Mosley v. Johnson

• Decision Date: 03 April 1969
• Docket Number: No. 11073,11073
• Citation: 22 Utah 2d 348,453 P.2d 149
• Parties: d 348 Glen MOSLEY, Plaintiff and Appellant, v. Marinus JOHNSON and Katie A. Johnson, husband and wife, and DeLila Knudsen, Defendants and Respondents.
• Court: Utah Supreme Court

Page 149

453 P.2d 149

22 Utah 2d 348

Glen MOSLEY, Plaintiff and Appellant, v. Marinus JOHNSON and Katie A. Johnson, husband and wife, and DeLila Knudsen, Defendants and Respondents.

No. 11073.

Supreme Court of Utah.

April 3, 1969.

John L. McCoy, Milford, for appellant.

Fred L. Finlinson, Richard J. O'Rourke, Salt Lake City, for respondents.

ELLETT, Justice:

The appellant as plaintiff below sued to recover for the balance due him on a contract to drill a well for the respondents. His action was in two counts: (a) for the contract price; (b) for the reasonable value of the work done. The respondents, who were defendants below, defended on the ground that plaintiff was not licensed to drill wells as required by Sec. 73--3--25, U.C.A.1953, which provides:

Every person, * * * drilling a well or wells in the state of Utah shall, before the first day of May, 1937, and thereafter annually, make application to the state engineer for a permit to drill such well or wells. The application shall be in a form to be prescribed by the state engineer. All permits shall expire on the thirty-first day of December following the issuance thereof and shall not be transferable. The state engineer is authorized and directed to prepare and keep on file in his office rules and regulations for well drilling.

No person, * * * shall drill a well or wells in this state without having first obtained an annual permit therefor as provided in this section and without having first filed with the state engineer a bond in the penal sum of $500, conditioned upon the proper compliance with the provisions of this section and the rules and regulations promulgated pursuant thereto. Such bond shall be made payable to the state of Utah and shall be approved by the state engineer. Well drillers are required to comply with the rules and regulations to be promulgated by the state engineer and if the state engineer determines, after an investigation and after a hearing upon at least ten days' notice to the permittee, by registered mail, that such permittee has failed to comply with such rules and regulations, the state engineer may revoke the permit. The state engineer may refuse to issue a permit to a well driller if it appears that there has been a violation of the rules and regulations or a failure to comply with Sec. 73--3--22. ¹ * * * (Emphasis added.)

The defendants also counterclaimed for recovery of a core drill which had been delivered to plaintiff as part payment for drilling the well. The plaintiff refused to accept the core drill as part payment on the contract because he claimed some parts, including a mud pump and swivel, were missing. He claims to have a lien on the core drill to secure his right to recover under the contract.

The defendants by written motion moved for summary judgment. The plaintiff orally moved for summary judgment, and the court considered both motions. The court denied plaintiff's motion but granted that of defendants. In doing so, however, it dismissed the counterclaim with prejudice. This appeal followed, the plaintiff appealing from dismissal of his complaint, the defendants from dismissal of their counterclaim.

As to the dismissal of the complaint: The plaintiff had no permit to drill the well in question. This court had a similar situation before it in the case of Olsen v. Reese, 114 Utah 411, 200 P.2d 733 (1948). That was a case wherein an unlicensed contractor sued on his contract. The court said at pages 416--417 of the Utah Reports, at page 736 of 200 P.2d:

The authorities are fairly uniform to the effect that failure to obtain a license which is required by a statute enacted solely for revenue purposes does not render contracts made by the offending party void. On the other hand, contracts made by an unlicensed contractor when in violation of a statute passed for the protection of the public are held to be void and unenforceable. Our statute is so worded as to indicate a legislative intent to protect the citizens from irresponsible contractors. The statute, while not comprehensive, provides for a small license fee. Control over the contractor is given to the Department of Registration. Upon an appropriate hearing, the department may, for unprofessional conduct, suspend or cancel the license. Godd reputation and integrity are essential to obtaining a license and the entire object of the statute is protection of the public against fraudulent and illegal practice which have always been recognized as a distinct characteristic of statutes, which are not mere revenue measures. The statute being enacted for the protection of the public, plaintiff's written contract is void * * *.

