occasion to deplore its want of power to bring in necessary parties and to aw ard equitable rel ief— sometimes on behalf of the claimants, sometimes on behalf of the defendants, always on behalf of the due administration of justice. In many important cases, such as the Hot Springs Cases (16 Stat. L., 149), the District of Columbia Cases (21 id., 284), Harvey & Livesey’s Oase (19 id., 490), Congress have specially conferred on the court the requisite power; but it has not been conferred by a general act, and cannot be exercised in the present case.

With regard to the second question, it was contended with great ability that a district court of the United States is not a foreign jurisdiction; that the pendency of a prior suit in another court within the same jurisdiction is good cause of abatement in a subsequent suit, and that the court which first gets jurisdiction keeps it. We agree that this is a sound principle, but are of the opinion that this case does not come within the operation thereof. The distinctive fact here is that the jurisdiction of the two courts is not the same, the district court not being competent to exercise jurisdiction against the United States. It is true that both courts have jurisdiction of the cause of action against the claimants; but in this court the United States have the statutory right not only to prosecute their demand against the claimants, but also to have an account stated and a balance struck, and to have whatever judgment they may recover against the claimants deducted from whatever demand the claimants are able to maintain against them.

We are still of the opinion, as held on the recent motion in this case, that the Attorney-General has the right to determine in which court the United States shall prosecute their cross-demand, and if he determine to prosecute it in this court this court cannot decline jurisdiction. Undoubtedly the claimants should not be vexed twice in the same matter, and when the Attorney-General elects to prosecute in this jurisdiction, it should operate as the defendants’ election to abandon their action in the district court. It is the opinion of the court that the Attorney-General, who controls both actions, should discontinue the action in the district court or suspend all proceedings therein.

Should that case hereafter be proceeded with by the United States, this court will regard it as their abandonment of their counter-claim here, and will either dismiss it or stay proceedings thereon.

The judgment of the court is that the counter-claim of the defendants, filed the 1st April, 1884, setting up a judgment recovered by the defendants against Samuel B. Boehm and Nathaniel Boehm, two of the claimants in this action, be dismissed.

And it is further ordered that the replication of the claimants, filed the 26th December, 1883, be dismissed.