                                                No.    80-372

                     I N THE SUPREME COURT O THE STATE O M N A A
                                            F           F OTN

                                                       1981




J A C K TAURMAN and LON WOCASEK,
d/b/a     T & W CONSTRUCTION,

                               P l a i n t i f f s and A p p e l l a n t s ,



TOWN O CASCADE,
      F

                               Defendant        ,   Respondent             & Cross-Appellant.,




Appeal from:          D i s t r i c t Court o f t h e Eighth J u d i c i a l D i s t r i c t ,
                      I n and f o r t h e County o f C a s c a d e , The H o n o r a b l e
                      H. W i l l i a m Coder, J u d g e p r e s i d i n g .


Counsel o f Record:

         For A p p e l l a n t :

                      D z i v i , C o n k l i n & Nybo, G r e a t F a l l s
                      R i c h a r d D z i v i and Susan Rebeck a r g u e d , Great F a l l s ,
                      Montana


         For Respondents:
                      Cure & Borer, G r e a t F a l l s , Montana
                      Maxon X. D a v i s a r g u e d , G r e a t F a l l s , Montana




                                                    Submitted:          Aprib&3,     1981
                                                                   jbjji       4
                                                       Decided :



F i l e d :JUN




                                                Clerk
Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d                t h e Opinion of
the Court.

            This     is an a p p e a l        from       the         District         Court     of   the

E i g h t h J u d i c i a l D i s t r i c t o f t h e S t a t e o f Montana,                i n and f o r

t h e County of C a s c a d e .

           Appellant,            T & W Construction,                   s u e d on c o n t r a c t f o r

the     performance            of      street     construction               in       the     Town    of

Cascade.           Respondent,          t h e Town o f            Cascade,        counterclaimed

a l l e g i n g t h a t a p p e l l a n t b r e a c h e d t h e c o n t r a c t and f a i l e d t o

fully      perform         the      contract       and       raised        as     a    defense       the

i l l e g a l i t y of    the contract.              R e s p o n d e n t moved         for     summary

judgment,        and t h e m o t i o n was g r a n t e d .                The D i s t r i c t C o u r t

a l s o dismissed respondent's counterclaim.                                Appellant appeals

from t h e       summary judgment               order.            R e s p o n d e n t a p p e a l s from

t h e d i s m i s s a l of t h e c o u n t e r c l a i m .

           J a c k Taurman and Lon Wocasek a r e a p a r t n e r s h i p d o i n g

business        i n Cascade County a s T                     &   W    Construction.              On o r

about       July         24,     1979,       following               competitive             bidding,

r e s p o n d e n t Town o f C a s c a d e awarded a c o n t r a c t t o a p p e l l a n t T

&   W   Construction             for    street       construction               and     improvement

work.       A p p e l l a n t began work on t h e s t r e e t p r o j e c t on A u g u s t

7 , 1979.        On A u g u s t 1 5 , 1 9 7 9 , an a g e n t o f r e s p o n d e n t a d v i s e d

a p p e l l a n t t o c e a s e and d e s i s t from a n y f u r t h e r work on t h e

construction             project        because       of         respondent's           uncertainty

about obtaining funding f o r t h e p r o j e c t .                         Appellant stopped

work.

           On S e p t e m b e r 2 5 , 1 9 7 9 , a p p e l l a n t , a t t h e d i r e c t i o n o f

respondent,          resumed work on t h e s t r e e t p r o j e c t .                      Appellant

