Hall v. Hard

• Court: Texas Supreme Court
• Writing for the Court: GRIFFIN; CULVER; HAMILTON; SMITH
• Citation: Hall v. Hard, 160 Tex. 565, 335 S.W.2d 584 (Tex. 1960)
• Decision Date: 17 February 1960
• Docket Number: No. A-7117,A-7117
• Parties: , Blue Sky L. Rep. P 70,462 D. C. HALL et al., Petitioners, v. J. L. HARD, Respondent.

Page 584

335 S.W.2d 584

160 Tex. 565, Blue Sky L. Rep. P 70,462

D. C. HALL et al., Petitioners, v. J. L. HARD, Respondent.

No. A-7117.

Supreme Court of Texas.

Feb. 17, 1960.

Rehearing Denied May 18, 1960.

Rawlings, Sayers, Scurlock & Eidson, Fort Worth, for petitioners.

Barwise, Magoffin & Carrigan, Tilley, Hyder & Law, Fort Worth, for respondent.

GRIFFIN, Justice.

This is a suit by respondent, Hard, against petitioners, Hall, et al. to recover a commission. The parties will be referred to as they were in the trial court.

Hard, as plaintiff, alleged that by an oral contract defendant, Hall 'employed plaintiff to attempt to find a buyer for the certificates, properties and other assets owned by said defendants'; that defendant, Hall, agreed to pay plaintiff a 5% commission if he would procure a buyer, ready, willing and able 'to purchase these properties upon terms satisfactory to defendants.' Plaintiff alleged that he procured a buyer, to wit, J. B. Braswell and Braswell Motor Freight Lines who entered into a formal contract to purchase the 'Hall properties' for the sum of $1,500,000; that this purchase was consummated after securing the necessary approval from the Interstate Commerce Commission. Plaintiff alleged that he was the one who interested Braswell in 'the Hall properties' while his employment by Hall was in full force and effect and that the 'Hall properties' were sold to Braswell; therefore, plaintiff alleged, he was entitled to a 5% commission, namely $75,000, on the sale price of $1,500,000 paid by Braswell to defendant for such properties. Plaintiff further alleged that he had demanded payment from Hall and Hall had refused to pay him, whereupon he filed suit for recovery of the $75,000 commission and $15,000 attorney's fees.

Hall answered with a general denial. The case was tried to a jury. The trial court submitted three special issues, to which the jury answered (1) that Hall agreed to pay Hard a 5% commission if Hard would procure a buyer of the Hall Motor Freight properties on terms satisfactory to Hall; (2) Hard procured such a buyer and (3) $10,000 was a reasonable attorney's fee. There were no objections nor exceptions to the court's charge by either party.

Plaintiff filed a motion for judgment on the verdict. Defendants filed a motion for judgment non obstante veredicto. Among the grounds urged by defendants was that the sale of the Hall properties involved the sale of real estate, and plaintiff had not pleaded and proven that he was a licensed dealer under the Real Estate Dealers License Act (Art. 6573a, Vernon's Annotated Texas Civil Statutes) as required by Section 19 of such Act. Defendants also alleged that the sale of the Hall Motor Freight Line properties included the sale to Braswell of capital stock in some of the corporations owned by Hall; that plaintiff was not a licensed dealer in securities required by Art. 581-34, V.A.C.S., as a condition precedent to a recovery of a commission on the sale of capital stock. The trial court sustained the defendants' motion for judgment non obstante veredicto and overruled plaintiff's motion for judgment on the verdict.

On appeal the Court of Civil Appeals reversed the trial court's judgment and rendered judgment for plaintiff against defendants for $75,000, plus $10,000 attorney's fees. Tex.Civ.App., 318 S.W.2d 108.

We hold that the Court of Civil Appeals was in error in its judgment. We shall first dispose of defendant's claim that he was entitled to a judgment because plaintiff had no real estate dealer's license.

