Document: 359 U.S. 314 79 S.Ct. 857 3 L.Ed.2d 845 UNITED STATES of America, Petitioner,v.ISTHMIAN STEAMSHIP CO. No. 285. Argued Feb. 25, 1959. Decided April 27, Mr. Ralph S. Spritzer, Washington, D.C., for petitioner. Clement C. Rinehart, New York City, respondent. Chief Justice WARREN delivered the opinion Court. 1 The principal question presented in this case is whether an action under Suits Admiralty Act, 41 Stat. 525, as amended, 46 U.S.C. § 741 et seq., U.S.C.A. United States may defend by pleading against libelant a claim arising out unrelated transaction. 2 In 1953, S.S. Steelworker, ship belonging to respondent, Isthmian Steamship Company ('Isthmian'), carried certain cargo States. submitted bill $116,511.44 service. paid $1,307.68 but withheld remaining $115,203.76. This sum was said have been applied alleged indebtedness which claimed arisen 1946, when States, acting through War Shipping Administration, chartered eight vessels on bare boat basis. Some disagreement arose over amount charter hire due and asserted that owed $115,203.76 additional period from May 1, July 31, 1948. Steelworker not one boats involved 1946 filed libel District Court Southern alleging transported Steelworker; had amount; failed refused pay payable.1 made no reference whatsoever parties' dispute 1946—1948 period. 4 answer admitting $116,511.44; denying $115,203.76; further 'paid' application hire. Shortly before filed, cross-libel seeking recovery After filing answer, moved consolidate its with original ground charter-hire dispositive both libels. 5 excepted defensive matter pleaded therein did arise 'out same contract, cause or transaction filed.' be stricken asked 'judgment pleadings.' held setting forth withholdin d set defense payment rather setoff separate transaction.2 then setoffs distinct transactions could admiralty sustained Isthmian's exceptions. Since there longer any common issue, consolidation denied awarded decree pro confesso. 134 F.Supp. 854. Government's still pending. 6 Court's final interest at 4% per annum date day decree. ordered should run until it paid. second computed included basic recovery, costs 7 On appeal, Appeals Second Circuit affirmed. 255 F.2d 816. relied authority decided time instant case, Grace Line, Inc. v. Cir., 810, wherein withholding applying constitute 'payment,' but, rather, setoff. based, cognizable admiralty. award also upheld. We granted certiorari principally consider posed outset opinion. 358 813, 63, 56. 8 Government presses threshold argument which, if accepted, would obviate need reach While correctness bill, claims has argues true nature between parties concerns despite fact does mention dispute. agree courts below properly payment. 9 relies upon Act March 3, 1817, 366, now appears similar form Section 305 Budget Accounting 1921, 42 24, 31 71, 71. section provides General Office shall settle adjust all demands Government. mean administratively sets off another But recognizing long-standing power far different finding 'payment' enables plead foreign transactions. See Munsey Trust Co. 332 234, 239, 67 1599, 1601, 91 L.Ed. 2022; McKnight 13 Ct.Cl. 292, 306, affirmed 98 179. 25 115; Climatic Rainwear 88 415, 418, 115 520. other situations, traditionally treated Virginia-Carolina Chemical Kirven, 215 252, 257—258, 30 78, 79—80, 54 179; Merchants Heat & Light James B. Clow Sons, 204 286, 289—290, 27 285, 51 488 (a recoupment case); Scammon Kimball, 92 362, 367, 23 483; Eckford, Wall. 484, 18 920. Williston, Contracts (rev. ed. 1936), 887E. context, connotes tender debtor intention satisfy debt coupled acceptance satisfaction creditor. Luckenbach W. J. McCahan Sugar Co., 248 139, 149, 39 53, 55, 63 170; Bronson Rodes, 229, 250, 19 141; Sheehy Mandeville, Cranch 253, 264, 215; Use Par-Lock Appliers Jersey, J.A.J. Const. 137 584, 586. 10 To equivalent strange consequences. Inc., supra, example, carrier become time-barred. performed some services brought suit collect. money time-barred claim. Thus, attempted use unique concept revive totally 11 can understand desire litigate disputes lawsuit, warrant abandoning traditional meaning payment.3 12 therefore outset. 743, suits 'poroceed heard determined according principles law rules practice obtaining like cases private parties.' With express command us, we must ascertain permits up parties. Traditionally, narrowly circumscribed cross-libels defenses. first American considering problem Willard Dorr, 1823, 29 Fed.Cas. page 1277, 17,680, Story sitting permit early holding various reasons offered refusal entertain defenses: protection seaman's wage claims;4 preservation relatively simple proceedings affecting third-party rights;5 recognition allowing might deprive litigants jury trials they otherwise entitled were pressed independent proceeding.6 whatever reason, doctrine gained general acceptance.7 14 consistent pattern point reflected promulgation Rule Rules December Term, 1868, v: 15 'Whenever counter claim, respondents give security usual form, respond damages cross-libel, unless court shown, direct; stayed such given.' 