Nern v. Employes' Liability Assurance Corp.

56 Pa. D. & C. 629
CourtPennsylvania Court of Common Pleas, Dauphin County
DecidedJanuary 29, 1946
Docketno. 24
StatusPublished

This text of 56 Pa. D. & C. 629 (Nern v. Employes' Liability Assurance Corp.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Dauphin County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nern v. Employes' Liability Assurance Corp., 56 Pa. D. & C. 629 (Pa. Super. Ct. 1946).

Opinion

Rupp, J.,

This matter comes before us on a rule to show cause why a counterclaim should not be dismissed for lack of jurisdiction in this court to entertain it.

For our present purposes we need only state that plaintiffs sued in assumpsit to recover from defendant company the sum of $21,450, with interest from July 24,1941, the balance allegedly due plaintiffs by reason of the theft of certain surplus commodities stamps to the value of $64,350. The statement of claim alleges that the Commonwealth of Pennsylvania, Department of Public Assistance, use plaintiff, is indemnified against such loss by an insurance policy of defendant and that the Commonwealth has reimbursed the proper [630]*630Federal agency for the entire amount of the stolen stamps entrusted to it, to wit, $64,350.

Defendant filed an' affidavit of defense with a counterclaim. In its affidavit it averred that it is not indebted to plaintiffs in any amount whatsoever under the aforesaid policy by reason of the theft. In its counterclaim it averred that “under a mutual mistake of fact” it paid the sum of $42,900 to the Commonwealth and therefore demands that amount of the Commonwealth with interest from August 29, 1941, the date of payment.

At the outset, no extended' citation of authority is necessary to show that a counterclaim, in and of itself, is a separate suit, and it has been so defined. Thus, in 4 Standard Pennsylvania Practice 415, we find:

“A counterclaim is a claim presented by a defendant in opposition to, or deduction from, the claim of the plaintiff. It is, in effect, a declaration by the defendant against the plaintiff in the nature of an independent action deferred until the defendant is brought into court.”

And in 47 Am. Jur. 717:

“The counterclaim is in itself a distinct and independent cause of action, so that when properly stated as such, the defendant becomes, in respect to the matters stated by him, an actor, and there are two simultaneous actions pending between the same parties, wherein each is at the same time both a plaintiff and a defendant. Counterclaim is an offensive as well as a defensive plea and is not necessarily confined to the justice of the plaintiff’s claim. It represents the right of the defendant to have the claims of the parties counterbalanced in whole or in part, and judgment to be entered for the excess, if any.”

In Pennsylvania, counterclaimants not only are faced with a wealth of opinion law, both of this and [631]*631other jurisdictions, to the effect that because of the sovereign’s inherent immunity from suit it cannot be sued without its consent, but with article I, sec. 11, of our Constitution, which provides, inter alia:

“Suits may be brought against the Commonwealth in such manner, in such courts and in such cases as the Legislature may by law direct.”

and section 1003 of The Fiscal Code of April 9, 1929, P. L. 343, 72 PS §1003, which states:

“The Auditor General and State Treasurer shall continue to have the power to adjust and settle claims against the Commonwealth, as now provided by law, and they shall settle an account with any claimant against the Commonwealth in the manner following:

“When the Department of the Auditor General shall have examined and adjusted any claim against the Commonwealth, it shall submit the same, together with the vouchers and all other papers and information appurtenant thereto, to the Treasury Department for its revision and approbation. Thereafter, the procedure shall be the same as in the ease of the audit of requisitions as hereinafter in this act provided.”

Here, defendant has an even higher hurdle to surmount. It admits both it and the Commonwealth cannot recover in this action and that the adjudication of the Commonwealth’s claim will automatically adjudicate the counterclaim. Hence, defendant’s counterclaim is not a cross demand by way of defense, nor a counterclaim by way of diminution of an acknowledged debt due the Commonwealth. Defendant is disclaiming any indebtedness to the Commonwealth while alleging that the Commonwealth owes it a specified amount and specifically “demands of The Commonwealth of Pennsylvania the said sum of $42,900, with interest from August 29, 1941”. In other words, defendant is seeking an affirmative judgment against the Commonwealth. It follows the question for our [632]*632determination is not, as argued before us, whether a counterclaim can stand against the Commonwealth by way of setoff, but whether a counterclaim can stand which asks an affirmative judgment against the sovereign.

We neither have been referred to, nor have we discovered, any Pennsylvania case which permitted either type of counterclaim against the sovereign. In fact, so far as we have been able to ascertain, no State or Federal court has permitted an affirmative money judgment against a sovereign by way of counterclaim. Even in those jurisdictions where, unlike Pennsylvania, the sovereign, by statute, has waived certain immunities from suit, an affirmative money judgment has not been allowed against the sovereign by way of counterclaim.

For example, by the Act of Congress of March 3, 1797, and its successor legislation (1 Stat. at L. 512, 514), 28 U. S. C. A. sec. 774, as interpreted by the Supreme Court of the United States, crossclaims are allowed against the United States to the amount of the Government’s claim, where the Government voluntarily sues. Likewise, specially designated claims against the United States may be sued upon in the Court of Claims or the district courts under the Tucker Act of 1887 (28 U.S.C.A. sec. 41 (20). And special Government activities, set apart as corporations or individual agencies, have been made suable. Yet this legislation has been most stringently construed, actions have been confined to the courts specified, and the particular immunity waived, and claims not even considered until submitted to and refused by the Government accounting officers.

Thus, the Supreme Court of the United States has consistently held, as in DeGroot v. United States, 5 [633]*633Wall. (U. S) 419, 18 L. Ed. 700 (1867), that (L. Ed. page 703):

“The government of the United States cannot be sued for a claim or demand against it without its consent. This rule is carried so far by this court, that it has been held that when the United States is plaintiff in one of the Federal Courts, and the defendant has pleaded a set-off which the Acts of Congress have authorized him to rely on, 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.”

And in Schaumburg v. United States, 13 Otto. 667, 26 L. Ed. 699 (1881) (L. Ed. page 599):

“Claims for credit can be used in suits against persons indebted to the United States- to reduce or extinguish the debt, but not as the foundation of a judgment against the government.”

In the recent case of United States v. Shaw, 309 U. S. 495, 84 L. Ed. 888 (1940), the Supreme Court of the United States, speaking through Mr. Justice Reed, said:

“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, we granted certiorari.”

There the specific question was whether the United.

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Bluebook (online)
56 Pa. D. & C. 629, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nern-v-employes-liability-assurance-corp-pactcompldauphi-1946.