Nichols v. Sefcik

• Decision Date: 26 February 1960
• Docket Number: No. 6583,6583
• Citation: 349 P.2d 678,1960 NMSC 25,66 N.M. 449
• Parties: Jack NICHOLS and E. C. McReynolds, Plaintiffs-Appellants and Cross-Appellees, v. John SEFCIK and Callie Sefcik, Defendants-Appellees and Cross-Appellants.
• Court: New Mexico Supreme Court

Page 678

349 P.2d 678

66 N.M. 449

Jack NICHOLS and E. C. McReynolds, Plaintiffs-Appellants and Cross-Appellees, v. John SEFCIK and Callie Sefcik, Defendants-Appellees and Cross-Appellants.

No. 6583.

Supreme Court of New Mexico.

Feb. 26, 1960.

Emmett C. Hart, Tucumcari, for appellants.

Rowley, Breen & Bowen, Tucumcari, for appellees.

MOISE, Justice.

This is an action commenced by Jack L. Nichols and E. C. McReynolds to recover a commission from the defendants John and Callie Sefcik for producing a customer to whom the defendants sold the Circle S Motel owned by them in Tucumcari.

The action was dismissed on motion as to the plaintiff McReynolds on the ground that he was not a licensed real estate broker under the laws of New Mexico, and who accordingly barred from bringing the action.

The case proceeded as between plaintiff Nichols and the defendant and was tried to a jury resulting in a verdict for defendants.

Both plaintiffs appeal and defendants have filed a cross-appeal complaining of certain rulings of the court during the trial.

The pertinent facts stated as briefly as possible follow. Plaintiff Nichols was a resident of Tucumcari, New Mexico, and had engaged in the real estate business there since January 12, 1952, at which time he was licensed as a real estate salesman. He was continuously so licensed until November 9, 1956, when he was licensed as a real estate broker. In 1954, while employed as a real estate salesman by Quay County Abstract Company, Nichols obtained a listing from the defendants on the Circle S Motel. This listing was on a letterhead of the motel, contained a description of the property and the terms upon which a sale could be made and was signed by defendants. In the handwriting of plaintiff Nichols there also appeared the words '5% commission listing to Jack L. Nichols.' There is considerable discrepancy in the record as to when the quoted words were placed on the listing, and whether it was before or after it was signed by defendants, and whether it was with the knowledge and consent of defendants.

Some time in 1957, the defendants having made additions and improvements to the property, plaintiff Nichols was advised by defendants that the price for the property was now raised to $300,000.

Plaintiff Nichols left the employ of Quay County Abstract Company, and after being licensed as a real estate broker he went into business for himself. When he left Quay County Abstract Company he took the listings he had obtained including the one in controversy. This was agreeable to his employers.

Plaintiff McReynolds is a resident of Amarillo, Texas, and is a licensed real estate broker in Texas, but has no license in New Mexico.

On September 23, 1957, plaintiff McReynolds contacted plaintiff Nichols concerning some prospective customers for a motel that he wanted to bring over to Tucumcari. Plaintiff Nichols made reservations at the Circle S Motel for plaintiff McReynolds and his customers, Don Parker and Ken Dunlap. There is some dispute in the evidence as to whether plaintiff Nichols advised the prospects when he first met them that he had a listing on the motel where they were staying. After staying one night plaintiffs Nichols and McReynolds took the prospective customers to Las Cruces and showed them two motels and then to Alamogordo and showed them one. Plaintiff Nichols then phoned back to the Circle S in Tucumcari and again made reservations for the prospects.

The next day, in the presence of defendant John Sefcik, the plaintiff Nichols told Don Parker he could buy the Circle S for $300,000, or three times the gross, whereupon Mr. Sefcik said, 'Jack, don't make it any worse than it is. It's three and one-half times the gross.' Plaintiff McReynolds and the prospects looked over some units at the Circle S and then returned to Amarillo.

Plaintiff Nichols obtained a listing on another motel in Tucumcari known as the Golden W Motel, and advised plaintiff McReynolds, who passed the information on to Mr. Parker and Mr. Dunlap, who on October 12, 1957, returned to Tucumcari without plaintiff McReynolds and without advising plaintiff Nichols. They looked at the Golden W Motel and then went to the Circle S Motel. On October 15, 1957, plaintiff Nichols went to the Circle S Motel and there found defendant John Sefcik, Mr. Parker and Mr. Dunlap apparently taking an inventory. When plaintiff Nichols asked about his commission, defendant Sefcik replied that he did not have a listing. Plaintiff Nichols said he did and the defendants Sefcik said it was forged. Later, upon being shown the listing the defendants claimed it had been revoked.

