Stegall v. Kynaston, 3428-III-3

• Decision Date: 10 July 1980
• Docket Number: No. 3428-III-3,3428-III-3
• Citation: 613 P.2d 1214,26 Wn.App. 731
• Parties: Thurman M. STEGALL and Inez Stegall, husband and wife, Respondents, v. Glade B. KYNASTON and Mary T. Kynaston, husband and wife, Appellants.
• Court: Washington Court of Appeals

Page 731

26 Wn.App. 731

613 P.2d 1214

Thurman M. STEGALL and Inez Stegall, husband and wife, Respondents, v. Glade B. KYNASTON and Mary T. Kynaston, husband and wife, Appellants.

No. 3428-III-3.

Court of Appeals of Washington, Division 3, Panel Two.

July 10, 1980.

As Changed July 31, 1980.

Thomas B. Gess, Kennewick, for appellants.

Joseph Schneider of Sensney, Davis, McCormick & Schneider, Prosser, for respondents.

GREEN, Chief Justice.

Thurman Stegall and his wife, holders of a promissory note, obtained a judgment against the makers, Glade B. Kynaston and his wife. The Kynastons appeal.

The dispositive question on appeal is whether the resale of a mobile home in violation of RCW 43.22.340 ¹ is illegal, rendering the note unenforceable.

In 1973, the Stegalls purchased a mobile home to be placed upon a residential lot. The mobile home was moved to the lot and attached to a permanent building.

In 1976, they sold their residence to the Kynastons. As part of the purchase price, the Stegalls received a note for $5,500 from the Kynastons. Prior to taking possession, the Kynastons discovered that the plumbing in the building addition had never been hooked up to city sewage. Mr. Stegall orally agreed to pay the cost of connecting the main sewer. The plumber who was hired to do this work discovered that the existing plumbing was faulty and would have to be replaced. Because this additional cost was greater than anticipated, Mr. Stegall refused to reimburse the Kynastons. It was later learned that the electricity running to the addition tapped into the mobile home pedestal, and that the electrical wiring from the pedestal to the addition was improperly installed. The Kynastons initially paid $3,000 on the note, but refused to pay the balance, claiming an offset for the cost of correcting the alleged plumbing and wiring defects. As a result, the Stegalls brought this action to collect the balance they claim is owed by the Kynastons on the note.

The Kynastons assert that Stegalls are not holders in due course; and therefore, the promissory note is subject to the defenses of the makers. RCW 62A.3-306. ² They reason that if the underlying contract is illegal, the promissory not is void. Accordingly, the court must leave the parties where it finds them; that is, the Kynastons are entitled to keep their property while the Stegalls must be satisfied with what they had previously received. We disagree.

Kynastons' argument presumes that the underlying contract is void because the electrical and plumbing modifications had not been approved by a representative of the Department of Labor and Industries as required by Washington's Mobile Home Act. RCW 43.22.340-.433. Assuming arguendo the Kynastons are correct, the contract is not necessarily void. It is the rule that a contract which violates a business statute or regulation is not void unless so made by the express terms of the Act. Allison v. Medicab International, Inc., 92 Wash.2d 199, 597 P.2d 380 (1979); Hennessey v. Vanderhoef, 1 Wash.App. 257, 461 P.2d 581 (1969); Fleetham v. Schneekloth, 52 Wash.2d 176, 324 P.2d 429 (1958); Yakima Lodge 53 v. Schneider, 173 Wash. 639, 24 P.2d 103 (1933). RCW 43.22.431 requires the director of the Department of Labor and Industries "(to) enforce mobile home safety and construction standards adopted by the secretary of housing and urban development under the National Mobile Home Construction and Safety Standards Act of 1974 (800 Stat. 700; 42 U.S.C. §§ 5401-5426)." The purpose of the National Mobile Home Act is "to establish Federal construction and safety standards for mobile homes and to authorize mobile homes safety and research and development." 42 U.S.C. § 5401. Accordingly, the National Mobile Home Act and the complementary state enforcement procedures set forth in RCW 43.22.340-.433 are, in effect, business statutes intended to regulate the manufacture of mobile homes. Since neither the federal nor state mobile home acts contain a provision rendering sales contracts in violation of the Act void, the promissory note is enforceable.

Further, we find Yakima Lodge 53 v. Schneider, supra, controlling. There the parties entered into a lease made in violation of a city ordinance. The ordinance provided that no part of a building used as a public hall or place of assembly shall also be used as a public garage. Specifically, the ordinance made it unlawful "to rent, lease, use or occupy any part of such building as a public hall or place of public assembly during the time that any part of the building is being used as a public garage." Yakima Lodge 53 v. Schneider, supra, 173 Wash. at 642, 24 P.2d 103 at 105. The lower part of the building was used for garage purposes pursuant to the lease but in violation of the ordinance. Both the facts of the case and the language of the ordinance parallel the facts and statute in question in the present case. The Schneider court held that the lease, although violative of the ordinance, was enforceable.

Additionally, Washington has adopted the rule that "where a statute imposes a penalty for failure to comply with statutory requirements, the penalty so provided is exclusive of any other; at least, no other penalty will be implied." La France Fire Engine Co. v. Town of Mt....