Breeding v. Anderson
| Decision Date | 21 January 1953 |
| Docket Number | No. A-3805,A-3805 |
| Citation | 152 Tex. 92,254 S.W.2d 377 |
| Parties | BREEDING et al. v. ANDERSON. |
| Court | Texas Supreme Court |
Hutcheson, Taliaferro & Hutcheson, Vinson, Elkins & Weems, Baker, Botts, Andrews & Parish, Palmer Hutcheson, Jr., M. C. Chiles, R. E. Morse, Jr., Thomas B. Weatherly, Wm. E. Loose, Denman Moody and J. Curtiss Brown, Houston, for petitioners.
Barkley & Woods, Stanley C. Woods and Searcy Bracewell, Houston, for respondent.
In this case respondent Anderson, as plaintiff, brought a suit in a district court of Harris County, Texas, against S. W. Breeding, Marshall H. Stone, Hydrocarbon Production Company, Columbian Carbon Company, Howard S. Cole, W. C. Kneale and the Texas Company, petitioners herein, and who were defendants in the trial court. The parties will be referred to as they appeared in the trial court. Plaintiff in his answer to the application for writ of error states that his cause of action was a three-pronged affair as follows:
'(1) To recover damages for wrongful conspiracy to defraud plaintiff of earned compensation for services performed by him resulting in the sale of certain oil and gas properties owned by the estate of Rogers Lacy, deceased.
'(2) to recover damages for breach of a written contract to compensate plaintiff for his personal services; and,
'(3) to recover damages for the wrongful conversion and breach of trust in regard to confidential data, information and reports compiled and accumulated by plaintiff and delivered to defendant, The Texas Company, for limited purposes.'
The pleading, less the formal parts, is set out as Exhibit A and attached by the Court of Civil Appeals to its opinion on rehearing. 250 S.W.2d 467. A reading of the allegations contained in paragraph III through V of said pleading shows, beyond any question, that such allegations seek to recover a commission of $35,000 from all defendants, because plaintiff Anderson was the procuring cause of the sale of the Lacy's oil and gas leases and other mineral properties to Hydrocarbon Company and defendant, Cole. The petition does not allege that plaintiff Anderson had a license either as a real estate broker, as provided in Article 6573a, Vernon's Annotated Civil Statutes of Texas; or as a salesman or dealer in securities as is provided in Article 600a, Vernon's Annotated Civil Statutes of Texas. Plaintiff and defendant entered into a stipulation that at all times material hereto, plaintiff, George H. Anderson, was not licensed as a Real Estate Dealer, Salesman, or Agent under the Real Estate Dealers' License Act, Article 6573a, Texas Revised Civil Statutes, nor as a securities Dealer, or Salesman, or Agent, under the Securities Act, Article 600a, Texas Revised Civil Statutes.
After filing their answers in which exceptions were made to plaintiff's pleadings for failure to allege he was duly licensed, and issue being joined by a general denial, the defendants filed a motion for summary judgment on the following grounds: (1) that plaintiff Anderson 'was not licensed as a Real Estate Broker under Article 6573a, nor as a securities dealer, salesman or agent under Article 600a, Texas Revised Civil Statutes'; (2) this is a suit by plaintiff to recover a commission for alleged efforts of plaintiff in assisting in the sale of real estate, and oil, gas and mineral leases, and the stipulation reveals plaintiff had no license; (3) that plaintiff could not legally recover any commission or compensation because he had no license. Plaintiff Anderson filed his answer to said motion wherein he first files a general denial, then resists the motion for summary judgment on the ground that he comes within the terms of Subsections (a) and (c) of Section 3, Article 600a; also that since Article 600a governs plaintiff's dealings, Article 6573a does not apply as is provided in Section 3, Subsection (c) of said last mentioned article. Plaintiff filed an affidavit opposing such motion and attached to it his affidavit Exhibit A, which was the sale contract between the Lacys and Hydrocarbon Production Company, Inc. This contract is for the sale of oil and gas leases and mineral properties, together with the machinery, appurtenances, easements, etc. necessary to produce such minerals, and four tracts of real estate. The affidavit sets out the negotiations between Breeding and plaintiff wherein Breeding informed plaintiff that the properties to be sold for $5,100,000 in truth belonged to the Roger Lacy estate, although title was held in various names. The affidavit further states that Breeding represented to affiant plaintiff that he had authority from the Lacys to sell these properties for such sum; and that Breeding and affiant agreed that if plaintiff sold the properties to the Texas Company, Breeding would pay affiant $35,000 as commission. Affiant denies that he has been engaged in selling securities under Article 600a, or real estate under Article 6573a, Texas Revised Civil Statutes; but says he has bought leases and mineral interest and land exclusively for the Texas Company for more than ten years previous to filing the affidavit, and with funds supplied wholly by the Texas Company. The affidavit is silent as to any breach of trust or confidence on the part of the Texas Company (or any of the defendants), in the purchase of the Lacy properties by Cole, Columbian Carbon Company or the Hydrocarbon Company.
There can be no question but that the cause of action which plaintiff Anderson asserts against all defendants for a commission, earned compensation for services, or conspiracy to defraud him of either, is such a transaction as to come under the ban of Article 600a, Section 33b, and Article 6573a, Section 13, which prohibits recovery of a commission, or compensation for services rendered in making sales of securities or real estate, unless the party bringing the action alleges in his pleadings and makes proof that he has a license issued by the proper authority. Plaintiff's answer to this is to claim he is exempt by virtue of Section 3(a) and (c) of Article 600a and Section 3(c) of Article 6573a. Sections 3(a) and (c) of Article 600a provide that the provisions of the Act shall not apply under any of the following transactions or conditions:
'* * * (a) At any judicial, executor's, administrator's, guardian's or conservator's sale, or any sale by a receiver or trustee in insolvency or bankruptcy.
'(c) Sales of securities made by, or in behalf of a vendor in the ordinary course of bona fide personal investment of his personal holdings, or change of such investment, if such vendor is not otherwise engaged either permanently or temporarily in selling securities, provided, that in no event shall such sales or offerings be exempt from the provisions of this Act when made or intended, either directly or indirectly, for the benefit of any company or corporation within the purview of this Act.'
Subsection (a) above excludes sales made by executors, administrators, etc., but it does not exempt dealers or salesmen who make sales or offer securities for any of those named exempt persons. Subsection (c) excludes 'owners' of securities from coming within the definition of a 'dealer' as set out in the Act. We think the language used by the Court of Civil Appeals in the case of Sibley v. Coffield, Tex.Civ.App., 193 S.W.2d 239, 241, writ refused, n. r. e., is particularly applicable, and exactly fits our present situation:
'Several court decisions have construed either Sec. 3(c) or Sec. 33b, or both of them together, and hold in substance that even if, in fact, an owner or seller of stock or security were exempt from obtaining a dealer's license and from registering such stock or security, and even if in fact the sale or offer to sell by such owner or seller is made in the ordinary course of a bona fide sale, such facts do not exempt or relieve a person employed to aid the owner or seller in making or offering the stock or security for sale from registering and obtaining a license as a 'dealer' or 'broker,' as required by Sec. 2(c) of the Act, before he can collect a commission or compensation for such services; or sue therefor in the courts.'
The facts of this case do not show an executor's or administrator's, etc. sale, and if they did, plai...
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