Court Opinion

ID: 9532453
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:21:28.546445+00
Date Added: 2024-06-11T13:28:45.932107
License: Public Domain

SCHAUER, J., Dissenting.
In my view the majority opinion errs egregiously in holding, implicitly, that the defendant by his own act, in concert with a third person, subsequent to the execution of the contract with plaintiff, may retroactively render plaintiff’s contract with defendant unlawful, and may then invoke his own wrong to defeat plaintiff’s right of recovery after the latter’s faithful performance of the contract. Such contract, on any reasonable view of the evidence, appears to me to have been lawful when made, lawful in object, and lawful in performance. The only possibly unlawful dealing in connection with it appears to have been defendant’s conduct in renting to third persons a portion of the completed elevator storage space and thereby and to that extent apparently engaging in a commercial rather than a strictly farming activity. The principal question argued on appeal is whether the work called for by the contract comes within the farming exemption created by Business and Professions Code, section 7049, hereinafter quoted.
For a clear comprehension of the legal problem involved, the salient facts of the controversy should be borne in mind.
At all times concerned plaintiff has been a “registered professional engineer,” skilled in the design and construction of grain elevators, but not “licensed as a contractor.” Defendant is engaged in farming some 5,000 acres of land. Plaintiff contracted with defendant to “prepare plans, blueprints and specifications for a grain elevator and storage facility of an approximate capacity of 800 tons of barley,” to “sub-contract for the customer” certain specified work, to “furnish all machinery, equipment and materials,” and to “inspect and supervise all work performed by others and to furnish a superintendent.” The basis of plaintiff’s compensation was to be “cost plus ten per cent.” It is conceded (at this stage of the litigation) that the terms of the contract bring plaintiff within the definition of a contractor as that term is defined in Business and Professions Code, section 7026, hereinafter quoted. Such concession does not, however, establish that the contract was either unlawful or unenforcible, as will be hereinafter shown.
*385It is to be emphasized that the controlling issue before us is not whether after completion of the structure defendant may have put it to some unlawful use but is whether the contract upon which plaintiff sues was lawful when executed.
The elevator was constructed on land owned by defendant where it would be most efficient in defendant’s farming operations ; i.e., where it would not use up arable land of the main agricultural tract and where it would be adjacent to a railroad so that the marketing of defendant’s farm produce would involve a minimum of handling. That the railroad’s tracks and nearest station happen to lie some 3% miles from the land on which defendant’s grain is grown does not appear to me to be important. The important thing to the farming operation is that the elevator be adjacent to the railroad tracks and station. So located, the farm produce as harvested could be picked up and transported directly to the elevator for temporary storage and direct loading from it onto railroad cars. The tonnage capacity for the elevator was determined from defendant’s acreage and past harvests. That fact, as will appear from the law hereinafter developed, is consistent with—and only with—an intention by plaintiff to use his engineering and construction skills lawfully in contracting with defendant to build an elevator to be used by defendant in his farming operation.
It is not disputed that the primary purpose of building the elevator was the efficient marketing (temporary storage and loading for shipment) of defendant’s farm produce. We may infer that defendant, intending to operate for the greatest possible profit and to that end to pare losses in bad crop years, had in mind also that, when his own crop was short, he might derive some benefit himself—and possibly confer some on neighbors—by renting surplus space. In actual use it appears that the first year’s storage consisted of 800 tons of defendant’s grain and 200 tons on rental; the next year defendant required space for 700 tons and found rental for 300 tons. But in my view the use to which defendant put the elevator after its construction (as well as any secret intention he may have harbored upon entering into the contract) is wholly immaterial in this litigation between plaintiff and defendant. There is no showing that plaintiff in entering into the contract with defendant had guilty knowledge of the latter’s unlawful intentions, if he then had any, as to use of the completed structure.
This litigation is in itself strong evidence of defendant’s *386alertness and willingness to the end of turning a tidy penny. The trial court found that the contract price of construction was $21,238.95; that during the course of construction defendant paid plaintiff $8,979.94, but has refused to pay any part of the balance. Defendant argues in support of his refusal to pay—and the majority give his legal position their judicial blessing—that the elevator is not located on defendant’s farm, that since its construction defendant has used it in some part for commercial rental as well as for his own farming operations, that plaintiff is licensed only as a “professional engineer,” that he does not possess a building contractor’s license, and that therefore under certain provisions of the Business and Professions Code plaintiff cannot require defendant to pay for what he received.
