Opinion ID: 1136480
Heading Depth: 1
Heading Rank: 1

Heading: R.C.P. 15(c) provides:

Text: Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. Appellant's objection to the admission of exhibits and testimony concerning the January 13, 1968 meeting was directed solely to the competency and relevancy of the evidence as it applied to the issue before the court, i.e., whether or not there was a lien in favor of Cameron Sales. After the trial court determined to allow the amendment of the pleadings, under the provisions of I.R.C.P. 15(c), such amendment would relate back and the relevancy to the issues under the amended pleading becomes apparent. It is our conclusion that the trial court did not err in granting the motion to amend. The appellants also contend that, in any event, there was no compromise or settlement as between the parties here because the parties never intended any such settlement and that there is no consideration to support such settlement. It should be noted that the trial court did find there was a compromise and settlement reached by the parties and that it was supported by adequate consideration. In Muncey v. Children's Home Finding & Aid Society, 84 Idaho 147, 369 P.2d 586 (1962), this court stated: It is generally recognized that an attorney has `   the general implied or apparent authority to enter into or make such agreements or stipulations, with respect to procedural or remedial matters, as appear, in the progress of the cause, to be necessary or expedient for the advancement of his client's interest or to accomplishment of the purpose for which the attorney is employed.' 7 C.J.S. Attorney and Client § 100, p. 917. Yet it is well settled that `   The implied authority of an attorney ordinarily does not extend to the doing of acts which will result in the surrender or giving up any substantial right of the client.   ' 7 C.J.S. Attorney and Client § 79, p. 897. (at 151-152, 369 P.2d at 588) See also: Evans v. Power County, 50 Idaho 690, 1 P.2d 614 (1931); Storey v. United States Fidelity & Guaranty Co., 32 Idaho 388, 183 P. 990 (1919). Here there was no showing that the attorney had the actual authority to compromise or settle the claim on behalf of the bank. On the contrary, Mr. Harward testified at the trial that as representative of the bank in this matter he did not give Mr. Nielson any authority to compromise the claim. Nor does it appear that the bank later ratified its attorney's actions. There was no showing that the bank had knowledge of the unexecuted compromise agreement and Mr. Nielson was not called to testify that he advised the bank of the compromise. The respondent's argument, then, that the bank stood by while others acted in reliance upon the compromise and should now be estopped from denying its existence is not well founded. Ratification by conduct cannot be inferred in the absence of any showing that the client had knowledge of its attorney's action. Storey v. United States Fidelity & Guaranty Co., supra. It is our conclusion that the appellant bank was not bound by any compromise and settlement and that the trial court was in error in holding that it had waived its mortgage security in favor of Cameron Sales. However, insofar as appellant Co-op Supply is concerned, the trial court found Around the first of August, 1967 Klemish came to plaintiff [Cameron Sales] to obtain the services of the combine to harvest the 1967 grain crop. Plaintiff advised Ralph Kruse, manager of Co-op Supply Assn. Inc., of the proposed harvest arrangement, and it was understood by them that harvest would be necessary to realize on the grain crop. This finding is sustained by competent evidence. And the court further stated: Plaintiff furnished a machine in which it had a substantial, if not full, interest, for the harvest of the mortgaged grain. Defendant Co-op Supply Assn. Inc. had a prior knowledge of, and acquiesced in, the proposal to furnish the machine for said purposes. At the time of the January 1968 meeting, Cameron Sales had an agreement with Klemish that $2,000 was to be paid for use of the self-propelled combine. This agreement also provided: That there will be a lien upon said crop for the costs and expenses incurred in this harvest agreement   . Klemish, who defaulted in this action never contested the validity of this agreement. The Co-op Supply at the January 1968 meeting agreed that Cameron Sales should have its $2,000 out of the $4,393.27, and that Klemish, to further secure Co-op Supply, would execute an assignment of his interest in some fifty head of cattle, in which Klemish had an interest by reason of a cattle feeding agreement with one Newcomb. Klemish endorsed the grain check and executed the security instrument to Co-op Supply, which agreement was recorded by Co-op Supply's counsel on January 31, 1968. There is no question that Co-op Supply was a party to this agreement, the manager being present and represented by its attorney, Mr. Nielson. The agreement was adequately supported by consideration in that in exchange for Co-op Supply's releasing its rights to the grain proceeds, Klemish gave Co-op Supply additional security in its cattle. Thus insofar as Co-op Supply is concerned, Cameron Sales is entitled to its share of the proceeds of the grain check, subsequent to satisfaction of the bank's interest therein. The judgment of the trial court insofar as the appellant Co-op Supply is concerned, thus, must be affirmed. As previously pointed out, however, that portion of the judgment of the trial court which held that appellant bank was bound by the compromise agreement was in error and must be reversed. However, as the trial court stated: Nevertheless, this being an equity case, the evidence being before the Court and the court can proceed to dispose of the case as it was made by the parties and the proof. See: Anderson v. Whipple, 71 Idaho 112, 122, 227 P.2d 351, 357 (1951); Bethlahmy v. Bechtel, 91 Idaho 55, 68, 415 P.2d 698 (1966), and cases therein cited. In the instant case the record is undisputed that appellant bank not only had as security for the sums advanced to Klemish, a mortgage on Klemish's interest in the crop of grain, but also on his interest in certain other crops, as well as on 30 head calves White face and Lessee's share of all increase of calves. This presents an issue which the trial court should determine, and that is whether appellant bank should first be required to exhaust its other security before resorting to its interest in the grain proceeds. It has been held that where a junior lienor has a security interest in certain property and a senior lienor has a security interest in the same property and also in other property, a court of equity may compel the senior lienor to first resort to the other property in satisfaction of its claim. American Nat. Ins. Co. v. Vine-Wood Realty Co., 414 Pa. 263, 199 A.2d 449 (1964); Johnson v. Lentini, 66 N.J. Super. 398, 169 A.2d 208 (1961); Equitable Sav. & Loan Ass'n v. 6322 20th Ave. Corp., Sup., 235 N.Y.S.2d 394 (N.Y. Sup. Ct. 1962); Victor Gruen Associates Inc. v. Glass, 338 F.2d 826 (9th Cir.1964); Rundquist v. O'Leary, 184 Kan. 496, 337 P.2d 1017 (1959). Thus the judgment of the trial court insofar as it holds that appellant Co-op Supply Association, Inc., was a party to the settlement and has waived its lien on the proceeds of the sale of the mortgaged grain is affirmed. That portion of the judgment which holds that appellant Cassia National Bank was a party to the settlement agreement is reversed, and the cause is remanded for the trial court to determine whether the bank should be required first to resort to its other security before it is awarded payment out of the crop proceeds which would diminish respondent Cameron Sales, Inc.'s interest in the check representing proceeds of sale of the mortgaged crop. No costs allowed. McQUADE, DONALDSON, SHEPARD and SPEAR, JJ., concur.