Oregon Farm Bureau v. Thompson

• Decision Date: 31 July 1963
• Citation: 235 Or. 162,384 P.2d 182
• Parties: OREGON FARM BUREAU, a corporation, Appellant, v. Frank THOMPSON and Dean Kellar, Respondents.
• Court: Oregon Supreme Court

Page 182

384 P.2d 182

235 Or. 162

OREGON FARM BUREAU, a corporation, Appellant, v. Frank THOMPSON and Dean Kellar, Respondents.

Supreme Court of Oregon, In Banc.

Argued and Submitted on Rehearing June 3, 1963.

Decided July 31, 1963.

Duane Vergeer, Portland, for appellant. On the brief were Vergeer & Samuels and Charles S. Crookham, Portland.

Kenneth E. Roberts, Portland, for respondent Thompson. With him on the brief were Mautz, Souther, Spaulding, Kinsey & Williamson, Portland, and David B. Williamson and George G. Van Natta, St. Helens.

Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN, O'CONNELL, GOODWIN and DENECKE, JJ.

ROSSMAN, Justice.

The petition for a rehearing submits the following as its challenge to our decision:

'In support of the within petition defendant submits that this Court, in rendering its decision has erred in the following particulars:

'1. The Court exceeded constitutional and statutory limitations upon its right to re-examine Findings of Fact on the appeal of proceedings in the nature of an action at law, when it held contrary to the findings of the trial Judge, that an employee of defendant Thompson was not a farm employee engaged as such or in activities incidental to the operation of a farm at the time he was injured.

'2. The Court sustained the second assignment of error, overruling an award of attorney's fees to defendant-Thompson, upon an erroneous and unwarranted determination of fact on appeal.'

ORS 28.090, which is a part of our Declaratory Judgments Act, states:

'When a proceeding under this chapter involves the determination of an issue of fact, such issue may be tried and determined in the same manner as issues of fact are tried and determined in other actions at law or suits in equity in the court in which the proceeding is pending.'

ORS 17.440 in specifying the procedure upon appeal in equity cases, provides:

'* * * on appeal to the Supreme Court the cause shall be tried anew without reference to such findings.'

The Uniform Declaratory Judgments Act, written by the Commissioners on Uniform State Laws, and of which the Oregon act is largely a counterpart, does not prescribe in phraseology similar to ORS 28.090 the manner of trial. Its language is:

'When a proceeding under this Act involves the determination of an issue of fact, such issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending.'

The alteration to the language of the Uniform Act which was made by the Oregon Legislature seems to emphasize that whether the cause receives trial by a jury or the chancellor is dependent upon whether it is a law or an equity proceeding.

Webb v. Clatsop Co. School District No. 3, 188 Or. 324, 215 P.2d 368, declares:

'Counsel for plaintiffs contends that, under the declaratory judgments law, plaintiffs 'have a choice between impanelling a jury' and 'allowing the trial judge to decide the question of fact'. In this, counsel is surely in error. The appropriate section of the statute reads: * * *.'

At that point ORS 28.090, supra, was quoted.

The foregoing appears to answer the contention of the petition for a rehearing that we misapplied 'constitutional and statutory limitations' upon this court's 'right to re-examine Findings of Fact on the appeal of proceedings in the nature of an action at law.'

In our previous decision we construed this cause, as the trial judge had, as governed by equity procedure. The complaint prayed for equitable relief. Thompson's answer did likewise. The final instrument which terminated the case and which was prepared by counsel for defendant Thompson was entitled 'Decree.' At the close of the plaintiff's case in chief, the trial judge, in unmistakable language, announced that he deemed that the cause was governed by equity rules. No objection was made by any one to that interpretation of the nature of the case. The defendant Thompson at no time asked for a jury trial of any issue or that the case be tried as one at law.

Notwithstanding the foregoing, we believe that the real contention of the petition for a rehearing is that we should now deem that the parties sought relief only of a law character and that, therefore, the instrument which Thompson's counsel prepared and entitled 'Decree' was in truth a Judgment. If such was its nature and if this case was not subject to equity procedure the findings were binding upon us and the excerpt which we quoted from ORS 17.440 has no application to this cause.

It will be necessary, in resolving the issue just mentioned, to turn again to the pleadings and the evidence.

