Schantz v. Ellsworth

• Decision Date: 16 August 1971
• Citation: 19 Cal.App.3d 289,96 Cal.Rptr. 783
• Court: California Court of Appeals Court of Appeals
• Parties: Melvin R. SCHANTZ, dba Investment Trends, Plaintiff and Appellant, v. Robert L. ELLSWORTH, Spring Valley Properties, Inc., a corporation, Defendants and Respondents. Civ. 10599.

Page 783

96 Cal.Rptr. 783

19 Cal.App.3d 289

Melvin R. SCHANTZ, dba Investment Trends, Plaintiff and Appellant, v. Robert L. ELLSWORTH, Spring Valley Properties, Inc., a corporation, Defendants and Respondents.

Civ. 10599.

Court of Appeal, Fourth District, Division 2, California.

Aug. 16, 1971.

[19 Cal.App.3d 290] Blatt & Rosoff and William Blatt, Los Angeles, for plaintiff and appellant.

James Ralston Smith, Laguna Beach, for defendants and respondents.

OPINION

KAUFMAN, Associate Justice.

Plaintiff sued to recover $18,166 in real estate brokerage commissions allegedly earned by him as a result of procuring two leases for defendants. The cause was tried by the court without a jury. Judgment was rendered for defendants. Plaintiff appeals.

The Facts

The court found generally in favor of plaintiff and denied recovery solely on the basis that plaintiff failed to prove he was a duly licensed real estate broker as required by Business & Professions Code, section 10136. Specifically, the court found that 'plaintiff procured leases for defendants with GOODYEAR TIRE AND RUBBER COMPANY,' which defendants executed and accepted; that defendants executed certain' commission schedules' attached to the complaint as exhibits 'A' and 'B'; that these 'Commission schedules * * * constitute agreements by defendants to pay real estate commissions to plaintiff for the procurement of the above mentioned leases for the terms and at the rates as set forth in said schedules.' ¹

With respect to the licensing problem, the following appears. Although the court made no finding on the point, the undisputed evidence establishes and defendants concede that, at all times pertinent to the transactions here involved, plaintiff was a licensed real estate broker. The license, which was read into evidence, was issued to Melvin Rucker Schantz at 1741 West Katella Avenue, Anaheim. The court found, however, that plaintiff was also conducting a real estate brokerage business at 401 West Katella Avenue in Anaheim under the fictitious name Investment Trends; that 'plaintiff's dealings with defendants were from said location'; and that although plaintiff had complied with the statutory provisions then pertaining to doing business under a fictitious name, '(a)t no time mentioned in the complaint did plaintiff have a real estate license to operate or conduct a real estate brokerage business at 401 West Katella Avenue * * *.' It also appears from the uncontradicted evidence that the office at 1741 West Katella was plaintiff's main office primarily handling resale houses, whereas the real estate brokerage business conducted by plaintiff under the fictitious name Investment Trends was concerned primarily with commercial property and operated from the 401 West Katella Avenue address.

Issue and Discussion

The single issue of substance presented by this appeal is whether to recover in an action for a real estate brokerage commission, a broker must not only prove that he holds a valid real estate broker's license but also that he is licensed to do business at the address from which the brokerage services were rendered and in the fictitious name under which the brokerage services were rendered. ²

Defendants' contention is uncomplicated. Business & Professions Code, section 10136 ³ prohibits a real estate broker from recovering commissions 'without alleging and proving that he was a Duly licensed real estate broker * * * at the time the alleged cause of action arose.' (Emphasis supplied.) The provisions of sections 10162 and 10163 make it plain that a real estate broker maintaining a branch office must 'apply for and procure an additional license for each branch office so maintained by him.' Furthermore, '(n)o fictitious name shall be used by a licensee * * * unless a license bearing such fictitious name has been issued to said licensee.' (10 Cal.Adm.Code, § 2731; see also Bus. & Prof.Code, § 10159.5.) Defendants argue that, having produced no evidence of being licensed for the branch office at 401 West Katella Avenue or for the use of the fictitious name Investment Trends, plaintiff failed to prove he was 'a duly licensed real estate broker' as required by section 10136.

While defendants' argument has the appeal of simplicity, it is not persuasive. In dealing with a provision of the contractors' licensing law (Bus. & Prof.Code, § 7031) similar in purpose and wording to section 10136, it has been noted that literal observance will not be required 'if it would transform the statute into an 'unwarranted shield for the avoidance of a just obligation. " (Latipac, Inc. v. Superior Court, 64 Cal.2d 278, 281, 49 Cal.Rptr. 676, 679, 411 P.2d 564, 567; S & Q Construction Co. v. Palma Ceia Development Organization, 179 Cal.App.2d 364, 367, 3 Cal.Rptr. 690.) Nor will the courts enlarge upon the statute in imposing penalties for noncompliance. (Davis Co. v. Superior Court, 1 Cal.App.3d 156, 158, 81 Cal.Rptr. 453; S & Q Constuction Co. v. Palma Ceia Development Organization, Supra, 179 Cal.App.2d at pp. 367--368, 3 Cal.Rptr. 690.) Literally, all that section 10136 requires is that the plaintiff prove 'that he was a duly licensed real estate broker.' There is literally no requirement in section 10136 that, as a prerequisite to the maintenance of his action, he prove that he had a branch office license for the branch office from which the services were performed or a fictitious name license authorizing the use of the fictitious name under which his services were performed.

Where the statute is not explicit, problems such as that now confronting us are to be resolved by reference to the statutory purpose. (Cf. Latipac, Inc. v. Superior Court, Supra, 64 Cal.2d at p. 281, 49 Cal.Rptr. 676, 411 P.2d 564; Gatti v. Highland Park Builders, Inc., 27 Cal.2d 687, 690, 166 P.2d 265; Davis Co. v. Superior Court, Supra, 1 Cal.App.3d at p. 158, 81 Cal.Rptr. 453.) The purpose of the licensing requirement is to protect the public from the perils incident to dealing with incompetent or untrustworthy real estate practitioners. (See Koeberle v. Hotchkiss, 8 Cal.App.2d 634, 640, 48 P.2d 104; cf. Davis v Superior Court, Supra, 1 Cal.App.3d 156, 158, 81 Cal.Rptr. 453 and cases there cited (dealing with the contractors' licensing law).) The statutory purpose, insuring the competency and trustworthiness of real estate practitioners, is satisfied by proof of plaintiff's valid real estate broker's license. It was in connection with the application for and issuance of...