Purtell v. Tehan

Decision Date01 February 1966
Citation29 Wis.2d 631,139 N.W.2d 655
PartiesEdward A. PURTELL, d/b/a Edward A. Purtell Co., et al., Respondents, v. Eugene TEHAN et al., Defendants, Morris J. Hack et al., Appellants.
CourtWisconsin Supreme Court

Action by plaintiffs Edward A. Purtell, d/b/a Edward A. Purtell Co. and Melvin B. Raskin against defendants Eugene Tehan; Charlotte Tehan, his wife; Morris J. Hack; and Harold Sampson; for conspiracy to cause the Tehans to breach their real estate listing contract with Purtell.

The complaint originally also contained a second cause of action in which a real estate commission was sought to be recovered by plaintiffs on the basis that Purtell had fully performed the listing contract which had been entered into between him and the Tehans. The plaintiffs moved for a voluntary nonsuit as to this cause of action but the circuit court dismissed this cause of action on the merits.

Defendants Hack and Sampson separately demurred to the complaint, prior to the dismissal of the second cause of action, on the grounds that it failed to state facts sufficient to constitute a cause of action and that several causes of action were improperly united. The dismissal of the second cause of action eliminated the basis for the last mentioned ground of demurrer.

The complaint as it now stands, after elimination of the second cause of action, alleges in part as follows: On May 16, 1960, Eugene Tehan, who was the owner of certain described premises, entered into a listing contract with Purtell, a real estate broker, which contract was subsequently modified and extended by a writing signed by Tehan, Mrs. Tehan, and Purtell. Purtell contracted with Raskin, also a real estate broker, to divide with him $15,000 commission provided for in the listing contract if Raskin found an acceptable buyer for the premises. Hack, also a real estate broker, acted as agent for Sampson in the purchase of the premises. Paragraph 9 of the complaint reads:

'That the Defendants conspired to defraud the Plaintiffs of their just commission due pursuant to said contracts and other writing and memorandums and oral agreements between the brokers and the parties, on information and belief, said conspiracy and fraud being committed as follows: That the Defendants did jointly and/or severally set up certain conditions, on information and belief, above and beyond the basis terms of sale. That on further information and belief, the sellers and/or their agents, did refuse to comply with conditions demanded by the buyers; that on further information and belief, subsequent thereto, the identical parties entered into the sale under identical conditions arranged by the Plaintiff brokers, eliminating the conditions referred to, thereby defrauding and attempting to deprive the Plaintiff brokers of their just commissions.'

The complaint further alleges that plaintiffs were damaged in the sum of $15,000 and the prayer requests damages in that amount.

The circuit court determined that the complaint did state facts sufficient to constitute a cause of action and by order dated May 11, 1965, overruled the demurrers. Hack and Sampson have appealed therefrom.

Levin & Levin, Milwaukee, James S. Levin, Milwaukee, of counsel, for appellants.

Blumenthal, Herz & Scholl, Milwaukee, Harold Harris, Milwaukee, of counsel, for respondents.

CURRIE, Chief Justice.

This issues on this appeal are:

(1) Is the allegation that 'a listing contract' was entered into between Eugene Tehan and Purtell sufficient to permit such allegation to be construed as a valid real estate broker's agreement which contains the provisions required by sec. 240.10, Stats.?

(2) If the allegation with respect to the listing contract is held to be sufficient, do the allegations of paragraph 9 of the complaint spell out a cause of action against the two appellants, Hack and Sampson?

(3) May the agent Hack be sued inasmuch as the complaint discloses that plaintiffs knew he was acting as agent for his principal Sampson?

(4) May the dismissal of the second cause of action be considered in passing on the issue of whether the demurrer should be sustained to the first cause of action?

Allegations With Respect to Listing Contract.

Respondents concede that the existence of a valid listing contract between Eugene Tehan and Purtell is an essential prerequisite to their complaint stating a cause of action against appellants Hack and Sampson. Sec. 240.10, Stats., provides:

'Every contract to pay a commission to a real estate agent or broker or to any other person for selling or buying real estate or negotiating lease therefor for a term or terms exceeding a period of three years 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.'

Appellants contend that the complaint is fatally defective because it merely alleged, 'That on the 16th day of May, 1960, the Defendant, Eugene Tehan, did enter into a certain listing contract with the Plaintiff, Edward A. Purtell, * * *.'

This court has interpreted sec. 240.10, Stats., as an extension of the statute of frauds. In Hale v. Kreisel, 1 it was said:

'This statute clearly expresses the legislative intent that there shall be no recovery for such services in the absence of such a written contract. This statute is an extension or enlargement of the statute of frauds. It is as valid an exercise of the police power as are any of the other provisions of the statute of frauds which require certain contracts to be in writing.'

There is a conflict in the holdings of this court whether in pleading a contract which is subject to the statute of frauds it is essential to allege facts to establish that the contract does comply with the statute. The more recent cases hold that this is not necessary, 2 while the earlier cases held that it was. 3 Ordinarily, where there is a conflict in our past decisions, we prefer to adhere to the more recent cases. Furthermore, the more recent cases in this instance are in accord with the principle that a complaint, when challenged by demurrer, is to be given a liberal construction to permit all reasonable inferences to be drawn in favor of a finding that a cause of action has been stated. 4 Therefore, we determine that the allegation with respect to the listing contract is sufficient against demurrer.

Appellants rely upon Raskin v. Hack 5 which grew out of the sale by the Tehans to Hack as agent for Sampson of the same premises involved in this action. The contract at issue therein was not the instant listing contract, but rather the agreement for the sale of the premises which contained a provision for deduction from the purchase price of a $15,000 broker's commission. Furthermore, the complaint set forth the entire agreement relied upon and this court held that the provision for payment of the broker's commission did not comply with sec. 240.10, Stats. We fail to see how our holding in that case is material to the issue of the sufficiency of the instant complaint.

Allegations With Respect to Conspiracy to Induce Breach of Contract.

Paragraph 9 of the complaint is set forth verbatim in the statement of facts portion of this opinion. Appellants assert in their brief 'The allegations of Paragraph 9 of the complaint that defendants conspired to defraud plaintiffs of their just commissions does not in itself establish actionable fraud.' The fallacy of this contention lies in the fact that if the complaint states any cause of action against the two appellants it is good against demurrer.

While the complaint is not a model...

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