Tracer v. Bushre

Citation381 Mich. 282,160 N.W.2d 898
Decision Date25 September 1968
Docket NumberNo. 25,25
PartiesRobert D. TRACER, Plaintiff and Appellant, v. Donald E. BUSHRE and Janet R. Bushre, his wife, Defendants and Appellees.
CourtSupreme Court of Michigan

Ralph B. Hoschner, Corunna, for plaintiff and appellant.

Douglas I. Buck, Flint, for defendants and appellees.

Before the Entire Bench.

BRENNAN, Justice.

Plaintiff sued defendants for money allegedly due under an oral contract to build a residence. Defendants moved for summary judgment on the ground that plaintiff was not licensed as a residential builder as required by P.A.1953, No. 208 (C.L.S.1961 § 338.971 et seq., Stat.Ann.1957 Rev. and Stat.Ann.1961 Cum.Supp. § 18.86(1) et seq.). 1

The motion for summary judgment was granted. Appeal was taken to the Court of Appeals, challenging the constitutionality of the cited statute. The summary judgment was affirmed by the Court of Appeals, 3 Mich.App. 494, 142 N.W.2d 915, and we granted leave to appeal, 387 Mich. 733.

One issue is deemed worthy of discussion.

WHETHER THE RESIDENTIAL BUILDERS LAW IS UNCONSTITUTIONAL BECAUSE IT DOES NOT LICENSE AND REGULATE BUILDERS OF COMMERCIAL BUILDINGS.

The gist of plaintiff's argument is as follows:

While the State has the authority under the police power to regulate building contractors, there is no reasonable basis upon which residential and commercial builders can be distinguished.

It is pointed out that both commercial and residential builders deal with the public, both are in a position to injure the public through dishonesty or incompetence.

Plaintiff contends that many, if not most, building contractors engage in both residential and commercial building work, and use the same materials, workmen, subcontractors, etc., for both types of construction.

Thus it is argued that if there is a need to regulate the one, there is the same need to regulate the other; that no reasonable classification relating to the purpose of the regulation can be hypothesized, and therefore P.A.1953, No. 208, is discriminatory class legislation, offends against State and Federal constitutional mandates of equal protection, and is void and unenforceable.

'These constitutional provisions do not mean that there can be no classification in the application of statutes and ordinances, but only that the classification must be based on natural distinguishing characteristics and must bear a reasonable relation to the object of the legislation.' Cook Coffee Co. v. Flushing, 267 Mich. 131, p. 134, 255 N.W. 177, p. 178.

The title of P.A.1953, No. 208, is as follows:

'AN ACT to provide for the licensing and rights of any person to engage In business as a residential builder or residential maintenance and alteration contractor in certain counties within the state, and prescribing duties and powers of the Michigan corporation and securities commission relative thereto; to fix the standards of qualifications and eligibility for the practice thereof; to authorize the collection and expenditure of fees; to provide penalties for the violation of this act; and to repeal all acts and parts of acts in conflict with the provisions of this act.' (Emphasis supplied.)

Section 1 of the act clearly states that the regulation thereof is To safeguard and protect home owners and persons undertaking to become home owners.

In Alexander v. Neal, 364 Mich. 485, at page 487, 110 N.W.2d 797, at page 798, we said:

'Statutes and municipal ordinances similar in purport to the above are commonplace in this country. The police power is thus employed to protect the public from incompetent, inexperienced, and fly-by-night contractors.'

Examination of the causes for which a residential builder's license can be revoked or suspended gives us the best understanding of the evils sought to be cured by this act:

'Sec. 9. The commission may, upon its motion, * * * upon the verified complaint in writing of any person (made within 18 months after completion, occupancy or purchase of a residential or combination of residential and commercial building,) investigate the actions of any residential builder and/or residential maintenance and alteration contractor or any person who shall assume to act in such capacity within this state, and shall have the power to suspend or revoke any licenses issued under the provisions of this act at any time where the licensee is performing or attempting to perform any of the acts mentioned herein:

'(a) Abandonment without legal excuse of any construction project or operation engaged in or undertaken by the licensee;

'(b) Diversion of funds or property received for prosecution or completion of a specific construction project or operation, or for a specified purpose in the prosecution or completion of any construction project or operation, and their application or use for any other construction project or operation, obligation or purpose;

'(c) Failure to account for or to remit for any moneys coming into his possession which belong to others;

'(d) Wilful departure from or disregard of plans or specifications in any material respect and prejudicial to another, without consent of the owner or his duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications;

'(e) Wilful or deliberate disregard and violation of the building laws of the state or of any political subdivision thereof, or of the safety laws or labor laws or compensation insurance laws of the state;

'(f) Misrepresentation of a material fact by an applicant in obtaining a license;

'(g) Making any substantial misrepresentation, or making any false promise of a character likely to influence, persuade or induce;

'(h) Advertising in any manner whatsoever that said residential builder and/or residential maintenance and alteration contractor is licensed under this act;

'(i) Changing business location without notification to the commission within 30 days from the date of change; or

'(j) Any conduct, whether of the same or of a different character than hereinbefore specified, which constitutes dishonesty or unfair dealings.

