Schoene v. Hickam, S-T
| Decision Date | 13 December 1965 |
| Docket Number | S-T,No. 1,No. 51189,51189,1 |
| Parties | Calvin G. SCHOENE and Charles M. Turlington, a Partnership d/b/aEnterprises, Respondents, v. George HICKAM, Sheriff of Jasper County, Missouri, and Otto A. Owen and Elizabeth L. Owen, Appellants |
| Court | Missouri Supreme Court |
Robert E. Seiler, Joplin, for respondents; Seiler, Blanchard & Van Fleet, Joplin, of counsel.
John R. Martin, Joplin, for appellants; Richart, Titus & Martin, Joplin, of counsel.
HOUSER, Commissioner.
Otto A. Owen commenced foreclosure proceedings on a motel property at Joplin, Missouri under a deed of trust executed by plaintiffs to secure their promissory note for $14,500. The note and trust deed were given for services rendered by Owen as a real estate broker in negotiating an exchange of plaintiffs' 1,200 acres of land located in Colorado for the motel property in Missouri. Plaintiffs brought suit against Owen and his wife, the payees of the note, and the local sheriff who was named trustee in the deed, to enjoin foreclosure and (1) to declare the deed of trust and note void and unenforceable as arising out of an illegal transaction or in the alternative (2) to declare that plaintiffs are not in default on the note and deed of trust. The circuit court found the note and deed of trust invalid and unenforceable and enjoined the foreclosure. Defendants appealed. Title to real estate is directly involved and this court has jurisdiction, since the ultimate issue is whether the instruments were void ab initio. Kramer v. Johnson, 361 Mo. 1085, 238 S.W.2d 416; Cannon v. Blake, 353 Mo. 294, 182 S.W.2d 303.
We find these to be the pertinent facts: Owen, a resident of Phoenix Arizona, advertised and held himself out to the public and represented himself to plaintiffs Schoene and Turlington as a real estate broker. In the course of his real estate transactions he had performed many of the acts recognized by SEC. 32-2101 OF THE ARIZONA REVISED STATUTES ANNOTATED1 as those of a real estate broker. He did business generally as a sole trader, occupying his real estate office by himself. He had been in the real estate business since 1960. He had arranged the exchange of properties in California, Colorado and Missouri, in fact all across the United States from New York to the Pacific Ocean. Owen was a licensed real estate salesman but was not a licensed real estate broker in Arizona at the times in question. As a licensed real estate salesman in the transaction in question Owen was not employed or compensated by any licensed real estate broker. He did not hold a nonresident real estate broker's or salesman's license in Colorado or Missouri. In March, 1963, Owen was employed by plaintiffs in Arizona as a real estate broker to sell or exchange plaintiffs' 1,200 acre tract of land in Colorado. There no mention of Owen acting as agent or in any capacity other than for himself. It was intended that the contract be performed and it was in fact performed in Arizona. Acting under his contract of employment. Owen advertised the 1,200 acres in newspapers in the Phoenix, Arizona area, but not in Colorado or Missouri. He at no time left the State of Arizona to show the properties in Colorado or Missouri. He did nothing personally within the borders of those states to promote the deal in any way. He did give plaintiffs the information required by them to locate and examine the motel property in Joplin. Through Owen's efforts a contract was eventually entered into between plaintiffs and William Stonecipher and wife for the exchange of the 1,200 acres of Colorado land for the motel property in Joplin, Missouri. The transaction was consummated in the office of plaintiff's attorney in Scottsdale, Arizona. In order to collect compensation for his services as a real estate broker in negotiating the trade Owen prepared a separate written commission agreement. The parties to this agreement were Owen and plaintiffs. It was prepared in Arizona and was signed for the partnership of Schoene and Turlington by Calvin G. Schoene in Arizona. It provided for the giving by plaintiffs of a promissory note for $14,500 to Owen and his wife to be secured by a deed of trust on the motel in Missouri. A note and deed of trust were prepared by Owen pursuant to the agreement. They were signed by plaintiffs in Maricopa County, Arizona. The note called for installment payments. The first payment was not make but several subsequent payments were made by plaintiffs and accepted by Owen. There is a dispute whether the first payment was waived but we are not concerned with this, for we do not reach the question whether plaintiffs were in default when Owen instituted foreclosure proceedings.
