Schmidt v. Earl
| Decision Date | 16 April 1968 |
| Docket Number | No. 10372,10372 |
| Parties | Earl J. SCHMIDT, dba Schmidt Agency, Plaintiff and Appellant, v. Lorne T. EARL, Defendant and Respondent. |
| Court | South Dakota Supreme Court |
Miller, Kaye & Hanson, Shandorf & Bleeker, Mitchell, for plaintiff and appellant.
Morgan & Fuller, Mitchell, for defendant and respondent.
This action was brought to recover a real estate broker's commission. The jury returned a verdict for the plaintiff. On defendant's motion for a judgment notwithstanding the verdict, the verdict was set aside and a judgment entered in favor of the defendant in accordance with his motion for a directed verdict. From this the plaintiff appeals.
Defendant was the owner of a well improved farm in Davison County, South Dakota, containing about a section of land. When he evidenced a desire to sell it for $96,000 a mutual friend who had resided in Iowa, suggested that he list the farm with plaintiff, a real estate broker in the city of Spirit Lake, Iowa, licensed in that state, but not in South Dakota. Many of the plaintiff's claims are denied and disputed by the defendant. The jury by its verdict resolved these in favor of the plaintiff. In our review we must accept that version of the testimony which supports the verdict. Hullander v. McIntyre, 78 S.D. 453, 104 N.W.2d 40. When viewed in that light these are the basic facts.
The defendant listed his farm with the plaintiff who found and produced to the owner a purchaser from Ohio, ready, able and willing to purchase the same on the terms of the listing. He and his associate brought the prospective purchaser to the farm, and made a thorough investigation of it, but the defendant refused to complete the sale. About a week later these three returned again to the farm and spent considerable time looking it over. This time they did not see the defendant. A couple of months later plaintiff and his associate returned to the farm and tried to persuade the defendant to pay the commission which plaintiff claimed was due him. He refused to pay and claimed that he owed plaintiff nothing.
This was the only transaction in which plaintiff acted as a real estate broker in South Dakota.
In addition to denying the claims made by the plaintiff, defendant also urged that plaintiff is prevented from recovering any commission because he was not licensed as a real estate broker in South Dakota. Plaintiff seeks to avoid the bar of our statute on the grounds: (1) that this was a single isolated transaction and (2) he held a power of attorney from the owner. It is his claim that such circumstances exempt this transaction from the operation of our statute. In the posture in which the case is presented these are the questions which we must decide. Because of differences in statutory provisions decisions from other jurisdictions do not shed much light on our problems.
South Dakota had no statutory law regulating real estate brokers until Ch. 268, Laws of 1955 was enacted. It now appears as SDC 1960 Supp. Ch. 51.07A. So far as here material 51.07A05 provides:
'It shall be unlawful on and after January 1, 1956, for any person, copartnership, association or corporation, to act as a real estate broker or real estate salesman, or to advertise or assume to act as such real estate broker or real estate salesman, without a license issued by the Real Estate Commission and no person, firm, copartnership, association or corporation shall be entitled to collect any fees, compensation or commission as a real estate broker or real estate salesman without having first complied with the provisions of this chapter.'
In the next section 51.07A06, a real estate broker and a real estate salesman are defined thus:
'A real estate broker within the meaning of this chapter is any person, firm, partnership, copartnership, association or corporation, who for a compensation or valuable consideration sells or offers for sale, buys or offers to buy, or negotiate the purchase or sale or exchange of real estate, or of the improvements thereon for others, as a whole or partial vocation. * * *
'A real estate salesman within the meaning of this chapter is any person who for a compensation or valuable consideration is employed either directly or indirectly by a real estate broker, to sell or offer to sell, or to buy or offer to buy, or to negotiate the purchase or sale or exchange of real estate, or of the improvements thereon, as a whole or partial vocation.'
It is to be observed from these definitions that both brokers and salesmen are persons engaged in the business of selling real estate for others. That section further provides that a single act or an isolated transaction shall not constitute the one performing it a real estate broker or salesman.
Exceptions to the statute are listed in 51.07A07. These concern transactions by persons not engaged in the business of selling real estate for others, such as an owner or a lessor and their employees, a resident lawyer, one holding a power of attorney, a fiduciary and public officers in the performance of their duties. The power of attorney exception is limited to a person 'holding in good faith a duly executed power of attorney from the owner, authorizing the final consummation and execution for the sale, purchase, leasing or exchange of real estate when such acts are not of a recurrent nature and done with the intention of evading this section'. No exception is made of nonresident brokers licensed under the laws of another state.
However, SDC 1960 Supp. 51.07A10 does provide a simple procedure whereby brokers licensed in another state can become licensed in this state without taking an examination or maintaining an office here, provided the state in which they are licensed offers the same privileges to the licensed brokers of this state. See I.C.A. § 117.21, § 117.22, and § 117.23. The provisions of these sections are substantially the same as those contained in 57.07A10. One of these common provisions requires an irrevocable consent that the...
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