This case was instituted by the plaintiff, an insurance company, as one for declaratory relief. The defendant Thompson had only one employee, the defendant Kellar. Since the latter's status as a defendant in this case is unimportant, we will hereafter refer to Thompson as the defendant. As stated in our previous opinion, the plaintiff had issued a policy of liability insurance to the defendant as the insured. The plaintiff claims that the policy protected the defendant only in his farming operations.

Some time after the policy was issued, Kellar was injured while in the defendant's employ. He sought compensation from the Industrial Accident Commission upon a contention that his injury befell him while he was working as a logger. Since farming is a non-hazardous occpation, Kellar could obtain no compensation if he was injured while performing farm labor. The Commission, after a hearing, ruled that Kellar was injured while working for Thompson as a logger and awarded him compensation. Still later, Kellar filed an action for damages against this defendant (Thompson) in which he alleged that his injury was due to Thompson's negligence. At that point Thompson demanded that the plaintiff (insurance company) defend him against Kellar's claim. As we have seen, the plaintiff claims that the policy which it issued to Thompson requires it to defend Thompson only against claims that arose out of his farming operations. When Thompson made his demand that the plaintiff defend him against Kellar's action, the plaintiff filed this proceeding for declaratory relief. After setting forth the contentions of the parties which showed that a controversy existed between them, it prayed for a decree declaring that (1) the plaintiff was required to defend Thompson only against claims that arose out of farming work; (2) Kellar was injured while performing logging work; (3) the award which the Industrial Accident Commission made to Kellar established that he sustained his injury while performing logging work; and (4) such other and further relief as appropriate be awarded plaintiff.

When Thompson was confronted with the complaint, he did not challenge the jurisdiction of a court of equity over the cause by filing a demurrer of the kind authorized by ORS 16.260(1). He filed an answer which included the following:

'* * * Kellar thereafter made application for the benefits of the Workmen's Compensation Law of the State of Oregon, and that a hearing officer took evidence on said application on March 28, 1961, and found that the defendant Kellar was entitled to said benefits which were thereafter paid to him on his behalf, and admits that this defendant claims a right or interest in the policy of insurance * * *.'

Continuing, Thompson's answer submitted 'an affirmative defense' which alleged that the plaintiff had issued to him not only the policy of insurance mentioned in the complaint but also another policy which agreed to protect him from any claims arising out of the operation of 'a certain International two-ton truck, including the loading and unloading thereof.' It alleged that Kellar 'was either a farm employee of this defendant or was engaged with this defendant' in a joint venture for their mutual profit and gain. Then Thompson's answer averred:

'This defendant contends that if the relationship between the defendant Kellar and this defendant at the time of said accident was that of farm employee and employer, then the insurance policy attached to and made a part of the plaintiff's complaint is applicable and covers this defendant for the claim being asserted by the defendant Kellar against this defendant in the action referred to in paragraph IV of plaintiff's complaint. If the defendant Kellar was not a farm employee of this defendant at the time of said injury, but was engaged in a joint venture with this defendant at said time and place, then the said liability policy issued by the plaintiff covering said truck would be applicable and would protect and insure this defendant against the claim asserted by defendant Kellar against this defendant in said action.'

The prayer of Thompson's Answer reads:

'Wherefore, this defendant prays for a decree of this court adjudicating as follows:

'1. That at the time and place of the accident involved herein, the defendant Kellar was either a farm employee of this defendant, or was engaged with this defendant in a joint venture for their mutual profit and gain;

'2. That either policy No. T-2950-70, which is a part of plaintiff's complaint, insures this defendant for the claim of the said defendant Kellar, or plaintiff's insurance policy T-295011, covering the truck above referred to, protects and insures this defendant for the claim of the defendant Kellar;

'3. For such other and further relief as to the Court may seem meet and equitable.'

The reply filed by the plaintiff admitted that Kellar was an employee of Thompson, but denied that he was 'a farm employee engaged in farm employment or engaged in a joint venture for the mutual profit and gain of the defendants.' The reply also alleged:

'* * * the said policy of insurance insuring the truck previously described herein contains the following exclusion:

"This policy does not apply; * * * (e) Under bodily injury and medical payment coverages

"(...