Georgia Real Estate Commission v. Accelerated Courses in Real Estate, Inc.

• Decision Date: 04 March 1975
• Docket Number: No. 29398,29398
• Citation: 214 S.E.2d 495,234 Ga. 30
• Court: Georgia Supreme Court
• Parties: The GEORGIA REAL ESTATE COMMISSION et al. v. ACCELERATED COURSES IN REAL ESTATE, INC.

Page 495

214 S.E.2d 495

234 Ga. 30

The GEORGIA REAL ESTATE COMMISSION et al. v. ACCELERATED COURSES IN REAL ESTATE, INC.

No. 29398.

Supreme Court of Georgia.

March 4, 1975.

Rehearing Denied March 25, 1975.

Arthur K. Bolton, Atty. Gen., R. Douglas Lackey, Asst. Atty. Gen., Atlanta, for appellants.

Lokey & Bowden, Hamilton Lokey, Gerald F. Handley, Atlanta, Henry C. Head, Carrolton, for appellee.

Syllabus Opinion by the Court

HILL, Justice.

Appellee, Accelerated Courses in Real Estate, Inc. ('ACRE'), filed suit for injunction and declaratory judgment against the Georgia Real Estate Commission and its members, appellants. ACRE teaches courses to students seeking careers in the real estate business. The Commission has the duty and responsibility of licensing real estate brokers and salesmen (Code Ann. Ch. 84-14).

In 1974, the General Assembly enacted the following provision applicable to real estate salesmen (Ga.L.1974, pp. 375, 376; Code Ann. § 84-1411(b)): 'Each applicant for a salesman's license shall (1) furnish evidence of completion of twenty-four inclass hours in a course of study approved by the commission or, in lieu thereof, a correspondence course approved by the Commission, or (2) furnish a certificate that he has successfully completed at least five credit hours in subjects related to real estate at an accredited university or college prior to standing a real estate examination.' (Emphasis supplied.) The amendment became effective July 1, 1974 (Code Ann. § 102-111).

The Commission thereafter adopted Rules 520-2-.01 through 520-2-.10 providing for such matters as the means by which an applicant for a salesman's license would furnish evidence of completion of the required study and the means by which a school would certify a student as having passed its course of study, requiring such schools subject to the Georgia Proprietary School Act (Code Ann. Ch. 32-23B) to be approved by the State Board of Education, etc.

One such Rule, 520-2-.03, required that a school seeking approval of its course submit a proposed course outline, copies of textbooks, copy of sample final examination, resumes on its instructors, etc.

Subparagraph (f) of said Rule 520-2-.03 provided in pertinent part as follows: 'A schedule of course offerings for the year for which approval is sought must accompany the application. Each schedule must include the name, the date, time and place of any course offering. The schedule of course offerings must be arranged so as to allow reasonable time for either home study or in-class preparation for each classroom session. No course offering of between 24 and 48 hours in duration will be approved unless the schedule calls for three or less hours per day of classroom study. No course offering between 48 hours and 92 hours in duration will be approved unless the schedule makes provision for no more than six hours per day of any class study. No course exceeding 92 hours or more of study shall be approved unless provision is made for no more than eight hours per day of in-class instruction.' (Emphasis supplied.)

ACRE filed application with the Commission for approval of its course of study. That application showed that its 24-hour course consists of 3 days of instruction of 8 hours each. The Commission denied the application on the ground that the course offered by ACRE did not comply with Rule 520-2-.03(f).

ACRE filed this suit alleging that its 24-hour course complies with the 1974 Act, that the Commission was without authority to adopt Rule 520-2-.03, and that the Commission's action was arbitrary and capricious. (Actually, the complaint challenges a statement of policy apparently adopted and issued by the Commission after approval of the 1974 Act and before it became effective on July 1, 1974. We treat the complaint as attacking the rules adopted after the effective date of the Act, as did the court below, because it would be of no benefit to the parties to rule upon the statement of policy and leave the validity of the rules undecided.)

ACRE's verified complaint and supporting affidavits showed that its 3-day course permitted use of highly qualified instructors who would be unavailable if the course were taught over longer periods of time, permitted students from across the State to attend ACRE's courses offered in Atlanta and Savannah who could not attend an extended course in those cities, and was a more efficient use of classtime in that it allowed progression based upon material taught and avoided review of previously learned material.

