noted that 'No question has been raised as to whether laches can be applied against the sovereign in this case.' The reason the court included that sentence was that its research had indicated that under some circumstances the United States is subject to the defense of laches. Since six briefs had been submitted by the United States and Todd, however, and the issue had not been raised, the court inferred that counsel had considered the issue but had decided that in this case the defense of laches was proper. Apparently, the court's inference was incorrect, for the request by the United States for reargument was based mainly on that issue.
Todd's position, as stated in its brief, is that 'Laches resting only on the running of time will not suffice' but that since Todd has suffered prejudice, the defense of laches against the United States is proper. But when the courts in the cases cited below held that the defense of 'laches' cannot be invoked against the United States, they obviously used the word 'laches' to mean the passage of time plus prejudice resulting therefrom, for that is what is meant by the legal conclusion 'laches.' The mere passage of time, of course, does not constitute laches.
Todd also argues that Congress and the courts have decreased the scope of sovereign immunity from suit. While that may be so, is there any indication in any recent case or statute that would permit this court to rule that the laches of the United States bars its impleader action against Todd?
Todd cites the exceptions to the general rule that the United States is not subject to the defense of laches: (1) Cases holding that when the United States issues commercial paper, it becomes subject to the same defenses, including laches, as would a private party. United States v. Nashville, etc., R. Co., 118 U.S. 120, 6 S. Ct. 1006, 30 L. Ed. 81; Cooke v. United States, 91 U.S. 389, 23 L. Ed. 237; Ladd & Tilton Bank v. United States, 9 Cir., 43 F.2d 665; United States v. Bank of America Nat. T. & S. Ass'n, D.C., 47 F.Supp. 279; United States v. National Rockland Bank, D.C., 35 F.Supp. 912; United States v. National City Bank of New York, D.C., 28 F.Supp. 144; United States v. First Nat. Bank & Trust Co. of Oklahoma City, D.C., 17 F.Supp. 611; (2) cases involving the ownership of land where the courts have refused to cancel a patent for a tract of public land on the ground of fraud which was known to the United States many years prior to the action. United States v. Smith, 9 Cir., 14 F.2d 391; cf. United States v. Stinson, 197 U.S. 200, 25 S. Ct. 426, 49 L. Ed. 724; (3) cases holding that when the United States is a mere nominal party in an action, laches may be applied against the real party in interest. United States v. Beebe, 127 U.S. 338, 8 S. Ct. 1083, 32 L. Ed. 121; State of Iowa v. Carr, 8 Cir., 191 F. 257; United States v. Fletcher, D.C., 231 F. 326 affirmed 8 Cir., 242 F. 818. Todd also cites cases which are not pertinent to the issue now before the court. The category (3) principle does not apply here where the United States is not a nominal party.
The rationale of the commercial paper cases is that in order to have free and confident circulation of negotiable paper, as a result of the United States' daily, widespread use of negotiable instruments, when, for example, it sues a bank for wrongfully paying on a forged indorsement, the United States must submit itself to the same defenses that would have been available against a private party. See Graham v. White-Phillips Co., Inc., 296 U.S. 27, 31, 56 S. Ct. 21, 80 L. Ed. 20; Cooke v. United States, 91 U.S. 389, 23 L. Ed. 237. That rationale is not applicable to this case. As to the cases involving the ownership of land, they only illustrate a second limited exception to the general rule that the United States is not subject to the defense of
Some of the cases in support of the United States' argument are: Guaranty Trust Co. of New York v. United States, 304 U.S. 126, 132, 58 S. Ct. 785, 82 L. Ed. 1224; Utah Power & Light Co. v. United States, 243 U.S. 389, 409, 37 S. Ct. 387, 61 L. Ed. 791; United States v. Kirkpatrick, 9 Wheat. 720, 735, 6 L. Ed. 199; The Lake Galera, 2 Cir., 60 F.2d 876, certiorari denied sub nom. Jamison v. United States, 287 U.S. 670, 53 S. Ct. 314, 77 L. Ed. 578; United States v. Czarnikow-Rionda Co., 2 Cir., 40 F.2d 214, certiorari denied 282 U.S. 844, 51 S. Ct. 24, 75 L. Ed. 749; United States v. Alex Dussel Iron Works, Inc., 5 Cir., 31 F.2d 535; The Messenger, D.C., 14 F.2d 147; Read v. Williams, 1951 A.M.C. 1564.
