Faulkner v. Stapleton Ins. & Realty Corp., 3 Div. 706

• Decision Date: 22 August 1957
• Docket Number: 3 Div. 706
• Citation: 266 Ala. 437,96 So.2d 761
• Parties: James H. FAULKNER et al. v. STAPLETON INSURANCE and REALTY CORPORATION.
• Court: Alabama Supreme Court

Page 761

96 So.2d 761

266 Ala. 437

James H. FAULKNER et al. v. STAPLETON INSURANCE and REALTY CORPORATION.

3 Div. 706.

Supreme Court of Alabama.

Aug. 22, 1957.

Capell, Howard & Cobbs, Montgomery, and J. B. Blackburn, Bay Minette, for appellants.

Telfair J. Mashburn, Jr., Bay Minette, for appellee.

GOODWYN, Justice.

This is a suit by Stapelton Insurance and Realty Corportion, a corporation, against James H. Faulkner, James M. Folmar and Henry I. Flinn, Jr., to recover a broker's commission in the amount of $21,250 allegedly due under an employment agreement involving what is known as the Northrop lands in Monroe County, Alabama. The trial court, sitting without a jury, rendered judgment in favor of plaintiff for $5,000. The defendants bring this appeal from that judgment.

Appellants insist that the judgment should be reversed for the following reasons:

I. Appellee did not have a broker's license as required by Act No. 422, approved Aug. 15, 1951, effective Oct. 1, 1951, Acts 1951, Vol. I, p. 745, Code 1940, Title 46, §§ 311(1) to 311(20), Cumulative Pocket Part, thus rendering any agreement for payment of a broker's commission, if in fact made, void and unenforceable.

II. There is a failure of proof of an agreement to pay the claimed broker's commission.

I.

It appears to be firmly established that the contract of a real estate broker who has not obtained a broker's license, such as that required by Act No. 422, supra, is unenforceable. Waldrop v. Langham, 260 Ala. 82, 86, 69 So.2d 440; Knight v. Watson, 221 Ala. 69, 70, 127 So. 841. While those cases dealt with §§ 298 to 311, Tit. 46, Code 1940, which were repealed by Act No. 422, § 22, supra, the holding there that a contract to pay a real estate broker's commission is not enforceable unless the broker has secured a broker's license is equally applicable in the instant case. Act No. 422 superseded §§ 298 to 311, Tit. 46, Code 1940, but both laws were enacted 'under the police power designed to regulate the real estate business and to protect the public against fraud and imposition.' Waldrop v. Langham, supra [260 Ala. 82, 69 So.2d 443]; Knight v. Watson, supra. Being so, the failure of a real estate broker to procure the broker's license required by Act No. 422, as under the prior law, renders unenforceable any contract entered into by such broker which provides for payment of a commission. As stated in Knight v. Watson, supra [221 Ala. 69, 127 So. 842]:

'A statute imposing a license tax as a revenue measure merely, although declaring the doing of business without such license unlawful and affixing a penalty as a method of enforcement, does not render void and unenforceable contracts made without such license. * * *

'But an act under the police power, designed to regulate the business, to protect the public against fraud and imposition, requiring a license as evidence of qualification and fitness, and prohibiting any act of business under penalty, unless such license is first obtained, does render such contracts illegal, void, and unenforceable in actions for the recovery of compensation and the like. * * *'

However, appellee takes the position that since it is a corporation it cannot be issued a broker's license, and that it was authorized to act as a real estate broker in this instance because it had in its employ a licensed broker who handled the transaction. We are unable to agree with this contention for the reason that Act No. 422 clearly, it seems to us, provides for the issuance of a broker's license to a corporation. Section 3 of the Act (§ 311(3), Tit. 46, Code 1940, Cumulative Pocket Part, supra) defines the meaning of the word 'person' as used in the Act, unless the context requires a different meaning, to include 'partnerships, associations, firms, and corporations.' Section 7 of the Act (§ 311(7), Tit. 46, Code 1940, Cumulative Pocket Part, supra) deals with non-resident licensees and requires every non-resident applicant to file an irrevocable consent with respect to the filing of suits and the service of process. It is there provided that 'said consent shall be duly acknowledged, and if made by a corporation, shall be authenticated by the seal of such corporation.' (Emphasis supplied.) Section 8 (§ 311(8), Tit. 46, supra) provides for a written examination of each applicant for real estate broker. Subsection (d) thereof provides as follows:

'(d) If the applicant is a partnership, association or corporation, said examination shall be submitted to on behalf of said partnership, association or corporation, by the member or officer thereof who is designated in the application as the person to receive a broker's license by virtue of the issuance of a license to the partnership, or association or corporation, provided that where more than one member of such partnership or association or corporation shall be actively engaged in the real estate...