Cameron Sales, Inc. v. Klemish

• Decision Date: 02 January 1970
• Docket Number: No. 10354,10354
• Citation: 93 Idaho 451,463 P.2d 287
• Parties: CAMERON SALES, INC., a corporation, Plaintiff-Respondent, v. Lorin F. KLEMISH, Defendant, Cassia National Bank, a corporation, and Co-op Supply Association, Inc., a corporation, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 287

463 P.2d 287

93 Idaho 451

CAMERON SALES, INC., a corporation, Plaintiff-Respondent, v. Lorin F. KLEMISH, Defendant Cassia National Bank, a corporation, and Co-op Supply Association, Inc., a corporation, Defendants-Appellants.

No. 10354.

Supreme Court of Idaho.

Jan. 2, 1970.

Nielson, Nielson & Nielson, Burley, for appellants.

Goodman & Duff, Rupert, for respondent.

Church, Church & Snow, Burley, for defendant.

McFADDEN, Chief Justice.

This appeal involves the division of $4,393.27, proceeds of a grain crop, and arises out of a dispute as to the priority between a claimed farm laborer's lien asserted by Cameron Sales, Inc., the plaintiff-respondent, a crop mortgage held by the defendant-appellant, Co-op Supply Association, Inc. (hereinafter referred to as Co-op Supply), and a crop and chattel mortgage held by defendant-appellant Cassia National Bank (referred to herein as the bank).

On June 14, 1967 Lorin Klemish, a defendant in default in this action, mortgaged his interest in a grain crop to the Co-op Supply, to secure a $8,700 line of credit against which he would be entitled to draw for farm supplies, including fertilizer, seed and fuels. This mortgage was recorded on June 12, 1967, and Klemish subsequently drew $6,414 in supplies under this mortgage. Klemish also mortgaged his interest in the same grain crop, along with his interest in hay and beet crops and thirty head of white face calves with increase, to the Cassia National Bank as security for a $2,500 cash advance. Later as provided by the mortgage, the bank advanced an additional $400 secured by the same mortgage. This mortgage to the bank, dated July 31, 1967, was recorded August 2, 1967. Although it was subsequent to the Co-op Supply Mortgage, the Co-op Supply had previously agreed to subordinate its prior first mortgage to the lien of the $2,500 advanced by the bank, but not as to the $400 later advanced by the bank.

Respondent Cameron Sales filed its action claiming a lien in the amount of $2,000 against the proceeds of the grain crop arising out of the following transaction with defendant Klemish. In 1965 Cameron Sales sold to Mr. Klemish an International Harvester grain combine on a conditional sale contract. Klemish, having paid a total of $2,500 toward the purchase of this machine, defaulted on payments in 1967 and the combine was repossessed by the respondent, who held it for resale from the spring of 1967 until August of that year. In August Klemish contacted the respondent regarding use of the combine to harvest his 1967 grain crop with was mortgaged to the two appellants.

Klemish and the respondent entered into a written agreement, which they called a 'Custom Harvest Agreement,' under the terms of which respondent returned the combine to Klemish to harvest the grain crop and Klemish agreed to pay to the respondent $2,000 on or before September 20, 1967. The written agreement also stated that

'The Employer (Klemish) understands that there will be a lien upon said crop for the costs and expenses incurred in this harvest agreement and said Corporation (respondent) may file said lien at any time it deems itself insecure hereunder.'

The agreement also provided that Klemish would pay all repair costs and furnish the gas and oil for the combine. Although the agreement provided that either party could furnish the operator of the machine, Klemish actually operated the machine himself.

The day following execution of the 'Custom Harvest Agreement' by Cameron Sales and Klemish, Cameron Sales executed an 'Option Agreement' to Klemish, giving him an option to purchase the self-propelled combine for $4,500 with the option to be exercised by paying $2,000 with 6% interest on September 20, and the balance with interest on October 1, 1968. If the September 20, 1967 payment was not made, the option terminated at that date.

Klemish used the combine to harvest 180 acres of grain, whereupon the respondent immediately filed a farm laborer's lien upon the grain for $2,000 plus $25 lien costs. Klemish then sold the grain to Union Seed Co. fro $4,393.27, paid by check, the subject of this litigation, which check was made payable to Klemish, respondent, and the two appellants.

