United States v. Shaw

Citation309 U.S. 495,60 S.Ct. 659,84 L.Ed. 888
Decision Date25 March 1940
Docket NumberNo. 570,570
CourtUnited States Supreme Court

Messrs. Robert H. Jackson, Atty. Gen., and Francis B. Biddle, Sol. Gen., for petitioner.

Messrs. Eugene F. Black and Shirley Stewart, both of Port Huron, Mich., for respondent.

[Argument of Counsel from page 496 intentionally omitted] Mr. Justice REED delivered the opinion of the Court.

In 1918 Sydney C. McLouth contracted to construct nine tugs for the United States Shipping Board Emergency Fleet Corporation. On May 24, 1920, the contract was cancelled and the parties entered into a settlement agreement providing that McLouth was to keep as bailee certain materials furnished him for use in building the tugs and that the Fleet Corporation was to assume certain of McLouth's subcontracts and commitments. Among the commitments assumed was a contract of Mc- Louth's to purchase lumber from the Ingram-Day Lumber Company. The Lumber Company obtained a judgment against McLouth for $42,789.96 for breach of this contract,1 and, McLouth having died in 1923, filed its claim on the judgment in the probate court of St. Clair County, Michigan. Subsequently the Unites States obtained a judgment of $40,165.48 against McLouth's administrator,2 representing damages for the conversion of the materials left with McLouth as bailee, and claim on this judgment was filed in the probate court. The administrator, respondent here, having presented without success the Lumber Company's judgment to the General Accounting Office,3 sought to set off that judgment against the judgment of the United States. The probate court allowed the claim of the United States and denied the set-off, but its ruling as to the set-off was reversed on appeal to the Michigan Supreme Court.4 The administrator then petitioned the probate court to grant statutory judgment of the balance due the estate. The court found that the claim of the United States, with interest, amounted to $49,442.41 and the Lumber Company's claim to $73,071.38 and 'ordered, adjudged and ascertained' that the United States was indebted to the estate for the difference, $23,628.97, 'and that such indebtedness be and the same is hereby allowed as and determined to be a proper claim which is owing to said estate by the United States of America.' The probate court's judgment was affirmed on appeal.5

On this certiorari we are concerned with the question whether the United States by filing a claim against an estate in a state court subjects itself, in accordance with local statutory practice, to a binding, though not immediately enforceable, ascertainment and allowance by the state court of a cross-claim against itself.

Because of different views of other federal courts as to the decisions of this Court in the important federal field of cross-claims against the United States, 6 we granted certiorari.7 United States v. United States Fidelity and Guaranty Company8 involves this question.

The statute of Michigan under which this ascertainment of indebtedness was made, so far as pertinent, is set out in the footnote.9 There is no contention on the part of respondent that the judgment is enforceable against the United States even in the limited sense of statutory direction to report the judgment to Congress as in the Court of Claims Act10 or the Merchant Marine Act.11 Execution against property of governmental agencies subjected to such procedure by statute is sometimes allowed.12 The position taken is that the probate court judgment is a 'final determination' of the rights of the litigants, howsoever such rights may later become important. We are not here concerned with the manner of collection. Such was the holding of the Supreme Court of Michigan.13

The state procedure for the determination of the balance against or in favor of an estate, which was employed here, was the recognized method of closing an estate at the time of the probate judgment. The probate judge was empowered to act as commissioner under the statute quoted above.14 His decision unreviewed was considered final.15 The determination of the probate court between private parties was enforceable without reexamination in the circuit court.16 Even the right to execution is not essential to a complete judicial process.17 The order entered was a final determination of the amounts due the estate by the United States on this claim and cross-claim if the probate court had jurisdiction to render the order against the petitioner.

