Mathews v. Greiner

• Citation: 130 Ga.App. 817,204 S.E.2d 749
• Decision Date: 08 February 1974
• Docket Number: No. 2,No. 48493,48493,2
• Parties: E. E. MATHEWS, Jr., et al. v. Fred L. GREINER et al
• Court: United States Court of Appeals (Georgia)

Page 749

204 S.E.2d 749

130 Ga.App. 817

E. E. MATHEWS, Jr., et al. v. Fred L. GREINER et al.

No. 48493.

Court of Appeals of Georgia, Division No. 2.

Feb. 8, 1974.

Powell, Goldstein, Frazer & Murphy, Frank Love, Jr., Harvey D. Harkness, Hunter R. Hughes, III, Atlanta, for appellants.

Patrick, Sidener, Bryant & Hamner, Griffin Patrick, Jr., Joseph C. Miller, East Point, Troutman, Sanders, Lockerman & Ashmore, Robert H. Forry, Ezra H. Cohen, Atlanta, for appellees.

Syllabus Opinion by the Court

CLARK, Judge.

'Abracadabra Alakazam' are words wonder workers in necromancy use. Likewise, legal lexicons lure lawyers and judges to seek magic phrases to serve as simplistic solutions. Thus, we find our answers to the three questions presented by this appeal in such judicial incantations as 'Lex Loci Contractus,' 'Alternative Pleading', and 'Stare Decisis'.

The trio of questions are: (1) Can a nonresident real estate broker sue in Georgia for breach of a contract made in the state where he is licensed when the contract provides for sale of land in Georgia? (2) Does the Civil Practice Act permit a complaint in which counts based upon breach of contract and quantum meruit as to three co-defendants are joined with another count framed in tort contending a conspiracy between the three co-defendants and a fourth defendant to avoid making payment of the amounts claimed for breach of contract? (3) Does the conspiracy count state a claim for relief on a tort when the allegations relate to the breach of a contractual duty?

Appellants were plaintiffs below and will be referred to as such. They filed suit against three Georgia residents and a Delaware corporation, Donald J. Scholz & Co. The Georgians will be referred to as landowners and the Delaware defendant as Scholz. Averring themselves to be 'duly licensed real estate brokers in the State of Virginia' plaintiffs plead they contracted with the landowners 'whereby Plaintiffs agreed to attempt, in the State of Virginia, to procure a purchaser who was ready, willing and able to buy, or act in concert with others to buy, upon specified terms' (R. 7) a tract of land in DeKalb County owned by the three Georgians who agreed to be jointly liable to plaintiffs for their services if they were able to procure such purchaser. They allege they secured such buyer in Scholz who is named as co-defendant but only in count 3 which is framed to plead a conspiracy tort between the landowners and Scholz to deprive plaintiffs of the amount claimed as being due them by their performance of the alleged Virginia contract. The first two counts in which only the three landowners are named as defendants are for breach of contract and in quantum meruit. Count 3 involving Scholz Company is based upon a conspiracy between the four defendants whereby the four have tortiously 'entered into a joint venture to develop the property so as to avoid the consummation of the sale of the property to Scholz Company, with the purpose of attempting to avoid the joint obligation of the (other three) defendants to pay the plaintiffs the sum of $74,000 to which they are entitled as commission.' (R. 8, 9).

This appeal involves only the third count which was stricken by the trial court sustaining a defense motion to dismiss for failure to state a claim upon which relief may be granted. The necessary trial judge's certificate for immediate review of this order has been provided.

1. We deal first with the question of the validity of the contract because no cause of action could exist for tortious conspiracy to breach an illegal contract. The Georgia law which was in force at the time of the transaction under consideration is contained in Chapter 84-14 of the Annotated Code of Georgia. ¹ Therein it is expressly stated that 'No person, firm, or corporation shall have the right to enforce in any court any claim for commissions, profits, option profits or fees for any business done as real estate broker or salesman, without having previously obtained the license required under the terms of this Chapter.' Code Ann. § 84-1413 (Ga.L.1929, pp. 316, 319).

Our court has heretofore in Dixon v. Rollins, 120 Ga.App. 557, 171 S.E.2d 646 and Beets v. Padgett, 123 Ga.App. 68, 179 S.E.2d 560 expressly ruled that a broker doing business in Georgia without the required license had no standing to sue. Furthermore, this taint of illegality would also apply to quantum meruit. D. L. Stokes & Co., Inc. v. McCoy, 212 Ga. 78, 90 S.E.2d 404.