We are asked to overrule the case of Olsen v. Reese, but we decline to do so for the reason that we are convinced the decision therein given is sound. The law is set out in 53 C.J.S. Licenses § 59a, as follows:

Where the statute or ordinance merely imposes a penalty without expressly prohibiting the business or declaring void acts done or contracts made therein, it becomes necessary to determine whether the imposition of the penalty is intended to be prohibitory, which determination is reached on a consideration of the nature, language, and terms of the statute. Generally the following tests are applied: Where the evident object of the statute or ordinance in requiring a license or tax and imposing a penalty for its violation is for the purpose of police regulation and protection of the public, it will be construed as forbidding, by implication, the carrying on of the business without a license, and a contract made by an unlicensed person in violation of the statute or ordinance ordinarily is void and unenforceable; * * *

In the Olsen case, supra, this court did not pass on the question of whether or not the contractor could have recovered upon the theory of quantum meruit. In fact, the court was not required to pass on that question and stated in that regard:

We do not pass on the question as to whether or not plaintiff might recover upon the theory of quantum meruit for the reason that the pleadings are not sufficient to raise this question and many ancillary problems might be presented if plaintiff were to elect to proceed on that theory.

We are unable to see why this plaintiff, whose contract is void, should be able to recover on the theory of quantum meruit. To permit him to do so would permit him to evade the law and recover for work which he is forbidden to pursue. If he got the reasonable value of his services, he might even prove more than his contract would have given him had it been valid.

The general law is to be found in 53 C.J.S. Licenses 59b as it pertains to quantum meruit:

Where a contract is unenforceable by one of the parties thereto by reason of his noncompliance with a license or occupation tax law, such party may not recover for services which he has performed under such contract.

The law seems plain enough, but how does it apply to an unlicensed well driller? What is the purpose of the law in requiring an annual permit in such cases? The fee required is nominal, and if it were a revenue-producing measure, it would be difficult to see why the state engineer should be required to set rules and regulations for well drilling. Why, too, should the state engineer be authorized to revoke a permit when the driller failed to comply with the rules and regulations required?

Pursuant to the statute quoted above, the state engineer has set forth rules and regulations. Section 1 thereof is as follows:

1. It is the purpose and intent of these rules and regulations:

(a) To assist in the orderly appropriation of water, the construction and maintenance of wells, and the distribution of water;

(b) To insure the construction or repair of wells in such manner that the flow, if any, can be completely controlled;

(c) To prevent waste of water from wells at the ground surface, and from one aquifer to another below the ground surface;

(d) To prevent pollution and contamination of underground water;

(e) To prevent overappropriation of water (f) To obtain complete logs of formations and materials encountered in drilling wells.

In order to understand the purpose and intent as set out one must know that water in Utah is scarce and must be conserved. Much of our underground water is in aquiferous strata separated by impervious layers. Often the water is under pressure, and careless puncturing of the impervious layers will permit water to mix underground. Appropriators may have priorities in the various water bodies, and by intermingling, these priorities would be impaired. One aquifer may be pure and fit for culinary uses, while another may be polluted, and the public has an interest in seeing that well drillers are skilled in the manner in which they drill wells.

All unappropriated water in Utah is owned by the State for the use and benefit of its citizens, and the State has a decided interest in seeing to it that water is not wasted in quantity or deteriorated in quality. Wells must be so cased as to prevent leakage outside the pipe, particularly when the flow of water is shut off in the pipe.

It is obvious that the statute requiring well drillers to secure and keep an annual permit is designed for the protection of the people of this State, and the one who drills a well in Utah without first securing an annual permit cannot recover in the courts of this State for the work done, either on a contract or on a theory of quantum meruit.

As to the dismissal of the counterclaim: The contract provided that plaintiff would accept a core drill equipped with a mud pump and swivel as part payment for the services to be rendered. The core drill was delivered, but because it was not equipped with a mud pump and swivel, the plaintiff refused to accept it as part payment and claims to be holding it under a lien to secure payment of the amount due him.

Had he accepted the equipment as part payment, the defendants could not have...