16 That rule remained Rules8 ever since only slight change 50 following reflects underlying settled state law: 17 counterclaim contract respondent claimant given damages, directs.'9 urges particular apply more flexible procedure utilized civil federal courts.10 contends none limited suggested above facts that, moreover, anachronism line specific courts11 courts.12 observed where changed regard result legislation rulemaking decisional process.13 beyond doubt lower many years recognizes law. think decision. 20 Whether operative anachronistic, best considered litigation without benefits normally accompany intelligent rulemaking—including hearings opportunities submit data. addition responsibility rulemaking, Judicial Conference States14 responsibilities area 11, 1958, 72 356: 21 'The carry continuous study operation effect hereafter prescribed Supreme pursuant Such changes additions those deem desirable promote simplicity poocedure, fairness administration, just determination litigation, elimination unjustifiable expense delay recommended consideration adoption, modification rejection, accordance law.' 22 irreparable loss nor indeed require expenditure government funds prior complete disposition claims. authorized withhold judgment extent outstanding Isthmian.15 requirement press pending situations pending, commence than suit. inconvenience remembered Congress expressly declared sued procedural rights governed manner complains improperly compound interest. resulted decree's disrection entry decree, latter entire including 24 provides: 'A * include suit, judgment, rate centum satisfied, higher stipulated based. Interest court. *' 26 Congress' demonstrated concern indicates intended cover these awards affirmatively them controlled 'shall proceed law' applicable satisfaction. find nothing ambiguous statute authorizing accumulation operates Compound presumed Cherokee Nation 270 476, 490, 428, 433, 70 694. improper reversed remanded inconsistent 28 It so ordered. Judgment part directions. recover unpaid portion freight Claims. dismiss because maritime nature, thus giving Courts exclusive jurisdiction Act. seq. Claims dismissed 130 336, 131 472. Before dismissal, proceeding. generally, setoff, Loyd, Development Set-Off, 64 U. Pa.L.Rev. 541 (1916). As distinctions see Shipman, Common Law Pleading (3d 1923), §§ 209, 210; Waterman Set-Off Recoupment, Counter Claim (2d 1872), 464. cites several cases, e.g., York, N.H. H.R. 355 78 212, 247; Alcoa 338 421, 190, 94 225, Wabash R. 59 322, sub nom. St. Louis S.F. T.R. 182, 435, adjudicated bases complaints. None cited two invoked Tucker 1346, while controlling statutes contain entertaining setoffs. n. infra. point, indicate pladings taken together, are issues raised complaint, will determined. See, Hudson, 805, 6,831; 17,680; Shilman 164 649. Isbrandtsen Johnson, 343 779, 1011, 96 1294. Howard 9,889 Bags Malt, F. 917; Ping-On Blethen, 607, 611—612. British Transport Commission 354 129, 77 1103, 1234, collisio. C f. Powell 300 276, 290, 57 470, 477, 81 643. Yankee, 37 512; Bains Catherine, 410, 756. Circuit: Emery Tweedie Trading 143 144, 146; Oceano, 148 131, 132; Transportation Lighterage T. 185 386; Jane Palmer, 609; Cioffi Zealand 73 1015, 1016; Ozanic 188 228, 231. Cases Circuits include: 756; Two Brothers, 158; Zouave, 296; Anderson Pacific Coast 99 109; Monongahela Ohio Dredging Rodgers Sand 296 916; Susquehanna A. O. 858, 859; Hildebrand Geneva Mill 32 343, 347. Present found 2073, 2073. Original August 23, 1842, 516, 518. interesting note local recognized principle. Eastern Districts York. Fed.Rules Civ.Proc. 13(b), U.S.C.A.: opposing party occurrence subject party's claim.' 13(c): diminish defet t he sought party. relief exceeding kind party.' Moore, Federal Practice ed.), 13.01 jurisdictional Claims, 1503, render demand plaintiff court.' 17(b) petition.' 1346(c), 1346(c) relating States: conferred includes set-off, counterclaim, commencing section.' 10, supra. Public Vessels 43 1112, 783, providing files party, 'arising action. Clark, Code 100, 101. For composition function 331, amended 356, quoted text. 1875, 481, 227, 227 provisions well prejudiced disregarded exist. If permitted raise lose merits, Comptroller terminated merits requires 6% 'for from' Isthmian. difference rates significance large here.

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