Hilboldt v. Wisconsin Real Estate Brokers' Bd.

• Decision Date: 02 November 1965
• Parties: Charles S. HILBOLDT, d/b/a Charles S. Hilboldt Investment Real Estate, Appellant, v. WISCONSIN REAL ESTATE BROKERS' BOARD, Respondent.
• Court: Wisconsin Supreme Court

Page 482

137 N.W.2d 482

28 Wis.2d 474

Charles S. HILBOLDT, d/b/a Charles S. Hilboldt Investment Real Estate, Appellant, v. WISCONSIN REAL ESTATE BROKERS' BOARD, Respondent.

Supreme Court of Wisconsin.

Nov. 2, 1965.

Rehearing Denied Jan. 4, 1966.

Michael, Best & Friedrich, Milwaukee, Frank J. Pelisek and David R. Olson, Milwaukee, of counsel, for appellant.

Bronson C. La Follette, Atty. Gen., Robert J. Vergeront, Asst. Atty. Gen., Madison, for respondent.

BEILFUSS, Justice.

The issue, broadly stated, is: Does the evidence, as it appears in the record, sufficiently support the findings of the Wisconsin Real Estate Brokers' Board so as to justify a revocation of the appellant's real estate broker's license?

Ch. 136, Stats., Real Estate Brokers' Board, is a regulatory legislative enactment, under the police power, designed, primarily, to protect the interest of the general public. The history, as set out by the early cases, reveals that prior to the enactment of these regulatory statutes unscrupulous persons dealt in the buying and selling of real estate either for themselves or others in an unethical and fraudulent manner to such an extent that regulation, for the protection of the general public, became necessary.

The statutes, as they now exist, provided that one cannot act as a real estate agent, broker or salesman unless he has a license issued to him by the state through the Real Estate Brokers' Board. Before a license can be issued the applicant must meet established qualifications as to education, knowledge of real estate law, and ethical character. The statute further charges the board with the responsibility of suspending or revoking a license when the holder has violated statutory standards.

The statutory sections under which the board acted in this instance are as follows:

'136.08(2) The board may also on its own motion, or upon complaint in writing, duly signed and verified by the complainant, and upon not less than 10 days' notice to the broker or salesman, suspend any broker's or salesman's license or registration if it has reason to believe, and may revoke such license or registration as provided hereafter, if it finds that the holder of such license or registration has:

'* * *

'(b) Made any substantial misrepresentation with reference to a transaction injurious to a seller or purchaser wherein he acts as agent; * * *

'(h) Failed, within a reasonable time, to account for or remit any moneys coming into his possession which belong to another person;

'(i) Demonstrated untrustworthiness or incompetency to act as a broker, salesman or cemetery salesman in such manner as to safeguard the interests of the public; * * *

'(k) Been guilty of any other conduct, whether of the same or a different character from that specified herein, which constitutes improper, fraudulent or dishonest dealing; * * *.'

Hilboldt contends that evidence before the board is insufficient to permit a finding that he, as a real estate broker, acted as agent for the purchaser, Family Service.

The scope of judicial review of the board's finding of fact is controlled by sec. 227.20(1)(d), Stats., which authorizes a reviewing court to reverse or modify an administrative agency decision if substantial rights of the aggrieved party have been prejudiced as a result of administrative findings being unsupported by substantial evidence in view of the entire record as submitted. ¹ The credibility of the witnesses and the weight to be attached to the reasonableness of the evidence as a whole remains with the agency.

Without again detailing the evidentiary facts, we have no hesitancy in concluding that the findings of the board are supported by substantial evidence in view of the entire record. A finding that the representatives of Family Service understood that Hilboldt, as a real estate broker, would act as their agent to procure suitable real estate for Family Service, and that Hilboldt agreed to act in that capacity is amply supported by a review of all the material evidence in the record before us.

Hilboldt next contends that even though there is a finding that as a real estate broker he orally agreed to act as an agent for the purchase of land, as a matter of law, such agreement is void. In support of this contention he cites sec. 240.10, Stats. This statute provides, in part:

'Every contract to pay a commission to a real estate agent or broker or to any other person for selling or buying real estate * * * shall be void unless such contract or note or memorandum thereof describing such real estate, expressing the price for which the same may be sold or purchased, or terms of rental, the commission to be paid and the period during which the agent or broker shall procure a buyer or seller or tenant, be in writing and be subscribed by the person agreeing to pay such commission.'

Otto v. Black Eagle Oil Co. (1954), 266 Wis. 215, 63 N.W.2d 47, and other cases ² are cited as authority for the contention that the agreement to retain Hilboldt as an agent is void because it was not in writing.

We cannot accept this contention. In all of the cases cited by Hilboldt, the broker was attempting to collect a commission based in whole or in part upon an oral contract. The words of the statute are: 'Every contract to pay a commission to a real estate agent or broker * * * shall be void unless such contract * * * be in writing.'

This court has specifically held in Krzysko v. Gaudynski (1932), 207 Wis. 608, 242 N.W. 186, that real estate brokers can become agents for some purposes without a written contract. At page 614, 242 N.W. at page 189 it is stated:

'Whether the defendant can be held as a constructive trustee as an agent depends on whether his contract of agency, not being in writing and not in conformity with section 240.10, should be considered as wholly void and imposing no duty whatsoever upon him. Appellants contend it should be so construed. Section 240.10, however, does not require that such a construction be placed upon it. Its declaration is not that a contract of agency, but a contract 'to pay a commission.' is void unless in writing. The purpose of the statute was not to relieve real estate agents from their obligations as agents, but to protect the public against frauds perpetrated by dishonest agents through falsely claiming oral contracts of agency when another agent effected a sale by which the landowner was subjected to claims for commission by two or more agents, and by falsely claiming agency and claiming a commission for procuring a purchaser when no bona fide purchaser was in fact procured. One may become an agent without compensation. Absence of compensation is immaterial. Wright v. Smith, 23 N.J.Eq. 106, 111. If a real estate agent actually agrees orally to purchase land for another and takes money from the other to make the first payment on the purchase price, he must be held to have assumed to act for the other. And, having assumed so to act, he should be held to the same obligations of duty as if he were acting under a contract binding the other party to pay him a compensation. * * *'

The Krzysko Case has not been overruled and we reaffirm the rule stated therein.

The concern of ch. 136, Stats., and the Wisconsin Real Estate Brokers' Board goes beyond a consideration of the right of brokers or agents to collect a commission for services rendered. The entire scope of the activities of a real estate broker or salesman when he deals as an agent for other persons in his capacity as a real estate broker or agent are matters which come within the scrutiny of the board when it appears or is suggested that the broker or agent is acting inconsistent with standards set forth in sec. 136.08(2).

In Sphatt v. Roth (1948), 253 Wis. 339, 346, 34 N.W.2d 222, 225, the court said:

'It is the rule in this state that where a broker is authorized to sell his principal's property...