Case: ST. LOUIS-SAN FRANCISCO RAILWAY CO. v. THE UNITED STATES
Abbreviation: St. Louis-San Francisco Railway Co. v. United States
Decision Date: 1969-11-14
Docket Number: Nos. 289-65 and 303-66
Citation: 189 Ct. Cl. 280
Volume: 189
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: ST. LOUIS-SAN FRANCISCO RAILWAY CO. v. THE UNITED STATES
Judges: Before Cowen, Chief Judge, Laramore, Dureee, Davis, ColliNS, SeleltoN, and Nichols, Judges.
Pages: 280–283

Head Matter:
417 F. 2d 1359
ST. LOUIS-SAN FRANCISCO RAILWAY CO. v. THE UNITED STATES
[Nos. 289-65 and 303-66.
Decided November 14, 1969]
George K. Dunham for plaintiff; Robert T. MoTloy, attorney of record.
E. Adam, Moorhouse, with, whom was Assistant Attorney General Johnnie M. Walters, for defendant.
Before Cowen, Chief Judge, Laramore, Dureee, Davis, ColliNS, SeleltoN, and Nichols, Judges.

Opinion:
Laramore, Judge,
delivered the opinion of the court:
This case arises on plaintiff's request for review of Trial Commissioner Fletcher's Order wherein he permitted the defendant to file amended answers in the above consolidated cases, raising two setoff claims relating to the accounting treatment for second-hand rail and welded rail.
The objection raised by plaintiff to the commissioner's ruling is that the amendment comes too late and will permit defendant to unduly prolong the litigation and, consequently, constitutes an abuse of the trial commissioner's discretion.
The petition in case #289-65 relating to the taxable years 1953 through 1958 was filed on August 18, 1965. Defendant originally answered on February 14, 1966. The petition in case #303-66, relating to the taxable years 1959 through 1962, was filed on August 17, 1966 and the answer was filed on March 15,1967. By order dated August 23,1966 these cases were consolidated.
The short answer to the controversy now before us is twofold; i.e., in Missouri Pacific Railroad Co. v. United States, 168 Ct. Cl. 86, 92, 338 F. 2d 668, 672 (1964), the court held as follows:
(2) as outlined above, our trial commissioners should make a determination at pre-trial as to the reasonableness and adequacy of the government's setoff defense. If, after an examination of the pleadings and materials furnished by the government at pretrial, the trial commissioner determines that the contention raised by the setoff has substance, then the burden is on the taxpayer to prove the validity of the challenged item raised by the answer in setoff.
Admittedly, the instant case is still in the pre-trial stage, and we are not convinced that any substantial rights of plaintiff will be adversely affected by the trial commissioner's order.
Furthermore, the setoff defenses raised in this case were raised and allowed as additional defenses in Chicago, Burlington & Quincy Railroad Co. v. United States, Ct. Cl. No. 149-65, and Missouri Pacific Railroad Co. v. United States, Ct. Cl. Nos. 142-67, 95-68. In this posture it would be manifestly inconsistent to permit the setoff to be raised in these two cases and refuse to permit it in the instant case.
This is not to say that the government may unduly delay the raising of the issue, and we now warn that any undue delay on the part of the government will result in the denial of the right to raise setoff defenses. In other words, we hold that the defense must be raised at the earliest possible stage in the proceedings.
For the above reasons, we deny the plaintiff's request for review and affirm the ferial commissioner's order of May 19, 1969.