United States v. Hougham
364 U.S. 310 (1960)

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U.S. Supreme Court

United States v. Hougham, 364 U.S. 310 (1960)

United States v. Hougham

No. 24. Argued October 18, 1960

Decided November 7, 1960

364 U.S. 310

Syllabus

The Government sued respondents to recover civil damages under § 26(b)(1) of the Surplus Property Act of 1944 for obtaining surplus government property by fraud. Later it moved to file an amended complaint seeking instead to recover damages under § 26(b)(2). That motion was withdrawn, and the Government filed a second amended complaint again seeking damages under § 26(b)(1). After trial, the District Court awarded the Government damages under § 26(b)(1). Both sides appealed, and the Court of Appeals affirmed. While the appeal was pending, the Government accepted from respondents promissory notes totalling the amount of the judgment, and it released only its judgment liens in two counties.

Held:

1. By accepting payment of an amount equal to the judgment appealed from as inadequate and releasing only its judgment liens in two counties in the circumstances of this case, the Government did not lose its right to press its claim for the full amount of the damages it believed to be due. Pp. 364 U. S. 312-313.

2. Recoveries under § 26(b) are not penalties, and the claims asserted by the Government were not barred by the statute of limitations. P. 364 U. S. 313.

3. In the circumstances of this case, in which the issue was preserved in a pretrial order pursuant to Rule 16 of the Federal Rules of Civil Procedure, the Government did not waive its contention that it was entitled to change its election of remedies and to recover under § 26(b)(2), instead of § 26(b)(1). Pp. 364 U. S. 313-316.

4. The Government's original complaint seeking damages under § 26(b)(1) did not constitute an irrevocable election of remedies, and, in the circumstances of this case, the Government had a right to amend its pleadings so as to seek damages under § 26(b)(2). Pp. 364 U. S. 316-317.

5. Section 26(b) did not empower the District Court to determine according to the evidence which of the three subsections would

Page 364 U. S. 311

be the most appropriate and to require the Government to accept judgment under that subsection. P. 364 U. S. 317.

6. In the circumstances of this case, respondents are not entitled to a new trial. Pp. 364 U. S. 317-318.

270 F.2d 290, reversed.

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