Opinion
May 16, 1972.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 345
Petersen, Evensen, Mattoon & Tracey, William F. Mattoon, Pueblo, for defendants, Donald Wayne Owens, Eleanor M. Owens, Don Owens, General Contractor, Inc. and Philip Kalish.
Kettlekamp & Vento Pueblo, for plaintiff-appellant.
Hodges, Harrington, Kerwin & Otten, Arthur E. Otten, Jr., Richard W. Breithaupt, Denver, for defendant-appellee, Rainbo Bakers, Inc.
ENOCH, Judge.
Two separate appeals (No. 70--591 and No. 70--604, 497 P.2d 346) were filed in this court, both of which originated from the same judgment of the trial court. These appeals were consolidated by this court for purposes of briefs and oral arguments. However, since the issues are not related and there is some difference in parties, we have found it to be more expedient to determine the two appeals by separate opinions, published on this same date.
Midtown National Bank, plaintiff-appellant (bank), initiated this action, alleging several claims for relief against the named defendants. Trial was to the court and at the close of plaintiff's case, a judgment of dismissal was granted as to defendant-appellee, Rainbo Bakers, Inc. The other named defendants were not affected by this judgment and are not parties to this appeal. The bank's claim against Rainbo is based on an alleged assignment to the bank of the proceeds due under a construction contract. We affirm the judgment of the trial court.
On September 22, 1967, Donald Wayne Owens, a general contractor, entered into a contract with Rainbo for the construction of a building. The contract contained a clause to the effect that Owens could not assign the contract without the consent of Rainbo. At the insistence of the bank from which Owens was obtaining financing, and without the knowledge of Rainbo, Owens formed a corporation and assigned the Rainbo contract to the corporation. On September 25, 1967, the corporation assigned the proceeds due under the Rainbo contract to the bank. There is a dispute as to whether Rainbo knew about the assignment to the bank on September 25, 1967, or not until about May 3, 1968. However this point is immaterial in that the bank makes no claim on Rainbo for the periodic payments made to Owens during construction prior to May 3, 1968.
On or about May 10, 1968, Rainbo made a payment to Owens of $5,831.51 which Owens deposited in his corporate bank account. On May 24, 1968, the bank seized the balance in this account ($4,641.81) and applied it to one of Owens' notes held by the bank. In July 1968, Owens filed a petition in bankruptcy, stating that he owed in excess of $30,000 to subcontractors and materialmen on the Rainbo job. Subsequently, the bonding company on the Rainbo job, St. Paul Fire and Marine Insurance Company, was required to pay in excess of $30,000 to finish the Rainbo job and clear the liens on the property. Rainbo then paid the bonding company about $13,000, which was the retainage and balance due at the completion of the construction contract. This payment to the bonding company was made pursuant to a prior valid assignment contained in the bond.
The bank now claims that Rainbo owes the bank $5,831.51, the amount Rainbo paid Owens on May 10, 1968, and the additional $13,000 Rainbo paid the bonding company, on the basis that all the proceeds of the contract had been assigned to the bank and Rainbo at that time knew of the assignment.
There is considerable disagreement between the parties as to whether there was a valid assignment to the bank which was binding on Rainbo. We have determined, however, that even if the assignment was valid and binding on Rainbo, Rainbo is not liable to the bank in that Rainbo did not owe Owens or his corporation any money after May 3, 1968.
To establish its right to recover, the bank had the burden of proving that Rainbo was obligated by its contract to pay monies to Owens. The bank, as assignee of Owens, had no greater rights under the contract than Owens would have had against Rainbo. Matson & Mulhausen Construction Co. v. Boulevard National Bank, 28 Colo.App. 427, 475 P.2d 356. The mere fact that Rainbo paid Owens $5,831.51 on May 10, 1968, does not, in and of itself, prove that Rainbo owed any money to Owens at that time. To the contrary, Owens' petition in bankruptcy reveals that Owens owed over $30,000 to subcontractors and materialmen on the Rainbo job and the payment by Rainbo to Owens was a mistake. The trial court's finding that Rainbo owed nothing to Owens in May 1968, and the court's dismissal of the bank's claim against Rainbo is amply supported by the evidence.
Judgment affirmed.
COYTE and DWYER, JJ., concur.