The parties could not agree upon a distribution of the grain proceeds. A meeting was held on January 13, 1968 at the office of Norman H. Nielson, counsel for both the Co-op Supply and the bank, to discuss the problem. The meeting was attended by Mr. Cameron and his counsel, Mr. Klemish, Mr. Kruse, manager of the Co-op Supply, and Mr. Nielson. As concerns this meeting, the trial court found:

'At this meeting it was agreed that plaintiff (Cameron Sales) should have the first $2,000.00 of the grain proceeds, in return for which defendant (appellant) Co-op Supply Assn. Inc. would, and did, receive Klemish's assignment of the cattle contract (to the extent of 50 head of cattle) as security for Klemish's indebtedness to it. Klemish endorsed and turned over the grain proceeds check; no one else has endorsed the check to this day.'

On February 23, 1968, Cameron Sales filed the present action claiming a farm laborer's lien by virtue of the custom harvest agreement made between Klemish and the respondent. Nothing further occurred until June 1968 at which time Cameron Sales again repossessed the self-propelled combine from Klemish and sold it on July 23, 1968 for an undisclosed sum. On August 29, 1968, appellants answered the complaint, and the case proceeded to trial.

Following trial, the court entered judgment for Cameron Sales in the amount of $2,000, not on the basis of the farm laborer's lien, but rather on the ground that all parties had made a compromise and settlement of the claim, which was adequately supported by consideration and enforceable. The court specifically found against respondent Cameron Sales on its theory of foreclosing a farm laborer's lien. The Co-op Supply and the bank have appealed to this court.

No cross-appeal was taken as to the trial court's ruling that I.C. § 45-301 (which limits the right to a farm laborer's line to a 'person who does any labor on a farm' in harvesting crops) was not applicable here for the reason that Cameron Sales did not do any labor on the crop.

Both appellants, Co-op Supply and the bank, contend that this determination should end the inquiry since the instant action was initiated on the theory that Cameron Sales was entitled to a farm laborer's line. They contend that the trial court erred in overruling their objection to testimony pertaining to the January 13, 1968 meeting, and, further, that the trial court erred in allowing Cameron Sales, at the close of all evidence, to amend the pleadings to conform to the proof to show the existence of a compromise and settlement.

The rule is well established that a trial court has wide discretion in permitting amendments of pleadings at any stage of the proceedings to conform to the proof. Even prior to adoption of Idaho Rules of Civil Procedure, Idaho recognized liberality in this regard. See Pennsylvania-Coeur D'Alene Mining Co. v. Gallagher, 19 Idaho 101, 112 P. 1044 (1910); Gaskill v. Jacobs, 38 Idaho 795, 225 P. 499 (1924). I.R.C.P. 15(b) states in pertinent part that

'If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.'

At the trial both appellants were represented by the same counsel, even though their interests were opposed to each other by reason of their different interests in the check representing the proceeds of the grain crop. Appellants objected to the admission of any evidence relating to the January 13, 1968 meeting. The record, however, fails to show any prejudice of such nature as to require a reversal in that regard. The record reflects that counsel representing both appellants was present at the meeting, which was held in his office. At that meeting he purportedly was representing both parties. The record fails to reflect that any request was made for a continuance of the trial in order to better prepare a defense to meet this issue presented by this evidence of a compromise. The appellants argue that the trial court erred in allowing the respondent at the close of the evidence to amend his complaint to allege a compromise agreement because such amendment, they contend, introduced a new cause of action. I.R.C.P. 15(b) does not bar amendments which change the cause of action or theory of the case. Moore states that

'Rule 15(b) has rejected any concept that such amendments are barred if they result in a change of the plaintiff's 'cause of action.' Rule 15(b) does not even limit the amendment to the transaction or occurrence set forth in the pleadings; the only apparent limitation is that the court have jurisdiction over the matter tried, although as a matter of practice issues tried by implied or express consent ordinarily do arise from the same general set of facts set forth in the complaint. * * * The fact that this involves a change in the nature of the cause of action, or the legal theory of the action, is immaterial so long as the opposing party has not been prejudiced in presenting his case.'

3 Moore's Federal Practice, 15.13(2), pp. 984-985 (2d...