Johnson v. Neel

• Decision Date: 26 March 1951
• Docket Number: No. 16483,16483
• Citation: 123 Colo. 377,229 P.2d 939
• Parties: JOHNSON et al. v. NEEL.
• Court: Colorado Supreme Court

Page 939

229 P.2d 939

123 Colo. 377

JOHNSON et al. v. NEEL.

No. 16483.

Supreme Court of Colorado, en Banc.

March 26, 1951.

Katherine H. Johnson, Durango, for plaintiffs in error.

E. Ellison Hatfield, William C. Horther, Durango, Benjamin E. Sweet, Denver, for defendant in error.

MOORE, Justice.

We will herein refer to the parties as they appeared in the trial court, where plaintiffs in error were named 'petitioners,' and defendant in error was named 'respondent.'

Petitioners sought to remove a cloud upon the title to real estate owned by them and located in La Plata county, which cloud allegedly was created by the filing by respondent of a mechanic's lien. The specific grounds upon which petitioners sought the removal of said cloud upon their title were: That any labor performed in the construction of the dwelling house and garage mentioned in the lien statement was 'performed by persons other than the respondent'; that any materials furnished in the construction of said buildings, 'were furnished by persons other than the respondent'; and that the respondent, 'is not a person entitled to the provisions of The Mechanics' Lien Act.'

Respondent, for answer, denied every allegation set out in petitioners' complaint, and for counterclaim alleged that he entered into a verbal contract with petitioners to furnish labor and material, and to build and construct for them a dwelling house and other buildings upon the real estate owned by them. He further alleged that petitioners agreed to pay to him the cost of said labor and materials plus a contractor's fee of ten per cent thereof, and that payment was to be made by petitioners 'in monthly installments as the said labor and materials were furnished by respondent, each installment payment to be in an amount sufficient to cover and satisfy the entire amount due to respondent, under the terms of said verbal contract, for the labor and materials furnished, plus the contractor's fee of ten percent (10%) of said amount, during the preceding thirty day period.'

Respondent also alleged that pursuant to his contract he commenced work on or about the 7th of May, 1948, and diligently proceeded with the erection of the buildings, and furnished labor and material therefor until October 8, 1948; that the value of said labor and material thus furnished was $11,366.28; and that the petitioners failed and refused during all of said period of time to make any payment to respondent on account of said contract and thereupon he elected to treat the contract at an end, and on October 20, 1948, he filed his statement of mechanic's lien. Attached to the counterclaim filed by respondent was a statement duly executed by his attorneys, as follows:

'Demand For Trial By Jury

'Respondent Garland Neel does hereby demand a trial by jury in the above entitled action, both as to the issues raised under the petition and under the counterclaim.'

After motions filed by petitioners were overruled they filed an instrument entitled, 'Answer to Counterclaim of Respondent and Counterclaim of Petitioners,' in which they denied that they entered into a contract with the respondent upon a 'cost-plus' basis. They alleged that the oral contract with respondent was that they would pay him the sum of $7,300.00 upon completion of the carpenter work, masonry and roofing work which was to be done in accordance with plans and specifications furnished him. Petitioners further alleged that in the event any materials used by respondent were paid for by them, the value thereof was to be deducted from the maximum contract price of $7,300.00; that they expended $4,180.24 in acquiring materials to be used by respondent's carpenters, masons and roofers; and that on October 8, 1948, respondent, without just cause or excuse, refused to furnish further labor upon said buildings and thereby abandoned and breached his contract, notwithstanding that petitioners had performed 'each and every part of their said contract with respondent.' Petitioner offered to pay respondent the difference between $7,300.00 and the cost of materials paid for by them in the event that respondent would complete the buildings. They claimed compensatory damages in the amount of $11,041.95, plus $5,000.00 punitive damages. Respondent denied the facts upon which petitioners' claim for damages was based.

