Opinion ID: 1165768
Heading Depth: 1
Heading Rank: 4

Heading: respondent's petition for rehearing

Text: On this appeal the court has reversed the judgment for the respondent on one cause of action and affirmed the judgments on the other two. Both the appellants and the respondent filed cost bills. On objections of each party to the other's cost bill, we sustained the appellants' objections, but have granted a rehearing because the problem involved is a recurring one and our decisions regarding it are not uniform. Upon the argument neither side claimed the right to recover all its costs. Counsel for the respondent suggested that a division of one-third to the appellants and two thirds to the respondent would be fair, just as though there had been three separate lawsuits. Counsel for appellants thought that there should be an apportionment of the expense of preparing the transcript of testimony and of printing the briefs based upon an allocation of the portions of the testimony and the briefs properly referable to each cause of action. He admitted that this would be a difficult task. In a case like this where much of the testimony related to all three causes of action, we think it would be a Herculean one. Both counsel assumed, not without justification in our decisions, that this court has discretion in the matter. Whether it has or not is, we think, the primary question. The first statute relating to costs was passed in 1862, Deady's Civil Code, ch 6, Title V. Section 542 (General Laws of Oregon 1845-1864, pages 287-288) provided: Costs, when allowed to either party, are as follows: 1. In the supreme court, on an appeal, to the prevailing party, fifteen dollars; 2. In the circuit court, to the prevailing party, when judgment is given without trial of an issue of law or fact, or upon an appeal, five dollars; when judgment is given after trial of an issue of law or fact, ten dollars; 3. In the county court, one-half the amount allowed in the circuit court. But when on an appeal to the supreme or circuit court a new trial is ordered, or a decision given modifying the judgment appealed from, the costs on appeal shall be allowed or not, in the discretion of the appellate court. Section 543 (now ORS 20.020) provided: A party entitled to costs shall also be allowed for all necessary disbursements, including the fees of officers and witnesses, the necessary expenses of taking depositions by commission or otherwise, the expense of publication of the summons or notices, and the postage where the same are served by mail, the compensation of referees, and the necessary expense of copying any public record, book or document used as evidence on the trial. [1] In a suit in equity, however, costs were allowed to the prevailing party unless the court otherwise directs. Deady, section 544, now ORS 20.030. The statute regarding costs on appeal in a law action remained unchanged until 1907, when the provision that when a new trial is ordered, or a decision given modifying the judgment appealed from, the costs on appeal shall be allowed or not, in the discretion of the appellate court, was dropped, General Laws of Oregon 1907, ch 181, § 2; and ever since then the law of this state has provided that in the Supreme Court costs shall be allowed to the prevailing party. See ORS 20.070 (1). Turning now to our decisions we find that in the earlier cases after 1907 the court applied the statute as it was written, that is, costs were allowed to the prevailing party, Gardner v. Kinney, 60 Or 292, 296, 117 P 971 (1911); Lemler v. Bord, 80 Or 224, 230, 156 P 427, 1034 (1916); Propst v. William Hanley Co., 94 Or 397, 404, 185 P 766 (1919). In Gardner v. Kinney, the plaintiff was ordered to remit $285 of a judgment for $1,171 or suffer a reversal and the defendant was awarded costs, the court saying, per McBRIDE, J.: As defendant has been put to the trouble and expense of an appeal, he will recover his costs in this court in any event. There was a similar ruling in Lemler v. Bord , where there was a judgment for the plaintiff for $270.60 on a first cause of action and a judgment for $10 on a second cause of action. The former judgment was affirmed, the latter set aside, and it was held that defendant was entitled to costs as the prevailing party. So, also, in Propst v. William Hanley Co ., when a judgment for the plaintiff for $1,631 was reduced on appeal to $148.33. The first mention of Article VII, § 3, of the Constitution in this connection was made in Lemler v. Bord . That section provides, in part, that if, in any respect, the judgment appealed from should be changed, and the supreme court shall be of opinion that it can determine what judgment should have been entered in the court below, it shall direct such judgment to be entered in the same manner and with like effect as decrees are now entered in equity cases on appeal to the supreme court. Respecting this provision the court said: It must be remembered, however, that it is a judgment and not a decree which is to be entered under that clause. The incidents of the former will therefore follow, and the question must be settled on the basis of a judgment as distinguished from a decree. 