Plaintiffs' theory below as to the illegality of the transaction, as reflected by the pleadings, evidence and memorandum opinion of the trial judge sustaining plaintiffs' position, was that defendant Owen illegally engaged in the business of a real estate broker by negotiating an exchange agreement and entering into a commission agreement in the State of Colorado involving an illegal commission on the exchange of land in Missouri, without being licensed either in Colorado or in Missouri to engage in real estate transactions, contrary to Sec. 339.020, V.A.M.S. and Colo.R.S. Sec. 117-1-1.
Appellants' brief makes two points: 'The judgment is contrary to the law under the evidence in this case' and 'The judgment is against the weight of the evidence.' Neither point preserves anything for appellate review. Both points violate the rules of appellate practice because of their generality. Instead of sustaining respondents' motion to dismiss the appeal for violation of the rules, however, we are making an exception, in the exercise of our discretionary powers. It unmistakably appears from the argument portion of appellants' brief that appellants' principal point is that the court erred in ruling the note invalid and the trust deed unenforceable as an illegal transaction on the basis that Owen violated the licensing laws of Colorado 2 and Missouri, 3 in that Owen did not make any contract to act as a real estate broker in either of those two states and did not in fact act as a real estate broker in Colorado or Missouri, and erred in not ruling that Owen was licensed as a real estate broker in Arizona, where the contract of employment was entered into; that it was intended that the employment contract be, and it actually was, performed in Arizona and that the commission was legally earned under a valid Arizona employment contract. In support of this position appellants contend that the validity of the employment contract is governed by the law of the place where it was made (Arizona) and not by the law of the place where the real estate is located (Colorado and Missouri); that Owen did not engage in the real estate business in either of those two states, buy stayed at all times within the State of Arizona, where he was licensed; that as a licensed real estate broker Owen procured a purchaser ready, able and willing to purchase on terms agreeable to plaintiffs; that he earned his commission under the Arizona law and was given a valid note and deed of trust therefor; that recovery on these instruments cannot be refused on the ground that he failed to comply with the licensing requirements of Colorado and Missouri, which should not be applied be cause Owen did not act as a broker in those states; that the note and deed of trust should be enforced by the courts and processes of Missouri, and that to do so will not violate the public policy of Missouri.
In their brief respondents make the point that the note and trust deed are invalid but they expand their reasons and grounds beyond those urged upon the trial court. In the Supreme Court, while not abandoning their contention that the Colorado and Missouri licensing laws are applicable to Owen and that he violated them, respondents have added a new and different reason for affirmance, namely, that throughout his dealings with plaintiffs Owen acted as a real estate broker but that he was not licensed as a broker in Arizona, and that under Arizona statutes it was unlawful for him to transact this business as a broker without first obtaining an Arizona broker's license; that it was unlawful for Owen ( only a real estate salesman's license) to accept employment and compensation from anyone other than a licensed broker, and therefore Owen could not legally enter into an employment contract or a commission agreement with plaintiffs or take a note and deed of trust from them as a commission.
In oral argument appellants vigorously objected that whether Owen was licensed in Arizona as a broker was not an issue in the trial below and that it is too late to raise this question for the first time on appeal, citing Welch v. McNeely, Mo.App., 269 S.W.2d 871; Haire v. Stagner, Mo.App., 356 S.W. 305; Stoll v. First Nat. Bank of Independence, 345 Mo. 582, 134 S.W.2d 97, 98[1, 2], and other cases, for the proposition that an appellate court will review a case only upon the same theory upon which it was submitted in the trial court and that a party may not shift his position on appeal. Appellants are not entitled to the benefit of this rule. There has been no change in respondent's ultimate contention that the note is invalid and that the trust deed is unenforceable. The only change is a change in the reasons for the illegality, but the facts which provide the basis upon which the new reason is asserted are undisputed. Owen himself testified on cross-examination that he was licensed only as a salesman and did not hold a broker's license at the times in question; that he personally entered into the employment contract directly with plaintiffs; that he prepared and forwarded the written commission agreement between Owen and plaintiffs, and that he prepared and attended to the execution of the note and trust deed which names...
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