United States v. EASTPORT STEAMSHIP CORPORATION

• Decision Date: 17 July 1956
• Citation: 142 F. Supp. 375
• Parties: UNITED STATES of America, Libelant, v. EASTPORT STEAMSHIP CORPORATION, Respondent.
• Court: U.S. District Court — Southern District of New York

142 F. Supp. 375

UNITED STATES of America, Libelant, v. EASTPORT STEAMSHIP CORPORATION, Respondent.

United States District Court S. D. New York.

July 17, 1956.

Paul W. Williams, U. S. Atty., Southern Dist. of New York, New York City, for libelant (Leavenworth Colby and Benjamin H. Berman, Washington, D. C., of counsel).

Zock, Petrie, Sheneman & Reid, New York City, Kominers & Fort, Washington, D. C., for respondent (J. Franklin Fort and John Cunningham, Washington, D. C., and Francis J. O'Brien, New York City, of counsel).

THOMAS F. MURPHY, District Judge.

Respondent's exceptions to the libel of the United States raise issues of law concerning voluntary payment and compulsory counterclaims and for the reasons hereinafter stated they are sustained and the libel is dismissed.

In June 1954 respondent recovered a judgment against libelant in the amount of $54,000. Shortly thereafter Congress appropriated funds to pay this judgment. The General Accounting Office on September 29, 1954, deducted the sum of $31,102.71 from the amount appropriated and remitted the balance to respondent. The withholding of this sum was done under the provisions of 31 U.S.C.A. § 227 which provides in substance that it shall be the duty of the Comptroller General to withhold payment of any judgment equal to a debt owing to the United States and if the judgment creditor denies his indebtedness or refuses to consent to the set-off then the Comptroller General shall withhold payment and if such debt is not already in suit it shall be his duty to cause proceedings to be immediately commenced to enforce the same.

The Comptroller General withheld the sum of $31,102.71 because of his claim that respondent owed that amount to libelant as charter hire. Respondent then brought an action in the Court of Claims on October 17, 1954, to recover the amount withheld. The government made a motion to dismiss on the ground that the Court of Claims lacked jurisdiction, but before decision on the motion filed the instant libel on November 9, 1954, in this district for $31,102.71 for charter hire. The Court of Claims denied the government's motion on April 5, 1955. 130 F.Supp. 333, 131 Ct.Cl. 210. Three weeks later on April 28, 1955, the government paid the full amount that was withheld. After making payment the government then pleaded payment as a defense in the Court of Claims action.

Respondent moved to strike this defense because the government had not paid the 6% interest for the period of the wrongful withholding. The Court of Claims on May 1, 1956, granted the motion to strike with leave to plead an amended answer denying the withholding was improper. Such answer was filed May 31, 1956, but it contained no counterclaim for the $31,102.71 which is the subject matter of the present libel in this district.

On June 14, 1956, respondent moved in the present proceeding in this district to suspend proceedings in this court pending final disposition of the Court of Claims action. That motion was denied without opinion by Judge Cashin.

On July 2, 1956, the present exceptive allegations were filed in this court. The grounds are (a) the sum of $31,102.71 sought to be recovered herein was paid by libelant to respondent while suit therefor was pending and the same cannot be recovered under established principles of voluntary payment, and (b) that libelant has waived the claim against respondent by failure to demand said sum by counterclaim in the action pending between the parties in the Court of Claims action.

The undisputed facts leave no room for doubt that the payment to respondent on April 28, 1955, was a voluntary payment in every particular. No duress or compulsion is alleged — not even a protest was made. Payment was made with full knowledge of all the facts without necessity or urgency. It...