Nordling v. Johnston

• Citation: 283 P.2d 994,205 Or. 315
• Parties: , 48 A.L.R.2d 1369, 28 Lab.Cas. P 69,297 Seth NORDLING, Respondent, v. Arthur JOHNSTON, Appellant.
• Decision Date: 18 May 1955
• Court: Supreme Court of Oregon

Page 994

283 P.2d 994

205 Or. 315, 48 A.L.R.2d 1369, 28

Lab.Cas. P 69,297

Seth NORDLING, Respondent, v. Arthur JOHNSTON, Appellant.

Supreme Court of Oregon.

Argued Feb. 16, 1955.

Decided May 18, 1955.

Warde H. Erwin, Portland, argued the cause for appellant. On the briefs were Boyd & Erwin, Portland.

Sidney I. Lezak, Portland, argued the cause for respondent. With him on the brief were Peterson & Pozzi, Portland.

Before WARNER, C. J., and LUSK, BRAND and LATOURETTE, JJ.

LUSK, Justice.

This action was brought, pursuant to statute, to recover wages, a penalty, and attorney's fees. ORS 652.140; Oregon Laws 1947, Ch. 193, ORS 652.150; O.C.L.A. § 102-607, ORS 652.200. From a judgment for plaintiff based on a verdict of the jury the defendant has appealed.

The plaintiff alleged in his complaint that between June 5 and June 12, 1950, defendant employed the plaintiff, Walter Newman and John Jacobsen as 'fallers and buckers' of certain timber near Vernonia, Oregon, at the agreed and stipulated wage of $2.50 per M of timber felled and bucked; $1.50 per M for all timber felled, and for trimming broken logs, commonly known as 'breaks', $1.00 per M. It is alleged that Newman and Jacobsen assigned their claims to the plaintiff for collection.

There was evidence to support the foregoing allegations and evidence to support other allegations of the complaint respecting the amount earned under the contract by plaintiff and his assignors and the wilful failure of the defendant to pay the men the moneys earned by them in the prosecution of the work. The judgment included the statutory penalty and an attorney's fee.

The defendant assigns error to rulings of the court denying his motions for judgment of involuntary nonsuit and a directed verdict. One ground of these motions was a claimed fatal variance between pleading and proof because, it is said, the complaint alleges a several contract while the proof establishes a joint contract between plaintiff and his assignors, on the one hand, and the defendant, on the other. We agree that the proof establishes a joint contract, but we cannot concur in the view that the complaint alleges a several contract. McGinnis v. Keen, 189 Or. 445, 221 P.2d 907, is controlling. The agreement involved in that case was similar to the one under consideration here, and we held that the amended complaint alleged a joint contract. 189 Or. 459, 221 P.2d 913. It is true that in the McGinnis case the action was brought in the names of the three wage earners, parties to the contract, instead of, as here, in the name of one of them to whom the other two have assigned their claims. It is the assignment which, according to the defendant's contention, evidences an intention to declare on a several, rather than a joint, contract. The argument is that, since the action must be brought in the name of the real party in interest ORS 13.030, and since an action upon a joint contract must be brought in the name of all those jointly interested, Pitts v. Crane, 114 Or. 593, 597, 236 P. 475; McGinnis v. Keen, supra, plaintiff 'must rely on a several contract when he pleads the assignment of two separate claims of Newman and Jacobsen.' This does not follow, for the question whether the contract as alleged is joint or several cannot be affected by any subsequent unilateral acts of the plaintiffs, and, consequently, the allegations respecting the assignment of the claims of two of the parties to the contract will not convert the pleading from a complaint on a joint contract to one on a several contract. If it be true, as is asserted, that a party to a joint contract cannot separately assign his cause of action based thereon, then there has been in fact no assignment and the result here is merely a defect of parties plaintiff. The plaintiff came into court litigating the claim arising on the joint contract on behalf of himself and the other two joint contractors. The defendant, it is true, might have successfully challenged this mode of proceeding. But the objection on account of a defect of parties must be taken by demurrer, ORS 16.260, 16.270, or answer; otherwise it is waived, ORS 16.330; Blaser v. Fleck, 96 Or. 187, 189 P. 637. So also of the statute which requires that the action shall be prosecuted in the name of the real party in interest. It 'was enacted for the benefit of a party defendant, to protect him from being again harassed for the same cause. But if not cut off from any just offset or counterclaim against the demand, and a judgment in behalf of the parties suing will fully protect him when discharged, then is his concern at an end.' Sturgis v. Baker, 43 Or. 236, 241, 72 P. 744, 746. See, also, Title & Trust Co. v. United States Fidelity & Guaranty Co., 147 Or. 255, 263, 32 P.2d 1035, and cases there cited.

