Gregory v. Roedenbeck

• Citation: 174 S.W.2d 585
• Decision Date: 20 October 1943
• Docket Number: No. 8124.,8124.
• Parties: GREGORY v. ROEDENBECK.
• Court: Texas Supreme Court

Page 585

174 S.W.2d 585

GREGORY v. ROEDENBECK.

No. 8124.

Supreme Court of Texas.

October 20, 1943.

Rehearing Denied November 10, 1943.

Error to Court of Civil Appeals of Ninth Supreme Judicial District.

Action by Herbert Roedenbeck against W. W. Gregory for one-half of defendant's commission on the sale of realty to a purchaser whose name was furnished by plaintiff. A judgment denying recovery was reversed by the Court of Civil Appeals, 169 S.W.2d 780, and defendant brings error.

Judgment of the Court of Civil Appeals reversed and judgment of the trial court affirmed.

W. M. Crook, of Beaumont, for plaintiff in error.

Otis Bowyer, Jr., of Dallas, amicus curiæ.

W. T. McNeill, of Beaumont, for defendant in error.

SHARP, Justice.

This suit was brought by Herbert Roedenbeck against W. W. Gregory, to recover one-half of the commission earned by Gregory on the sale of certain lands to a purchaser whose name had been furnished by Roedenbeck to Gregory pursuant to contract. The trial court rendered judgment for the petitioner, Gregory, because the plaintiff did not have a license under the Real Estate Dealers' License Act, Article 6573a, Vernon's Annotated Civil Statutes. Upon appeal, the Court of Civil Appeals reversed the judgment of the trial court and rendered judgment for Roedenbeck, holding that the Act was inapplicable to a case where a party merely furnished the name of a prospective purchaser; and, also, that the Act would be unconstitutional if applied to this transaction. 169 S.W.2d 780. This court granted a writ of error on Points 1 and 2, having reference to the construction and validity of the Act.

On the 14th day of July, 1941, Roedenbeck, a rice farmer, visited Gregory, who was a licensed real estate dealer. Gregory informed Roedenbeck that he was an agent for the sale of certain lands; and an agreement was reached whereby Roedenbeck was to furnish the name of a prospective purchaser, and in return was to receive one-half of Gregory's commission, when and if the sale was consummated. Roedenbeck gave Gregory the name of C. Doornbos, to whom 2740 acres of the land were sold on the 18th day of December, 1941. Both the trial court and the Court of Civil Appeals found that Roedenbeck fully performed his contract.

Roedenbeck was not, and never has been, a licensed real estate dealer, and this was the only time he furnished to a dealer for a valuable consideration the name of a prospective purchaser. His only connection with the sale was the furnishing of the name of Doornbos as a prospective purchaser. The commission on the sale to Doornbos amounted to $3,288. When Gregory repudiated his contract on January 6, 1942, and refused to pay him one-half of the commission, Roedenbeck filed this suit to recover one-half of the $3,288 and ran garnishment proceedings to impound the commission earned by Gregory. Gregory answered that his contract with Roedenbeck was void, because it violated the provisions of the Real Estate Dealers' License Act, and filed a cross-action for damages for the garnishment. On trial without a jury, judgment was rendered that plaintiff recover nothing, and that defendant recover damages for the garnishment.

The Legislature enacted the Securities Act, Article 600a, Vernon's Annotated Civil Statutes. See, also, Article 1083a, Vernon's Annotated Penal Code. That law is similar to the Act before us, and has been upheld by the courts of this State. Kadane v. Clark, 135 Tex. 496, 143 S.W. 2d 197; Atwood v. State, 135 Tex.Cr.R. 543, 121 S.W.2d 353. Real estate dealers' license laws have been held valid in other States. City of Little Rock v. Barton, 33 Ark. 436; Yount v. Denning, 52 Kan. 629, 35 P. 207; Riley v. Chambers, 181 Cal. 589, 185 P. 855, 8 A.L.R. 418; Haas v. Greenwald, 196 Cal. 236, 237 P. 38, 59 A.L.R. 1493, affirmed 275 U.S. 490, 48 S.Ct. 33, 72 L.Ed. 389; Bratton v. Chandler, 260 U.S. 110, 43 S.Ct. 43, 67 L.Ed. 157; City of St. Louis v. McCann, 157 Mo. 301, 57 S.W. 1016; Payne v. Volkman, 183 Wis. 412, 198 N.W. 438.