A pre-trial conference was held, at the conclusion of which the court entered an order in which it held, among other things, that under the pleadings the lien statement filed by respondent was invalid for the reason that the building was not completed and there had been no cessation from labor upon the unfinished structure for thirty days prior to the filing of the lien statement, as provided by section 23, chapter 101, '35 C.S.A. The order contained the following: 'In the opinion of the Court the contention of the petitioner is correct that if the respondent relies upon the provision for an unfinished contract and/or unfinished structure, the time for filing the lien claim statement would have started November 8th and ran for a period of 3 months therefrom.'

There also was a provision in the order that respondent be given ten days within which to amend his pleading for the purpose of meeting the stated objection to the legality of the lien statement, and it was further provided that if no such amendment was filed petitioners 'may draft an order holding said lien claim statement void, and with proper provisions to remove the cloud from the title of petitioner's property in question.' No amendment raising different issues was filed by respondent, and no further order was tendered to, or signed by, the trial court before trial of the action.

The above quoted demand for jury trial was filed March 15, 1949, and the case was reached for trial August 30, 1949, at which time no statement whatever was made by the court or any of the litigants as to whether or not the cause should be tried to a jury. No formal disposition was made of the demand for jury trial; the cause proceeded to trial to the court without a jury and all parties participated in said trial, without objection, at the conclusion of which the court entered its 'Findings of Fact, Conclusions of Law and Judgment,' from which we quote the following:

'It is the Conclusion of the Court, that the only contract the Court can find from the evidence existing between the parties was the contract between petitioners and respondent that respondent should do carpentry work, masonry work and roofing and furnish materials for the construction of the dwelling house, a two car garage and pump house on the property of the petitioners, and was to be paid therefor on the basis of cost of labor and materials plus 10% contractor's fee; that the petitioners failed to make payments from time to time as required; that the 8th day of October, 1948, on account of the failure of the petitioners to make payments the respondent ceased work under the contract; that the contract was then treated by both parties as being at an end. No binding contract was made by the parties to settle the controversy existing between them; that respondent as of said date was entitled to receive the sum expended by him for labor and materials plus the 10% contractor's fee.

'That as matters then stood there was an unfinished contract entered into by the respondent as principal contractor for an unfinished building; that the contractor was within his rights in refusing to proceed further upon the building without payment for the materials and labor theretofore placed in the construction of the buildings.

'That the mechanics lien claim was filed prior to the time provided by law for filing and is of no effect herein.

'It Is Therefore Ordered, Adjudged and Decreed:

'1: Mechanics lien statement filed in the office of the county clerk of La Plata County, Colorado and recorded in Book 275 at page 293 is null and void and does not constitute any lien on the property the lien described.

'2: Judgment is hereby entered in favor of respondent and against the petitioners, and each of them, for labor and materials furnished by respondent in the construction of said dwelling house, garage and pump house, together with 10% additional as contractor's fee; all in the sum of $11,586.47, together with interest thereon from the 8th day of October, 1948 to the date of this order, to-wit: the 24th day of September, 1949; said interest being in the sum of $668.10; For court costs in this behalf expended in the sum of $10.00.'

Upon application of petitioners for stay of execution the trial court entered an order which provided, inter alia:

'It Is Further Provided that as security for this, and any further stay of execution, petitioners shall execute a deed in favor of Walter C. Allan, Clerk of the District Court, conveying to the said Walter C. Allan, the approximately forty-eight (48) acres of land as described in the pleadings herein as belonging to petitioners, together with all improvements thereon; pay the expense of recording the same, and deliver to the said Walter C. Allan an abstract of title to said premises properly certified and showing merchantable title in them, subject only to the judgment herein rendered.

'Said conveyance to be conditioned that the same shall be security for the judgment in favor of the respondent as the same may be determined under the final judgment, order or decree in these proceedings, whether rendered by the judge of this Court, or by the Supreme Court of the State of Colorado, as follows: * * *'

Petitioners made no objection to this order, in which also was a provision for the sale of the property upon final disposition of this cause and for application of the proceeds of the sale as payment upon the judgment entered. Several motions were presented to the trial court; the pleadings as a whole were voluminous and somewhat confusing; and we have limited our analysis of the record to that portion thereof...