Section 4 of Art. 6573a defines a real estate broker as 'any person who, for another or others and for compensation or with the intention or in the expectation or upon the promise of receiving or collecting compensation: (a) Sells, exchanges, purchases, rents or leases real estate; * * * (j) Procures or assists in procuring of prospects, calculated to result in the sale, exchange, leasing or rental of real estate.' At the time of plaintiff's employment by defendant to procure a purchaser ready, willing and able to buy the Hall properties, and at all times until the closing of the sale contract, Hall owned and used in his trucking business leases for longer than one year on terminal facilities, including real estate located in Jackson, Mississippi; Tulsa and Oklahoma City, Oklahoma; Dallas, Texas; and Monroe, Ouachita Parish, Louisiana. This latter lease had a provision whereby defendants had an option to purchase the leased property after ten years. All parties are agreed that it was necessary to the operation of a motor freight line that it have terminals in the principal cities served by it. The contract for the sale of the Hall properties, as submitted to and approved by the Interstate Commerce Commission, shows that Braswell had no terminals in Jackson, mississippi; Monroe, Louisiana; or Tulsa and Oklahoma City, Oklahoma. Nowhere in plaintiff's pleadings did he make any allegations that the leases were not included in the Hall properties, nor did he allege that his listing contract was one other than for the sale of the whole of the Hall properties. The sale contract required the purchaser to 'assume the leases of all those freight terminals where the leases are assignable, which are now under lease to Hall or Transport (Hall Transport Co., a corporation), true copies of said assignable leases being attached hereto, marked Exhibit J.' Braswell further covenanted to save and hold Hall and Transport harmless in respect of such lease assumptions. Plaintiff argues that this provision binds only Braswell, but does not bind Hall to assign or transfer the leases on the terminals. A reading of the whole of the contract, however, shows that defendants were obligated to transfer and assign the leases. The contract further provides that it 'is not severable and shall, as to each party, and as to all things required of each, be performable in its entirety.' Plaintiff, Hard, testified that at the time of the oral contract between him and Hall, the leases were not mentioned by name. He testified that Hall wanted to sell his trucking operations; that Hall told him that if he could secure a buyer for the operations that he (Hall) would consider selling; that his conversation with Hall agreeing to pay a commission was a contract for the sale of the Hall trucking properties; that he was to sell for Hall everything in connection with the Motor Freight Lines; that nothing was said by either party that the leases were to be excluded but that the sale was to include everything that had anything to do with the trucking operations; that he and Mr. Hall were talking about selling the Motor Freight Lines.

On being questioned about his trade with Hall to pay the commission, Hard testified:

'q. Now among the other assets owned by those companies were leases on terminals in Oklahoma and Louisiana. Did you, when you negotiated your trade, did you expect to leave out those leases? A. Everything that was involved in the Motor Freight Line.

'q. Now they were the leases on the terminals. You know terminals are necessary for the operation of motor freight lines, did you? A. That's right.

'q. All right. Did you expect to leave out those leases? A. Not the ones Mr. Hall had, no. I expected Joe Braswell to take them over, which would be natural.'

In answer to the question, 'what was it that you claim Mr. Hall employed you to do?' Hard testified 'sell the operation, the Hall trucking operations,' and again, 'I intended to sell the whole thing in one lump sum.'

All of the above testimony made a prima facie case that the leases on the terminals were included in the 'Hall properties' which Hall employed Hard to sell. However, plaintiff Hard testified that he had nothing to do with the leases; that the price at which defendant Hall listed the properties for sale included only the Interstate Commerce Commission certificates under which defendant operated his truck line, and the furniture and equipment used in the business; that all that went with the properties was the certificates, furniture and equipment; and denied that his contract of employment covered the sale of the leases.

This being the state of the record a fact issue was raised as to whether the leases were included in the Hall properties. No issue was submitted to the jury, nor was any request made for the submission of an issue determining the above fact. Plaintiff contends that the burden was on defendant to secure a finding that the Hall properties did include the leases. Defendant claims the burden was on plaintiff to secure a finding that the leases were not included in the Hall properties.

If the Hall properties, which Hard testified he was employed by Hall to sell, consisted, in part, of the leases on the terminals above set out, then Hard is seeking to recover a commission on the sale of real estate. Under the provisions of Sec. 19 of Art. 6573a, it was the burden of Hard to plead and prove he was a duly licensed real estate broker, or salesman, at the time the alleged cause of action arose. The leases being for a term of longer than one year were 'real estate' within the terms of Art. 6573a. Stroble v. Teral, 1949, 148 Tex. 146, 221 S.W.2d 556, 558; Robertson v. Scott, 1943, 141 Tex. 374, 172 S.W.2d 478, 479(2); 20-A Tex Jur. 374, Sec. 104.

The Real Estate Dealers License Act is an exercise of the police power of the State to regulate a private business which affects the public interest. As such the business may be reasonably regulated by the State. Gregory v. Roedenbeck, 1943, 141 Tex. 543, 174 S.W.2d 585(1). The Legislature has seen fit to regulate the business of real estate dealers by requiring that anyone engaging in that business undergo investigation and examination by representatives of the State, and secure a license from the Texas Real Estate Commission. The business practices of the real estate dealers are regulated and certain practices are prohibited. The...