On October 15, 1957, defendants entered into a contract of sale for the property to Mr. and Mrs. Dunlap for a price of $295,000.

The first error claimed to have been made by the court arose out of the ruling that plaintiff McReynolds, not being licensed in New Mexico, could not bring an action for a commission in the courts of New Mexico.

He bases his contention upon the claim (1) that all of the purposes of the act are acccomplished by having a licensed New Mexico broker associated in the transaction; (2) on the language of Rule 12 of the Rules and regulations of the Real Estate Board which reads as follows:

'No licensed broker shall pay a commission or any part thereof for performing any of the acts specified in this act to any person who is not a duly licensed broker or a licensed salesman in the State of New Mexico, or who is not regularly licensed as a real estate broker or a real estate salesman in any other state having enacted a real estate license law or who is not regularly engaged in the business of a real estate broker in any state not having enacted a real estate law acceptable to this board.'

and (3) on an asserted analogy between the situation of these two brokers and a local attorney being associated in a case in court in this state with an attorney licensed in another state, but not in New Mexico.

The basis for the court's ruling is Sec. 67-24-15, N.M.S.A.1953, which reads as follows:

'No action for the collection of commission or compensation earned by any person as a real estate broker or salesman required to be licensed under the provisions of this act (67-24-1 to 67-24-18) shall be maintained in the courts of the state unless such person was a duly licensed broker or salesman at the time the alleged cause of action arose.'

Real estate broker and real estate salesman are defined as follows:

'A real estate broker within the meaning of this act (67-24-1 to 67-24-18) is any person, firm, partnership, copartnership, association or corporation, who for a salary, fee, commission or valuable consideration lists, 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 for the improvements thereon for others, as a whole or partial vocation. The term 'real estate' as used in this act shall include leaseholds and other interests less than leaseholds.

'A real estate salesman within the meaning of this act is any person who for a compensation or valuable consideration is employed either directly or indirectly by a real estate broker, in the pursuance of his business, as a whole or partial vocation.' N.M.S.A. 1953, Sec. 67-24-2.

It would appear that generally a person who makes an isolated sale or participates in a casual transaction is not considered to be a real estate broker under statutes placing restrictions on the practice. See note in 56 A.L.R. 486 and 167 A.L.R. 783.

In the case of Haas v. Greenwald, 196 Cal. 236, 237 P. 38, 41, 59 A.L.R. 1493, the Supreme Court of California held that no commission could be recovered on the one and only transaction of the plaintiff where their statute had a special provision concerning a single transaction. The analysis and disposition of this argument is fully set forth in the following quoted from that case:

'It is, however, contended by the appellant herein that conceding that A. M. Johnson did act in the part he took in said negotiations in the capacity of a real estate broker, his action in so doing was only in a single though twofold transaction, and not in a course of business as a real estate broker, and hence that the inhibitive provisions of said act do not apply to him. This argument, with the authorities which are cited in support of it, might have some cogency but for the express and unmistakable terms of the statute to the contrary. The language of the concluding clause of section 2 of the act is as follows: 'One act, for a compensation, of buying or selling real estate of or for another, or offering for another to buy or sell or exchange real estate, or negotiating a loan on or leasing or renting or placing for rent real estate, or collecting rent therefrom shall constitute the person, copartnership or corporation making such offer, sale or purchase, exchange or lease, or negotiating said loan, or so renting or placing for rent or collecting said rent a real estate broker within the meaning of this act.'

'The particularity with which this clause in said act is phrased leaves no room for any other interpretation than that which its plain terms import, and which are not rendered uncertain by any other phrase or clause which said section of said act or which act as a whole contains. The authorities cited in support of the appellant's position in this regard do not sustain it for the reason, as is well illustrated by the case of Miller v. Stevens, 224 Mich. 626, 195 N.W. 481, mainly relied upon by appellant, that the statute under review in said decision omitted this very provision which our statute contains, rendering a single act of the character defined, for a compensation, sufficient to constitute the person performing it a real estate broker.'

In Young v. Kidder, 33 N.M. 654, 275 P. 98, this Court held under a statute requiring real...