Court Opinion

ID: 3839319
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:08:21.198509+00
Date Added: 2024-06-11T14:14:20.531351
License: Public Domain

The question here is not whether attorneys are entitled to a reasonable compensation for their services. No thinking person could or should withhold from them the benefit of the scriptural injunction that "a laborer is worthy of his hire". Luke x, 7; 1 Tim. v, 8. Neither is it a matter of construing a statute allowing an attorney's fee in cases wherein an insurance company not acting in good faith interposes a defense as in the case ofSupreme Ruling of the F.M.C. v. Snyder, 227 U.S. 497
(57 L. Ed. 611, 33 S. Ct. 292).
As the writer understands the prevailing opinion, it holds that the allowance of $150 as an attorney's fee on appeal in a case involving a contract for the payment of $2,700 is either a mere procedural incident to be regarded as only another item of costs, which costs also include an attorney's fee of $300 *Page 605 
allowed by the trial court; or the exaction of a condition prerequisite to the right of an insurance company to prosecute an appeal to this court.
"The obligation of a contract depends upon its terms and the means which the law in existence at the time [of its execution] affords for its enforcement". State Tax on Foreign-held Bonds, 15 Wall (U.S. 300, 320 (21 L. Ed. 179).
The writer thinks that a statute authorizing the recovery of an attorney's fee in insurance cases should not be given retroactive effect.
The courts of Nebraska and Arizona hold that retroactive effect should be given. Nye-Schneider-Fowler Co. v. Bridges Hoye Co., 98 Neb. 863 (155 N.W. 235); American Fire Insurance Co. v.Landfare, 56 Neb. 482 (76 N.W. 1068); Ward v. Bankers' LifeCo., 99 Neb. 812 (157 N.W. 1017); Germania Fire Ins. Co. ofN Y v. Bally, 19 Ariz. 580 (173 P. 1052, 1 A.L.R. 488).
In Nebraska, however, we find the court saying:
"If the question that we are considering was now presented for the first time, we would hesitate to say that this statute does not create and add to the contract a legal liability which would not exist under the contract prior to the enactment of this statute". (Nye-Schneider-Fowler Co. v. Bridges, supra.) And also: "The reasons advanced for this contention on the part of the defendant [i.e. that the statute should not be given retroactive effect] and the manner in which they are presented in this brief, might well cause us to hesitate if the question was an open one". Reed v. American Bonding Co., 102 Neb. 113
(166 N.W. 196, L.R.A. 1918C, 63).
Bullard v. Smith, 28 Mont. 387 (72 P. 761), merely holds that notes, which were declared by a statute to be nonnegotiable because they contained a clause providing *Page 606 
for the payment of an attorney's fee in case of suit, could be rendered negotiable by a subsequently enacted statute. It will be noted that the only effect of this doctrine is that certain defenses given by the earlier statute were withheld by the later legislation. No question was involved concerning the payment of a substantial or any sum of money not mentioned in the original contract.
The Kansas cases cited in the opinion of the court do not involve the question whether statutes providing for attorneys' fees in insurance cases may be given retroactive effect.
In the Indiana case cited therein, we find this statement:
"We are of opinion that the amended seventh section of the act of 1889, in conferring the right on the contractor to foreclose his lien and to recover a reasonable attorney's fee did not impair any vested right or constitutional guaranty. It simply provided a remedy for the enforcement of a right which had already been created by the act of 1889 in conferring on the contractor a lien. That act had already made the abutting property liable to a lien in favor of the city, the contractor, and the holders of certificates or bonds issued under the act on account of street improvements for the contract price of such improvements, and had conferred the right on the city and on the holders of such certificates or bonds to maintain a suit to foreclose the lien as a mortgage and to recover an attorney's fee therein.
"As we have already seen, the right given the city and the holders of the bonds or certificates to foreclose and recover attorney's fees was for the benefit of the contractor. The extension of the remedy to the contractor did not create any new right, nor did it impose a new burden on the abutting property. Such property was already subject to that burden, subject to foreclosure and attorney's fees". Dowell v. Talbot Paving Co.,138 Ind. 675 (38 N.E. 389). *Page 607 
In Kline Bros.  Co. v. Royal Ins. Co., 192 Fed. 378, the New York Federal court refused to apply a Florida statute authorizing the allowance of an attorney's fee. The question discussed herein was not there considered.
The courts of Louisiana, Arkansas, Oklahoma, Missouri and Texas hold that retroactive effect should not be given to such statutes as the one under consideration. Guardian Fire Ins. Co. v.Central Glass Co., 114 C.C.A. 639 (194 Fed. 851) (construing La. Act of 1908, No. 168); Central Glass Co. Ltd. v. Niagara FireIns. Co., 131 La. 513 (59 So. 972); Central Glass Co. v.Hamburg-Bremen Fire Ins. Co., 133 La. 598 (63 So. 236);Arkansas Mut. Fire Ins. Co. v. Woolverton, 82 Ark. 476
(102 S.W. 226); Arkansas Mut. Fire Ins. Co. v. Stuckey, 85 Ark. 33
(106 S.W. 203); American N. Ins. Co. v. Donahue, 54 Okla. 294
(153 P. 819); Thompson v. Traders' Ins. Co., 169 Mo. 12
(68 S.W. 889); Piedmont  A. Life Ins. Co. v. Ray, 50 Tex. 511.
