Roberts v. Ross

• Decision Date: 29 April 1965
• Docket Number: No. 14901.,14901.
• Citation: 344 F.2d 747
• Parties: Herbert J. ROBERTS, Appellant, v. Norman M. ROSS, Jr.
• Court: U.S. Court of Appeals — Third Circuit

344 F.2d 747 (1965)

Herbert J. ROBERTS, Appellant, v. Norman M. ROSS, Jr.

No. 14901.

United States Court of Appeals Third Circuit.

Argued January 25, 1965.

Decided April 29, 1965.

Joseph McGowan, Charlotte Amalie, St. Thomas, V. I., for appellant.

George H. T. Dudley and Dudley, Hoffman & Grunert, Charlotte Amalie, St. Thomas, V. I., for appellee.

Before MARIS, McLAUGHLIN and FREEDMAN, Circuit Judges.

Argued at Christiansted January 25, 1965.

MARIS, Circuit Judge.

The plaintiff, Herbert J. Roberts, appeals from a judgment entered in the District Court of the Virgin Islands dismissing his action brought to recover the sum of $3,087.50 which he alleged the defendant Norman M. Ross, Jr. promised to pay him for services rendered in producing a buyer for a dwelling house which the defendant had built in St. Thomas. The defendant answered, denying any such promise and, subsequently, with leave of court, he filed an amended answer in which he interposed the special defense of the Statute of Frauds.

On May 21, 1963 the case was tried to the Court. The testimony given at the trial was sharply conflicting. The plaintiff, who was employed by the defendant as a foreman in connection with the construction by the defendant of a dwelling house on Parcel 1-14, Estate St. Joseph and Rosendahl, St. Thomas, testified that in December 1961 the defendant promised him a 5% commission of the sale price if he "sold the house". The plaintiff brought one James Soutter, who was in the market for a home, to see the house and introduced Soutter to the defendant. The plaintiff had quoted $65,000 as the sale price to Soutter. Thereafter, Soutter and the defendant negotiated for the purchase of the house. They agreed upon the price of $61,750.00, an agreement of sale was drawn up on March 5, 1962 and a deed was executed on May 1st. The plaintiff testified that following the sale of the house, the defendant offered to pay him a commission of 2½% of the sale price which he refused and subsequently the defendant offered him a percentage which would have amounted to several hundred dollars which he also refused. The plaintiff, who had left the Virgin Islands in July 1962 for the United States, received a letter from the defendant under date of August 28, 1962 notifying him that the defendant had "laid off all of the crew" including the plaintiff. Then, under date of August 31st, the plaintiff wrote the defendant stating, inter alia, "The thing that bothers me is that you have never mentioned the commission for selling the house."

Soutter, the purchaser, testified that the plaintiff brought him to the house and that Soutter had never discussed the purchase of the property with any real estate broker. When the final price was being discussed with the defendant, Soutter was given the impression that payment of a commission would be made to plaintiff, but he had no idea as to the amount.

The defendant testified that he did not make the plaintiff any offer of a commission or a promise of any amount for bringing about the sale to Soutter and that the first time the plaintiff made a demand for a commission on the sale was in the letter of August 31st. The defendant further testified as follows:

"A. We had one discussion about a commission. I told Herb the plaintiff the day before I was going down to sign the contract of sale that I was going to Cox\'s office the next morning to meet Mr. Soutter and sign it, and at that time he said `Am I going to get a commission on the house?\' and I said `I don\'t think so.\'

"Q. That was all the discussion?

"A. That was all. He approached me with the idea himself. I could see no reason why he should get a commission. He wasn\'t a broker. He was an employee of mine. The next day when I talked with Mr. Soutter I asked him about a commission. I said `Herby expects a commission\' and Soutter says `He does not deserve a commission. He is a friend, he is an employee of yours, and he is not a broker, and I\'m not going through a broker, so I see no reason why he should get a commission.\'

"Q. And that\'s why you dropped the price from —

"A. From $65,000 to $61,750."

On December 30, 1963, the trial judge entered an order stating that he had found for the defendant on the issues presented and directing counsel for the defendant within 10 days to file proposed findings of fact, conclusions of law and draft of judgment. Counsel for the plaintiff was given leave within 10 days thereafter to file objections thereto, which he did. On January 14, 1964 the findings of fact, conclusions of law, and judgment prepared and filed by counsel for the defendant were signed by the trial judge without change. It was concluded as a matter of law that "plaintiff has failed to prove by a preponderance of the evidence that the sale of said property by the defendant was procured through the agency of plaintiff", and that "in any event, said alleged promise not being in writing is within the Statute of Frauds." The plaintiff appealed from the judgment entered thereon dismissing his complaint.