The four defendants contend these Georgia cases bar plaintiffs from use of our courts. One of the arguments contained in their briefs asserts that certain evidence obtained by deposition show Georgia to be the situs both of the making and performance of the contract. Similarly appellants refer to the same deposition as proof that the contract was made and performed in Virginia. As this deposition is not a part of this appeal, we cannot consider these factual assertions as we are limited to the record. Hunt v. Denby, 128 Ga.App. 523, 526(4), 197 S.E.2d 489; Tingle v. Arnold, Cate & Allen, 129 Ga.App. 134, 139, 199 S.E.2d 260 and citations therein.

The record upon which this appeal must be decided consists solely of the complaint, answer, motions to dismiss, and dismissal order limited to the third count accompanied by the requisite review certificate. Paragraph four of the complaint avers that 'the plaintiffs are both duly licensed real estate brokers in the State of Virginia.' The pertinent portion of paragraph five of the complaint specifically states the agreement to have been made 'in the State of Virginia.' We must therefore deal with this case as being one in which licensed Virginia brokers have made a contract in Virginia for performance in that state.

The leading Georgia case explanatory of the law of lex loci contractus is Trustees of Williams Hospital v. Nisbet, 189 Ga. 807, 7 S.E.2d 737 where our court said (p. 811, p. 740 of 7 S.E.2d): 'Where a pleaded contract not only is executed in a foreign State, but contains nothing to indicate by the place of performance or otherwise that it was intended to be construed as a Georgia contract, it will be treated as a contract of the foreign State, and governed by its laws. (Cits.)' The general rule is that it will not be presumed that a contract is illegal. 6 Encyc. of Ga.Law, § 115, p. 174. Additionally contracts made and performed in another state will be enforced unless such state's laws are contrary to the public policy of the enforcing state. Sally v. Bank of Union, 150 Ga. 281, 103 S.E. 460; Ulman v. Magill, 155 Ga. 555, 117 S.E. 657. This general principle applies to land brokerage contracts. Pratt v. Sloan, 41 Ga.App. 150, 152 S.E. 275.

' A contract should not be held unenforceable as being in contravention of public policy except in cases free from substantial doubt where the prejudice to the public interest clearly appears.' 6 Encyc. of Ga.Law, § 116, p. 175. There is no prejudice here to the public interest because our legislature has provided for nonresident brokers to be licensed by comity to do business in Georgia. This was contained in the statute (Code Ann. § 84-1422; Ga.L.1958, p. 24; 1965, pp. 629, 638) applicable to this case and again in the 1973 revision of our licensing laws on real estate brokers and salesmen in Ga.L.1973, pp. 112, 113.

We recognize that in the case at bar the Virginia plaintiffs did not obtain a Georgia license but they are not seeking to enforce a Georgia contract. Thus they do not come within our statutory sine qua non of doing business 'within any county in this State'. Code Ann. § 84-1401.

Having reached the conclusion that the pleadings present a contract made in Virginia to be performed in that state and that enforcement thereof is not in violation of Georgia's public policy we do not regard it necessary to discuss the numerous cases from foreign jurisdictions cited by capable counsel for both sides excepting for Folsom v. Young & Young, Inc., 216 F.2d 352 (5th Cir. 1954). There the Fifth Circuit wrote an opinion dealing with a Florida broker's suit for a share of commissions received by a Georgia broker for sale of land in Georgia under a referral contract. The opinion was based upon Tillman v. Gibson, 44 Ga.App. 440, 161 S.E. 630 and concludes '(S)ince no act agreed by it to be done was performed in Georgia, then by the settled law of Georgia, which this court is bound to follow, appellee was not engaging in the business of a real estate broker in Georgia, notwithstanding the location of the land.' See also Annotation in 159 A.L.R. 266 on this question generally.

2. Alternative pleading has been permitted since passage of our Civil Practice Act now codified as Title 81A of the Annotated Code. Code Ann. § 81A-108(e)(2) expressly provides: 'A party may set forth two or more statements of a claim or defense alternately or hypothetically, either in one count or defense or in separate counts or defenses. When two or more statements are made in the alternative and one of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. A party may also state as many separate claims or defenses as he has regardless of consistency and whether based on legal or on equitable grounds or on both.' (Emphasis supplied.)

Accordingly the plaintiffs here were entitled to remain in court under their pleading whereby one count proceeded upon a breach of contract and the third count was based upon a tort alleging a conspiracy involving a party other than the contracting parties. It then depends upon the facts produced at the trial for a determination as to whether the proof presented is sufficient to prove a case under any of the theories contained in the complaint.

3. The adjudicated cases which constitute stare decisis dispose of the remaining matters. It is well established that a cause of action may be based on a...