Frankenthal v. Wisconsin Real Estate Brokers' Bd.

Decision Date28 February 1958
Citation3 Wis.2d 249,88 N.W.2d 352
PartiesElla FRANKENTHAL et al., co-partners, d/b/a A. Frankenthal & Son, Respondents, v. WISCONSIN REAL ESTATE BROKERS' BOARD, an agency of the State of Wisconsin, Appellant.
CourtWisconsin Supreme Court

Stewart G. Honeck, Atty. Gen., Roy G. Tulane, Asst. Atty. Gen., Madison, for appellant.

Bernard Berk, Green Bay, for respondents.

CURRIE, Justice.

The issues confronting us on this appeal are as follows:

(1) Did the attacked action of the board constitute the making of a rule within the meaning of sec. 227.014, Stats., so as to be reviewable by an action for declaratory judgment as provided by sec. 227.05, Stats.?

(2) Is such board action invalid as being an unauthorized interpretation of ch. 136, Stats., governing the licensing of real estate brokers?

(3) May costs be taxed against a state agency such as the instant board?

The attorney general contends that the refusal of a license to the partnership constituted an agency determination which is only reviewable under sec. 227.15, Stats., in the manner specified by sec. 227.16, Stats., and not by an action for declaratory relief under sec. 227.05, Stats. We deem that the cases of Wisconsin Tel. Co. v. Wisconsin E. R. Board, 1948, 253 Wis. 584, 34 N.W.2d 844; and Kubista v. State Annuity & Inv. Board, 1950, 257 Wis. 359, 43 N.W.2d 470, decide the issue contra to such contention of the attorney general.

The Wisconsin Tel. Co. case held that it was the legislative intent that administrative agency decisions which are reviewable under sec. 227.15, Stats., be final orders entered at the end of contested proceedings which are based on findings of fact required under sec. 227.13, Stats. In the instant case there was no contested proceeding in which the plaintiffs were accorded a hearing, and no findings of fact whatever were attempted to be entered.

In Kubista v. State Annuity & Inv. Board, supra, a state employee requested the defendant board to change the plan of payment of an annuity. The applicant was advised by letter that the request came too late to effect a change. It was conceded that the action of the agency did not constitute a 'decision' within the meaning of sec. 227.15, Stats., under the rule of the Wisconsin Tel. Co. case. While the opinion of this court did not expressly so hold, it did so by implication. This is because the opinion assumed that a 'rule' and not a 'decision' of the agency was involved, and held that the complaint was sufficient to spell out a cause of action for declaratory relief. The facts in the Kubista case parallel those of the instant appeal because the only ruling of the agency consisted of the board's letter of December 4, 1956, returning the partnership's application for license.

We have no hesitancy in holding that the issuance by the board in 1956 of the mimeographed instructions for renewal of real estate broker's licenses, which contained the requirement that all members of a partnership must be licensed as a condition to licensing the partnership, constituted the making of a rule reviewable by the declaratory relief procedure set forth in sec. 227.05, Stats. The facts that no hearing was held before adoption, if such hearing was required, and that such rule was not filed and published as prescribed by ch. 227, Stats., are wholly immaterial on the issue of whether the same was so reviewable.

We now turn to the merits of the controversy, viz., whether the rule, that required inactive partners to be licensed as a condition to licensing the partnership, is valid.

Wisconsin enacted its first act for the licensing of real estate brokers in 1919. Laws of 1919, ch. 656. This act was thereafter extensively amended and revamped by the legislature enacting ch. 231, Laws of 1929, and now comprises ch. 136, Wis.Stats. Sec. 136.07(2) has since 1929, read as follows:

'If the licensee is a corporation, the license issued to it entitles the president thereof or such other officer as may be designated by such corporation to act as a broker. For each other officer who desires to act as a broker in behalf of such corporation, an additional license shall be obtained, the annual fee for which shall be $1 for a real estate broker's license and $10 for a business opportunity broker's license. No license as a real estate or business opportunity salesman shall be issued to any officer of a corporation or member of a partnership to which a license was issued as a broker. If the licensee is a partnership, the license issued to it entitles on member to act as a broker, and for each other member who desires to act as a broker an additional license shall be obtained, the annual fee for which shall be $1 for a real estate broker's license and $10 for a business opportunity broker's license.' (Italics supplied.)

The italicized words in the above quoted statute, standing alone, seem to make it abundantly clear that only those members of a partnership who desire to act in the capacity of a broker are required to be licensed. However, the attorney general points to an apparently inconsistent provision contained in sec. 136.05(1)(e), Stats. Such subsection relates to the required contents of the application for license, and reads as follows:

'Such further information as the board may reasonably require to enable it to determine the trustworthiness and competency of each applicant, including each member of the partnership, or each officer of the corporation, to transact the business of a real estate or business opportunity broker or salesman in such manner as to safeguard the interests of the public.'

It would seem to serve a useless purpose to require such information respecting the competency of an inactive partner, such as Ella Frankenthal, to transact the business of a real estate broker, if there is no requirement imposed by ch. 136 that such an inactive partner be licensed. Sec. 136.05(1)(e) remained unchanged as a result of the 1929 revision, and as enacted by the 1919 legislature such subsection was numbered sec. 1636-225(11)(e). On the other hand, the provisions of present sec. 136.07(2) were inserted into the licensing act as a result of such 1929 revision.

Viewing the issue of statutory interpretation most favorably from the standpoint of the board, we can come to no other conclusion than that an ambiguity exists as to whether an inactive partner is required to be licensed as a condition to licensing the partnership. This is exactly the situation where practical interpretation over a long period by the agency charged with administering an act or statute should be deemed controlling. For nearly twenty-seven years the board interpreted ch. 136 as not requiring that each inactive partner of a licensed partnership be licensed. During all of such period the legislature apparently acquiesced in such practical interpretation by the agency, and made no change in the wording of sec. 136.07(2). We adopt such practical interpretation upon the authority of Dunphy Boat Corp. v. Wisconsin E. R. Board, 1954, 267 Wis. 316, 326, 64 N.W.2d 866, and the other cases cited therein.

The attorney general further cites the provisions of secs. 136.01(2)(b), 136.10 and 136.11 as being pertinent on this issue of statutory interpretation. We find...

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