Court Opinion

ID: 9763920
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:01:07.840622+00
Date Added: 2024-06-11T07:29:51.149970
License: Public Domain

Mr. Justice Culver,
joined by Justices Smith and Green-hill dissenting.
The question of law presented here is whether in a suit by petitioner-Railway Company, to recover freight charges for an interstate shipment of cattle by connecting carriers from Montana to California, the respondent-shipper may interpose defensively a claim for damages by way of recoupment although the claim if asserted as a setoff or counterclaim was barred by limitations. This question was resolved in favor of the shipper by the trial court and affirmed by the Court of Civil Appeals. 319 S.W. 2d 810.
The case of Pennsylvania Railway Company v. Miller, 124 F. 2d 160 (writ of certiorari denied)1 appears to be the only one wherein the precise question has been considered. That decision of the 5th Circuit affirming a judgment from the Eastern District of Texas I regard as controlling and on that basis agree with the conclusion formed by the Court of Civil Appeals.
*336On this question the petitioner contends, first, that the defense of recoupment, even in those jurisdictions where permitted, is available only as against a plea of limitation and respondent’s failure to give the written notice which the contract makes a condition precedent to recovery bars the defense of recoupment. Second, that whether the matters relied on by respondent can be asserted as a defense by way of recoupment is determined by the state law rather than the federal law and that under the law of Texas the defense of recoupment did not exist in this instance.
Petitioners argue that the Miller case stands for the proposition that the law of the forum must be followed in determining whether or not the defensive plea of recoupment will be permitted but that while the Court in that case permitted recoupment to be interposed it misconstrued the Texas law. Petitioner points out that the dissenting opinion predicated its disagreement on that phase of the case upon Morris-Buick Co. v. Davis, 127 Texas 41, 91 S.W. 2d 313, where we said: “The intent of our remedial statutes (Articles 2015-2017), regulating the subject of counterclaim and setoff, is such that the remedy of recoupment, to the extent that same has been expanded and applied in some jurisdictions, has no place in the jurisprudence of this state.” That pronouncement has not been overruled or modified and represents the law in Texas as it exists and at the time of the Miller decision. On this premise petitioner concludes that the Miller case was incorrectly decided and a different result should obtain here.
Now regardless of what is said in the dissent about the Texas law controlling, it is quite evident that the majority was well aware of the Miller-Buick decision, having expressly cited it in their opinion. What the majority held amounts to this, that recoupment is recognized as a part of the common law that was adopted by the State of Texas and by most of the other states and based their decision not on the law of Texas as it presently affects a plea of recoupment, but rather upon the common law principles generally as adopted by Texas and the other states, and as accepted and enforced by the federal courts. Pursuant to the Carmack Amendment, (U.S.C.A., Title 49, Sec. 20, #11), no remedial state legislation is effective.
In denying writ of certiorari the Supreme Court must have done so in the light of and in spite of the views expressed in the dissent.
In the field of federal taxation the defense of recoupment *337has been expressly recognized even though the claim would have been barred if asserted as an independent suit or counterclaim or setoff for the reason, it is said, that recoupment is in the nature of a defense arising out of some feature of the transaction upon which the plaintiff’s action is grounded. The federal courts hold that the claim asserted defensively is not barred by the statute of limitations so long as the main action is timely brought. Bull v. United States, 295 U.S. 247, 79 L. Ed. 142.
The petitioner quotes from American Jurisprudence, Vol. 11, Conflict of Laws, Section 190, where it is said that by the weight of authority the law of setoff and counterclaim is remedial in its nature rather than substantive, but we are impressed by the contrary contention asserted by the respondent and supported by the preceding section 189 to the effect that defensive matters are generally regarded as substantive rather than remedial and not controlled by lex fori. Recoupment is solely defensive in its function.
Thus I am convinced that regardless of local law a federal question is here raised and the decisions of the federal courts control.
The only factual distinction pointed out between the case at bar and Pennsylvania v. Miller, is that in the latter case notice of the loss was timely filed by the shipper and disallowed by the carrier, while in our case no notice was given by the shipper at any time. No authority is cited on this point of distinction and we think that the failure to file notice would have no bearing on the right of the appellee to present his claim defensively nor that the failure of the shipper to have filed written notice of claim would have resulted in a contrary holding in that case. Under the terms of the shipment contract written notice of the loss or damage was to be filed within nine months after delivery to be followed by suit within two years after disallowance of the claim and these were both conditions precedent to recovery. Whether the claim be barred as a setoff by reason of the failure to give timely notice of the claim or by the failure to assert the claim as a setoff within the 2-year period would seem to make no difference so far as the right to assert the claim defensively by way of recoupment is concerned. In either instance the claim would be barred as a matter of affirmative relief. The uniform livestock contract in evidence here provides in part as follows:
“* * * Where claims are not filed or suits are not instituted *338thereon in accordance with the foregoing provisions, no carrier hereunder shall be liable, and such claim will not be paid.”
I therefore respectfully dissent from the holding of the majority.
Opinion delivered January 6, 1960.
Rehearing overruled February 3, 1960.

 — 316 U.S. 676, 86 L. Ed. 1750, 62 S.C. 1047.