In this case the assignors 'freely participated in the maintenance of this action' and therefore 'they will be bound by its result as completely as if it had been instituted in their names.' Title & Trust Co. v. United States Fidelity & Guaranty Co., supra, 147 Or. 264, 32 P.2d 1038. Defendant waived the objection by failing to interpose a special demurrer; the case was tried no differently than if all three of the joint contractors had been named as plaintiffs; and, as no prejudice to the rights of the defendant resulted, it would be contrary to the modern judicial conception of the purposes for which procedural rules are established to give heed to the defendant's contention first made after the plaintiff had rested his case. For procedure is the "means whereby the court reaches out to restore rights and remedy wrongs; it must never become more important than the purpose which it seeks to accomplish." Clark v. Kirby, 243 N.Y. 295, 153 N.E. 79, quoted with approval in Sheppard v. Blitz, 177 Or. 501, 511, 163 P.2d 519, 523.

Closely related to the foregoing question is the defendant's claim of error going to the allowance in the judgment of the sum of $356.34 as a penalty. ORS 652.150 provides:

'If an employer, being financially able, wilfully fails to pay any wages or compensation of any employe who is discharged or who quits his employment, as provided in ORS 652.140, then, as a penalty for such nonpayment, the wages or compensation of such employe shall continue from the due date thereof at the same rate until paid or until action therefor is commenced; provided, that in no case shall such wages continue for more than 30 days.'

Defendant urges that a claim for a penalty is not assignable. Plaintiff argues that the statute does not provide for a penalty but for liquidated damages, and that in any event the rule against assignment of a claim for a penalty does not extend to an assignment made solely for collection, as is the case here.

Defendant attempted to raise the question by a motion to strike certain paragraphs of the complaint on the ground that they are 'sham, frivolous, irrelevant and redundant and are contrary to law.' Paragraph IV, one of those moved against, contains allegations to the effect that defendant's failure to pay the wages of the three men was wilful and stating the amount of the penalty for which defendant was liable. Paragraph V, which alleged the assignment to the plaintiff for collection of the claims of Newman and Jacobsen, was not moved against. One of the grounds of the motions for nonsuit and a directed verdict was that a claim for a penalty cannot be assigned.

Assuming that the question is properly before us, we consider first whether the provision is penal in character.

An accepted definition of a statutory penalty is that it is one which an individual is allowed to recover against a wrongdoer, as a satisfaction for the wrong or injury suffered, and without reference to the actual damage sustained. Noble v. Martin, 191 Wash. 39, 70 P.2d 1064; Stevenson v. Stoufer, 237 Iowa 513, 21 N.W.2d 287; Cummings v. Board of Education, 190 Okl. 533, 125 P.2d 989.

In the strict sense the purpose of a penalty is to punish an offense against public justice, not to afford a private remedy to a person injured by the wrongful act. Bowles v. Barde Steel Co., 177 Or. 421, 428, 164 P.2d 692, 162 A.L.R. 328; Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123; Denison v. Tocker, 55 N.M. 184, 229 P.2d 285. But this is not the view generally held, 70 C.J.S., Penalties, § 1, page 389, and as a matter purely of state law we rejected it in the recent case of Kinzua Lumber Co. v. Daggett, Or., 281 P.2d 221, 230. In earlier cases we held that the statute, ORS 86.140, which provides that if a mortgagee fails or refuses, in circumstances stated, to discharge a mortgage after full performance of the conditions thereof, he shall be liable to the mortgagor "in the sum of one hundred dollars damages, and also for all actual damages occasioned by such neglect or refusal, to be recovered in an action at law", is penal in character. The purpose of the statute was said to be to 'quicken the diligence of a mortgagee in this regard.' Malarkey v. O'Leary, 34 Or. 493, 499, 56 P. 521, 523. Since the provision for the recovery of $100 is a 'penal one', it must be strictly construed. Knudson v. Knudson, 128 Or. 635, 642, 275 P. 663. And in Ebbert v. First Nat. Bank of Condon, 131 Or. 57, 64-66, 70, 279 P. 534, 536, we held that an action to recover under that provision was governed by the three-year statute of limitations, Or.L. 1920, § 7, subd. 2, applying to 'an action upon a statute for penalty or forfeiture.'

While the cases are legion which have considered the question whether particular statutes are penal in character or otherwise, there seem to be but few decisions upon statutes like the one here under consideration. Such statutes have been held to be penal in Robinson v. St. Maries Lumber Co., 34 Idaho 707, 204 P. 671; Martin v. Going, 57 Cal.App. 631, 207 P. 935; Manford v. Memil Singh, 40 Cal.App. 700, 181 P. 844; Chicago, R. I. & P. R. Co. v. Russell, 173 Ark. 398,...