Whether that jurisdiction exists depends upon the effect of the voluntary submission to the Michigan court by the United States of its claim against the estate. As a foundation for the examination of that question we may lay the postulate that without specific statutory consent, no suit may be brought against the United States.18 No officer by his action can confer jurisdiction.19 Even when suits are authorized they must be brought only in designated courts.20 The reasons for this immunity are imbedded in our legal philosophy. They partake somewhat of dignity and decorum, somewhat of practical administration, somewhat of the political desirability of an impregnable legal citadel where government as distinct from its functionaries may operate undisturbed by the demands of litigants. A sense of justice has brought a progressive relaxation by legislative enactments of the rigor of the immunity rule. As representative governments attempt to ameliorate inequalities as necessities will permit, prerogatives of the government yield to the needs of the citizen. By the act of March 3, 1797, and its successor legislation, as interpreted by this Court, cross-claims are allowed to the amount of the government's claim, where the government voluntarily sues.21 Specially designated claims against the United States may be sued upon in the Court of Claims or the district courts under the Tucker Act.22 Special government activities, set apart as corporations or individual agencies, have been made suable freely. When authority is given, it is liberally construed. 23 As to these matters no controversy exists.

Respondent contends this immunity extends, however, only to original suits; that when a sovereign voluntarily seeks the aid of the courts for collection of its indebted- ness it takes the form of a private suitor and thereby subjects itself to the full jurisdiction of the court. The principle of a single adjudication is stressed, as is the necessity for a complete examination into the cross-claim, despite attendant dislocation of government business by the appearance of important officers at distant points and the production of documents as evidence, to justify the allowance of an offset to the government's claim.24 It is pointed out that surprise is not involved as no cross-claim may be proven until after submission to and refusal by the government accounting officers.25 Respondent further insists that his position is supported by The Thekla26 and subsequent decisions quoting its language.27 Emphasis is placed upon the fact that these probate proceedings are in rem or quasi in rem28 as were the libels in admiralty in The Thekla.

It is not our right to extend the waiver of sovereign immunity more broadly that has been directed by the Congress. We, of course, intimate no opinion as to the desirability of further changes. That is immaterial. Against the background of complete immunity we find no Congressional action modifying the immunity rule in favor of cross-actions beyond the amount necessary as a set-off.

The Thekla turns upon a relationship characteristic of claims of collision in admiralty but entirely absent in claims and cross-claims in settlement of estates. The subject matter of a suit for damages in collision is not the vessel libelled but the collision. Libels and cross-libels for collision are one litigation and give rise to one liability.29 In equal fault, the entire damage is divided. As a consequence when the United States libels the vessel of another for collision damages and a cross-libel is filed, it is necessary to determine the cross-libel as well as the original libel to reach a conclusion as to liability for the collision. That conclusion must be stated in terms of responsibility for damages. In The Thekla opinion the cases of Illinois Central Railroad Company v. Public Utilities Commission30 and Nassau Smelting Works v. United States31 were cited in support of the statement that '* * * generally speaking a claim that would not constitute a cause of action against the sovereign cannot be asserted as a counterclaim.' This Court then said: 'We do not qualify the foregoing decisions in any way.' In the Smelting case this Court had said, two weeks before, on a certificate as to the jurisdiction of the district court to consider a counterclaim:

'The objection to a suit against the United States is fundamental, whether it be in the form of an original action, or a set-off, or a counterclaim. Jurisdiction in either case does not exist, unless there is specific congressional authority for it. Nor is there doubt that the question is one which involves the jurisdiction of the District Court as a federal court under the statutes of the United States, for the jurisdiction of the District Court in this regard is wholly dependent on such statutes.'32

There is little indication in the facts or language of The Thekla to indicate an intention to permit generally unlimited cross-claims. Quotations from The Thekla in later opinions of this Court are used to illustrate prob- lems entirely apart from the one under consideration here.33

The suggestion that the order of the probate court is in reality not a judgment but only a 'judicial ascertainment' of credits does not affect our conclusion. No judgment against the United States is more than that. But such an entry, if within the competence of the court passing the order would be res judicata of the issue of indebtedness.34 The suggestion springs...

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