SCHRADER v. NEVILLE

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District Court of Appeal, Second District, Division 2, California.

SCHRADER et al. v. NEVILLE et ux.

Civ. 16647.

Decided: December 21, 1948

Monta W. Shirley, of Los Angeles, for cross-complainants and appellants. Parker, Stanbury & Reese, of Los Angeles (John Henry Peckham, of Los Angeles, of counsel), for cross-defendants and respondents.

From an order denying cross-complaints' motion to strike a memorandum of costs and disbursements filed by the cross-defendants, cross-complainants appeal.

FACTS

1. Delos and Helen Schrader as plaintiffs, filed a complaint against John and Marietta Neville as defendants, alleging a cause of action for negligence.

2. Defendants filed an answer to the complaint denying negligence, and on the same date filed a cross-complaint as cross-complainants seeking to recover damages for negligence from Delos and Helen Schrader as cross-defendants.

3. Cross-defendants filed an answer to the cross-complaint denying the allegations of negligence.

4. Judgment was entered in favor of defendants on the complaint, awarding them their costs, for having prevailed against the complaint, and on the same date a judgment was entered in favor of the cross-defendants on the cross-complaint, awarding them their costs for having prevailed vailed against the cross-complaint.

The cross-complainants made a motion to strike the cross-defendants' memorandum dum of costs and disbursements which was denied, resulting in the present appeal from such order.

QUESTION

Where a cross-defendant is successful in obtaining judgment on a cross-complaint, is such cross-defendant entitled to his costs incurred in connection with the defense of the cause of action stated in the cross-complaint even though judgment has gone against him on his complaint?

This question must be answered in the affirmative and is governed by this rule:

When a cross-defendant obtains judgment in his favor on the cross-complaint and a defendant obtains judgment in his favor on the complaint, each of the prevailing parties is entitled to the costs incurred in obtaining a judgment in his favor. (Borror v. Berry, 51 Cal.App.2d 552, 554, 125 P.2d 537; Cone v. Montgomery 25 Colo. 277, 53 P. 1052, 1053; Gilly v. Hirsh, 122 La. 966, 48 So. 422, 424, 20 L.R.A.,N.S., 972.

The reasons for the soundness of this rule become apparent upon consideration of the nature of a cross-complaint. When a cross-complaint is filed with an answer to the complaint, there are then two separate and distinct causes of action simultaneously pending between the same parties wherein the plaintiff in the complaint becomes the defendant on the cross-complaint, and the defendant in the complaint becomes the plaintiff on the cross-complaint. (Pacific Finance Corp. v. Superior Court, 219 Cal. 179, 182, 25 P.2d 983, 90 A.L.R. 384; Millar v. Millar, 51 Cal.App. 718, 721, 197 P. 811; see also, Luse v. Peters, 219 Cal. 625, 630, 28 P.2d 357; Northwestern & Pacific Hypotheek Bank v. Ridpath, 29 Wash. 687, 70 P. 139, 143; Ewing and Others v. Patterson, 35 Ind. 326, 330.)

Referring to such a situation our Supreme Court in Pacific Finance Corporation v. Superior Court, 219 Cal. 179, 182, 25 P.2d 983, 984, 90 A.L.R. 384, thus states the rule: ‘These cross-actions, however, are still distinct and independent causes of action, so that when properly interposed and stated the defendant becomes in respect to the matters pleaded by him, an actor, and there are two simultaneous actions pending between the same parties wherein each is at the same time both a plaintiff and a defendant. Francis & Bro. v. Edwards, 77 N.C. 271; Davidson v. Remington, 12 How.Prac., N.Y., 310; Cragin v. Lovell, 88 N.Y. 258. The same view has been taken by our appellate courts, for the cases recognize and establish the principle that the issues presented upon a cross-complaint and answer are entirely separate and distinct from the issues raised upon the original complaint and answer.’

In Millar v. Millar, 51 Cal.App. at page 721, 197 P. at page 813, the court quoting with approval from Pomeroy's Remedies and Remedial Rights, says: “When a defendant files a cross-complaint, and seeks affirmative relief, he becomes a plaintiff, and the plaintiff in the original action becomes the defendant in the cross-complaint.”

Applying this rule to the present situation, we find that appellants John and Marietta Neville were defendants in the complaint, and respondents Delos and Helen Schrader were plaintiffs in the complaint; also that appellants were plaintiffs on the cross-complaint and respondents were defendants on the cross-complaint. As such, we now turn to the pertinent provisions of the Code of Civil Procedure relative to costs which is section 1032, and which so far as material here reads thus:

‘In the superior court, except as otherwise expressly provided, costs are allowed of course: (a) To plaintiff upon a judgment in his favor: * * * in an action for the recovery of money or damages; * * * Provided, that the plaintiff shall not recover costs when the judgment is one which could have been rendered by a municipal or inferior court within the same county or city and county. (b) To the defendant upon a judgment in his favor * * * in the actions mentioned in subdivision (a) * * *.’