'This act shall not be construed to relieve any person from civil liability or criminal prosecution under the general laws of this state, and complaints pertaining to the erection, construction, replacement, repair, alteration, additions to, subtractions from, improvement, movement of, wrecking or demolition of any building covered by the provisions of this act shall only be considered by the commission, and if made by written verified complaint within 60 days after completion, occupancy or purchase of said structure, by the proper authorities charged with the enforcement of the laws governing the construction of residential or a combination of residential and commercial buildings in the various political subdivisions of the state.' P.A.1953, No. 208, § 9, as amended by P.A.1960, No. 101 (C.L.S.1961, § 338.979, Stat.Ann.1961 Cum.Supp. § 18.86(9)).

The distinctions between commercial and residential builders as they relate to the evils enumerated in the act, are rather subtle.

We must assume that the legislature found as a fact that residential builders were in need of policing more than commercial builders.

But the mere finding that residential builders more frequently abandon projects, divert funds, fail to account, etc., than do commercial builders, would not be a sufficient basis upon which to predicate the classification.

'It is not sufficient that the public sustains harm from a certain trade or employment as it is conducted by some engaged in it. Because many men engaged in the calling persist in so conducting the business that the public suffers and their acts cannot otherwise be effectually controlled is no justification for a law which prohibits an honest man from conducting the business in such a manner as to not inflict injury upon the public.' State v. City of Sheridan (1918), 25 Wyo. 347, 358, 170 P. 1, 3, 1 A.L.R. 955, 959.

There must be something intrinsic in the class regulated, its activities or its particular relationship to the public, which bears a logical relationship to the legislative purpose.

Thus residential builders may be regulated as a class only if there be something in the nature of the residential building trade or a contract to build a residence, which exposes the public to a greater danger, or at least a different danger than is naturally to be found in that segment of the industry which is not regulated.

The residential builders law is essentially a consumer protection measure. Typically, a residential building contract situation will have many of the following incidents:

1. The buyer will be an individual.

2. The buyer and builder will not have been previously acquainted.

3. Construction advances, deposits and down payments will be required.

4. The buyer will make such advances or deposits out of personal savings accumulated from wages.

5. The buyer will depend on the builder's skill and expertise, both in construction techniques and in the requirements of building codes, etc.

6. A registered architect will not be employed, or if retained to design the home, will not supervise the construction. 2 7. The builder will be an individual entrepreneur or a closed corporation with very minimal capitalization, and will need to use deposits and construction advances to continue the work.

8. The buyer intends to occupy the home, and any abandonment of the project or failure of the builder seasonably to perform will work personal hardship on the buyer.

9. If the builder fails to pay subcontractors and suppliers, they will have a right to encumber the home with mechanics' liens.

10. The buyer anticipates encumbering the property with a long term first mortgage.

Now it may be that there are some commercial building transactions in which many of the above elements are present; and many residential building...

To continue reading

Request your trial
10 cases
  • Bowser v. Jacobs, Docket Nos. 8197
    • United States
    • Court of Appeal of Michigan (US)
    • October 19, 1971
    ......236). Accord: Naudzius v. Lahr (1931), 253 Mich. 216, 234 N.W. 581; Mutchall v. City of Kalamazoo (1948), 323 Mich. 215, 227, 35 N.W.2d 245; Tracer v. Bushre (1968), 381 Mich. 282, 291, 160 N.W.2d . Page 114 . 898; People v. Chapman (1942), 301 Mich. 584, 599, 4 N.W.2d 18. . ......
  • Miller v. State Dept. of Treasury (Revenue Division), 34
    • United States
    • Supreme Court of Michigan
    • July 7, 1971
    ...... * * * ' (Emphasis added.)' .         Decisions of this Court have repeated those criteria. Tracer v. Bushre (1968), 381 Mich. 282, 160 N.W.2d 898, Naudzius v. Lahr, Supra. More recently, the United States Supreme Court has stated: . "* * * The ......
  • Detroit Police Officers Ass'n v. City of Detroit, 18
    • United States
    • Supreme Court of Michigan
    • August 27, 1971
    .......         The test for validity under the equal protection clauses, as noted by Justice Williams, is stated in Tracer v. Bushre (1968), 381 Mich. 282, 286--287, 160 N.W.2d 898, 899: . "These constitutional provisions (the Federal and State equal protection clauses) ......
  • Green v. Ingersoll, Docket No. 78-1777
    • United States
    • Court of Appeal of Michigan (US)
    • March 20, 1979
    ...... M.C.L. § 338.1501; M.S.A. § 18.86(101). The provisions of the act must be construed with this legislative purpose in mind. Tracer v. Bushre, 381 Mich. 282, 290, 160 N.W.2d 898 (1968). Artman v. College Heights Mobile Park, Inc., 20 Mich.App. 193, 199, 173 N.W.2d 833 (1969). ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT