Opinion
For Opinion on Hearing, see 115 Cal.Rptr. 625, 525 P.2d 65.
Opinion on pages 587-591 omitted.
HEARING GRANTED
Evelle J. Younger, Atty. Gen., and Ronald F. Russo, Deputy Atty. Gen., for defendants and appellants.
Harrison W. Hertzberg, and Joshua Kaplan, Los Angeles, for plaintiff and respondent.
COBEY, Acting Presiding Justice.
Leo B. Hoschler, Registrar of Contractors for the Contractors' State License Board, and the Board appeal from a judgment [108 Cal.Rptr. 231] in administrative mandamus directing them to set aside his order revoking the license of Ray Grimes as a general building contractor because Grimes had himself adjudicated a bankrupt.
The question posed is whether the State of California may revoke a contractor's license because of his avoidance or settlement of his contracting obligations for less than their full amount by adjudication in bankruptcy pursuant to Business and Professions Code section 7113.5 in view of section 7102 of the same code permitting the regaining of a revoked license only on a proper showing that all loss caused by the act for which the license was revoked has been fully satisfied. The trial court held, on the authority of Perez v. Campbell (1971), 402 U.S. 637, 91 S.Ct. 1704, 29 L.Ed.2d 233, that the revocation of Grimes' license was unconstitutional under the supremacy clause of the United States Constitution (art. VI, cl. 2) as conflicting with the debtor discharge provisions of the Federal Bankruptcy Act (11 U.S.C. § 35) which would otherwise relieve a bankrupt contractor from his preexisting obligations. We agree and affirm.
In article I, section 8, subdivision 4 of the United States Constitution, Congress is granted the power 'To establish . . . uniform Laws on the subject of Bankruptcies throughout the United States.' (Emphasis added.)
The Attorney General contends that Perez is not controlling as to the federal constitutionality of section 7113.5 and that the constitutionality of this section only may be considered in this proceeding since Grimes' license was revoked pursuant to it alone and any present consideration of any future problem of his in regaining his license in view of the requirements of section 7102 would be premature.
We do not believe that this is a correct statement of the basic issue on this appeal. What is before us is not primarily the federal constitutionality of these two sections, but instead whether it is federally constitutional to revoke a contractor's license in this state pursuant to the one section in view of the requirements of the other with regard to regaining a revoked license.
In Perez the United States Supreme Court held that the portion of the Arizona Motor Vehicle Safety Responsibility Act, providing that a discharge in bankruptcy would be ineffective to relieve a bankrupt from his obligation to pay a preexisting judgment arising from an automobile accident tort as a condition precedent to his regaining his license and his automobile registration, conflicted with the discharge provisions of the Federal Bankruptcy Act. (See 402 U.S. 638, 641-643, 91 S.Ct. 1705, 1707-1708, 29 L.Ed.2d 236, 238-239.) The Court pointed out that acts of state legislatures which interfere with the laws of Congress or which constitute an obstacle to the accomplishment and execution of the full purposes and objectives of Congress are invalid under the supremacy clause of the United States Constitution. (Id. at 402 U.S. 649, 91 S.Ct. 1711, 29 L.Ed.2d 242.) Obviously revoking a contractor's license for voluntarily going into bankruptcy and thereby exposing him to the subsequent withholding of such a license until he pays his debts otherwise discharged in bankruptcy conflicts with the discharge provisions of the Bankruptcy Act and nullifies the fresh start approach of that legislation.
[108 Cal.Rptr. 232]In determining whether the revocation of a contractor's license pursuant to section 7113.5 because he has been adjudicated a bankrupt is federally unconstitutional, we must consider that a consequence of such revocation is to bring section 7102 into play against the contractor so unlicensed. Contrary to the position taken by this court some years ago in Hope v. Contractors' etc. Bd., supra, 228 Cal.App.2d at pp. 425-426, 39 Cal.Rptr. 514, we do not believe it proper to view the federal constitutionality of the application of these two sections separate and apart from each other. Both statutes are a part of one statutory scheme regulating by licensing the contractors in this state. The statutes are obviously related in fact and in operation one is sequential to the other. Furthermore, we do not regard such consideration of section 7102 as premature. Multiplicity of suits is avoided by using this proceeding to determine the question as to the constitutionality of the application of section 7102 to a contractor whose license has been revoked because he has had himself adjudicated a bankrupt. In its nature administrative mandamus is an equitable proceeding and, therefore, equitable considerations should prevail. (See Dare v. Bd. of Medical Examiners, 21 Cal.2d 790, 795, 136 P.2d 304.)
The Attorney General in his closing brief has informed us that the Registrar of Contractors has not applied and does not intend to apply the provisions of section 7102 to cases in which licenses have been revoked pursuant to section 7113.5. This may be true, but the applicable portion of the statute itself (§ 7102, second par.) contains no such exception and the Registrar is constitutionally required to enforce the statute as written. He possesses no authority to write into it an exception which the Legislature has not made.
The judgment is affirmed.
SCHWEITZER and ALLPORT, JJ., concur.
In Perez, a five to four decision, the United States Supreme Court criticized at length two of its prior decisions that had found no conflict between the Bankruptcy Act and motorist financial responsibility statutes of Utah and New York similar to the Arizona one then before it. These two decisions were Kesler v. Department of Public Safety (1962), 369 U.S. 153, 82 S.Ct. 807, 7 L.Ed.2d 641, and Reitz v. Mealey (1941), 314 U.S. 33, 62 S.Ct. 24, 86 L.Ed. 21. These decisions were relied upon by our Supreme Court and this court in previously holding section 7113.5 to be federally constitutional. (See Tracy v. Contractors' State License Board, 63 Cal.2d 598, 47 Cal.Rptr. 561, 407 P.2d 865; Hopkins v. Contractors' State License Bd., 240 Cal.App.2d 710, 49 Cal.Rptr. 917; Hope v. Contractors' etc. Bd., 228 Cal.App.2d 414, 39 Cal.Rptr. 514.)