Allan & Leuthold, Inc. v. TERRA INVESTMENT COMPANY

532 P.2d 218, 271 Or. 335, 1975 Ore. LEXIS 517
Oregon Supreme Court·Decided February 27, 1975·Published·Cited by 8 cases

Opinions

HOLMAN, J.

Plaintiff brought this case in a court of equity to foreclose a mechanic’s lien for surveying work upon defendant Terra Investment Company’s property. Defendant then filed a legal counterclaim for damages because of poor workmanship arising out of the surveying which was the basis for plaintiff’s claim. The trial judge erroneously overruled plaintiff’s objection to defendant’s legal counterclaim in what was then, ostensibly, an equity case. When put to proof plaintiff could not prove a valid lien. After plaintiff failed to prove equitable cognizance in its case in chief, defendant did not object to the equity court’s continuing with either plaintiff’s claim or defendant’s counterclaim. Neither did plaintiff object to the further consideration of its claim, although it continued to object [337]*337to defendant’s counterclaim. The trial court held that defendant was not entitled to recover on its counterclaim and that although plaintiff had not proved a valid lien, it had a good claim, and the court awarded plaintiff a judgment.

Defendant appealed, seeking de novo consideration of hotli plaintiff’s judgment and defendant’s counterclaim. Although plaintiff contends that defendant cannot assert a legal counterclaim in what was originally an equity case, it nevertheless contends the appeal should be treated as one at law and defendant should not be entitled to a de novo consideration of the facts upon which plaintiff’s judgment was based.

It is this court’s view that both parties availed themselves of the use of the services of a court of equity for a trial of legal claims and that both waived their right to proceed at law. The two significant differences between proceedings at law and in equity are a jury trial at law and de novo review upon appeal in equity.

In the cases of Olson v. Roop, 255 Or 368, 467 P2d 437 (1970) and Winkleman v. Ore.-Wash. Plywood Co., 240 Or 1, 10, 399 P2d 402 (1965), we decided that a defendant in the position of defendant here waived its right to have its ease tried at law by failing to ask at the completion of plaintiff’s case in chief that the case be transferred to the law side of the court. In Olson we said:

“* * * However, In Winkleman v. Ore.-Wash. Plywood Co., 240 Or 1, 10, 399 P2d 402 (1965), we, finally, clearly held that a jury trial is waived by defendant’s failure, at the completion of plaintiff’s case in chief, to request that the case be transferred to the law side of the court for a jury trial. See also Ward v. Town Tavern et al, supra at 38, and [338]*338Topolos v. Skotheim et al, 126 Or 683, 693, 250 P 235, 270 P 753 (1928). We believe this rule to be an eminently fair one, which adequately protects the right of a jury trial and at the same time avoids repetitious trials resulting from a change of heart after an adverse result is known.” 255 Or at 370-71.

In the opinion, we quoted from Ward v. Town Tavern et al, 191 Or 1, 38, 228 P2d 216, 42 ALR2d 662 (1951), as follows:

“ * * Notwithstanding the fact that the defendant’s motion deemed the lien invalid, it did not ask that the cause be transferred to the law side of the court and that it be tried from there on as a law action. We add that after defendant had become satisfied from the evidence that the lien was invalid, it did not object to the jurisdiction of equity over the remaining phases of the controversy.’ * * 255 Or at 372 (Emphasis ours).

The above authority dictates that defendant acquiesced in the court’s procedure by not objecting to the submission of plaintiff’s claim to the court and by its submission of its legal counterclaim. “[I]t did not object to the jurisdiction of equity over the remaining phases of the controversy,” which includes appellate review.

Plaintiff, on the other hand, filed what was a legal case in a court of equity. It can be argued that plaintiff may not have known until the proof was in whether it had a case of equitable cognizance or not and that if it found it did not have one, it was entitled to proceed at law. However, it certainly cannot be said that it did not have the same opportunity as defendant had to analyze its own proof at the completion of its case and to decide whether it had made out one of equitable cognizance. If a plaintiff decides he has not, he can move for a transfer to the law side of the court in the same manner as a defendant is required to do. [339]*339We should not put a plaintiff, who made the original mistake and files the ease on the wrong side of the court, in any better position than our cases put a defendant. If a defendant must make up his mind and move at the end of a plaintiff’s case, the plaintiff, who starts the fiasco, should be placed in a no different position. We therefore conclude that plaintiff has likewise submitted the controversy to the mercies of a court of equity and its procedures, and that it should not be able to avoid a legal counterclaim, after it fails to prove equitable cognizance, by failure to request that its legal claim be transferred to a court of law.

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Allan & Leuthold, Inc. v. TERRA INVESTMENT COMPANY, 532 P.2d 218, 271 Or. 335, 1975 Ore. LEXIS 517 (Or. 1975).

532 P.2d 218 (Allan & Leuthold, Inc. v. TERRA INVESTMENT COMPANY) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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Allan & Leuthold, Inc. v. TERRA INVESTMENT COMPANY
532 P.2d 218 (Oregon Supreme Court, 1975)