C. I. T. Corp. v. Breckenridge

MARKS, J.

This is an appeal from a judgment for the balance of $1,117.77, besides interest, attorney’s fees and

[199]

costs, unpaid on a promissory note for $2,874.47, signed by defendants, dated November 25, 1939, payable in instalments to E. 0. Sears and by Mm endorsed without recourse and delivered to plaintiff in consideration of the payment to Mm of $2,500.

Defendants were the owners of a cafe in Eureka, Califorma. They employed Sears as contractor to remodel the building and applied to plaintiff for a loan to help finance the improvements. The application was approved and the loan was made in the manner indicated. While the note was payable to Sears, he did not enter into the transaction other than to endorse it and deliver it to plaintiff on the payment of $2,500. The loan was negotiated by defendants.

No officer or agent of plaintiff knew or ever saw Sears during these negotiations. Their dealings were with defendants who had contracted with Sears to furnish the materials and do the work of making the improvements.

At no time material here was Sears licensed as a contractor under the provisions of chapter nine of the Business and Professions Code. It is therefore clear that Sears could not recover on Ms contract with defendants. (Sec. 7031, Business and Professions Code;

Holm

v.

Bramwell,

20 Cal. App.2d 332 [67 P.2d 114];

Siemens

v.

Meconi,

44 Cal.App.2d 641 [112 P.2d 904];

Phillips

v.

McIntosh,

51 Cal.App.2d 340 [124 P.2d 835].) It is now argued that the same disability attaches to plaintiff’s demand and that it cannot recover because it furnished money used to pay the unlicensed contractor in the performance of his contract. There is no evidence indicating that either plaintiff or defendants knew that Sears was unlicensed and the trial court found that neither of them had any knowledge of that fact, so plaintiff acquired the note before maturity, for a valuable consideration and without notice of any defect in it.