Page:Federal Reporter, 1st Series, Volume 3.djvu/528

 EBERT «. SCHOONER BEUBEN DOUD. 521 �the part of libellants, and thereupon respondents also intro- duced testimony, but under objection, to show the damages sustained by the Doud. The question now arises whether, either under the order of reference which wàs made, or under any proper modification of that order, proofs can be taken and should be considered showing the damages sustained by the Doud; and herein is involved the inquiry, whether, in a case of collision, a respondent, having only answered the libel, and not having filed a cross libel for the recovery of affirma- tive damages, should be permitted, by way of recoupment, to reduce or extinguish the claim of the libellants. It is insisted by counsel for respondent that this may properly be done, while it is very earnestly contended, in behalf of libellants, that sueh a proceeding or course of practice ought not to be entertained in a case of collision ; and it is further insisted that, if it is permissible, the practice of filing cross libôls, hitherto prevailing in such cases, may well be entirely dis- pensed with. The question has not heretofore arisen in this court, and appears to be oûe of considerable interest. �It is well settled, in a series of adjudicated cases, that in actions in rem or in personam, in admiralty, which are f ounded upon contract, the respondent may avoid an obligation which his contract, in terms, imposes upon him, by showing that the contract has not been duly performed by the other party thereto, who seeks to enf orce it ; and that, by way of recoup- ment, the damages which have been sustained by a respond- ent in such case may be applied in reduction of the damages , which the libellant would otherwise be entitled to recover. �The case of Kennedy et al. v. Dodge et al. 1 Ben. 311, is, perhaps, a leading case upon the question as thus presented. It was there held that, in a suit for freight money, the dam- ages to the cargo could be recouped under an answer setting up the injury to the cargo as a defence, but that the fespond- ents could not have an affirmative decree in their favor if their damages exceeded the freight. Judge Shipman says t "That the damages suffered by the respondents can be re- couped from the freight money which the libellants would otherwise recover, appears to be settled by authority. By ����