# Gatti v. Highland Park Builders, Inc. > California Supreme Court · February 19, 1946 · 27 Cal. 2d 687 URL: https://www.frixlaw.com/law-library/cases/9944943 ## Case - **Full name:** ALBERT GATTI Et Al., Respondents, v. HIGHLAND PARK BUILDERS, INC. (A Corporation), Appellant - **Court:** California Supreme Court - **Decided:** February 19, 1946 - **Citations:** 27 Cal. 2d 687; 166 P.2d 265; 1946 Cal. LEXIS 346 - **Precedential status:** Published - **Opinion:** Concurrence by Edmonds - **Judges:** Spence, Edmonds - **Cited by:** 52 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9944943 ## How later opinions describe it (automated extraction) - holding that a “contract made contrary to the terms of a law designed for the protection of 20 the public and prescribing a penalty for the violation thereof is illegal and void, and no action may 21 be brought to enforce such contract.” ## Opinion text I cannot join in a decision which is directly contrary to the plain and positive language of the statutes regulating the contracting business. Justification for a recovery by the plaintiffs is placed upon the ground that each of the individuals had a contractor's license in his own name, and it does not appear that the later association of these persons as partners "effected any change in the performance of the contract, which proceeded as from its inception under the direction of both plaintiffs." Yet this is exactly the conduct which is prohibited by the Business and Professions Code. That statute makes it unlawful "for any two or more licensees, each of whom has been issued a license to engage separately in the business or to act separately in the capacity of a contractor . . . to . . . act in the capacity of a contractor within this State without first having secured an additional license for acting in the capacity of such a joint venture or combination in accordance with the provisions of this chapter as provided for an individual, copartnership or corporation." (§ 7029.) Also, the code provides, no person may bring or maintain an action to recover compensation as a contractor "without alleging and proving that he was a duly licensed contractor at all times during the performance of such act or contract." (§ 7031.) There can be no substantial compliance with such a statute. Wisely or unwisely, the Legislature has specified that two persons individually licensed may not, as partners, engage in the contracting business without having obtained a license in the name of the partnership. Unquestionably, that *Page 692 requirement is within the scope of legislative action and, therefore, beyond the reach of judicial consideration. ( Lucas v. City of Los Angeles, 10 Cal.2d 476 , 485 [ 75 P.2d 599 ].) For almost three months of the time Gatti and Albert Moore were jointly acting as contractors for the building company, they had licenses only as individuals which was in direct contravention of the statute. A license was then obtained in the names of Gatti, Albert Moore and Delbert Moore, the latter of whom has no interest in the contract sued upon and is not a party to the action. The conclusion reached in Citizens State Bank v. Gentry, 20 Cal.App.2d 415 [ 67 P.2d 364 ], the case solely relied upon to support the determination in favor of Gatti and Moore, is of no authority, for it was decided before the enactment of section 7028.5 of the Business and Professions Code which specifically prohibits the conduct which was said to satisfy the requirements of the law as it then existed. Factually in point with the present controversy is Wise v. Radis, 74 Cal.App. 765 [ 242 P. 90 ], in which two persons jointly negotiated the sale of real estate. Only one of them was a broker licensed in accordance with the requirements of the Real Estate Broker's Act. (Stats. 1919, p. 1252; as amended, Deering's Gen. Laws, 1931, Act 112. Now Bus. Prof. Code, §§ 10000-10601.) In discussing the scope of the statute, the court declared that the failure of partners to secure a license in the name of the partnership in violation of the statutory mandate, rendered their contract "illegal from its inception; for in that case the partnership contract necessarily would involve the performance of illegal acts." (P. 776.) An earlier case concerned the contract by which the two licensed real estate brokers and an unlicensed attorney were employed to purchase certain real property and to procure a loan thereon. Because the services of all of them were the consideration for the contract, and it was void as to the attorney, the court denied any recovery. ( Haas v. Greenwald, 196 Cal. 236 [ 237 P. 38 , 59 A.L.R. 1493 ].) Assuming that the license issued in the names of Gatti, Albert Moore and Delbert Moore was a sufficient authorization for the contracting business of two of them, this observance of the statute occurred almost three months after the partnership contract was undertaken and did not cure the unlawfulness of the consideration up to that time. As the services of Gatti and Albert Moore as partners were illegally *Page 693 rendered, at least until the partnership license was obtained, a part of the consideration being unlawful, the entire contract was void. (Civ. Code, § 1608 ) The issuance of a license after unlawful acts are performed does not validate a contract. ( Holm v. Bramwell, 20 Cal.App.2d 332 , 335 [ 67 P.2d 114 ]; Wise v. Radis, supra, p. 774 .) For these reasons, in my opinion, the judgment should be reversed. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9944943. Public record. Not legal advice.