Costs disallowed either party December 20, 1927. ON MOTION TO RETAX COSTS. (262 P. 261.) On petition for rehearing, the judgment in this cause was modified by eliminating interest to the date the judgment was entered. It was held on the authority of Propst v. Wm. HanleyCo., 94 Or. 397 (185 P. 766), and Parks v. Smith, 95 Or. 306 (186 P. 554), that
"This modification entitles defendants to costs and disbursements in this court."
Notwithstanding this ruling, plaintiff has filed a cost bill, aggregating $512.72, covering costs and disbursements in the three trials in the Circuit Court and in the three appeals to this court. Defendants filed cost bill, amounting to $170.10, for costs and disbursements in this court on the last appeal. After reviewing the history of this litigation where first one and the other has prevailed, we have concluded that *Page 483 it would be more equitable and just that each party should pay its own costs and disbursements.
There is much confusion in the decisions of this state on the question of costs where there has been, on appeal, a modification of a judgment in an action at law. In Lemler v. Bord, 80 Or. 230 (156 P. 1034), the court said:
"It is taught in Section 565, L.O.L., that costs in the Supreme Court on appeal are allowed to the prevailing party. The issue in this court depends upon whether or not there was error in the judgment of the circuit court. The defendant-appellant here affirmed the proposition while the plaintiff-respondent took the negative. The result of the decision here was that the defendant prevailed, having succeeded in establishing the existence of error. To accomplish this he was obliged to appeal and, having maintained his contention, is entitled to costs and disbursements." Citing Gardner v. Kinney, 60 Or. 292 (117 P. 971).
This rule was also adhered to in Propst v. Wm. Hanley Co.,supra.
Section 3c of Article VII of the Constitution of Oregon, as amended in 1911, provides:
"If the Supreme Court shall be of the opinion, after consideration of all the matters thus submitted, that the judgment of the court appealed from was such as should have been rendered in the case, such judgment shall be affirmed, notwithstanding any error committed during the trial; or if, in any respect, the judgment appealed from should be changed, and the Supreme Court shall be of opinion that it can determine what judgment should have been entered in the court below, it shall direct such judgment to be entered in the same manner and with like effect as decrees are now entered in equity cases on appeal to the Supreme Court; * *." *Page 484
This court, in Stabler v. Melvin, 89 Or. 226 (173 P. 896), in construing the above provision, said:
"It is our opinion that the power given to this court under this section to enter a judgment upon the record carries with it the power to award costs on equitable principles, and to give or deny costs to either party on appeal."
In Dippold v. Cathlamet Timber Co., 98 Or. 183 (193 P. 909), it is said:
"In an action at law it is a rule that the prevailing party is entitled to recover costs and disbursements, but the rule has its exceptions as the following precedents bear witness: Stabler v.Melvin, 89 Or. 226 (173 P. 896); Olson v. Heisen, 90 Or. 176 (175 P. 859); Miller Lum. Co. v. Davis, 94 Or. 507 (185 P. 462, 464, 1107); Levine v. Levine, 95 Or. 94 (187 P. 609). The court is of the opinion that, under the circumstances as they exist in this cause, it is not fair, right or just to exact costs and disbursements from respondents. Therefore it is adjudged that neither party have judgment for costs and disbursements in this court."
We think that justice may be best administered by adhering to the rule as announced in Stabler v. Melvin, supra, that, where there has been modification on appeal, the taxing of costs and disbursements is a matter resting within the discretion of the court.
Defendants' cost bill will be stricken and the plaintiff's motion to allow costs, as above stated, will be denied. Neither party will recover costs and disbursements.
COSTS DISALLOWED REHEARING DENIED.
RAND, C.J., and COSHOW and McBRIDE, JJ., concur. *Page 485