Cohen v. Mayflower Corp., 4352
| Decision Date | 25 April 1955 |
| Docket Number | No. 4352,4352 |
| Citation | 86 S.E.2d 860,196 Va. 1153 |
| Court | Virginia Supreme Court |
| Parties | DONALD COHEN, TRADING AS DEECEE ASSOCIATES, AND UNITED STATES CASUALTY COMPANY v. MAYFLOWER CORPORATION. Record |
Shapero & Shapero, for the plaintiffs in error.
P. A. Agelasto, Jr. and Woodward & Ward, for the defendant in error.
Mayflower Corporation, hereinafter referred to as the plaintiff, filed a motion for judgment against Donald Cohen, trading as Deecee Associates, and United States Casualty Company to recover damages for the alleged breach of two written contracts whereby Cohen had agreed, for the sum of $20,895, to furnish the necessary labor, materials and equipment and perform certain work on buildings owned by the plaintiff. Cohen, as principal, and United States Casualty Company, as surety, executed a bond in the penalty of $21,000 guaranteeing the performance of the 'contract' (sic). There was a trial before a jury which resulted in a verdict and judgment of $21,000 in favor of the plaintiff against both defendants, and to review that judgment the present writ of error was allowed.
Mayflower Corporation owns a large 16-story brick apartment building with an adjacent one-story brick shopping center located near the ocean front at Virginia Beach. Shortly after the completion of the buildings serious leaks developed in both of them, and to correct this condition the plaintiff asked for bids for waterproofing the buildings. The written bids of Cohen to do the work, and the acceptances thereof by the plaintiff, are printed in the margin. 1
'DEECEE ASSOCIATES
'Donald Cohen
'April 29, 1952
'Re: Caulking of all windows, painting of all exterior trim, and waterproofing of all exterior brick surfaces on one-story Commercial Center adjacent to Mayflower Apartments.
'Yours very truly,
'DEECEE ASSOCIATES
'Donald Cohen
'Deecee Assoc.
'Per Donald Cohen'
The performance bond, which is in the usual form, was executed on May 1, 1952.
Cohen started work on the contracts in May, 1952, and on June 26 wrote the plaintiff that the work had been completed and that the balance was due. In this letter Cohen stated in part:
'This work has been completed as of this date and we will appreciate a check * * * which covers the following contracts:
'1. Waterproofing of the Mayflower Apartments $20,000.
'2. Waterproofing of the shopping center $895.
* * *
On or about July 31, 1952, the plaintiff paid Cohen the amount due under the contracts. Shortly thereafter it was found that the buildings were still leaking badly in the locations which Cohen had attempted to remedy. Cohen was notified and on several occasions from the fall of 1952 through the early summer of 1953 he returned and attempted to correct the situation, but was unable to do so. Finally, by letter dated August 28, 1953, the plaintiff notified Cohen that in view of his failure to perform the contracts the plaintiff would have the work done by someone else and would look to Cohen and the surety for reimbursement for the cost thereof. A copy of this letter was sent to the surety company. In reply, both Cohen and the surety company took the position that there had been no breach of the contracts and denied liability. Thereupon the plaintiff engaged another contractor, Harry E. Paul, to waterproof the buildings at a cost of $23,500.
The evidence on behalf of the plaintiff showed that the work done by Cohen had not corrected the leaks, that numerous window frames had not been properly caulked, and that many open mortar joints in the brick walls of the apartment building had not been properly filled.
There is further evidence that Paul, the second contractor, was successful in correcting these conditions and stopping the leaks.
At the trial in the lower court the defendant admitted that the leaks had not been corrected and the buildings had not been waterproofed by Cohen's work. But they contended that under the terms of the contracts Cohen was not obligated to waterproof the buildings; that his undertaking was merely to perform certain specified work, namely, to apply mortar where required, caulk the window frames, caulk the copings, and apply waterproof paint to the outside surface of the bricks, and that this was done. It was further contended that the provision in the contract that 'The above work is covered by our standard two-year guarantee against the penetration of water through the surfaces treated by us,' bound Cohen to 'service' for a period of two years the work done by him; that is, during the specified period Cohen would, at his own expense, attempt to correct any leaks which might develop.