80 Or at 231-232. The court then referred to section 565, L.O.L., providing that costs in the supreme court on an appeal are allowed to the prevailing party and said that wherever costs are allowed at law, they follow as a matter of course one way or the other. In 1918 the court first announced that Article VII, § 3, of the Constitution conferred upon it a discretionary power to determine a question of costs. This was in the case of Stabler v. Melvin, 89 Or 226, 173 P 896 (1918) in which, pursuant to the constitutional amendment, a judgment for fraud was reduced from $1,411 to $750 and it was held that neither party was entitled to costs. The court said: It is our opinion that the power given to this court, under this section, to enter a judgment upon the record carries with it the power to award costs on equitable principles, and to give or to deny costs to either party on appeal. 89 Or at 232. Other cases invoking the asserted power are: Olson v. Heisen, 90 Or 176, 175 P 859 (1918); Miller Lum. Co. v. Davis, 94 Or 507, 185 P 462, 1107 (1919); Levine v. Levine, 95 Or 94, 187 P 609 (1920); Obermeier v. Mortgage Co. Holland-America, 123 Or 469, 259 P 1064, 260 P 1099, 262 P 261 (1927); Wood et al v. Sprague et al, 165 Or 122, 106 P2d 287 (1940). McKinney v. Nayberger et al, 138 Or 203, 220, 295 P 474, 2 P2d 1111, 6 P2d 228, 229 (1931), Patterson v. Horsefly Irrigation Dist., 157 Or 1, 69 P2d 282, 70 P2d 36 (1937); and State v. Cummings, 205 Or 500, 534, 288 P2d 1036, 289 P2d 1083 (1955), mark a departure from the decisions just referred to. Recognizing that the statute regarding costs is controlling, they hold that on affirmance or outright reversal of a judgment, the party in whose favor the decision is rendered is the prevailing party and entitled to recover costs. State v. Cummings , by strong implication at least, repudiates the resort to Article VII, § 3, of the Constitution in some of the earlier cases. Referring to Stabler v. Melvin and similar cases, the court said that they    were decided before the adoption of Oregon Laws 1921, ch 322. That statute is now ORS 20.310. Accordingly, when the four cases just cited were decided, no enactment of this state entitled the prevailing party, upon appeal in law actions, to an award of costs and disbursements. We have no right to ignore the demands of ORS 20.310. The prevailing party  in this case the appellant  is entitled to costs and disbursements. 205 Or at 537. The 1921 enactment referred to by the court in that case, and which is now ORS 20.310, reads: When costs are allowed to the prevailing party on appeal to the supreme court the appearance fees, trial fees, attorney fees, as provided by law; the necessary expenses of transcript or abstract, as the law or rules require; the printing required by rule of the court, and the transcript of testimony or other proceedings, when necessarily forming part of the record on appeal, shall be taxed in the supreme court as costs of the appeal. As we have seen, however, the statute has provided since 1907 that the prevailing party is entitled to costs on appeal in the supreme court, and the 1921 enactment, therefore, instead of creating the right to recover costs, merely enumerated the recoverable items, including the expense of the transcript of testimony which theretofore had been held to be not taxable in the supreme court, but only in the circuit court. See Allen v. Standard Box & Lumber Co., 53 Or 10, 18-19, 96 P 1109, 97 P 555, 98 P 509 (1908); Sommer v. Compton, 53 Or 341, 100 P 289 (1909); McGee v. Beckley, 54 Or 250, 254, 102 P 303, 103 P 61 (1909). 38. We now hold that Article VII, § 3, of the Constitution cannot be resorted to for the purpose of awarding costs on appeal differently from the command of the statute. That section authorizes this court, when the entire record in a case tried by a jury is brought before it and the court is of the opinion that the judgment was such as should have been rendered, to affirm the judgment, notwithstanding any error committed during the trial. The section further provides, as previously stated, that if the judgment should be changed and the court shall be of the opinion that it can be determined what judgment should have been entered in the court below this court may direct such judgment to be entered in the same manner and with like effect as decrees are now entered in equity cases on appeal to the supreme court. The power of this court to retry the facts of a case tried by a jury where error appears, first asserted in Hoag v. Washington-Oregon Corp., 75 Or 588, 144 P 574, 147 P 756 (1915) and frequently exercised since, was challenged in the dissenting opinion of Mr. Justice ROSSMAN in Shelton v. Lowell et al, 196 Or 430, 249 P2d 958 (1952) and has not been resorted to since the decision in that case, notwithstanding the frequent urgings of litigants. But whether the power exists or not, it cannot be said that this court has been authorized by the Constitution to convert an action at law, in which parties are entitled to a trial by jury, into a suit in equity. See Lemler v. Bord, supra. 