Buras v. Fidelity & Deposit Co. of Maryland

• Decision Date: 03 March 1941
• Docket Number: 36050.
• Court: Louisiana Supreme Court
• Parties: BURAS et al. v. FIDELITY & DEPOSIT CO. OF MARYLAND.

1 So.2d 552

197 La. 378

BURAS et al. v. FIDELITY & DEPOSIT CO. OF MARYLAND.

No. 36050.

Supreme Court of Louisiana

March 3, 1941

Rehearing Denied March 31, 1941.

J. L. Warren Woodville, of New Orleans, for applicants.

P M. Milner, of New Orleans, for respondent.

FOURNET Justice.

Plaintiffs instituted this suit against the Fidelity & Deposit Company of Maryland, surety on the bonds furnished by Priest Montagnet & Roshko, Inc., as a real estate broker under the provisions of Act No. 236 of 1920, to recover the sum of $1,250, with interest and attorney fees, alleged to have been paid by them to the said corporation in pursuance of a contract for the purchase of real estate, which was never delivered to them.

For cause of action plaintiffs alleged in effect that in the years 1927 1928, and 1929, Priest, Montagnet & Roshko, Inc., was licensed and bonded as a real estate agent and broker to do business in the City of New Orleans in accordance with Act No. 236 of 1920, with the defendant Fidelity & Deposit Company of Maryland as surety on its bond, during which time plaintiffs paid to the said corporation the sum of $1,250 in pursuance of a contract dated August 27, 1927, whereby the corporation agreed to sell to them lots 3 and 4, Square 5, in the Roseland Park subdivision and gave them a so-called 'bond for deed' for the propety; that the said corporation, after having changed its name by amendments to the charter, first to Montagnet & Roshko, Inc., and then to Montagnet & Jones, Inc., went out of existence soon after plaintiffs had paid the last installment on the contract in February of 1929, and the whereabouts of its officers and directors were unknown to plaintiffs; that the said contract was executed and the consideration recited therin received by the said corporation, its officers and directors, with the intention of defrauding plaintiffs, for they well knew at the time that the tract of land of which the lots purchased by plaintiffs form a part was burdened with a large mortgage, making it impossible to give plaintiffs a clear title to the property; and that the said corporation and its surety, having failed to tender title or to pay the amount of the claim within 30 days after demand, plaintiffs are entitled to 10% attorney fees under the provisions of Act No. 225 of 1918, in addition to the $1,250 paid for the real estate.

The defendant in its answer denied liability for the reason that the plaintiffs dealt with Priest, Montagnet & Roshko, Inc., as the owner of the real estate and not as a real estate broker, as defined by the act. Plaintiffs then filed a motion for a judgment in their favor on the face of the pleadings and the defendant excepted thereto on the ground that plaintiffs' petition disclosed neither a cause nor a right of action. The trial judge overruled the exceptions and, on the merits, rendered judgment in favor of plaintiffs as prayed for. The defendant appealed suspensively from the judgment to this court, which appeal, on the motion of the appellee, was transferred to the Court of Appeal for the Parish of Orleans, because of lack of jurisdiction. See Buras v. Fidelity & Deposit Company of Maryland, 195 La. 244, 196 So. 335. The case is now before us on a writ of certiorari to review the judgment of the Court of Appeal reversing the judgment of the lower court and dismissing plaintiffs' suit. See 198 So. 396.

It is contended by the defendant that it became surety on the bond of Priest, Montagnet & Roshko, Inc., as a real estate broker under the provisions of Act No. 236 of 1920 and that inasmuch as plaintiffs have failed to allege affirmatively in their petition they were dealing with the corporation as a real estate agent or broker as defined by Section 2 of the act, their petition discloses neither a cause nor a right of action.

Section 1 of the act provides that after January 1, 1921, 'it shall be unlawful for any person, firm, association, co-partnership or corporation * * * to engage in the business or capacity, either directly or indirectly, of a real estate broker * * * within this State without first obtaining a license under the provisions of this Act,' and Section 16 forbids anyone to conduct a real estate agency or deal in real estate as broker or agent without first furnishing a bond, with good and solvent surety, to insure that the objects and purposes of the business shall be honestly conducted and that such person or firm will pay the damages resulting from the operation of the business. A 'real estate broker' is defined in Section 2 to be 'any person, firm, partnership, association, co-partnership or corporation, who for a compensation or valuable consideration sells or offers for sale, buys or offers to buy, or negotiate the purchase or sale or exchange of real estate, or who leases or offers to lease or rents or offers for rent, any real estate or the improvements thereon for others, as a whole or partial vocation.' In the same section it is declared that the provisions of the act shall not apply to anyone 'who, as owner or lessor, shall either individually or through an employee or representative not otherwise engaged in the real estate business perform any of the acts aforesaid with reference to property owned by them, nor shall the provisions of this Act apply to persons holding a duly executed power of attorney from the owner for the sale, leasing or rental of real estate, nor shall this Act be construed to include in any way the services rendered by an attorney at law in the service of a client, nor shall it be held to include a receiver, trustee in bankruptcy, administrator, executor, tutor, or civil sheriff for any parish of this State, nor a trustee selling under a deed of trust. * * *' (Italics ours.)

This court, in the case of Trentman Co. v. Brown, 176 La. 854, 147 So. 14, 15, had for consideration the exceptions to the act and, in construing the same in its original opinion, said Section 2 'declares that its provisions shall not apply to those who 'as owner or lessor, shall either individually or through an employee or representative not otherwise engaged in the real estate business perform any of the acts aforesaid with reference to property owned by them,' nor to persons 'holding a duly executed power of attorney from the owner for the sale, leasing or rental of real estate,' nor to an attorney at law rendering services to a client. Reading these provisions together, we think that the person 'holding a duly executed power of attorney from the owner' means one 'not otherwise engaged in the business of real estate,' who is acting as the 'alter ego' of an owner in an isolated transaction. * * *' A rehearing was granted for the purpose of reconsidering this holding and the court concluded that 'The exemption was not intended to protect those engaged in selling real estate as a business,' since it 'was intended to have effect and the Legislature did not intend that its provisions could be defeated by the persons engaged in the business which it sought to regulate.' (Italics ours.)

But it has been suggested that because a comma does not separate the word 'representative' resentative' from the clause 'not otherwise engaged in the real estate business' this clause modifies 'employee or representative' and not 'owner or lessor,' and consequently the clause does not refer to a real estate agent, or broker dealing with his own property.

'The universal and most effectual way of discovering the true meaning of a law, when its expressions are dubious, is by considering the reason and spirit of it, or the cause which induced the Legislature to enact it.' Article 18, Revised Civil Code. 'Punctuation * * * cannot control its (a statute's) construction against the manifest intent of the legislature, and the court will punctuate or disregard punctuation * * * to ascertain and give effect to the real intent * * *' (59 Corpus Juris 989, Section 590. Brackets ours), and the doctrine of the 'last antecedent' that 'relative and qualifying words, phrases, and clauses are to be applied to the words or phrases immediately preceding and are not to be construed as will not...