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decided: March 13, 1981.


No. 29 January Term, 1979, Appeal from an Adjudication and Order of the Superior Court dated September 25, 1978 and referenced to No. 425 October T., 1978 affirming a judgment of the Court of Common Pleas of Berks County, dated October 31, 1977, and referenced to No. 72 June T., 1976


Louis M. Shucker, John S. Alexander, Alan Linder, Reading, for appellant.

Roderick G. Snyder, Asst. County Sol., Louis R. Rizzuto, Reading, for appellee.

O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty and Kauffman, JJ.

Author: Larsen

[ 493 Pa. Page 505]


This is an appeal from a per curiam order of the Superior Court (Hoffman, Van der Voort and Spaeth, JJ., dissenting) affirming an order of the Court of Common Pleas of Berks County. We granted the petition for allowance of appeal in order to define the standards for the waiver of costs in appeals from adverse arbitration awards under the Act of June 16, 1836, P.L. 715, §§ 27, 28, as amended, 5 P.S. §§ 71, 72.

In 1976, an arbitration award in the amount of $587.02 was entered against appellant, Stephen D. Golla. Appellant, desiring to appeal this award to the court of common pleas for a trial de novo before a jury, filed a petition with the court of common pleas, pursuant to 5 P.S. § 72,*fn1 alleging

[ 493 Pa. Page 506]

    that he was unable to pay the "fees, costs and expenses" of appeal.*fn2 These costs are as follows:

Accrued costs $41.45

Appeal bond without surety

(rocognizance) 100.00

Arbitrators' fees 150.00

Appeal filing fee 10.00

Total $301.45

In his petition, appellant requested that he be permitted to pay only $51.45 -- the accrued costs and the appeal filing fee -- in installments; and that the remaining $250.00 -- the appeal bond and the arbitrators' fees -- be waived.

Although the lower court failed to make specific findings with respect to appellant's living conditions, the record contains uncontroverted evidence that appellant was 68 years old at the time of the hearing on his petition in 1977; that he had retired in 1971 and had been living since that time on an income comprised principally of Social Security benefits and a small pension; that he resided in a third floor walk-up apartment in the City of Reading; and that although his apartment had no telephone, he did own a black and white portable television, a broken radio, a toaster and a coffee pot.

[ 493 Pa. Page 507]

The court did find as a fact that appellant had a monthly income, including gifts from his sisters, of $273.90; that appellant owned a $31.00 savings account and a 1971 Chevrolet Malibu valued at approximately $1,100.00; and that appellant had monthly expenses for rent, food, clothing, household expenses and automobile operating costs of $263.12. The court further found that appellant could obtain his groceries and other necessities within walking distance of his apartment, and thus that his automobile was not a "necessity." The court concluded that "the defendant could prepay his court costs in full, prepay the arbitrators' fees in full and post a surety bond for $100.00, if he sold his Page 507} automobile." (Emphasis added). In accordance with its findings, the court refused to waive any costs and ordered that appellant pay $110.00 -- the appeal bond and the appeal filing fee -- in full; that he pay $150.00 -- the arbitrators' fees -- in installments of $10.00 per month; and that he pay any costs of litigation in monthly installments of $10.00 after the termination of the litigation.

We have determined that, under the circumstances of this case, the lower court's order requiring the payment of the $150.00 arbitrators' fees and the $100.00 appeal bond constituted an abuse of that court's discretion.*fn3

The Legislature, in enacting 5 P.S. § 72, made it lawful for a judge to relieve a party of the payment of "costs of the suit" if that party is, "by reason of poverty", unable to pay those costs. This Court has never had occasion to define those circumstances which constitute "poverty" within the meaning of the statute. The Superior Court has stated that "[t]he Act [of June 16, 1836] . . . is to be read not with an accountant's but a housewife's eyes. 'Poverty' does not refer solely to a petitioner's 'net worth' but to whether he is able to obtain the necessities of life." Gerlitzki v. Feldser, 226 Pa. Super. 142, 144, 307 A.2d 307, 308 (1973). We agree with the Superior Court that the determination of "poverty" within the meaning of § 72 is not to be a mere mathematical exercise offsetting credits against debits. Rather, all the facts and circumstances of the situation, both financial and personal, must be taken into the account.

