Martinez v. Research Park, Inc.

Citation1965 NMSC 146,410 P.2d 200,75 N.M. 672
Decision Date05 April 1965
Docket NumberNo. 7567,7567
PartiesJoe R. MARTINEZ, d/b/a Marco Construction Company, Plaintiff-Appellee, First American Indian Land, Inc., H. A. Jewsbury, d/b/a Yucca Plumbing & Heating and C. B. Roache, d/b/a B & D Electric Company, Defendants-Appellees, v. RESEARCH PARK, INC., Defendant-Appellant.
CourtSupreme Court of New Mexico
Sutin & Jones, Julius Wollen, Albuquerque, for appellant


Upon rehearing, the opinion originally filed is withdrawn and the following substituted:

NOBLE, Justice.

Research Park, Inc., a landowner, has appealed from personal judgments against it in favor of a general contractor and two subcontractors with whom it had no contractual relations, and from judgments foreclosing mechanic's and materialmen's liens against its land.

First American Indian Land, Inc. leased the land from Research Park, Inc. and contracted for the construction of certain structures thereon with Joe R. Martinez, d/b/a Marco Construction Company (hereinafter termed Marco). C. B. Roache, d/b/a B & D Electric Company (hereinafter termed Roache) and H. A. Jewsbury, d/b/a Yucca Plumbing & Heating (hereinafter termed Yucca) were subcontractors. All three filed claims of lien for amounts claimed to be unpaid under their respective contracts. The two subcontractors were made defendants in an action by Marco to foreclose his lien, and they each cross-complained against Research Park, Inc. seeking foreclosure of their respective liens.

The parties stipulated that the claims of liens were in proper form; that they stated the correct amounts due; that they were timely filed; and that the only issue before the trial court was whether a non-responsibility notice was posted by Research Park, Inc. in accordance with Sec. 61-2-10, N.M.S.A.1953. Marco, Roache and Yucca were awarded personal judgments against Research Park, Inc. for the amounts of their unpaid respective claims. The judgment also ordered foreclosure of the respective liens.

Counsel for the lienholders concede that the personal judgments entered against Research Park, Inc. are erroneous and require a reversal, since we held in Home Plumbing and Contracting Company v. Pruitt, 70 N.M. 182, 372 P.2d 378, and in Allison v. Schuler, 38 N.M. 506, 36 P.2d 519, that that personal judgment cannot be granted where there was no contractual relationship between the landowner and the lienors.

Because other questions argued will immediately arise upon remand, which we think will require our disposition, we consider them at this time.

The Contractors' License Law, Secs. 67-16-1 through 67-16-20, N.M.S.A.1953, requires contractors to be licensed, and Section 14 not only provides a criminal penalty but also imposes a forfeiture of the right to invoke the aid of the courts in the collection of compensation for the performance of construction work by an unlicensed contractor. The pertinent portion of the forfeiture clause reads:

'No contractor as defined by section 3 of this act shall act as agent or bring or maintain any action in any court of the state for the collection of compensation for the performance of any act for which a license is required by this act without alleging and proving that such contractor was a duly licensed contractor at the time the alleged cause of action arose.'

Since neither Marco nor Roache alleged that they were licensed contractors, the landowner argues that their complaints fail to state a cause of action and, by reason thereof, challenges the jurisdiction of the trial court. The cross-complaint of Yucca cannot be questioned on the jurisdictional ground because he did allege a license.

Clearly, foreclosure of a mechanic's lien arising out of a construction contract is an action seeking 'collection of compensation for the performance' of such work. An allegation that the contractor was duly licensed is a statutory prerequisite 'defined by section 3 of this act' follows that this allegation is essential in order to state a claim for relief, and we have consistently held that failure to state a cause of action is jurisdictional and may be raised for the first time on appeal. Campbell v. Smith, 68 N.M. 373, 362 P.2d 523.

