Court Opinion

ID: 9849784
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:46:21.277113+00
Date Added: 2024-06-11T09:20:26.060519
License: Public Domain

Gregory, Justice
(dissenting) :
I disagree with the construction placed by the majority on the statutory provisions involved and, therefore, dissent.
Henderson, a home-building contractor, appeals an order granting summary judgment to defendants in an action to foreclose a mechanic’s lien and to recover the balance due on a construction contract. The lower court held that Henderson was barred from legal action because he entered into the contract in violation of Act 897, Acts of 1974 of the General Assembly of South Carolina (hereinafter “Act”; codified as § 56-1545.31 et seq., Code of Laws of South Carolina, Cum. Supp. 1975). The exceptions present one issue: *133did a “grandfather clause” in the Act (in § 56-1545.37) give Henderson the right to continue his contracting business without the license required by the Act, or did the clause merely exempt him from taking an examination to get the license ?
Briefly, the facts are these. In late February of 1975, Henderson and Mr. and Mrs. Lawrence Evans entered into a contract for the construction of the Evanses’ home. The contract price was Twenty-Eight Thousand Five Hundred and Twenty-Eight ($28,528.00) Dollars. Henderson completed the house by the end of June 1975 and was paid Twenty-Six Thousand ($26,000.00) Dollars of the contract price. The Evanses refused to pay the balance. On October 2, Henderson filed a mechanic’s lien and on December 31, served a summons and complaint to foreclose the lien. The answer denied liability because of Henderson’s workmanship and further asserted that the contract was unenforceable under the Act. The trial judge ordered summary judgment on March 5, 1976 on the grounds that (1) Henderson did not have the license provided for in the Act when he entered into the contract with the Evanses and (2) by its express terms the Act prohibited any action either at law or in equity to enforce a contract in violation thereof. It is undisputed that Henderson did not have the license in February of 1975, but only obtained it on November 21, 1975, after applying for it (on November 18) and taking an examination.
To decide whether the trial judge erred we must examine and construe the Act. In so doing we must discover the legislative intent and effect it. Green v. Thornton, 265 S. C. 436, 219 S. E. (2d) 827 (1975); McGlohon v. Harlan, 254 S. C. 207, 174 S. E. (2d) 753 (1970). I think the court below correctly construed the Act and would affirm the order.
The Act created the South Carolina Residential Home Builders Commission (hereinafter “Commission”). The *134Commission was to regulate “residential home builders” — ■ essentially any persons who build homes for sale or for the use of others. (See § 56-1545.32.) It is undisputed that Henderson was a “residential home builder.” The Commission was given the power to license contractors, revoke licenses upon findings of misconduct or incompetence in building, and make rules. Penalties were provided for. The Act was apparently designed to complement Chapter 7, Title 56, Code, 1962, as amended, which relates to “Contracting.” That chapter created a State Licensing Board for Contractors, which was to regulate, inter alia, general contractors who undertook projects costing more than Thirty Thousand ($30,000.00) Dollars each (§ 56-401, Code, Cum. Supp. 1975). The Act exempted from licensing those contractors who were already licensed under Chapter 7 (§ 56-1545.44, Code, Cum. Supp. 1975). Thus, when read along with Chapter 7, the Act required only those contractors whose costs for each contract were less than Thirty Thousand ($30,-000.00) Dollars to be licensed by the Commission.
The effective date of the Act and the date of the establishment of the Commission was July 1, 1974.
The penalties section, § 56-1545.43, comprises three paragraphs. The first paragraph makes it a misdemeanor for any residential home builder to undertake the business of residential home building without “first having procured a valid license . . . required by the provisions of this chapter . . ..” The third paragraph of the section gives the Commission authority to petition for a temporary restraining order if its members believe that a builder has, or is about to, violate the provisions of the Act. 'The second paragraph, relied upon by the lower court in its order, provides:
“No residential home builder who does not have the license required herein may bring any action either at law or in equity to enforce the provisions of any contract for residential home building which he entered into in violation of this chapter.”
