Standard Abstract & Title Co., Inc. v. Rector-Phillips-Morse, Inc., RECTOR-PHILLIPS-MORS

• Decision Date: 26 March 1984
• Docket Number: RECTOR-PHILLIPS-MORS,No. 83-268,INC,83-268
• Citation: 282 Ark. 138,666 S.W.2d 696
• Court: Arkansas Supreme Court
• Parties: STANDARD ABSTRACT & TITLE COMPANY, INC., Appellant, v., Appellee.

Page 696

666 S.W.2d 696

282 Ark. 138

STANDARD ABSTRACT & TITLE COMPANY, INC., Appellant, v. RECTOR-PHILLIPS-MORSE, INC., Appellee.

No. 83-268.

Supreme Court of Arkansas.

March 26, 1984.

Rehearing Denied April 30, 1984.

Plegge & Church by Beresford L. Church, Jr., Little Rock, for appellant.

Rose Law Firm by Vincent Foster, Jr., Little Rock, for appellee.

W. Dent Gitchel, Little Rock, for Arkansas Realtors Ass'n, amicus curiae.

HOLLINGSWORTH, Justice.

In April, 1981, Appellant Standard Abstract and Title Company, Inc., (hereinafter Standard) entered into an exclusive listing contract for a period of twelve months with the Appellee, Rector-Phillips-Morse, Inc., (hereinafter RPM) for the sale of an office building. In February, 1982, Standard attempted to cancel the listing contract and proceeded to accomplish a sale of the property through another broker to Gary Eubanks and Hugh Spinks d/b/a Gary Eubanks and Associates. In December of 1981, an RPM salesman had shown the property to Eubanks.

The sale to Eubanks was consummated on March 25, 1982. Standard received $50,000.00 in cash and Eubanks assumed the obligation for mortgage loans totaling $608,552.52. RPM filed suit for a commission of seven percent of the gross consideration.

After a full trial on the merits, the trial judge, sitting as a jury, held that RPM had performed all its obligations under the exclusive listing contract, or that any nonperformance had been waived or excused by Standard's conduct. The trial court further found that during the term of the listing contract RPM did not consent to a cancellation of the contract, either verbally or by conduct, and that therefore, there was no cancellation of the contract by mutual consent. The trial court also held that the letter and intent of Ark. Stat.Ann. § 71-1302 does not bar RPM, as a corporation, from recovery.

We affirm.

Standard's first point on appeal is that RPM does not hold an Arkansas real estate broker's or salesman's license because corporations are not individuals as required by Ark.Stat.Ann. § 71-1302 (Repl.1979), therefore, RPM cannot sue to collect a commission. The argument is advanced that § 71-1302 is analagous to § 64-1202, a statute imposing a penalty on foreign corporations which do business in Arkansas without a certificate of authority. In Alexander Film Co. v. State ex rel. Phillips County, 201 Ark. 1052, 147 S.W.2d 1011 (1941), we discussed § 64-1202 and stated that since it is a penal statute, it must be strictly construed in favor of those against whom the penalty is sought. If a real estate firm such as RPM cannot take the listing in the firm name, they would have to require sellers to enter into mutually dependent listing contracts with each of the firm's licensed brokers and salespersons who might participate in the sale. We agree with the Amicus Curiae position that the purpose of the real estate statutes is to protect the public from unlicensed brokers and salespersons, not to prevent those properly licensed persons from doing business in a corporate form. Throughout the statutory scheme, there are numerous references to brokers doing business in "firms." See Ark.Stat.Ann. § 71-1306(a), (d), (e), (f) (Supp.1983). Since corporations can only act through their agents, so long as the salespersons and brokers employed by real estate firms are licensed, then the requirements mandated by the statute are being met. Construing the statute in favor of the party against whom the penalty would be imposed, § 71-1302 does not prevent licensed real estate brokers and salespersons from suing in their corporate name to collect a commission due them.

Standard's second point on appeal is that the trial court erred in holding that their listing contract had not been effectively cancelled, therefore, the sale to Eubanks occurred within the listing period. In support of their position, Standard argues that RPM did not fulfill its obligation under the contract to submit a plan on marketing a condominium project...