1. A suit against the United States may be brought only with
consent given, and in the courts designated, by statute. P.
309 U. S.
500.
2. The United States, by filing a claim against an estate in a
state probate proceeding, does not subject itself to a binding,
though not enforceable, ascertainment and allowance of a
cross-claim against itself in excess of set-off.
The
Thekla, 266 U. S. 328,
distinguished. Pp.
309 U. S.
501-504.
3. By taking over the assets of the Fleet Corporation and
assuming its obligations, the United States did not waive its
immunity from suit in a state court on a counterclaim based on the
corporation's breach of contract. P.
309 U. S.
505.
290 Mich. 311, 287 N.W. 477, reversed.
Certiorari, 308 U.S. 548, to review the affirmance of a decree
in probate holding the United States indebted to a decedent's
estate on a counterclaim.
Page 309 U. S. 497
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 McLouth's
Page 309 U. S. 498
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, [
Footnote 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 [
Footnote 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, [
Footnote 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. [
Footnote 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. [
Footnote 5]
Page 309 U. S. 499
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, [
Footnote 6] we granted certiorari. [
Footnote 7]
United States v. United States
Fidelity and Guaranty Company [
Footnote 8] 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. [
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
Page 309 U. S. 500
of Claims Act [
Footnote
10] or the Merchant Marine Act. [
Footnote 11] Execution against property of governmental
agencies subjected to such procedure by statute is sometimes
allowed. [
Footnote 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. [
Footnote
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. [
Footnote 14] His decision unreviewed was considered
final. [
Footnote 15] The
determination of the probate court between private parties was
enforceable without reexamination in the circuit court. [
Footnote 16] Even the right to
execution is not essential to a complete judicial process.
[
Footnote 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
Page 309 U. S. 501
States. [
Footnote 18] No
officer, by his action, can confer jurisdiction. [
Footnote 19] Even when suits are
authorized, they must be brought only in designated courts.
[
Footnote 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. [
Footnote 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. [
Footnote 22] Special government activities, set apart
as corporations or individual agencies, have been made suable
freely. When authority is given, it is liberally construed.
[
Footnote 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 indebtedness
Page 309 U. S. 502
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.
[
Footnote 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. [
Footnote 25]
Respondent further insists that his position is supported by
The Thekla [
Footnote
26] and subsequent decisions quoting its language. [
Footnote 27] Emphasis is placed upon
the fact that these probate proceedings are
in rem or
quasi in rem, [
Footnote
28] 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
Page 309 U. S. 503
liability. [
Footnote 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 Commission [
Footnote 30] and
Nassau Smelting Works v. United
States [
Footnote 31]
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.
[
Footnote 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 problems
Page 309 U. S. 504
entirely apart from the one under consideration here. [
Footnote 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. [
Footnote 34] The suggestion springs from the
opinion in
United States v. Eckford. [
Footnote 35] These words there appear:
"Without extending the argument, we adopt the views expressed by
this court in the case of
De Groot v. United
States (5 Wall. 419), decided at the last term,
that, when the United States is plaintiff and the defendant has
pleaded a set-off, which the acts of Congress have authorized him
to do, no judgment can be rendered against the government, although
it may be judicially ascertained that, on striking a balance of
just demands, the government is indebted to the defendant in an
ascertained amount."
The Court had just written that no action could be sustained
against the government without consent, and that to permit a demand
in set-off to become the foundation of a judgment would be the same
thing as sustaining the prosecution of a suit. [
Footnote 36] The language quoted above
means no more than that no judgment may be entered against the
government even though the court has ascertained through its
processes that the government is actually indebted to the
defendants. The judgment should be limited to a dismissal of the
government's claim.
In the
Eckford case, this Court was dealing with the
litigation at a more advanced stage than the present litigation
Page 309 U. S. 505
has reached. The United States had sued Eckford's executors on
his bond in the District Court for the Southern District of New
York. They pleaded a set-off, a balance was found in their favor,
and a judgment entered that the executors were entitled to be paid
the amount found. Suit in the Court of Claims was instituted by the
executors, the record was proven, over objection, and judgment
entered accordingly. Consequently a reversal of the Court of Claims
was the only step necessary. This Court did not deal with the New
York judgment. [
Footnote
37]
We have considered respondent's further argument that sovereign
immunity was waived when the United States took possession of the
assets of its agent the Fleet Corporation prior to the institution
of this action and later, but prior to the entry of the probate
judgment appealed from, assumed the Corporation's obligations by
the act of June 29, 1936. [
Footnote 38] We see nothing in these transactions which
indicates an intention to waive the immunity of the United States
in the state courts.
Reversed.
MR. JUSTICE McREYNOLDS took no part in the decision of this
case.
[
Footnote 1]
Ingram-Day Lumber Co. v. McLouth, 275 U.
S. 471.
[
Footnote 2]
Shaw v. United States, 75 F.2d 175.
[
Footnote 3]
The Act of March 3, 1797, 1 Stat. 512, 514, as amended, 28
U.S.C. § 774, provides that, in
"suits brought by the United States against individuals, no
claim for a credit shall be admitted . . . except such as appear to
have been presented to the General Accounting Office for its
examination, and to have been by it disallowed. . . ."
[
Footnote 4]
In re McLouth's Estate, 281 Mich.191, 274 N.W. 759.