Although courts in other jurisdictions have stated the guidelines differently, they have come to essentially the same practical conclusion: so long as an individual can pay the required costs and still obtain the necessities of life, he will be required to pay those costs before proceeding in

[ 493 Pa. Page 508]

    court; however, if the individual can afford to pay court costs only by sacrificing some of the items and services which are necessary for his day-to-day existence, he may not be forced to prepay costs in order to gain access to the courts, despite the fact that he may have some "excess" income or unencumbered assets.*fn4

In this case, the lower court found that appellant's automobile was not a necessity. However, individuals today customarily depend upon automobiles in order to obtain such necessities as food and medical care.*fn5 In view of the horizontal outgrowth of residential areas and the lack of centralization of vital services, modern society demands increased

[ 493 Pa. Page 509]

    mobility for its citizens. In this case, there is evidence in the record that appellant uses his car to obtain groceries, medical care and other necessities. He also uses his car to visit his sisters, his only living relatives, in an adjacent state. There is no evidence, however, concerning the availability and cost of alternate modes of transportation or the availability and cost of substitute goods and services that appellant now uses his automobile to obtain. We are satisfied from the record that appellant uses his automobile for legitimate, necessary purposes and that he is not attempting to subvert the purpose of § 72 by refusing to sell his automobile in order to generate funds for the payment of court costs. As the Supreme Court of Louisiana has stated:

[A] litigant is not regarded as necessarily disqualified from the privileges granted by the Act [allowing the waiver of costs if an individual is "unable to pay the costs of court, because of his poverty and lack of means"] if he does not dispose of or encumber . . . a modest automobile essential for family transportation.

Benjamin v. National Super Markets, Inc., 351 So.2d 138, 141 (La. 1977) (citation omitted).

Without selling his automobile, appellant is clearly unable to pay the costs of an appeal. According to the findings of the lower court, appellant has only $10.78 left at the end of each month. Even if appellant were to devote his entire excess income to paying the $250.00 here in issue, it would take him at least two years to fulfill this obligation: the law must not be so hard a taskmaster. We will not require appellant to contribute his "last dollar" in order to pay the costs of an appeal. The lower court was, therefore, in error when it found that appellant's car was not a necessity and that appellant was not in poverty within the meaning of § 72.*fn6

[ 493 Pa. Page 510]

To the extent that our 1896 decision in Noyes v. Brooks, 174 Pa. 632, 34 A. 285, 34 A. 450 (1896), is inconsistent with this opinion, it must be discarded. Noyes, our only prior decision construing "costs of the suit" within the meaning of § 72,*fn7 held that "there is no provision in the act [5 P.S. § 72] . . . authorizing the court or a judge thereof to make an order, in forma pauperis, relieving appellants . . . from complying with the third necessary prerequisite [recognizance] . . ." Id., 174 Pa. at 635, 34 A. at 450.*fn8 In so holding, this Court relied solely on the wording of §§ 71 and 72. However, the Court in Noyes failed to consider the purpose and effect of § 72.

The doctrine of stare decisis does not prevent us from departing from this solitary, stale precedent in order to re-examine and reinterpret § 72 in light of the policy and

[ 493 Pa. Page 511]

    purpose of that statute. As we said in Mayhugh v. Coon, 460 Pa. 128, 136, 331 A.2d 452, 456 (1975):

The doctrine of stare decisis was never intended to be used as a principle to perpetuate erroneous principles of law . . .

Where, as here, by our decision [] in [ Noyes ] . . . the Court distorted the clear intention of the legislative enactment and by that erroneous interpretation permitted the policy of that legislation to be effectively frustrated, we now have no alternative but to rectify our earlier pronouncements and may not blindly adhere to the past rulings out of a deference to antiquity.

Section 71 grants any party to compulsory arbitration the right to appeal an arbitration award, subject to the payment of required costs. While the imposition of these costs was certainly within the discretion and power of the Legislature, we think that the Legislature, in enacting § 72, nevertheless recognized that some parties would be unable to pay these costs and that it would be beyond the means of such parties to actually exercise their right of appeal. It is unfair, however, to hold, as did this Court in Noyes, that § 72 allows the waiver of some lesser costs, but not of other, more excessive, costs: so long as an appellant's inability to pay some of the costs of an appeal has the effect of precluding that appeal, the purpose of § 72 has been frustrated and the right granted in § 71 has been denied.*fn9 We conclude, therefore, that the purpose of the Legislature in

[ 493 Pa. Page 512]

    enacting § 72 was to ensure that qualified parties*fn10 would be able to take advantage of their right of appeal, regardless of their financial condition.*fn11 In order to give full effect to the language and purpose of § 72, we hold that the costs of an appeal bond and the arbitrators' fees are "costs of the suit" under § 72.

Accordingly, we direct that an order waiving the arbitrators' fees and the appeal bond be entered. The order of the Superior Court is reversed insofar as it is inconsistent with this opinion, and the case is remanded for further proceedings.*fn12

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