Ford v. Wisconsin Real Estate Examining Bd.

• Decision Date: 09 October 1970
• Docket Number: No. 131,131
• Citation: 179 N.W.2d 786,48 Wis.2d 91
• Parties: , 42 A.L.R.3d 1085 Ray FORD, Appellant, v. WISCONSIN REAL ESTATE EXAMINING BOARD, Respondent.
• Court: Wisconsin Supreme Court

Page 786

179 N.W.2d 786

48 Wis.2d 91, 42 A.L.R.3d 1085

Ray FORD, Appellant, v. WISCONSIN REAL ESTATE EXAMINING BOARD, Respondent.

No. 131.

Supreme Court of Wisconsin.

Oct. 9, 1970.

The complainant, Ray Ford, filed a complaint with the Wisconsin Real Estate Examining Board ¹ asking that the real estate broker's license of the 'Bud' Orth Real Estate Agency be revoked or suspended because of alleged racial discrimination on the part of the Orth Agency.

On March 6, 1967, complainant-appellant, a Negro, visited the 'Bud' Orth Real Estate Agency located at 1680 Douglas Avenue in Racine, Wisconsin, accompanied by his wife and infant child. The agency is owned and operated by Ellsworth C. 'Bud' Orth, a licensed real estate broker since 1949. The agency's listings are exclusive since it is not a member of the Multiple Listing Service of the Racine Realtors Listing Exchange. Mr. Ford asked Ken Orth, a licensed salesman on duty at the agency, to show him a particular piece of property listed with the agency since December of 1966, and advertised for sale in the Racine Journal-Times newspaper. The property was owned by Donald and Joanne McMahon, and located at 2608 Pinehurst in Racine, an area of the city in which few, if any, Negroes owned property or resided.

Ken Orth, in the presence of Ford and his family, made a phone call to the McMahons informing them that Ford wanted to look at the property as a prospective purchaser and that he was a Negro. After the telephone call Orth informed Ford that the owner did not want to show the property to colored persons and therefore he could not see it. Ford told Ken Orth that he was discriminating and left the agency. Ken Orth testified that Ford and his wife were a very nice looking couple and appeared to be perfectly respectable and neat.

The property was advertised for sale at $14,900, with $450 down. Ford had saved $1,700 and his wife earned $168 every two weeks.

The written listing contract between the Orth Agency and the McMahons expressed no restrictions as to race on showing the property. When there were such restrictions concerning particular property everyone in the office was supposed to carry the instructions 'in his head.' It appears from the record that prior to this time notations were made in the office card file as to whether or not particular pieces of property could be shown or sold to Negroes, but that the agency stopped this practice on the advice of its attorney. At the time in question there were about 50 listings being handled by the agency and between 15 to 20 involved instructions of the sellers that their homes were not to be shown to Negroes. If one of the salesmen was not sure whether a particular piece of property could be shown he would ask another salesman or call the owner and ask him.

The listing on this particular property was taken by Al Orth, another licensed salesman. He testified that McMahon gave him oral instructions that the property was not to be shown to Negroes. McMahon testified that he gave the instruction without any solicitation by Al Orth. McMahon stated that they made an oral agreement that it would not be shown to Negroes and that he made this a condition of his giving the listing, but later his testimony equivocates this to some degree. On August 7, 1967, Ford filed a complaint with the Wisconsin Real Estate Examining Board alleging in substance that E. C. 'Bud' Orth, a licensed broker, was guilty of racial discrimination as defined in sec. 101.60(1)(b), Stats., by refusing to show him property listed for sale with the agency solely because he was a Negro, and that such conduct constituted 'incompetency' and 'improper conduct' within the meaning and intent of sec. 136.08(2) (i) and (k), Stats. Further, he charged that the continued licensing of Orth, notwithstanding such conduct, violated Ford's right to equal protection of the laws under art. XIV, sec. 1 of the United States Constitution, and his inherent rights under art. I, sec. 1 of the Wisconsin Constitution. He asked that Orth's license be suspended and revoked.

The board held two hearings and dismissed the complaint, concluding that Orth was acting as agent under the explicit instructions of his principal and was not guilty of discrimination or of conduct in violation of sec. 136.08(2)(i) or (k), Stats. The circuit court for Dane county affirmed the findings of the board and this appeal was taken by Ford.

Theodore W. Harris, Racine, for appellant.

Fritschler, Ross, Pellino & Protzmann, Madison, for respondent.

BEILFUSS, Justice.