*135The trial judge read this provision as meaning that Henderson could not bring his action if he had entered into the contract with the Evanses “in violation of this chapter.” The trial judge found such a violation. He held that because Henderson did not have a license when he entered into the contract with respondents, he was in violation of the Act. The holding raises the issue: did the “grandfather clause” in § 56-1545.37 allow Henderson to contract with the Evanses without a license, or did that clause merely authorize him to obtain a license without examination ? The clause in question is contained in the following:
“§ 56-1545.37. Licenses required; exceptions; fees. — All residential home builders shall be required to be licensed by the Commission annually under the provisions of this chapter except that any person engaged in residential home building on or before July 1, 1974, shall be duly licensed by the Commission, without examination, after paying the required annual fee by submitting to the Commission within a period of twelve months after such Commission is established the following: [an affidavit showing that the builder has constructed at least one home within the year prior to July 1, 1974; and an executed bond or other proof of financial responsibility acceptable to the Commission].”
Appellant contends that this language authorized an already-practicing builder to continue building residential homes for twelve months after July 1, 1974, without obtaining a license. I disagree. § 56-1545.37 empowered builders already engaged in business to get a license without taking an examination; it does no more. The section begins, “All residential home builders shall be required to be licensed . . . under the provisions of this chapter except . . ..” The phrase, “under the provisions of this chapter” refers to § 56-1545.38, which sets out the method of licensing; i. e., by written application and examination. The “except” in the language quoted above only excepts the method of licensing. It does not except the licensing requirement itself.
*136The purpose of the Act was to regulate builders of homes who were not already regulated by Chapter 7, Title 56. § 56-1545.37 required a builder to offer proof of financial responsibility and proof of some recent experience in home building before he could obtain a license. There would be little point to these requirements if the builder could first have decided for himself whether he met the requirements and then have continued to build for twelve months without offering the Commission any information about himself.
Nowhere in the Act does the language indicate that a builder might have continued his business without first obtaining a license. The penalties section (§ 56-1545.43) says flatly that a builder shall be guilty of a misdemeanor if he engages in residential home building “without first having procured a valid license . . . required by the provisions of this chapter.” § 56-1545.40 requires the Commission to furnish clerks of courts throughout the State with a roster of licensees. Presumably this section is intended as a method of informing the courts of those builders approved by the Commission. If the Act is read as appellant suggests, this roster would not have informed a clerk of those builders carrying on business, but without a license, during the period of July 1, 1974 to July 1, 1975. Further, as I have stated, the Act is complementary to § 56-401 et seq., relating to “Contracting.” Those sections require a contractor to have a license before he enters into any contract covered by the sections, without exception. (See especially § 56-427, Code, 1962 and § 56-410, Code, Cum. Supp. 1975.)
I think that the intent of the Act was to protect the home-buying public from inexperienced and financially irresponsible builders. To read § 56-1545.37 as appellant does would not further this intent. Henderson did not have a license in February of 1975 and did not obtain one until November 21, 1975. I conclude that § 56-1545.37 did not give Henderson the right to continue his contracting business without a license; therefore, he was in violation of the Act when he entered into the contract with respondents.
*137The record presents an issue neither raised by appellant nor considered by the trial judge: can the penalties section, § 56-1545.43, be interpreted to allow Henderson to sue because he obtained a license before he brought suit? This issue is not properly before the Court and I do not consider it. See State v. Fields, 264 S. C. 260, 214 S. E. (2d) 320 (1975).
Appellant concedes that if he had entered into the contract after July 1, 1975, without first obtaining a license, enforcement of the contract would be barred. He only argues that the “grandfather clause” permitted him to contract between July 1, 1974 and June 30, 1975 without a license. Appellant does not contend that he can bring suit for foreclosure notwithstanding a violation of the Act.
Accordingly, I would affirm the order of the lower court granting summary judgment to respondents.