It thus becomes apparent that since Delos and Helen Schrader were the defendants on the cross-complaint and judgment was in their favor upon it, under the provisions of section 1032(b) they were entitled to a judgment for their costs, and the provisions in subdivision (a) of the same section ‘that the plaintiff shall not recover costs when the judgment is one which could have been rendered by a municipal or inferior court within the same county or city and county,’ was not applicable to them for the reason that they were not plaintiffs but they were defendants and fell within the provisions of subdivision (b) of section 1032 of the Code of Civil Procedure which relates to costs recoverable by a prevailing defendant, and not within those of subdivision (a) which pertain to costs allowable to a plaintiff.

Therefore the trial court properly allowed them costs for the expense of the items incurred in successfully prevailing upon the issues raised upon the cross-complaint and the answer thereto.

Gerstein v. Smirl, 70 Cal.App.2d 238, 160 P.2d 585, 586, is not to the contrary and is consistent with the above stated rule for the reason that the defendant was allowed costs, having prevailed in the cause of action set forth in the complaint even though he was unsuccessful in obtaining judgment on his cross-complaint. A mere reading of the opinion clearly calls attention to the distinction between this case and the cited case for the reason that it is stated in the latter, ‘We know of no California case determinative of this precise question.’ At such time the decision in Borror v. Berry, supra, had been of record for over three years. It is thus obvious that Gerstein v. Smirl is confined to the facts of that case, wherein defendant, who prevailed upon the issues raised by the complaint and the answer thereto, was properly allowed his costs as a matter of course.

Likewise, Shotwell v. Bloom, 60 Cal.App.2d 303, 314, 140 P.2d 728, is not here applicable. In this case the court simply held that plaintiffs who recovered in the superior court less than the jurisdictional amount of such court were not entitled to recover their costs on the issues raised by the complaint and answer even though they prevailed on the issues raised on the cross-complaint and answer thereto. It is clear from a reading of the case and the fact that the court places its disallowance of costs on the ground that the Shotwells, plaintiffs and appellants, were not entitled to their costs because of the provisions in section 1032(a), Code of Civil Procedure, which pertains to the allowance of costs to a plaintiff and not to a defendant. The court was not considering the question whether or not they would have been entitled to their costs had they claimed them as defendants under section 1032(b), Code of Civil Procedure.

The order is affirmed.

I dissent. The precise question presented by this appeal is completely answered by Gerstein v. Smirl, 70 Cal.App.2d 238, 160 P.2d 585, an action for damages alleged to have resulted from the collision of the automobiles of the litigants. It was there held that although the defendant did not recover on her cross complaint still she was entitled to her costs because plaintiff was denied recovery on the issues raised by the complaint. The Code of Civil Procedure, sec. 1032 is mandatory in requiring costs to be allowed a defendant who prevails. The plaintiff in an action arising out of a motor car collision necessarily contemplates the payment of all costs in the event he fails to establish his demand, and at the same time knows that he invites a cross-action, which may itself defeat his claim. A defendant in such action would not be compelled to incur any expense if the plaintiff did not commence the lawsuit. It is a rule of ancient origin that the cost of litigation be borne by him who initiates it but fails to establish his claim.

If a defendant who has filed a cross complaint against the plaintiff is entitled to his costs by reason of his having been awarded the net result of a dual recovery (Shelley v. Hart, 112 Cal.App. 231, 243, 297 P. 82; Dobbins v. Horsfall, 58 Cal.App.2d 23, 27, 136 P.2d 35) then by the same logic he should be allowed costs when he has totally defeated plaintiff's claims.

Pacific Finance Company v. Superior Court, quoted in the majority opinion, is not applicable to the instant action. It dealt (1) with the diligence of the litigants and (2) it had no relevancy to the subject of costs which are wholly incidental to a judgment. Wells Fargo & Co. v. City and County of San Francisco, 25 Cal.2d 37, 44, 152 P.2d 625; In re Estate of Yoell, 160 Cal. 741, 743, 117 P. 1047.

In the Pacific Finance Company case the court was considering the diligence of the parties and the penalty that would have been exacted by dismissing the cross complaint. The latter pleading had been filed from necessity. Having been forced to plead his cross-action the defendant would have been deprived of his right to enforce his claim had it also been dismissed under section 583, Code of Civil Procedure.

The order should be reversed.

McCOMB, Justice.

WILSON, J., concurs.