"The allowance of an attorney's fee relates to the right and not to the remedy". First Nat. Bank v. Security Mut. Life Ins.Co., 283 Mo. 336 (222 S.W. 832). See, also, Ayers v. Cont. Ins.Co., 217 S.W. 550.
The fact that in the cases refusing to give retroactive effect to statutes providing for damages and attorneys' fees, the courts did not allow attorneys' fees renders those cases decisive of the very question here involved; for the reason that it is elementary that any part of the statute which is constitutional is unaffected by those parts thereof which are unconstitutional. If the courts mentioned had deemed the allowance of attorneys' fees to be warranted under a subsequently enacted statute, they would have so declared even though refusing to uphold the allowance of damages. *Page 608 
In the opinion of the writer, the doctrine is unsound that, where the statute prescribes that an attorney's fee shall be a part of the judgment, it thereby becomes a part of the costs. The case of Title Guarantee  Trust Co. v. Wrenn, cited in the opinion of the court, construed a statute which expressly declared that "the court shall, upon entering judgment for the plaintiff, allow as part of the costs * * * a reasonable amount as attorney's fees". Johnson v. Prudential Life Insurance Co., also cited in the opinion of the court, held that —
"The attorney's fee provided by the statute is to be allowed as part of the costs and expenses of the litigation".
That case was decided before the decision was rendered in the case of People of Sioux County Nebraska v. National Surety Co.,276 U.S. 238 (48 S. Ct. 239, 72 L. Ed. 547), wherein, construing a similar statute of Nebraska (Section 7811, Comp. Stat. Neb. 1922), the Supreme Court of the United States used this language:
"That the statute directs the allowance, which is made to plaintiff, to be added to the judgment as costs are added, does not make its costs in the ordinary sense of the traditional, arbitrary and small fees of court officers, attorneys', docket fees and the like, allowed to counsel by R.S. §§ 823, 824. The present allowance, since it is not costs in the ordinary sense, is not within the field of costs legislation covered by R.S. §§ 823, 824. That the particular mode of enforcing the right provided by the state statute — i.e., by taxing the allowance as costs — is not available to the federal courts under R.S. §§ 823, 824, does not preclude the recovery. Since the right exists, the federal courts may follow their own appropriate procedure for its enforcement by including the amount of the fee in the judgment". *Page 609 
To the writer, the foregoing constitutes an unequivocal statement that the recovery of an attorney's fee, under such statutes as those being considered, is a matter of substantive right; and, therefore, the statutes, creating that right, ought not to be construed as being merely remedial in character.
The writer thinks that whether the statute in question is remedial or not, the provision thereof for attorneys' fees upon appeal, which was not in effect when the contract of indemnity was executed, cannot be applied to such contract without violating the constitutional inhibition against impairing the obligation of contracts. Article I, section 10, Constitution of the United States, Article I, section 21, Constitution of Oregon. To the writer, there is no difference between applying to a contract such a legislative mandate enacted subsequent to its execution, and at such time writing therein a clause providing for an attorney's fee.
"Whatever belongs merely to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract. But if that effect is produced, it is immaterial whether it is done by acting on the remedy or directly on the contract itself. In either case it is prohibited by the constitution". Bronson v. Kinzie, 1 Howard 311.
The obligation of the contract in suit was to pay the amount of the policy and a reasonable attorney's fee. Applying the amendment of the statute passed after the execution of that contract, the obligation thereof becomes enlarged to the extent of requiring the payment of a second and additional attorney's fee.
While there is authority to the contrary, the United States Supreme Court has held that — "The right of appeal must be reciprocal, and the statute does not *Page 610 
give to one party an advantage over the other party under the same circumstances". The Sydney and The William Worden et al. v.Providence Washington Ins. Co. et al., 139 U.S. 331
(11 S. Ct. 620, 35 L. Ed. 177). In this kind of a case the writer thinks that such holding is salutary. Too many policies of insurance have been veritable tinder boxes, although proof thereof has not been available, for this court to confine its sympathy to the honest victims of fires without taking into account the other losses occurring to the insurers and their stockholders by reason of the villainy of the insured. The writer knows by experience what it means to suffer loss by fire and no one sympathizes more keenly than he with those who through no fault of theirs sustain such loss; but many cases arise where arson is far more profitable to the insured than either liquidation or a continuance in business. In mentioning this sordid fact, the writer disclaims any intention to intimate that plaintiff herein is other than honest, honorable and fair.
Cases holding that the right of appeal must be reciprocal and to the contrary are collated in the notes to section 465, page 616 of the 3d volume of C.J., under the title Appeal and Error.
If the right of appeal must be reciprocal, and in the absence of some special or unusual circumstance or relationship it is only just that it should be, the imposition upon one party of a condition as a prerequisite thereto, not required of the other party, cannot be logically upheld, as suggested, on the ground that the right of appeal is wholly statutory and what the legislature has given the legislature may take away.
The motion for an allowance of an attorney's fee upon appeal should be overruled. *Page 611