The parties ² have formulated and argued three questions:

1. Is a real estate broker guilty of racial discrimination in refusing to show property listed with him to Negroes pursuant to the unsolicited oral instructions of the property owner when such instructions were agreed to by the broker at the time the listing contract was made?

2. Does racial discrimination by a licensed real estate broker constitute 'incompetency,' 'improper dealing,' or 'untrustworthiness' within the meaning, intent, and purpose of sec. 136.08(2)(i) and (k), Stats., so as to authorize suspension or revocation of his license by the Wisconsin Real Estate Examining Board?

3. Does the decision of the Wisconsin Real Estate Examining Board that such conduct by a licensed broker is not racial discrimination constitute state action so as to deny Negroes the equal protection of the law guaranteed by art. XIV, sec. 1 of the United States Constitution, and art. I, sec. 1 of the Wisconsin Constitution?

The appellant Ford initially argues that Orth's refusal to show him the property falls squarely within the definition of racial discrimination as set forth in sec. 101.60(1)(b), Stats., which reads:

"Discriminate' and 'discrimination' mean to segregate, separate, exclude or treat any person unequally only because of race, color, religion, national origin or ancestry. It is intended that the factors set forth herein shall be the sole bases for prohibiting discrimination.'

Orth's conduct does fall within this broad definition but it was not actionable under that chapter. Sec. 101.60(1)(a) 1., Stats., states that 'housing' within the meaning of that section does not include:

'Any building or structure containing living quarters occupied or intended to be occupied by no more than one family and which is used by or was last used by the owner thereof as a bona fide residence for himself and any members of his family forming his household.'

Further, sec. 101.60(3), Stats., provides in part: 'This section shall be administered by the industrial commission ³ through its equal opportunities division. * * *' This proceeding is clearly before the real estate examining board under the directives of ch. 136.

Appellant also predicates discrimination by Orth on a federal substantive right established by 42 U.S.C.A. p. 193, sec. 1982, which provides:

'All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.'

In order to sustain a cause of action under this section one must prove that he has been deprived of the 'same right * * * to purchase * * * real * * * property' as is enjoyed by white citizens. He must also show that he has been denied the opportunity to purchase property on the basis of his race. If there has been such a denial then a cause of action arises under sec. 1982. (There may be several legitimate reasons which justify an owner in not selling or renting his property to a particular person whether he is white or black.)

This nondiscriminatory right is conferred by federal law and is not dependent on state law. Bush v. Kaim (D.C.Ohio, 1969), 297 F.Supp. 151.

Previously, 42 U.S.C.A. sec. 1982 was thought to bar only discrimination which was the product of state action and that it did not reach private discriminations. See Hurd v. Hodge (1948), 334 U.S. 24, 68 S.Ct. 847, 92 L.Ed. 1187. However, in June of 1968, the United States Supreme Court decided the landmark case interpreting sec. 1982, Jones v. Alfred H. Mayer Co. (1968), 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189, which held the statute prohibits private discrimination as well as public.

In Jones, supra, the petitioners filed a complaint in Federal District Court alleging that the respondents had refused to sell them a home in a St. Louis county, Missouri community solely because the petitioners were Negroes. Relying in part on sec. 1982, the petitioners sought injunctive and other relief. (Jurisdiction was invoked under 28 U.S.C.A. pp. 202, 203, sec. 1343(4), providing for 'damages * * * equitable or other relief under any Act of Congress providing for the protection of civil rights.') The district court dismissed the complaint and the Eighth Circuit Court of Appeals affirmed, concluding that sec. 1982 applied only to state action and did not reach private refusals to sell. The Supreme Court granted certiorari and the precise issue it considered was whether sec. 1982 barred all racial discrimination or merely that which was the product of state action. The court stated, at p. 413, 88 S.Ct. at p. 2189:

'We hold that § 1982 bars all racial discrimination, private as well as public, in the sale or rental of property, and that the statute, thus construed, is a valid exercise of the power of Congress to enforce the Thirteenth Amendment.'

The court also considered the relationship between sec. 1982 and the 'Fair Housing Act of 1968' (42 U.S.C.A. p. 686, sec. 3601 et seq.) It found that the Acts have independent significance and that the exemptions in the 1968 Act are not applicable under the 1866 Act (sec. 1982). It stated at pp. 416, 417, 88 S.Ct. at p. 2191: 'Its enactment (Civil Rights Act of 1968) had no effect upon § 1982 and no effect upon this litigation, * * *'

The standard established in Jones, supra, would appear to be simple. At p. 421, 88...