Court Opinion

ID: 9536625
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:03:39.098246+00
Date Added: 2024-06-11T14:54:53.081780
License: Public Domain

LEAVY, J.,
Pro Tempore, dissenting.
The majority holds that plaintiff’s failure to request that its legal claim be transferred to the law side of the court, after an opportunity to evaluate its proof, is a waiver of its constitutional right to both a jury trial and to avoid de novo review. Oregon Constitution, Art VII, § 3 (Amended). The result has the superficial glamour of being symmetrical to Olson v. Roop, 255 Or 368, 467 P2d 437 (1970), but does violence to the record in this case and adds confusion to the law-equity distinction.
With respect to. the record, I find that plaintiff did about all that civility will permit in objecting to the counterclaim. It based its objections on its consistent position that it was proceeding with a suit in equity as distinguished from an action at law. In the opening statement, plaintiff’s counsel, Mr. Joyce, said :
“The only factor in this case, I think under the general denial which is paragraph I of the answer, they’re entitled to show these amounts as a set off to his lien. In other words, it goes to knock his lien down because of the reasonableness of the services. But, they’re not entitled to a counter-claim under the Wiggins versus Hendrickson, 191 Ore 285. So, I am objecting to the introduction of any evidence before the Court in support of this counterclaim. It may be some of the evidence that supports their counter-claim would be the same kind of evidence that goes in defense of the lien under the general denial. I am certainly going to object to any evidence on the counter-claim that might exceed the amount of the lien, so I don’t have to be jumping up all the time.
*343“THE COURT: All right.”
When plaintiff rested and defendant Terra Investment Company began calling witnesses, it happened this way:
“MR. JOYCE: [Plaintiff’s counsel] That is all.
“THE COURT: You may step down. Do you have any other witnesses ?
“MR. JOYCE: No other witnesses.
“THE COURT: Mr. Hurley?
“MR. HURLEY: [Defendants’ counsel] Call Mr. Clark.
“THE COURT: Come forward and stand right there and face her and raise your right hand.”
When defendant Terra Investment Company first offered evidence of damage in excess of plaintiff’s lien, plaintiff objected as follows:
“MR. JOYCE: If the Court please. At this juncture I want to remind the Court of my objection to introduction of evidence under his counter claim. By the time we deduct the admitted errors that Mr. Leuthold made and the value, this leaves about $1,600 due Mr. Leuthold. This man is testifying about a $1,700 charge. And this gets farther than set off and gets into counter claim.
“THE COURT: I will over rule the objection. He may want to treat it as a set off after while. We can change the pleadings. Anyway at this state I understand your objections, but—
“MR. JOYCE: I won’t have to make a continuing one?
“THE COURT: You know how you read some of these recorded cases. Sometimes you do what you think. I know what you are talking about. But sometimes—
*344“MR. JOYCE: If the Court is going to make a rule on my objections then I will sit down and be quiet. If you do that we must assume that you are not going to consider inadmissable [sic] evidence.
“THE COURT: I think that is a fair assumption. But, I may conclude this may not be proper. And he may have to treat it as a contract. And you could consider the questions of the counter claim. If at the proper time you want to move that all the testimony relating to counter claim be excluded why this is probably what I would suggest you do. So, if you don’t want—
“MR. JOYCE: You mean stricken?
“THE COURT: What did I say?
“MR. JOYCE: I will reserve that.
“THE COURT: And you can move at the proper time and it will all lie stricken.”
When the trial resumed, after a delay of many months, plaintiff again objected. Its objection and the fruits thereof are as follows:
“MR. JOYCE: I think I did and I would like the record to indicate I had interposed an objection at the beginning of the defense on counter claiming this.
“THE COURT: There is no counter claim— well, the record will show your objection is overruled. You may have a complete continuing objection to any testimony relating to a counter claim.”
The majority would require that plaintiff, when it rested, be a clairvoyant judge of its own case and know that it had failed to make out a ease of equitable cognizance. At that time, the trial judge had not ruled that the lien was bad. In denying the lien, after taking the case under advisement, he said in his letter opinion, “without going into all the lengthy reasoning, I do not *345think the plaintiff’s claim is lienable within O.E.S. 87.265, O.E.S. 87.270. I’ll treat the action as one in contract for the reasonable value of the services.”
