Miller v. Rush

• Decision Date: 22 June 1964
• Docket Number: No. 20437,20437
• Citation: 155 Colo. 178,393 P.2d 565
• Parties: William D. MILLER, Plaintiff in Error, v. Paul RUSH, Defendant in Error.
• Court: Colorado Supreme Court

Page 565

393 P.2d 565

155 Colo. 178

William D. MILLER, Plaintiff in Error, v. Paul RUSH, Defendant in Error.

No. 20437.

Supreme Court of Colorado, In Department.

June 22, 1964.

Rehearing Denied July 13, 1964.

Holland & Hart, Dwight K. Shellman, Jr., Denver, for plaintiff in error.

Milton Berger, Sidney Biderman, Denver, for defendant in error.

HALL, Justice.

On October 12, 1955, Miller, as purchaser, and Rush, as seller, entered into a written contract whereby Rush agreed to sell and Miller agreed to purchase Plot 6, Charlou Park Addition, known as 6464 Rim Road, with a residence to be constructed thereon by Rush for the agreed price of $63,000.00. Among other things the agreement provided:

'Title shall be merchantable in the seller. * * * the seller shall execute and deliver a good and sufficient warranty deed to said purchaser on or before January 10, 1956 * * *.

* * *

* * *

'* * * Prior to delivery of deed seller shall furnish waivers or releases of any and all mechanics' and materialmen's liens from any and all contractors, * * *.'

Rush completed the residence and on March 23, 1956, executed and tendered to Miller a warranty deed. At that time there was due and unpaid on the agreed price $25,000.00, and this amount was on that date paid by Miller to Rush and the deed delivered. Simultaneous with delivery of the deed and payment of the balance due and as a condition of making the payment, Miller required Rush to execute and deliver to him a written 'LIEN WAIVER' which is as follows:

'The undersigned does hereby waive, relinquish and absolutely release forever, all right now existing or which may hereafter accrue under the laws of the State of Colorado to claim mechanic's or materialman's lien or liens against the property described as follows:

Plot 6, Charlou Park Addition, Arapahoe County, Colorado, together with the improvements thereon, known as and numbered 6464 Rim Road, Englewood,

by virtue of work done and material furnished, and does hereby represent that all amounts due sub-contractors, materialmen and workmen employed by or working under the undersigned have been fully paid, and that all bills contracted by, through or under the undersigned for labor or materials which might become the subject of a mechanic's or materialman's lien or liens have been fully paid.'

On May 14, 1956, Pyramid Lumber and Supplies, Inc., and Hy Scott commenced an action against Miller and Rush. Each plaintiff alleged that they had furnished materials for the residence built on Plot 6, had recorded lien statements and each sought foreclosure. An additional lien claimant was permitted to intervene.

Miller, seeking to clear the property of the liens, filed a motion in the case seeking foreclosure. He requested permission to deposit with the court $14,000.00, an amount more then sufficient to pay the lien claims, and requested that on making the deposit an order be entered directing that the liens be released and that the claimants have recourse to the cash deposit in lieu of the real estate. By stipulation and order entered pursuant thereto the money was deposited and the liens on the real property released.

Rush answered the complaints of the lien holders and put in issue the amounts due. Miller filed his answer and cross-claim. His answer denied the claims of the lien holders; his denial was based on the fact that he was without knowledge with reference thereto.

For cross-claim against Rush, Miller set forth his contract with Rush and further alleged that:

'3. [Set forth in full is the above quoted lien waiver.]

* * *

* * *

'5. By virtue of the written instruments referred to in Paragraphs 1, [contract of sale], 2 [warranty deed] and 3 [lien waiver] above, Defendant Paul Rush is liable to Defendant William D. Miller for any and all sums which Defendant William D. Miller is or may become obligated to pay to Plaintiffs, or any of them, in or by reason of the within action.

'WHEREFORE, Defendant William D. Miller prays the Court to enter Judgment in his favor against Defendant Paul Rush in the amount of any Judgment entered in favor of plaintiffs, or any of them, against Defendant William D. Miller in the within action, for his costs expended herein, and for such other or further relief as may to the Court seem proper.'

On November 5, 1956, by agreement of all parties, findings and judgment were entered adjudicating all of the rights and duties of the parties asserted in the pleadings. Each lien holder had judgment for a specified amount and the amounts specified were paid out of the $14,000.00 deposit and the judgments satisfied.