[
Footnote 5]
290 Mich. 311, 287 N.W. 477.
[
Footnote 6]
Cf. 73 U. S.
Eckford, 6 Wall. 484;
The Thekla, 266 U.
S. 328;
In re Patterson-MacDonald Shipbuilding
Co., 293 F. 192,
certiorari denied sub nom. McLean v.
Australia, 264 U.S. 582;
Kingdom of Roumania v. Guaranty
Trust Co., 250 F. 341,
cert. denied, 246 U.S. 663;
United States v. Nipissing Mines Co., 206 F. 431, 434;
Adams v. United States, 3 Ct.Cls. 312, 333;
Peterson
v. United States, 26 Ct.Cls. 93, 98.
United States v.
National City Bank, 83 F.2d 236, 106 A.L.R. 1235,
cert.
denied, 299 U.S. 563;
American Propellor Co. v. United
States, 300 U. S. 475;
Guaranty Trust Co. v. United States, 304 U.
S. 126.
[
Footnote 7]
308 U.S. 548.
[
Footnote 8]
Post, p.
309 U. S. 506.
[
Footnote 9]
Compiled Laws of Michigan (1929), c. 266, § 15682:
"Set-offs in settlement of claims. Sec. 9. When a creditor
against whom the deceased had claims shall present a claim to the
commissioners, the executor or administrator shall exhibit the
claims of the deceased in offset to the claims of the creditor, and
the commissioners shall ascertain and allow the balance against or
in favor of the estate, as they shall find the same to be; but no
claim barred by the statute of limitations shall be allowed by the
commissioners in favor of or against the estate, as a set-off or
otherwise."
[
Footnote 10]
31 U.S.C. § 226.
[
Footnote 11]
46 U.S.C. § 1113.
[
Footnote 12]
Federal Housing Administration v. Burr, ante, p.
309 U. S. 242.
[
Footnote 13]
290 Mich. 311, 287 N.W. 477.
[
Footnote 14]
3 Comp.Laws Mich. (1929), § 15681.
[
Footnote 15]
Flynn v. Lorimer's Estate, 141 Mich. 707, 105 N.W.
37.
[
Footnote 16]
Shurbun v. Hooper, 40 Mich. 503.
[
Footnote 17]
Nashville, C. & St.L. Ry. v. Wallace, 288 U.
S. 249,
288 U. S. 263;
Flynn v. Lorimer's Estate, 141 Mich. 707, 105 N.W. 37.
[
Footnote 18]
Kansas v. United States, 204 U.
S. 331;
United States v. Thompson, 98 U. S.
486,
98 U. S.
489-490;
Buchanan v.
Alexander, 4 How. 20.
[
Footnote 19]
Stanley v. Schwalby, 162 U. S. 255,
162 U. S. 270;
Carr v. United States, 98 U. S. 433,
98 U. S.
437.
[
Footnote 20]
Minnesota v. United States, 305 U.
S. 382,
305 U. S.
388.
[
Footnote 21]
1 Stat. 512, 514, R.S. § 951, 28 U.S.C. § 774.
United
States v. Wilkins, 6 Wheat. 135,
19 U. S.
144.
[
Footnote 22]
28 U.S.C. §§ 41(20), 250.
[
Footnote 23]
Keifer & Keifer v. Reconstruction Finance Corp.,
306 U. S. 381;
Federal Housing Administration v. Burr, supra.
[
Footnote 24]
United States v. Wilkins, supra.
[
Footnote 25]
28 U.S.C. § 774.
[
Footnote 26]
266 U. S. 266 U.S.
328.
[
Footnote 27]
See note 33
infra.
[
Footnote 28]
United States v. Bank of New York Co., 296 U.
S. 463,
296 U. S. 477;
Montgomery v. Wayne Circuit Judge, 284 Mich. 430, 279 N.W.
889.
[
Footnote 29]
Bowker v. United States, 186 U.
S. 135,
186 U. S.
139.
[
Footnote 30]
245 U. S. 245 U.S.
493,
245 U. S.
504-505.
[
Footnote 31]
266 U. S. 266 U.S.
101.
[
Footnote 32]
Id., 266 U. S.
106.
[
Footnote 33]
American Propellor Co. v. United States, 300 U.
S. 475,
300 U. S. 478;
Guaranty Trust Co. v. United States, 304 U.
S. 126,
304 U. S.
134.
[
Footnote 34]
Williams v. United States, 289 U.
S. 553,
289 U. S.
564.
[
Footnote 35]
73 U. S. 6 Wall.
484,
73 U. S.
491.
[
Footnote 36]
Cf. 52 U. S.
Walker, 11 How. 272,
52 U. S.
290.
[
Footnote 37]
Cf. Schaumburg v. United States, 103 U.
S. 667.
[
Footnote 38]
49 Stat. 1987:
"SEC. 203. The United States Shipping Board Merchant Fleet
Corporation shall cease to exist and shall stand dissolved. All the
records, books, papers, and corporate property of said dissolved
corporation shall be taken over by the Commission. All existing
contractual obligations of the dissolved corporation shall be
assumed by the United States. Any suit against the dissolved
corporation pending in any court of the United States shall be
defended by the Commission upon behalf of the United States, under
the supervision of the Attorney General, and any judgment obtained
against the dissolved corporation in any such pending suit shall be
reported to Congress in the manner provided in section 226, title
31, United States Code, for reporting judgments against the United
States in the Court of Claims."