Morris v. O'Neill

• Citation: 215 N.W. 8,239 Mich. 663
• Decision Date: 29 July 1927
• Docket Number: No. 111.,111.
• Parties: MORRIS v. O'NEILL.
• Court: Supreme Court of Michigan

239 Mich. 663

215 N.W. 8

MORRIS

v.O'NEILL.

No. 111.

Supreme Court of Michigan.

July 29, 1927.

Error to Circuit Court, Wayne County; Joseph Collins, Judge.

Action by Don M. Morris against Eugene J. O'Neill. Judgment for plaintiff, and defendant brings error. Reversed, and new trial granted.

Argued before the Entire Bench.Joslyn, Joslyn & Joslyn, of Detroit, for appellant.

Stevenson, Butzel, Eaman & Long, of Detroit (Chas. F. Hemans and Chas. M. A. Martin, both of Detroit, of counsel), for appellee.

McDONALD, J.

This suit was brought to recover on a promissory note for $2,500, dated July 20, 1921, and payable on or before one year from date, with interest at 7 per cent. per annum. On the back of the note appeared the following:

‘It is agreed by both parties that this note can be renewed in part at the maturity of the note.’

The defendant claims that, before the note came due, the plaintiff had become indebted to him in the sum of $840 for a commission on the sale of real estate; that, when it became due on July 20, 1922, he asked the plaintiff to credit him with the $840, and to renew the note for the balance. This the plaintiff declined to do, and began this suit. On the trial, when the proofs were closed, the plaintiff moved for a directed verdict on two grounds: First, that the defendant had not shown a valid contract in writing to pay a commission for the sale of real estate; and, second, that the defendant was unlawfully engaged in the business of selling real estate, in that he had not obtained a license, as required by Act 306, Public Acts 1919, and that therefore, if his contract with the plaintiff had been otherwise valid, he could not recover a commission. The court sustained both contentions, and directed a verdict for the plaintiff in the full amount of his claim. Judgment was entered on the verdict. The defendant brings error.

The record shows a lack of competent evidence tending to establish a written contract to pay a commission for the sale of the real estate. Such contracts are void, unless they are in writing and signed by the party to be charged. Section 11981, C. L. 1915.

In view of this situation, it was the duty of the circuit judge to direct a verdict for the plaintiff, but, when he indicated his intention to do so, counsel for the defendant asked to have the case reopened that he might introduce further testimony on the question of the contract. He said:

‘Well, I have a witness here, the former stenographer in the employ of the Murphy Wall Bed Company, and we desire to call this witness for the purpose of showing we wrote a letter dictated by Mr. O'Neill, in which he stated to Mr. Morris, the plaintiff, that, if he sold this lot, he expected the usual commission, and that, in reply to that letter, Mr. Morris sent a telegram, which this witness saw and read, stating that he would pay the regular commission of 3 per cent. on the sale price of this property; that the copy of the letter written to Mr. Morris, that the telegram from Mr. Morris to Mr. O'Neill referred to, and the stenographic notes from which the letter written by Mr. O'Neill to Mr. Morris, was torn from the book, and that these letters and telegrams disappeared from the office of Mr. O'Neill in the Murphy Wall Bed Company. Florence Bowden is the name of the witness.’

Under the circumstances, the refusal of the court to reopen the case and to permit this testimony to be taken was an abuse of judicial discretion. The witness was present in court. No delay was requested. No prejudice could result to the plaintiff. The testimony offered was competent. It was necessary to the defendant's case. The refusal to receive it amounted to a denial of justice, for which the judgment ought to be reversed and a new trial granted, unless the failure of the defendant to obtain a real estate broker's license precludes his recovery on his contract for a commission.

In 2 Mechem on Agency, § 2479, p. 2091, it is said:

‘Where a statute or ordinance requires brokers to be licensed, and forbids, imposes a penalty for, or otherwise makes unlawful, the exercising of the vocation without a license, it is generally held that an unlicensed broker cannot recover either upon the contract or upon a quantum meruit for services rendered by him in that capacity.’

Act 306, Public Acts of 1919, as far as it is applicable to this case, reads as follows:

Section 1. ‘It shall be unlawful for any person * * * to engage in the business or capacity, either directly or indirectly, of a * * * real estate broker * * * within this state without first obtaining a license under the provisions of this act.’

Section 2. ‘A real estate broker within the meaning of this act is any person, * * * who for a compensation or a valuable consideration sells or offers for sale, buys or offers to buy, or negotiates the purchase or sale or exchange of real estate, or who leases, or offers to lease or rents or offers for rent any real estate or the improvements thereon for others, as a whole or partial vocation.’

It is conceded that the defendant had not obtained a license to engage in the real estate business. Was he required to do so? Was he a real estate broker within the meaning of the act? The statute furnishes its own definition of a real estate broker. In commenting on the use of similar language in defining a ‘business chance broker’ in Miller v. Stevens, 224...