Teller v. United States , 51 C.C.A. 297 ( 1901 )

ADAMS, District Judge,

after stating the case as above, delivered the opinion of the court.

The only assignment of error deemed necessary to consider in disposing of this appeal is that the complaint fails to disclose that the United States could have suffered any injury if Teller had assigned or transferred his judgment. The subject of set-off, or applying a creditor’s cross demands or counterclaims to the satisfaction of existing demands in favor of the debtor, is undoubtedly of equitable cognizance. North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co., 152 U. S. 596, 14 Sup. Ct. 710, 38 L. Ed. 565. But, as said by Mr. Justice Jackson, in delivering the opinion of the court in that case, such cross demands “may be enforced by way of set-off whenever the circumstances are such as to warrant the interference of equity to prevent wrong and injustice.” There must be in cases of this kind, as in all others seeking equitable relief in the nature of a restraining order, a reasonable ground to believe that some threatened or probable injury will result before a court of equity will’ subject a defendant to the annoyance, cost, and expense incident to a restraining order. It is not sufficient that such an order* will do no harm. It should at least be made to appear that it would do some good. Applying the foregoing principles of equity to the case before us, we observe: First, that it was not. in Teller’s power to enforce his judgment agaiust the United States by levy of execution as in cases between natural persons, the only possible resort for securing its payment being an act of congress making ati appropriation therefor; and, second, that any transfer or -assignment of his judgment would confer no greater rights upon a transferee or assignee than Teller himself had, and that all equities, whether of set-off, counterclaim, or otherwise, against him, would be enforceable against any such transferee or assignee. The foregoing propositions are not only obvious, but were conceded by counsel of the United States, at the argument of this case, to be correct. Not only so, but the act of March 3, 1875 (18 Stat. 481), affords an ample safeguard against any possible injury in such cases. It is as follows:

“When any final judgment recovered agaiust the United Stater, or other claim duty allowed by legal authority shall be presented to the secretary of the treasury for payment, and the plaintiff or claimant therein shall be 'indebted to the United States in any manner, ~ it shall be the duty of the secretary to withhold payment of an amount of such judgment or claim equal to the debt thus due to the United States.”

Aii_, person to whom Teller might have sold his judgment would have taken it with knowledge of the provisions of the foregoing act, and subject thereto. Teller, no doubt, fully recognizing the res r a finí i against him, never hap taken any steps to enforce his judgment or to sell or dispose of the same, and never has threatened to do so. Tibs appears by necessary inference from the fact that no averment to the contrary is made in the bill of complaint.

From the foregoing if clearly appears that no wrongful act has been threatened by Teller, and that, in the nature of the case, no wrong 01 injury in the matter complained of can, with or without a restraining order, be inflicted by him upon the United States. The restraining order was therefore a vain thing, and the court below was net, in our opinion, warranted in the exercise of a sound discretion in awarding the same. The order appealed from is therefore reversed, and the cause remanded to the trial court, with directions to deny the motion for a preliminary injunction.