Davis Co. v. Superior Court

• Decision Date: 23 October 1969
• Citation: 1 Cal.App.3d 156,81 Cal.Rptr. 453
• Court: California Court of Appeals Court of Appeals
• Parties: DAVIS COMPANY, aka the Davis Company, and David R. Davis, Petitioner, v. The SUPERIOR COURT OF the CITY AND COUNTY OF SAN DIEGO, Respondent; ESSEX CHEMICAL CORPORATION, Real Party in Interest. Civ. 9904.

Page 453

81 Cal.Rptr. 453

1 Cal.App.3d 156

DAVIS COMPANY, aka the Davis Company, and David R. Davis, Petitioner, v. The SUPERIOR COURT OF the CITY AND COUNTY OF SAN DIEGO, Respondent ESSEX CHEMICAL CORPORATION, Real Party in Interest.

Civ. 9904.

Court of Appeal, Fourth District, Division 1, California.

Oct. 23, 1969.

Opinion on Denial of Rehearing Nov. 7, 1969.

Hearing Denied Dec. 17, 1969.

Hervey & Mitchell, Hillyer & Irwin and Michael F. Welch, San Diego, for petitioner.

No appearance for respondent.

Procopio, Cory, Hargreaves & Savitch, San Diego, for real party in interest.

OPINION

COUGHLIN, Associate Justice.

Essex Chemical Corporation sued Davis Company and others to recover the value of material furnished to and used by Davis in the performance of a subcontract in connection with the construction of San Diego Stadium. Davis cross-complained for breach of warranty claiming the material furnished was not suitable for the purpose intended, as a result of which it sustained a loss in the sum of $23,405.02 because the defective material had to be removed and other material installed in its place. Essex moved for a summary judgment on the cross-complaint on the ground Davis was not a licensed contractor and thus was seeking recovery on an 'illegal and void contract'. The court granted the motion but allowed Davis to amend its pleadings to claim a set-off on account of the breach of warranty to the extent of Essex's claim. Davis seeks a writ of mandate directing the trial court to set aside its order granting the motion for partial summary judgment. Mandamus is a proper proceeding to review such an order. (Field Research Corp. v. Superior Court, 71 A.C. 119, 120, 77 Cal.Rptr. 243, 453 P.2d 747.)

The issue for determination is whether an unlicensed subcontractor may maintain an action for breach of warranty against a materialman furnishing material used by the subcontractor in performing his subcontract.

In California, by statute, a contractor must be licensed; it is unlawful, and a misdemeanor, for 'any person to engage in the business or act in the capacity of a contractor * * * without having a license therefor' (Bus. & Prof.Code, § 7028); and a 'person engaged in the business or acting in the capacity of a contractor' may not bring or maintain 'any action in any court of this State for the collection of compensation for the performance of any act or contract for which a license is required' unless he was a duly licensed contractor at all times during the performance of such act or contract. (Bus. & Prof.Code, § 7031.)

The purpose of the licensing requirement is to protect the public from the perils incident to contracting with incompetent or untrustworthy contractors. (Lewis & Queen v. N. M. Ball Sons, 48 Cal.2d 141, 149--150, 308 P.2d 713; Steinbrenner v. J. A. Waterbury Constr. Co., 212 Cal.App.2d 661, 666, 28 Cal.Rptr. 204; Grant v. Weatherholt, 123 Cal.App.2d 34, 43.) The penalty provisions of the statute are construed and applied accordingly. The court will not impose penalties for noncompliance not provided by the statute. (S & Q Construction Co. v. Palma Ceia Development Organization, 179 Cal.App.2d 364, 367--368, 3 Cal.Rptr. 690; Grant v. Weatherholt, Supra, 123 Cal.App.2d 34, 43, 266 P.2d 185.) The penalty provision proscribing the maintenance of an action by an unlicensed contractor is limited to an action 'for the collection of compensation for the performance of any act or contract for which a license is required.' (Bus. & Prof.Code, § 7031.) The term 'compensation' as used in the statute 'denotes sums claimed as an agreed price, fee or percentage earned by performance, and also sums claimed as the reasonable value of work done under implied contract.' (Grant v. Weatherholt, Supra, 123 Cal.App.2d 34, 43, 266 P.2d 185, 191.) The illegality attendant upon engaging in the business or acting in the capacity of a contractor without a license attaches only to transactions or contracts for construction and similar work described in Business and Professions Code, Sections 7026 and 7026.3, which define the activities of a person as a contractor subjecting him to the licensing requirement. (See S & Q Construction Co. v. Palma Ceia Development Organization, supra, 179 Cal.App.2d 364, 367, 3 Cal.Rptr. 690; Marshall v. Von Zumwalt, 120 Cal.App.2d 807, 810, 262 P.2d 363.) As a consequence, an unlicensed contractor may bring and maintain an action for the breach of a contract not within the scope of the protective purpose of the statute. (McCarroll v. L. A. County, etc., Carpenters, 49 Cal.2d 45, 69, 315 P.2d 322; Grant v. Weatherholt, Supra, 123 Cal.App.2d 34, 43, 266 P.2d 185; Galich v. Brkich, 103 Cal.App.2d 187, 190, 191, 229 P.2d 89; Norwood v. Judd, 93 Cal.App.2d 276, 286, 289, 209 P.2d 24.)

In the case before the trial court Davis, by its cross-complaint, is not seeking compensation for the performance of its...