The government seeks damages in the sum of $9,876.64 allegedly resulting from the “Glendora fire” which occurred September 5, 1960, and defendant counterclaims for damages in the amount of $40,-000.00 alleged to have resulted to it from the “Woodwardia fire” as of October 13, 1959. The action was filed May 31, 1962.

Plaintiff now moves to dismiss the counterclaim of defendant on the grounds:

The court concludes that defendant is not barred by the two-year statute of limitations to seek damages by way of recoupment or affirmative relief if the counterclaim originates out of the same transaction or circumstances. United States v. Southern Pacific Company, 210 F.Supp. 760 (D.C.N.D.Cal. Nov. 1962), where the court states at pages 762-763:

In United States v. Capital Transit Co., 108 F.Supp. 348 (D.C.Dist.Col. Nov. 1952), the court observes, at pages 349-350:

Although there are some earlier cases holding contrary to the above cited authorities, it appears that they are overruled as to this point by the Supreme Court of the United States in United States v. Yellow Cab Company, 340 U. S. 543 , 71 S.Ct. 399 , 95 L.Ed. 523 .

The defendant stipulates that the “Woodwardia fire” (October, 1959) did not originate out of the same circumstances, transaction or subject matter as the “Glendora fire” (September, 1960) but urges that damages allegedly resulting to it from the “Woodwardia fire” may be used by way of recoupment or set-off in the circumstances though it be held defendant is not entitled to affirmative relief in an amount in excess thereof.

Defendant asserts that this right is established by the rule as stated in United States v. Pollard, 124 F.Supp. 495 (N.D. Cal.1954). The court states, at page 497:

The Supreme Court of the United States in U. S. v. United States Fidelity & Guaranty Co., 309 U.S. 506 at 511 , 60 S.Ct. 653, at 656 , 84 L.Ed. 894 says:

It is noted that the court cites as authority for this statement the case of Bull v. United States, 295 U.S. 247 , 55 S.Ct. 695, 700 , 79 L.Ed. 1421 . The Bull case involved an action for income tax allegedly owed. The taxpayer proposed payment in full by demanding recoupment of the amount mistakenly collected as estate tax and wrongfully retained. At page 261 of its opinion, the court observes:

On page 262, the court says:

It is well established that unless a claim arises out of the same transaction recoupment is not available. 47 American Jurisprudence 708, Section 2.

With regard to “set-off”, it is true that under the California rule and generally, the claim of set-off need not arise out of the same transaction. Under the Federal rules a counterclaim is subject to Rule 13(d), F.R.Civ.P. After making provision for permissive and compulsive counterclaims, Rule 13(d) provides :

The court concludes that although the United States is party plaintiff to the action herein it cannot be sued without its consent, as provided by statute and case law interpreting same. The permission must be granted by Congress. The California rule re set-off is not, therefore, applicable to the case at bar. In Kearney v. A’hearn, 210 F.Supp. 10 (D.C.S.D.N.Y.1962), plaintiffs, as taxpayers, sought to enjoin the District Director from collecting income tax deficiency of plaintiffs, and so forth. In dismissing the action for lack of jurisdiction, the court denied plaintiffs the right to amend their complaint by setting up a counterclaim against the United States (pg. 19) for money alleged due under the provisions of 28 U.S.C. § 1346 (a) (2). At page 21 of its opinion, the court states:

The Court of Appeals, 7th Circuit (1954), in In re Greenstreet, Inc., 209 F. 2d 660 , was confronted with a matter involving a bankruptcy wherein it held that the bankruptcy court had no jurisdiction to allow the trustee’s counterclaim as a set-off against the government’s title to the property which it sought to reclaim. At page 663 of its opinion, the court says :

In the instant case it is agreed that the alleged set-off did not grow out of the same transaction. The court concludes the set-off alleged herein by defendant, claimed after the running of the statute of limitations, must arise out of the same transaction to be properly con *271 sidered in the case at bar by way of reducing the government’s claim.

In United States v. Schlitz, 9 F.R.D. 259 (D.C.E.D.Va.1949), the court, in allowing a counterclaim in a suit by the government for damages caused by an automobile collision, says at page 260:

Discussing the right of set-off by the defendant bank against a sovereign in a matter wherein the United States, as assignee of the Soviet Government, sought to recover assets held by the defendant New York Trust Company, the court, in United States v. New York Trust Co., 75 F.Supp. 583 (D.C.S.D.N.Y. 1946), at page 587 of its opinion, states:

Based on the facts involved in the case at bar, the law noted hereinabove, this court, for the reasons stated, concludes that the plaintiff's motion to dismiss defendant’s counterclaim is well taken and the said motion is hereby granted.