39. The constitutional provision was not intended to modify or repeal the statute governing costs on appeal. Even though it could properly be said that, when the court affirms a judgment or renders a different one pursuant to Article VII, § 3, it is authorized, as an incident to the exercise of that power, to determine the allowance of costs on an equitable basis, there is no justification for construing the provision as conferring on the court a separate and independent power to deal with a question of costs in that fashion. This case was decided wholly without regard to Article VII, § 3. 40-42. Costs are purely statutory. At common law they were unknown, and were not recoverable, and were not adjudged in the judgment of a case. McKinney v. Nayberger, supra, 138 Or at 220. We take it to be now settled by our recent decisions that under our statute costs and disbursements are allowed as a matter of course to the prevailing party on the affirmance or reversal of a judgment. It now remains to be determined, and this is the precise question before the court in this case, whether any different rule applies where a judgment is modified, and what is to be regarded as a modification for the purposes of the rule. 43. The 1907 amendment, it will be remembered, eliminated two exceptions to the provision of the original statute allowing costs on appeal to the prevailing party, namely, when a new trial is ordered and when there is a modification of the judgment. In such instances the court was formerly granted power to allow costs or not in its discretion. The effect of the amendment was to withdraw that discretion and leave the classes of cases theretofore excepted subject to the mandate that the prevailing party shall recover costs. In Patterson v. Horsefly Irrigation Dist . and State v. Cummings , both supra, we held after extensive review of our prior decisions that when a new trial is ordered the appellant is the prevailing party and entitled to costs. Who is the prevailing party when a judgment is modified? We think that the answer to that question must necessarily depend on the extent of the modification. It may be so trifling or unsubstantial that the decision amounts to an affirmance. See Steel v. Farrell, 31 Or 169, 49 P 974 (1897), where a decree was affirmed notwithstanding an error of $2.25. Whether a modification is of sufficient importance to put the party securing it in the position of the prevailing party within the meaning of the costs statute must be determined upon the facts of each case, 14 Am Jur 63, Costs § 98. 44. In any event, it is clear that under the statute there cannot be two prevailing parties on opposite sides of the same case. Nor can a decision disallowing costs be justified. As we said in Lemler v. Bord, supra: It is well settled that in actions at law costs must be allowed to one party or the other. 80 Or at 232. There is no provision for an apportionment of costs (cf. Phipps v. Taylor, 15 Or 484, 488, 16 P 171 (1887)) and we are aware of no decision of this court apportioning costs in a law action except Dixon et ux v. Schoonover et ux, 226 Or 443, 455, 359 P2d 115, 360 P2d 274 (1961) where the plaintiffs, who were both respondents and cross-appellants in this court, were successful in resisting the defendants' appeal, but unsuccessful on their cross-appeal. The rule is the same as that stated in Propper v. Chicago, Rock Island & Pacific Railroad Co., 237 Minn 386, 408, 54 NW2d 840, 35 ALR2d 459, quoting from Hildebrandt v. Hagen, 228 Minn 353, 360, 38 NW2d 815, 820: It is well settled here that the modification of a judgment entitles the party obtaining the same on appeal to costs and disbursements. This is true even though the disbursements were made in providing a record and brief on the issues upon which the party obtaining the modification did not prevail.    45, 46. In the present case the appellants obtained a substantial modification when this court reversed the judgment for malicious prosecution. They were the prevailing parties and entitled to statutory costs in the sum of $15, ORS 20.070, and their necessary disbursements pursuant to ORS 20.310. Bearing in mind that the power of the court to allow costs is wholly statutory and that the right to recover disbursements depends on the right to recover costs (i.e., statutory costs) we cannot, without doing violence to the statute, treat this case as three lawsuits and three appeals, in one of which the appellants are the prevailing parties and in the other two the respondents, and allow the appellants one-third and the respondent two-thirds of the statutory costs and disbursements. Nor can we resort to some other formula of apportionment deemed to be equitable. Indeed, the necessary  and absurd  result of treating the case as three lawsuits would be to award two statutory costs to the respondent as the prevailing party in two of them. The original statute allowed this court a measure of freedom in dealing with such problems which unfortunately has since been denied it. As has been before observed, a change does not always denote progress or improvement. Another change in the direction of the 1862 Act governing costs on appeal in actions at law may seem to the legislative assembly to be desirable. We adhere to our decision allowing costs to the appellants.