United Transp. & Lighterage Co. v. New York & Baltimore Transp. Line

• Decision Date: 23 June 1910
• Citation: 180 F. 902
• Parties: UNITED TRANSP. & LIGHTERAGE CO. v. NEW YORK & BALTIMORE TRANSP. LINE. NEW YORK & BALTIMORE TRANSP. LINE v. UNITED TRANSP. & LIGHTERAGE CO.
• Court: U.S. District Court — Southern District of New York

180 F. 902

UNITED TRANSP. & LIGHTERAGE CO. v. NEW YORK & BALTIMORE TRANSP. LINE.

NEW YORK & BALTIMORE TRANSP. LINE v. UNITED TRANSP. & LIGHTERAGE CO.

United States District Court, S.D. New York.

June 23, 1910

Mr Laws and Mr. Betts, for libelant.

Mr Kneeland, for respondent and cross-libelant.

HOUGHDistrict Judge(after stating the facts as above).

The first question suggested is this: During all the times covered by the pleadings herein were two contracts or only one contract made between the parties to this litigation?A complete and final definition of the word 'contract' will perhaps never be reached, but I know of no better description of a business or commercial compact than that approved by Washington, J., in Dartmouth College v Woodward, 4 Wheat., at page 656(4 L.Ed. 629):

'A transaction between two or more persons in which each party comes under an obligation to the other and each reciprocally acquires a right to whatever is promised by the other.'

Applying this to the uncontradicted evidence, when and how did libelant and respondent obtain the reciprocal rights against each other averred in the libel and admitted by the answer?Clearly on or about May 1, 1908, when Mr. Groves, Jr., and Mr. Roome had their conversation.Until the minds of those two men met whatever other contract or contracts may have existed between the lighterage company and the transportation line, the contract in suit did not exist; and the certain test of this is that no action could have been brought upon it.It does not advance matters to speak of this conversation as a modification of an existing contract.A contract once made cannot be modified except by a new meeting of minds, and, when such mind meeting occurs, a new contract springs into existence.

Holding, therefore, that the contract sued on in the libel had no existence before May, 1908, by what right can the respondent sustain either by way of set-off or cross-libel the matters shown in its pleadings?1

Undoubtedly the rule of the common law was hard, and a statute was required to correct an inequity that became more apparent as commercial transactions expanded, 'but courts of equity from a very early day were accustomed to grant relief in that regard independently as well as in aid of statutes upon the subject. 'Per Fuller, C.J., Scott v. Armstrong,146 U.S. 507, 13 Sup.Ct. 150, 36 L.Ed. 1059.The remedy of set-off 'has been very much extended in equity * * * (where) the mutual obligations have grown out of the same transaction; and * * * purely equitable considerations have been held to authorize the setting off of many classes of obligations held by the defendant against a judgment duly recovered against him, in a court of law. 'Blount v. Windley, supra.

It is true that a court of admiralty is often spoken of as one of

1The word 'set-off' is not used in respondent's pleadings, but the 'counterclaim'(for which no warrant is found in admiralty practice) has been regarded by all parties as an attempted set-off.'Set-off'(properly so called) did not exist at common law, but is founded on St. 2 George II, c. 24, Sec. 4, which in substance and effect enacted that, where there were mutual debts between the plaintiff and the defendant, one debt may be set against the be pleaded in bar, so that notice shall be given of the sum or debt intended to be offered in evidence.' United...