The findings and judgmnet further provided that:

'8. [Finding] That satisfaction of the judgments in favor of said plaintiffs from and out of the sums heretofore deposited in the Registry of this Court by Defendant William D. Miller is ordered without waiver, release or settlement by Defendant William D. Miller with respect to any claim or claims of any nature whatsoever which he has or may have against Defendant Paul Rush; that Defendant Paul Rush owes to Defendant William D. Miller the sum of $11,400 on account of plaintiffs' said lien claims, said sum being the amount herein ordered paid by Defendant William D. Miller to satisfy the amounts owing from Defendant Paul Rush to plaintiffs; that Defendant William D. Miller is entitled to judgment against Defendant Paul Rush in the amount of $11,400.

* * *

* * *

'5. [Judgment] Defendant William D. Miller have judgment and judgment is hereby entered against Defendant Paul Rush in the amount of $11,400, together with interest at the rate of six per cent per annum until satisfied.'

The judgment that Miller obtained against Rush (1956) was partially satisfied in 1958 by payment to Miller of $6807.00. Miller, on November 4, 1960, filed a motion for supplementary proceedings under Rule 69, R.C.P.Colo., seeking to make discovery of assets of Rush that might be available for satisfaction of the balance due on the judgment. On presentation of this motion the trial court, ex parte and without notice, entered an order directing Rush to appear on November 25, 1960, and respond to said motion and order. (The record before us is silent as to whether Rush did or did not appear on the 25th, or at all.)

On November 29, 1960, Rush filed a debtor's petition in bankruptcy. Among debts listed is:

'26. Miller, William c/O Holland & Hart, Equitable Building, Denver, Colorado--1956 at Denver, Colorado--unliquidated judgment--damages 5,000.00'

On February 23, 1961, Miller filed his verified 'PROOF OF CLAIM IN BANKRUPTCY' wherein it is stated:

'3. That the consideration of said debt is as follows: The unpaid principal amounts, interest and costs as of the date of bankruptcy of a judgment of $11,400.00 rendered in the District Court in and for the County of Arapahoe, Colorado, Civil Action No. 12053, based upon deponent's claim against the bankrupt for the obtaining of money or property of deponent by false pretenses or false representations.

'4. That no part of the said debt or liability has been paid except the sum of Six Thousand Eight Hundred Seven Dollars on December 5, 1958.

* * *

* * *

'8. This claim is filed as an unsecured, secured, priority claim.' (Emphasis supplied.)

On July 18, 1961, the referee in bankruptcy entered his order 'DISCHARGE OF BANKRUPT' wherein appears the following:

'It further appearing that, after due notice by mail, objection to the discharge of said bankrupt was filed within the time fixed by the court; which after hearing was overruled;

'IT IS ORDERED that the said PAUL EUGENE RUSH be, and he hereby is, discharged from all debts and claims which, by the Act of Congress relating to Bankruptcy, are made provable against his estate, except such debts as are, by said Act, excepted from the operation of a discharge in bankruptcy.'

On December 5, 1960, Rush filed his 'PETITION TO TERMINATE HEARING.' (The hearing ordered November 4, 1960, for November 25, 1960.) The purpose of the petition was to obtain an order directing that no further efforts be made to collect on the judgment. Therein Rush alleges that he had filed his petition in bankruptcy and scheduled Miller's judgment as one of his debts, and that further 'inquiry as to this court is moot.'

This petition was set for hearing for May 25, 1962, at which time, and after full argument, the court stated:

'THE COURT: The Court finds that Civil Action No. 12053 was litigated, and that judgment entered therein on November 5, 1956; that there is no finding in that judgment that sounded in fraud; there has been no appeal; there has been no action.

'The Court further finds that there was a claim filed in the Bankruptcy Court setting out that the claim was based on the obtaining of money or property by false pretenses or false representations; that there is no indication that the Bankruptcy Court did not proceed to discharge this debt along with all others.

'It is the position of the trial court that the matter may not be relitigated in this Court, and that the discharge of the bankrupt act effects a bar.'

On June 4, 1962, Miller filed his motion for new trial or rehearing. On August 15 1962, this motion denied and the court ordered:

'IT IS THEREFORE ORDERED AND ADJUDGED that the collection of the judgment is barred by the discharge in bankruptcy * * *.'

Miller is here by writ of error seeking reversal, contending that the trial court should conduct a hearing on the true nature of Miller's claim and find that...