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U.S. Supreme Court

United States v. Isthmian Steamship Co., 359 U.S. 314 (1959)

United States v. Isthmian Steamship Co.

No. 285

Argued February 25, 1959

Decided April 27, 1959

359 U.S. 314


1. Under the Suits in Admiralty Act, as amended, 46 U.S.C. § 741 et seq., respondent filed a libel against the United States in a Federal District Court, alleging that the United States owed respondent $116,511.44 for cargo transported on one of respondent's ships; that respondent had presented a bill for that amount; and that the United States had failed and refused to pay $115,203.76 which was due and payable. The United States filed an answer admitting that respondent had submitted a claim for $116,511.44; denying that the United States had not paid $115,203.76; and further alleging that this sum had been "paid" by application against an indebtedness of respondent to the United States for additional charter hire. Respondent excepted on the ground that the defensive matter pleaded did not arise "out of the same contract, cause of action or transaction for which the libel was filed," and moved that the excepted matter be stricken, and that respondent be awarded "judgment on the pleadings." This motion was granted, and respondent was awarded a decree pro confesso.

Held: this portion of the judgment is sustained. Pp. 359 U. S. 315-324.

(a) The Government's defense is not properly one of "payment," but one of setoff arising out of a transaction unrelated to the cause of action on which the libel was filed. Pp. 359 U. S. 318-319.

(b) In an action under the Suits in Admiralty Act, the United States may not defend by pleading against the libelant a claim arising out of a separate and unrelated transaction between the same parties. Pp. 359 U. S. 319-322.

(c) If the law on this point in admiralty is to be changed, it should be by rulemaking or legislation, and not by decision. Pp. 359 U. S. 322-324.

2. In the final decree, the District Court awarded respondent interest at 4% per annum from the filing of the libel until the entry of the decree, and at 4% from the entry of the decree until satisfaction, with this latter interest to be computed upon the entire decree, including the interest up to the date of the decree.

Held: insofar

Page 359 U. S. 315

as this judgment awarded compound interest from the date of the decree until the date of satisfaction, it was improper, and is reversed. Pp. 359 U. S. 324-325.

255 F.2d 816 affirmed in part and reversed in part.

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