These contentions are entirely devoid of merit. Cohen admitted that before he submitted his bids he examined the buildings, knew of the conditions which caused the leaks, and knew that the plaintiff wanted these corrected. It is absurd to say that in this situation the parties contemplated that Cohen was bound merely to furnish and apply the specified materials and do the specified work, regardless of whether the desired results were accomplished. Moreover, when Cohen wrote the plaintiff on June 26 that the work had been completed he demanded payment for 'Waterproofing of the Mayflower Apartments $20,000,' and 'Waterproofing of the shopping center $895. ' In the same letter he said, ' This letter clearly shows that the defendant, Cohen, interpreted the contracts as placing upon him the obligation to stop the leaks and waterproof the buildings.
Accordingly, the trial court correctly instructed the jury that under the provisions of the contracts the defendant, Cohen, undertook to waterproof the walls, window frames, etc., 'so as to prevent the penetration of water through these areas for a period of two years.'
The main question in the case and that which prompted the granting of this writ of error is, What effect did the failure of the defendant, Cohen, to register as a contractor and obtain the license required by the provisions of Chapter 7, Title 54, of the Code of Virginia (§§ 54-113 to 54-145, 2 inclusive), have upon the right of the plaintiff, Mayflower Corporation, to maintain this action?
The defendants argue that since 'the aggregate amount of the contracts * * * was for more than $20,000,' and since Cohen had not registered and had not obtained the license required by the provisions of the chapter, the contracts were 'illegal and void' under our holding in Bowen Electric Co. v. Foley, 194 Va. 92, 100, 72 S.E. (2d) 388, 393, and that consequently an action for damages for breach of the contracts and the performance bond cannot be maintained.
The statute applies 'when the cost of the undertaking * * * is twenty thousand dollars or more. ' Code, § 54-113. While there were actually two separate contracts, one for $20,000 and the other for $895, the case was tried in the lower court and presented to us on the basis that it involved the breach of a single contract for $20,895, the performance of which was guaranteed by a single bond. There was no apportionment of damages between the two contracts. However, if the contracts be treated as separate, the claim of illegality would, of course, apply only to the contract for $20,000, which would be within the statute. No question could then arise as to the illegality of the contract for $895, and the right to sue for its breach.
It is, of course, elementary that 12 Am. Jur., Contracts, § 10, p. 507. See also, Corbin on Contracts, Vol. 5, § 993, p. 7; 17 C.J.S., Contracts, § 10, pp. 331, 332.
An agreement may be void and of no legal effect because public policy forbids that a contract be entered into with respect to the subject matter. An example of this is found in Roller v. Murray, 112 Va. 780, 72 S.E. 665,38 L.R.A. (N.S.) 1202, Ann. Cas. 1913B 1088, relied on by the defendants. In that case we held that a contract whereby an attorney had agreed to carry on litigation at his own expense was 'contrary to public policy and void' and that there could be no recovery either on the agreement or for services rendered thereunder.
Again, an agreement may be void and of no legal effect because the statute forbids an agreement with respect to the subject matter with which the parties are undertaking to contract. For example, where the statute forbids the sale of intoxicating liquor an agreement for such sale is void.
But the contract with which we are here concerned suffers from neither of these infirmities. There is nothing immoral or contrary to public policy in a construction contract involving $20,000 or more. Neither does the statute (Code, § 54-113 ff.), either expressly or impliedly, forbid such a contract. It merely prohibits unqualified persons -- that is, those who have not registered or taken out the required license -- from entering into such an agreement.
There is a wealth of authority on the legal effect and consequences of contracts entered into by persons who have failed to procure licenses required by law. See Williston on Contracts, Rev. Ed., Vol. V, § 1630 ff., p. 4560 ff; Id., Vol. VI, § 1765 ff., p. 5007 ff; Corbin on Contracts, Vol. 6, § 1510 ff., p. 961 ff; 33 Am. Jur., Licenses, § 68 ff., p. 384 ff; 53 C.J.S., Licenses, § 59 ff., p. 711 ff.
While such contracts are frequently termed 'void,' the authorities which...
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