Plaintiff contended that it had a valid lien until the court ruled that it did not. So long as plaintiff was contending that its lien was valid it could not “object to further consideration of its claim” or “request that its legal claim be transferred to a court of law.” The validity of the claim is essential to the lien; thus, the litigation of the claim is consistent with and essential to equitable jurisdiction. The judge never told plaintiff why its lien was bad nor does the majority tell us. Failure of the plaintiff to correctly decide whether it had made out a case of equitable cognizance and to move to transfer the case to the law side of the court cost the plaintiff its constitutional right to jury trial and “submitted the controversy to the mercies” of this court sitting as a court of equity. The majority then decides the case on the merits against plaintiff on a counterclaim which in their opinion is in the case only as the product of the original error of the trial judge in overruling plaintiff’s repeated objections.
OES 16.310 provides:
“The counterclaim of the defendant in a suit shall be one upon which a suit might be maintained by the defendant against the plaintiff in the suit; and in addition to the cases specified in paragraphs (a) and (b) of subsection (1) of OES 16.300, it is sufficient if it is connected with the subject of the suit.”
In an equity suit a counterclaim containing no matters of equitable cognizance may be successfully attacked by objection to the introduction of testimony. Glaser et al v. Slate Const. Co., 196 Or 625, 251 P2d 441 (1952); Eagle Point v. Hanscom, 121 Or 40, 252 P *346399 (1927); McCargar et al v. Wiley, 112 Or 215, 229 P 665 (1924); Kondo v. Aylsworth, 81 Or 225, 158 P 946 (1916).
Wiggins v. Hendrickson et ux, 191 Or 285, 229 P2d 652 (1951), was a suit brought to foreclose a mechanic’s lien in which the defendants counterclaim, asking for damages. The trial court dismissed plaintiff’s complaint and awarded defendants a judgment on the counterclaim. The judgment was set aside on appeal with this language:
“In the instant case, however, defendants have gone further and have endeavored to recover a money judgment in excess of plaintiff’s claim. This, as pointed out, cannot be accomplished in a suit of the nature before us. Defendants’ counterclaim contains matters of legal rather than of equitable cognizance. The counterclaim is predicated on a breach of contract wherein damages are sought. Equity is not involved. The judgment of the trial court awarding damages to the defendants on their counterclaim was erroneous.” 191 Or at 288.
The result arrived at by the majority is identical to the result reversed in Wiggins v. Hendrickson et ux, supra, when arrived at by a trial court. The majority seeks to distinguish Wiggins by saying that in Wiggins as long as the lien was in proper form, the plaintiff had a case of equitable cognizance and there was no basis for his asking for a transfer to the law side of the court. The lien failed in Wiggins because the plaintiff could not prove the claim on which it was based. Because of no cross-appeal in the instant case, the majority is not required to determine whether plaintiff’s contention in the trial court that its lien was in good form was frivolous, arguable, or valid. We are told only that it should have known that it was bad. Ironically, the result reached by the majority on *347the merits tells us that had the lien not failed because of its lack of good form it would have failed for the same reason as the lien failed in Wiggins. Any distinction between this case and Wiggins is as subtle as the difference between law and equity procedure.
The majority, in applying the rule of Olson v. Boop, supra, says that a plaintiff has the same opportunity as a defendant to analyze its own proof at the completion of its case.
To avoid a waiver of an equity court’s lack of authority, a defendant’s analysis of the plaintiff’s lien need only be that it is bad—hardly a position inconsistent with anything he has been saying both in the pleadings and at trial. A defendant can then request that the legal claim be transferred to a court of law. There is no penalty for being wrong in the sense that defendant must give up some contention or right. On the other hand, the majority holds that given the error by the trial judge, which allowed the counterclaim to remain in this case, the only way for plaintiff to have avoided waiver of lack of authority on the counterclaim was to have been correct in its contention that it was entitled to equitable relief, or to have abandoned its request for such relief. Ignorance of any of the numerous reasons why a statutory lien might be bad (except for the one contained in Wiggins) carries with it the penalty of loss of the constitutional right to a jury trial.
I would hold that plaintiff’s objections were sufficient to prevent a court of equity from obtaining authority to decide the purely legal rights of the parties, both as to the claim and counterclaim. (liven the inability of equity to decide the purely legal claims asserted in the case, I would reverse the judgment of the *348trial court, entered while sitting in equity, and remand the cause to permit the transfer of the case to the law side where both parties may litigate their respective demands for damages.①
Howell and Sloper, J.J., join in this dissent.

 ORS 16.460(3):
“No cause shall be dismissed for having been brought on the wrong side of the court. The plaintiff shall have the right to amend his pleadings to obviate any objection on that account. Testimony taken before the amendment and relevant to the issue in the law actions shall stand with like effect as if the pleadings had been originally in the amended form.”