The Commission submitted affidavits of educators showing that teaching by the 'distributed learning' method (material presented for student consumption in small quantities over a period of time) is preferable to the 'mass learning' method (material presented in concentrated quantities in a short time span) in that distributed learning is more easily understood by students because time is allowed for absorption and to clear up confusion, and distributed learning is retained by students longer.

After hearing, the trial court enjoined the Commission 'until further order' from enforcing Rules 520-2-.01 through 520-2-.10, on the ground that the Commission had exercised Ga.L.1974, pp. 375, 376, supra, in an unconstitutional manner. The parties waived findings of fact and conclusions of law by the trial court (see Code Ann. § 81A-152), so that this court does not have the benefit thereof.

The Commission has appealed. Admittedly, several of the issues are extremely close.

1. Appellee has suggested that this court lacks jurisdiction. Although the appellee's complaint seeks a declaratory judgment, it also alleges that ACRE is without an adequate remedy at law. The prayer is not for injunctive relief to preserve the status quo pending the declaratory relief (see Code Ann. § 110-1102(b)) but is for a permanent, as well as temporary, injunction. The trial court enjoined the Commission 'until further order.'

Whether interlocutory or final, the order granting the injunction is appealable at this time (Code Ann. § 6-701(a)(3). Being an equity case, it is appealable to this court (Code Ann. § 2-3704, Const. art. VI, § II, par. 4), notwithstanding the fact that the constitutional validity of administrative rules would be appealable to the Court of Appeals.

We find that this court has jurisdiction of this appeal.

2. In Eason v. Morrison, 181 Ga. 322(1), 182 S.E. 163, it was held that the test of validity of an administrative rule is twofold: (1) Is it authorized by statute, and (2) is it reasonable? An agency rule might be reasonable but unauthorized by statute, or authorized by statute but unreasonable. In either event, it could not stand. However, because an unreasonable rule would be invalid and hence unauthorized, the distinction may occasionally have been overlooked.

Our first inquiry is whether the rule in issue here was authorized by statute.

In Eason v. Morrison, supra, the State Board of Barber Examiners was acting pursuant to statutory authority 'to adopt reasonable rules and regulations not inconsistent with the Constitution or laws of the United States or of this State or with the terms of this Chapter, for the enforcement of and carrying out the purposes of this Chapter.' Thus, the Board's rulemaking power was to adopt reasonable rules and regulations, not inconsistent with law, for the enforcement of and carrying out the purposes of the barbering law. The Board adopted a rule requiring a licensed applicant seeking renewal of his license to submit a laboratory report and doctor's certificate showing that the renewal applicant was free from infectious diseases. The rule was held to be authorized by the statute, not inconsistent therewith, and reasonable.

In Eason, supra, the court examined the Act in its entirety and determined that one of its purposes was to protect the public health. The Act creating the Real Estate Commission and regulating real estate practitioners, as does the 1974 amendment, has for its purpose the protection of the public welfare.

The 1974 Act (Ga.L.1974, pp. 375, 376; Code Ann. § 84-1411(b)) provides in pertinent part that each applicant for real estate salesman's license shall furnish evidence of completion of 'twenty-four-in-class hours in a course of study approved by the Commission.'

The inquiry at this point is whether the authority given the Commission to approve 'a course of study' includes authority to approve the time frame thereof. If 'course of study' is narrowly construed to mean 'curriculum,' the answer would favor the school, but the General Assembly did not use the word 'curriculum.' If, however, 'course of study' be construed broadly to mean 'course,' the answer would favor the Commission, but the General Assembly added the words 'of study.'

However, the 1974 amendment itself does not authorize the Commission to promulgate rules. Such authority existed previously in Code Ann. § 84-1405(d) (Ga.L.1973, pp. 100, 104) which authorizes the Commission '. . . to pass rules and regulations relating to the professional conduct of licensees and administration of, but not inconsistent with, the provisions of this Chapter,' to wit: Code Ann. Ch. 84-14. The 1974 Act (Ga.L.1974, pp. 375, 376), amended Ch. 84-14. Thus, the rule-making power of the Real Estate Commission is to pass rules and regulations relating to...