- 82 -
(1946), that emphasizes the importance and desirability of
maintaining a statute of limitations in the income tax area. As
I've already observed, supra pp. 49, 58-59, the purposes
underlying statutes of limitations--preventing stale litigation
and protecting repose--don't apply when the timely claim that
initiates a lawsuit is subjected to an otherwise time-barred
defensive claim that arose out of the same transaction, item, or
event. Indeed, those purposes are repugnant to disallowance of
such a defense, since such a limitation would encourage delay in
the bringing of some claims until a defense is time-barred.
United States v. Western Pac. R.R., 352 U.S. 59, 72 (1956).
In any event, Rothensies v. Electric Storage Battery Co.
(like Ford v. United States, 149 Ct. Cl. 558, 276 F.2d 17 (1960),
which the majority also cites and quotes in this connection,
majority op. p. 15), stands not just for limiting equitable
recoupment, but for limiting it through a narrow interpretation
of the single-transaction requirement.35 To limit equitable
recoupment in the way that those two cases do is more defensible
than to limit it in the way that the majority does here. There's
a connection between the defensive purpose of equitable
recoupment and the single-transaction requirement.
Recoupment is allowed to circumvent such bars as statutes of
limitations, sovereign immunity, and bankruptcy because it would
35The two cases are discussed at length, supra pp. 42-44,
47-52, in the section on the single-transaction requirement.
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