Since the forfeiture clause only denies the right to bring an action to those contractors (defined by section 3 of this act' (Sec. 3, Ch. 197, Laws 1939) who were not licensed 'at the time the alleged cause of action arose,' it becomes necessary at the outset to determine whether Marco and Roache were such contractors. That determination depends upon what is meant by the term 'at the time the alleged cause of action arose.' If it means after breach by non-payment, it may well be that the forfeiture clause is unenforceable because of an express repeal of Sec. 3, Ch. 197, Laws 1939 (Sec. 67-16-3, N.M.S.A. Sec. 1953) by Sec. 1, Ch. 222, Laws 1961, effective July 1, 1961. As an aid in arriving at what the legislature meant by such term, it is important to decide whether the legislature intended contractors to be licensed when the contract was entered into and the work performed, or only at the time a breach of the construction contract occurred because of non-payment by the owner.

It is a familiar rule of statutory interpretation that statutes are to be interpreted with reference to their manifest object, and 'if the language is susceptible of two constructions, one which will carry out and the other defeat such manifest object, it should receive the former construction.' 2 Sutherland, Statutory Construction, Sec. 4704. In applying this rule to a statute, the intention of the lawmaker will prevail over the literal sense of the terms, and its reason and intention will prevail over the strict letter. A statute should be construed, if possible, to give effect to all of its provisions and so that one part will not destroy another. 2 Sutherland Statutory Construction, Sec. 4705; Reed v. Styron, 69 N.M. 262, 365 P.2d 912. Applying these principles, we look at the entire Contractors' License Law and find that Sec. 67-16-3, N.M.S.A.1953 makes it unlawful to engage in the business or perform any act of a contractor without having a license, unless such person is particularly exempt as provided by the act. The criminal penalty imposed by the first paragraph of section 14 for acts performed by an unlicensed contractor has previously been noted. An additional forfeiture is provided by section 67-16-16, N.M.S.A.1953, which states that:

'Any contractor operating without a license as herein provided shall have no right to file or claim any mechanic's lien as now provided by law, * * *.'

It is thus clear from a reading of the statute as a whole that its purpose and object was to require licensing of those engaging in the contracting business, and that such a license is contemplated at the time the contract is entered into and the work is performed, so as to protect the public from unqualified contractors.

Ordinarily, a cause of action exists only when there is a concurrence of a right, a duty and a breach. See Jensen v. Allen, 63 N.M. 407, 320 P.2d 1016; London v. Bruskas, 64 N.M. 73, 324 P.2d 424. But, even though the forfeiture clause of section 14, supra, implies that a contractor may bring a suit if he had a license when a breach of his contract occurred, it is nevertheless well settled that one cannot maintain a suit if, in order to establish his cause of action, he must rely, in whole or in part, upon an illegal act or transaction to which he is a party, or where he must base his cause of action, in whole or in part, on a violation by him of the criminal or penal laws. Desmet v. Sublett, 54 N.M. 355, 225 P.2d 141; Garvin v. Gordon, 36 N.M. 304, 307, 14 P.2d 264. If Marco or Roache, while unlicensed, engaged in a single act prohibited by the statute, they were guilty of a misdemeanor.

It is, of course, axiomatic that to state a cause of action the complaint must allege facts which, if established, would entitle the party to the relief sought. We held in Crawford v. Holcomb, 57 N.M. 691, 262 P.2d 782, that a contractor who was unlicensed when the contract was entered into and a large part of the work performed could not validate the prior illegal contract and recover thereon by securing a license before default in payment occurred. It logically follows that a complaint which merely alleged that the contractor was licensed at the time the owner defaulted in payment would not be sufficient to state a cause of action. Certainly it would be absurd to provide that an action might be brought by a contractor who obtained his license after the work was completed and just before the owner defaulted, but at the same time to deny him recovery because the work was performed while he was unlicensed. We cannot impute such an intention to the legislature, and it is, therefore, obvious that they did not use the term 'at the time the alleged cause of action arose' in its ordinary sense.

Since the legislature has made illegal the entry into a construction contract or the performance of any act or work by an unlicensed contractor and has imposed a criminal penalty and prohibited the filing or claiming of any mechanic's lien by a contractor who was unlicensed when the work was performed, it is apparent to us that its intention was to prohibit the bringing of an action to enforce such an illegal contract or to recover compensation for work so illegally performed.

Applying the rules of construction supra, we will not sacrifice the manifest reason and obvious purpose of the law to a literal interpretation of the words 'at the time...

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