Guaranty Trust Co. of New York v. United States, 304 U.S. 126, 132, 58 S. Ct. 785, 788, explains the reason for the general rule that the United States is not subject to the defense of laches, which is established by the cited cases '* * * the great public policy of preserving the public rights, revenues, and property from injury and loss, by the negligence of public officers.'
In the case at bar, if the court held that the United States is subject to Todd's defense of laches (and there is no contention that, in fact, there has been no laches) then the delay by the United States' counsel in impleading Todd would deprive the United States of its rights under its indemnity contract with Todd. The result would be that if the libelant Finley recovered against the United States, then public revenue would be paid out which otherwise might have been saved. Such a revenue loss resulting from the laches of the United States' counsel would violate the policy basis for shielding the United States from laches. Thus, the court reluctantly holds that the laches is no bar to the impleader brought by the United States.
The court's idea of fairness, however, requires additional comment. As has been noted in the original opinion, the facts clearly establish laches. The prejudice suffered by Todd has been great. Nevertheless, there is no sound authority for holding that laches bars the United States' impleader action in this admiralty suit. But cf. The New Windsor, D.C., 13 F.2d 925, affirmed United States v. Jacksonville Forwarding Co., 5 Cir., 18 F.2d 39; The No. 34, D.C., 13 F.2d 927. The court is bound by the general principle established by the cases, even though an unfair result has been reached. Perhaps an appellate court could be persuaded that there should be an additional exception to the general rule set forth in the cases. Absent such authority, however, and despite its belief that such an exception would be proper, this court cannot reach a conclusion contrary to the clear and unlimited pronouncements of the Supreme Court and the cases following that authority.
Since the laches of the United States is not a defense available to Todd, it is necessary for the court to discuss Todd's second argument based on the supposed exclusivity of the Longshoremen's and Harbor Workers' Compensation Act.
Crawford v. Pope & Talbot, Inc., 3 Cir., 206 F.2d 784, 792, held that the Act '* * * does not insulate the employer from all liability to a third party from whom an employee has recovered damages. See United States v. Arrow Stevedoring Co., 9 Cir., 1949, 175 F.2d 329, 332. Liability for indemnity as distinguished from contribution, may arise from the contractual relations of the employer with the third party. Claims for full indemnity arising out of such contractual relations have not been considered barred by the section. See Rich v. United States, 2 Cir., 1949, 177 F.2d 688. * * *' The court then concluded that the charterer of the vessel may have been entitled to indemnity from the employer of the worker, who was the libelant. The holding is precisely applicable to this case. The court concludes that the Act does not bar the United States from an opportunity to establish its claim for indemnity.
Todd's remaining argument, which the court did not discuss in its original opinion, is that the United States has no right to contribution or indemnification from Todd. The United States bases its claim against Todd not on a right to contribution, but on the express indemnity contract quoted in the original opinion. It is unnecessary for the court now to construe that contract because for the purpose of this impleader action, Admiralty Rule 56, 28 U.S.C.A., requires only that Todd 'may be' liable to the United States. Todd may be liable to the United States on the indemnity promise.
Todd's Motion to Implead Guardino
Since Todd's motion to dismiss is denied, its motion to implead Guardino & Sons, Inc., must be decided. Guardino was the sub-contractor whose contractual undertaking, according to Todd's affidavit, was to gas-free the ship. That subcontract containing an indemnification clause, which the court need not construe now, is a sufficient ground under Admiralty Rule 56 to grant Todd's motion to implead Guardino. Additionally, Todd alleges that Guardino may be liable either to Todd or to Finley as a result of negligently failing to gas-free the ship. Both grounds are sufficient to grant Todd's motion to implead Guardino.
An order may be submitted in conformity with the opinion herein expressed.