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Malman v. United States.

UNITED STATES COURT OF APPEALS SECOND CIRCUIT.


decided: February 16, 1953.

MALMAN
v.
UNITED STATES.

Author: Frank

Before SWAN, Chief Judge and CLARK and FRANK, Circuit Judges.

FRANK, Circuit Judge.

1. Jurisdiction.

In support of its position that the district court had no jurisdiction, defendant advances several arguments. We think that these arguments lack merit, because plaintiff, in effect, sues as Trimore's assignee by "operation of law,"*fn2 and because the court clearly has jurisdiction of a suit by Trimore under its contract with the United States.

We think the earlier total assignment by Trimore to Concord Factors raises no jurisdictional questions. In this connection, the government cites Sherwood v. United States, 312 U.S. 584, 61 S. Ct. 767, 85 L. Ed. 1058. A majority of this court think that decision never had any application to a case like this.*fn3

2. The merits.

Trimore retained plaintiff on December 30, 1949, to prosecute its claim that the United States had erroneously determined that liquidated damages were deductible from the amount previously earned by Trimore under the contract. Accordingly, whatever right Trimore had to the $4,078.14, thus deducted, derived from what it had earned before plaintiff was retained or had rendered services to Trimore. However, also before that time, Trimore owed the United States $13,242.17 for taxes. Now suppose the same facts except that the United States were an ordinary person to whom Trimore owed the $13,242.17 on account of a non-tax obligation. Then, because of the right of set-off, the United States would owe Trimore nothing net under its contract until the $13,242.17 was paid; wherefore, there would be nothing to which plaintiff's lien could attach. Since the United States as creditor has at least as much right to a set-off as an ordinary person,*fn4 it follows that we must affirm on the merits the judgment dismissing the complaint.*fn5

Affirmed.


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