NO SET-OFF STRICTLY IN THE ADMIRALTY.

347

he is entitled to an excess of damage over the claim prosecuted, yet, having pleaded recoupment for that damage, in one suit, not adapted to secure him any of the excess, he is debarred from bringing a second suit, solely for the purpose of securing such excess, in a form and proceeding recognized as legitimate and appropriate.

These two peculiarities in the remedy by recoupment are indeed objectionable. But there are some compensations even for them, as will hereafter appear.

In the Soblomsten (1 Adm. & Eccl. 293), which was a suit concerning freight, Dr. Lushington recognizes the defense or process of recoupment as a legitimate remedy in admiralty touching freight, and uses the expression "recoup to freight."

There is no such doctrine as set-off, strictly speaking, recognized in the admiralty. Recoupment is only an approximation to set-off; in principle similar, in application less extensive. As a defensive allegation, if sustained by proof, it operates as evidence in the common law courts, and is sometimes introduced to justify a reduction or mitigation of damages. In this way, as a defense, it may be quite useful and convenient against the unjust claim of an irresponsible party; or against an alien friend or enemy, who is but temporarily within the proper jurisdiction; or to avoid duplicating suits; and thus the remedy by recoupment, though not so effectual for asserting and securing all equitable and legal claims for damages, and having other objections to it, which have been already stated, has much to recommend it in compensation for its remedial defectiveness.

The chief benefit to a party respondent in admiralty

348 is, that he is not necessarily driven to the remedy of a cross-libel, while this defense is open to him; and which, if duly alleged, would protect and secure him against, and to the extent of, the original claim for which a libellant may be promoting his suit. The claim for which suit is promoted, may be recouped to such extent, in order to make good another party's damage, loss, or deterioration of goods or property by the promovent's non-performance, non-delivery, breach of contract or negligence. Pro tanto, the original claim may be positively diminished, or it may be entirely extinguished. The damages, for which recoupment is an available remedy in admiralty, cannot exceed the original claim. If they do, then the excess can never be collected; for no decree can be made, and no second suit brought for that excess.

RECOUPMENT, WITH NO CROSS-LIBEL, IS DEFENSE ONLY.

Should there be the chance of an excess of damage over the claim sued, and a fair prospect of securing it, after legal contestation, the skillful practitioner would advise his client to resort seasonably to his cross-libel, and not attempt, in the first suit, any defense by way of recoupment. Spurr et al. v. Pearson, 3 Mason, 109; Willard et ux. v. Dorr's Admr., ibid. 161; Snow et al. v. Carruth et al., 1 Spr. 224. In this last case, a libel was brought in the Massachusetts District Court to recover freight, which had accrued under a couple of bills of lading, for goods delivered to a consignee; and the defense relied upon was non-delivery, or, rather, short delivery, which, being alleged and proved on the part of the consignee, would recoup to him from freight the amount of his loss suffered by damage, non-delivery, or deterioration of the consigned goods, after shipment or receipt for them.

AND AFFORDS NO REMEDY FOR ANY EXCESS OF DAMAGE. 349

In behalf of the ship-owners, as carriers, it was insisted, that even if the consignee had sufficient legal interest to maintain a suit for damages, deterioration, or diminution, by reason of leakage, improper stowage, or negligence of any kind, still such damage could not be set up in defense in this process, and deduction adjudged in the shape of recoupment to freight. And Judge Sprague, in pronouncing judgment, said: "Considering the question on principle, there seems to be no reason for not allowing" this defense of recoupment.

In a contract of freight, the question is as to the quantum, if any damage be recoverable. Everything may be settled in one proceeding. The libel and answer are on the same contract, and the evidence the same, particularly as to delivery or short delivery, and whether the damage, deterioration, detention, or deduction be greater or less.

As there is no general doctrine of set-off recognized in the admiralty, the damages to be recouped cannot exceed the amount of freight claimed. It is optional for a party to resort to this defense as his remedy, or bring at once his cross-libel, if he expect or desire to recover damages exceeding the freight demanded. However the proceeding may be instituted, it raises a question of remedy, not of right.

In Bearse v. Ropes et al. (1 Spr. 331), a carrier sued for freight, which had accrued for the carriage of hemp, that was damaged, as the libellant contended, from dangers of the sea and, therefore, was not liable for the damage but, as the respondent contended, by the fault or negligence of the carrier. As the court was not satisfied that the damage was occasioned by the danger of the seas, within the true meaning of the bill

350

RECOUPMENT, AS A REMEDY, EQUIVALENT TO

of lading, and as the amount of damage claimed exceeded the sum claimed as freight, the libel was dismissed with costs.

From what has been observed upon this subject, it will appear that, practically, recoupment is a mitigation, reduction, extinction, or deduction of damages claimed in an adversary suit; analogous to, but not identical with set-off in the common law courts. The latter is a full and complete remedy; the former but partial and incomplete; available, in defense, to secure and protect a party against possible loss; but not needed or useful, in prosecuting an ordinary right, inasmuch as the customary remedies are to be preferred. But as no statute has conferred on admiralty courts any jurisdiction over set-off, occasional resort to recoupment as a defense has been a necessity.

It is a convenient and just remedy, adapted to indemnify against equivocal claims, asserted by unscrupulous parties; summarily circumventing deep-laid or shallow schemes of sharp practice, and affording reasonable security to persons disinclined to litigation.

Most of the contested cases relate to the recovery of freight; some to the adjustment of demurrage. Of this latter description is the case of Nichols v. Tremlett, 1 Spr. 361. There, the parties brought cross-libels, and the discussion of the general doctrine by the court, furnishes a summary of the learning and perhaps a definition of the remedy, as well as of the doctrine upon which the remedy is founded.

The occasion for such discussion was a motion to stay further proceedings until a hearing could be had in a cross-libel by Tremlett v. Nichols. This libel, the court said, "is not merely defensive. It is not like a

MITIGATION OR REDUCTION OF DAMAGES.

351

cross-bill in equity, or a bill to enjoin a judgment, whose whole force is exhausted in repelling the claim of the other party. But it proceeds further, and claims damages upon an independent stipulation, and to a greater amount than may be decreed to the other party in the first libel.

"This claim the respondent did not present in answer to the former suit. It may be contended, that he might and ought to have set it up in defense of the first suit, and that he cannot now make it the ground of a new action. I think that he might have availed himself of it in his answer to the first suit, although this doctrine has been seriously doubted. The admiralty does not take cognizance of pleas in set-off, no statute having given it that authority, and it has been thought by some, that a distinct claim by the respondent, founded upon the violation of the contract by the libellant, is in the nature of a set-off, and so not cognizable by this court. But I am of opinion, that where the counter claim is founded upon the same charter-party, the respondent may set it up in his answer, so that the damages that he has sustained may be recouped from the amount which the libellant might recover.

"But in such case, if the damages sustained by the respondent should exceed the just claim of the libellant, the court can give no decree for such excess; the utmost effect being to diminish or extinguish the claim of the libellant. Nor could the respondent afterwards maintain a suit for such excess. He cannot be permitted to split up his demand, and litigate the same question twice."

Able and experienced counsel were engaged in this case, and the doctrines were, it may be supposed, thoroughly argued.