The first question with which we are presented is whether the trial judge erred in concluding that the action on the alleged oral promise of the defendant to pay a commission to the plaintiff for his services in procuring a purchaser for the defendant's house was barred by the Statute of Frauds. The conclusion of law prepared by counsel for the defendant and signed by the trial judge does not indicate which statute is relied upon. The defendant in his argument, however, relies in this regard upon 28 V.I.C. § 241(a) which provides:

"(a) Except for a lease for a term not exceeding one year, no estate or interest in real property, and no trust or power over or concerning real property, or in any manner relating thereto, can be created, granted, assigned, transferred, surrendered, or declared, otherwise than —

"(1) by operation of law; or

"(2) by a deed of conveyance or other instrument in writing, signed by the person creating, granting, assigning, transferring, surrendering, or declaring the same, or by his lawful agent under written authority, and executed with such formalities as are required by law."

In addition, we must consider in this connection 28 V.I.C. § 242 which provides:

"Every contract for the leasing for a longer period than one year from the making thereof, or for the sale of any lands, or any interest in lands, shall be void unless the contract or some note or memorandum is in writing, and signed by the party to be charged, or by his lawful agent under written authority."

It is perfectly clear to us that these Virgin Islands Statutes of Frauds relate only to the sale or conveyance of land or the creation, transfer, surrender or declaration of interests in land whether by way of trust or otherwise. They do not have any application to an agreement for the payment of compensation for effecting the sale of land.¹ In this respect the Virgin Islands statutes are not different from the similar Statutes of Frauds of other jurisdictions which have been held to have no application to agreements to compensate agents or brokers in connection with the purchase or sale of real estate. Rathbun v. McLay, 1903, 76 Conn. 308, 56 A. 511, 512; Friedman v. Suttle, 1906, 10 Ariz. 57, 85 P. 726, 9 L.R.A.,N.S., 933; Annotation 151 A.L.R. 648; 12 Am.Jur.2d Brokers § 38; Restatement, Agency 2d § 54 comment c. For such agreements do not deal with any interest in real estate but merely stipulate for personal services relating thereto and accordingly need not be in writing. Carter v. McCall, 1940, 193 S.C. 456, 8 S.E.2d 844, 151 A.L.R. 641. It follows that the trial judge erred in holding that the Virgin Islands Statute of Frauds barred the plaintiff's action on the alleged oral agreement by the defendant to pay him the commission which he has sued to recover.

The defendant also argues that the plaintiff is barred from recovering in this action because he did not have a license to engage in the business of a real estate agent as required by 27 V.I.C. §§ 301a and 303. These sections, when read together, so far as material here provide that any person engaging in the business of a real estate agent, as a condition precedent to engaging or continuing in such business shall obtain from the Government Secretary a license to engage in such business, for which an annual license fee of $50 is payable. The plaintiff contends that when a person engaged in another business, as he was, acts as a broker on a single occasion, but not as a regular business, he is not precluded from recovering compensation by reason of his failing to have procured a broker's license pursuant to the statute. We agree that engaging in a single isolated business transaction does not constitute being engaged in a business² for which a license to do business must be procured. In Downing v. Marks, 1935, 318 Pa. 289, 292, 178 A. 676, 677, the Supreme Court of Pennsylvania said:

"* * * Where the party did not hold himself out as a real estate broker, it has long been the law of this State that he may recover under his contract though he was not licensed as such a broker."

We regard this as a fair statement of the law of the Virgin Islands also. See, also, Ressler v. Marks, 1932, 308 Pa. 205, 162 A. 666, 86 A.L.R. 638; Trainer v. Deemer, 1933, 5 W.W.Harr. 396, 35 Del. 396, 166 A. 657; 12 Am.Jur.2d Brokers § 13. Since the plaintiff in the present case did not hold himself out as a real estate broker and indeed, so far as appears, had never acted as such on any other occasion, he is not precluded from recovery by the licensing statute.

The defendant further argues that, even assuming that the action is not barred by any statute, the plaintiff failed to prove the alleged agreement by a preponderance of the evidence, and the trial judge was accordingly justified in concluding that any discussion relating to compensating plaintiff for alleged sale of the property was at most the offer of a...