The pertinent provisions of the Business and Professions Code are as follows:
Section 7026 defines “contractor” as “any person who undertakes to . . . construct . . . any building ... or other improvement ... or other structures ...”
Section 7028 provides that “It is unlawful for any person to engage in the business or act in the capacity of a contractor within this State without having a license therefor, unless such person is particularly exempted from, the provisions of this chapter.” (Italics added.)
Section 7031 provides that “No person engaged in the business ... of a contractor, may bring or maintain any action in any court of this State for the collection of compensation for the performance of any act or contract for which a license is required by this chapter without alleging and proving that he was a duly licensed contractor at all times during the performance of such act or contract. ’ ’
Section 7049, however, provides that “This chapter [which contains the last quoted sections] does not apply to any construction or operation incidental to . . . farming, dairying, agriculture, viticulture, horticulture . . . except when performed by a licensee under this chapter.” Furthermore, section 7050 provides that the .chapter ‘ ‘ does not apply to an owner who contracts for a project with a licensed contractor or contractors” (see also §7030) and section 7051 declares that such chapter “does not apply to a licensed architect or a registered civil or professional engineer acting solely in his professional capacity ...” The majority expressed the view (in Fraenkel v. Bank of America (1953), 40 Cal.2d 845, 848 [1] [256 P.2d 569]) that section 7049 exempts “any *387construction or operation incidental to . . . farming . . . agriculture” but they now take the position that the marketing of farm produce is not an incident of farming insofar as it entails the use of a grain elevator which is not located on the parcel of land on which the grain is grown. More specifically, the majority say that plaintiff’s other arguments “need not be here decided, for the record clearly supports the finding that the grain elevator was not ‘located on a farm’ as required for application of the exemption.”
Regardless of the applicability of the other quoted sections dealing with exemptions, it is my view that farming includes marketing the produce of the farm, that a farmer should not be penalized for operating efficiently, and that neither should he be permitted—unless the law is altogether clear and compulsory to that end—to invoke the contractors’ license law in such a situation as this in order to achieve unjust enrichment. His defense here is an affirmative defense; he invokes the statute to defeat what otherwise appears to be a just and enforcible claim. Section 7050, hereinabove quoted, suggests that if plaintiff has violated the law by entering into the contract then so also has defendant, for defendant entered into the construction contract with plaintiff, a non-lieensed contractor. If defendant at the time of contracting for plaintiff’s services intended that the construction should serve any purpose other than one legitimately incidental to his farming operation he violated the law. Is he taking the position now that he confided such intention to plaintiff and conspired with him to commit a crime? How else can he prevail in his defense ?
If we construe the law fairly, and particularly if we give any weight whatsoever to the presumption of innocence and the rule of construction against extending a statute in order to find guilt of crime (People v. Valentine (1946), 28 Cal.2d 121, 143 [20] [169 P.2d 1]; People v. Smith (1955), 44 Cal.2d 77, 79 [2] [3] [279 P.2d 33], we should conclude that neither plaintiff nor defendant was guilty of a crime in entering into the contract. Section 7049, above quoted, does not require that the “construction or operation” which is the subject of exemption be conducted on land which is part of, or contiguous to, the parcel on which the crop is grown. The exemption rather, by its express terms is inclusive of “cmy construction or operation incidental to . . . farming, dairying agriculture, viticulture, horticulture ...” (Italics added.) The intention of the Legislature to grant a broad exemption *388extending throughout the area of farming and its incidental operations appears clear. (See Kelly v. Hill (1951), 104 Cal.App.2d 61, 65 [230 P.2d 864].) The word “agriculture,” in its commonly accepted meaning, includes not only “the production of plants and animals useful to man [but also] . . . to a variable extent the preparation of those products for man’s use and their disposal by marketing . . .” (Webster’s New International Dictionary, Second Edition.) It seems to me that the grain elevator, located exactly where it is, is part and parcel of defendant’s farming operation. At least there is no evidence sufficient to establish that plaintiff, in entering into the contract with defendant, had knowledge or notice that the contemplated construction was other than incidental to defendant’s farming operation. The elevator is not a part of the main farm crop growing area, but certainly it is a part of the farm in the same sense that harvesting the crop, collecting it, storing it and marketing it are a part of and incidental to farming. Surely the fact that defendant, after performance of the contract by plaintiff, rented some of the storage space in the elevator to third persons should not be considered as against plaintiff.
For the reasons above stated, I would reverse the judgment.