The pertinent parts of the statute are as follows:

Section 2, Subsection (a) 1. "The term `Real Estate Dealer' shall include every person or company, other than a salesman, and licensed and registered attorneys, * * * who advertises, or holds itself, himself, or themselves out as engaged in the business of selling, exchanging, buying, renting, or leasing real estate, or assists or directs in the procuring of prospects, or the negotiation or closing of any transaction which does or is calculated to result in the sale, exchange, leasing, or renting of any real estate, * * *." (Italics ours.)

Section 2, Subsection (b). "The term `Real Estate Salesman' shall mean and include any person or company employed or engaged by or in behalf of a licensed real estate dealer to do or deal in any act, acts, or transactions set out and comprehended by the definition of a `Real Estate Dealer' in Section 2, Subsection (a) of this Act." (Italics ours.)

Section 2, Subsection (c). "If the sense requires it, words in the present tense include the future tense; in the masculine gender, include the feminine or neuter gender; in the singular number, include the plural number; in plural number, include the singular number; `and' may be read `or'; and `or' may be read `and.'" (Italics ours.)

Section 4. "Any one act set out in Section 2, Subdivision (a) of this Act when performed for another or others for compensation or valuable consideration or who with the intention or in the expectation or upon the promise of receiving or collecting compensation shall constitute a person or company performing, offering or attempting to perform such act or acts, a real estate dealer or a real estate salesman within the meaning of this Act."

Section 11, Subsection 5, authorizes the administrator to suspend or revoke or refuse to renew a license of any real estate dealer who has "Paid commissions or fees to, or divided commissions or fees with anyone not licensed as a real estate dealer or salesman."

Section 13 provides: "No person or company engaged in the business of acting in the capacity of a real estate dealer or real estate salesman within this State shall bring or maintain any action in the courts of this State for the collection of compensation for the performance of any of the acts mentioned in Section 2, Subdivision (a) hereof, without alleging and proving that such person or company was a duly licensed real estate dealer or salesman at the time the alleged cause of action arose."

Section 20. "It shall be unlawful for any real estate dealer or real estate salesman to offer, promise, allow, give, or pay directly or indirectly any part or share of his commission or compensation arising or accruing from any real estate transaction to any person who is not a licensed dealer or salesman in consideration of service performed or to be performed by such unlicensed person, * * *."

When a business, otherwise private in nature, becomes affected with the public's interest, such business may be reasonably regulated by the State under the police power. Commercial Standard Insurance Co. v. Board of Insurance Commissioners of Texas, Tex.Civ.App., 34 S. W.2d 343, writ refused; 16 C.J.S., Constitutional Law, § 188, p. 558, and cases cited in footnotes.

The rule is generally accepted that the regulation of real estate dealers falls within the police power of the State. Riley v. Chambers, 181 Cal. 589, 185 P. 855, 8 A.L.R. 418; Roman v. Lobe, 243 N.Y. 51, 152 N.E. 461, 50 A.L.R. 1329; 16 C.J.S., Constitutional Law, § 188, pp. 558 and 559 and cases cited in footnotes.

Some parts of this Act have been sustained by the courts of Texas. Landis v. W. H. Fuqua, Inc., Tex.Civ.App., 159 S.W. 2d 228, writ refused; Goen et al. v. Hamilton, Tex.Civ.App., 159 S.W.2d 231.

The Court of Civil Appeals construed the definition of a real estate dealer as including only one who is in the business of...