was u n a b l e t o c o m p l e t e t h e c o n s t r u c t i o n c o n t r a c t d u r i n g t h e
1979    construction    season   because    of    the   forty-day   work
stoppage ordered by respondent.            Appellant alleged it had
completed the grading and graveling portion of the contract.
This portion of the work had a reasonable value of $25,857.
Respondent refused to pay appellant for the work performed.
         On January 30, 1980, appellant filed its complaint in
the District Court seeking to recover from respondent the
value of the work performed under the contract and related
damages.
         On May 8, 1980, appellant applied for and on May 20,
1980, obtained a valid and retroactive 1979 Montana Public
Contractor's License, No. 1717B.
         On May 9, 1980, respondent moved the District Court
for summary judgment.        On August      20, 1980, the District
Court    entered       summary   judgment        against    appellant.
Specifically, in its Conclusion of Law No. 3, the District
Court found:
         "In light of plaintiffs' failure to possess a
         public contractor's license in 1979, their
         alleged contract with the Town of Cascade for
         the performance of that public construction
         work was illegal pursuant to Section
         15-50-201, MCA."
        We address the following issue in this appeal:
         Can a contractor collect payment for work performed
under a contract with a municipality, if the contractor does
not obtain a public contractor's license until after the
work has been performed?
         Section 15-50-101(l)(a), MCA, states:
         "A 'public contractor' within the meaning of
         this chapter shall include any person who
         submits a proposal to or enters into a
           contract              for         performing         all       public
           c o n s t r u c t i o n work i n t h e s t a t e w i t h t h e
           f e d e r a l g o v e r n m e n t , s t a t e o f Montana, o r w i t h
           any b o a r d , c o m m i s s i o n , o r d e p a r t m e n t t h e r e o f
           o r w i t h any b o a r d o f c o u n t y c o m m i s s i o n e r s o r
           w i t h any c i t y o r town c o u n c i l o r w i t h any
           a g e n c y o f a n y t h e r e o f o r w i t h any o t h e r
           p u b l i c b o a r d , body, c o m m i s s i o n , o r a g e n c y
           a u t h o r i z e d t o l e t o r award c o n t r a c t s f o r a n y
           p u b l i c work when t h e c o n t r a c t c o s t , v a l u e , o r
           p r i c e t h e r e o f e x c e e d s t h e sum o f $ 1 , 0 0 0 . "

           S e c t i o n 15-50-201,        MCA, p r o v i d e s :

           " I t s h a l l be u n l a w f u l f o r a n y p e r s o n o r a n y
           combination of persons t o engage i n t h e
           b u s i n e s s or a c t i n t h e c a p a c i t y of p u b l i c
           contractor a s herein defined within the s t a t e
           o f Montana w i t h o u t h a v i n g a l i c e n s e t h e r e f o r
           a s herein provided."

           The     District          Court     erred       in      concluding        that       the

c o n t r a c t e n t e r e d i n t o b e t w e e n t h e p a r t i e s was i l l e g a l a n d ,

therefore,        void.        Appellant admits t h a t               it d i d n o t have a

public contractor's               l i c e n s e a s r e q u i r e d by s t a t u t e when         it

accepted        the     bid    proposal.           It     admits      that     it      may    have

violated        the    law    and may be           assessed         a misdemeanor            fine.

Nowhere i n t h e s t a t u t e s i s i t d e c l a r e d t h a t a c o n t r a c t made

w i t h o u t a l i c e n s e is u n e n f o r c e a b l e o r v o i d .    Nowhere i n t h e

s t a t u t e d o e s i t e x p r e s s l y p r o h i b i t t h e making o f a c o n t r a c t

o r recovery o u t s i d e of t h e c o n t r a c t .            S e e McManus v .         Fulton

( 1 9 2 9 ) , 85 Mont.        170,    278 P.      126.        It    is n o t t h e c o n t r a c t

which t h e s t a t u t e made i l l e g a l .          I t is " u n l a w f u l " t o " a c t i n

t h e c a p a c i t y of a p u b l i c c o n t r a c t o r . "      The c o n t r a c t    itself

was l e g a l a n d ,     therefore,         enforceable.            See V i t e k ,      I n c . v.

A l v a r a d o I c e P a l a c e ( 1 9 7 4 ) , 34 Cal.App.3d         5 8 6 , 110 C a l . R p t r .



           The l i c e n s i n g l a w s h o u l d n o t be u s e d a s a s h i e l d f o r

t h e avoidance of            a just      o b l i g a t i o n o r t o p r o h i b i t a. c l a i m
for just compensation.
       We reverse the District Court's summary judgment and

dismissal     of   respondent's   counterclaim   and    order   that
further    proceedings    be   conducted   consistent   with    this
opinion.




W e concur:



    Chief Justice
