Case Title: Lakeview Invest., Inc. v. ALAMOGORDO LAKE VIL.

Citation: 520 P.2d 1096

Docket Number: 

State: new-mexico

Court: New Mexico Supreme Court

Date: 1974-04-05T00:00:00Z

Document:
520 P.2d 1096 (1974) LAKEVIEW INVESTMENTS, INC., Plaintiff-Appellant, v. ALAMOGORDO LAKE VILLAGE, INC., Defendant-Appellee. No. 9793. Supreme Court of New Mexico. April 5, 1974. Keleher & McLeod, Ranne B. Miller, Albuquerque, for plaintiff-appellant. Branch, Dickson, Dubois & Wilson, Frank P. Dickson, Jr., Albuquerque, for defendant-appellee. MONTOYA, Justice. This appeal is brought from the granting of a motion to dismiss for failure to state a cause of action by plaintiff-appellant Lakeview Investments, Inc. (appellant). The facts are as follows. Appellant and *1097 defendant-appellee Alamogordo Lake Village, Inc. (appellee) entered into a written agreement dated April 4, 1972. Essentially, the agreement provided that appellant would serve appellee as exclusive sales representative of subdivided land owned by appellee in DeBaca County, New Mexico. According to the agreement, appellee was to place the land in a marketable condition and appellee agreed to pay appellant's monthly operating expenses in an amount not to exceed $10,000 per month. On June 21, 1972, appellant became licensed for the first time as a real estate broker under the laws of the State of New Mexico. After receiving payments through the month of August 1972, appellant complained that appellee repudiated and otherwise breached the agreement subsequent to June 21, 1972, and specifically on or about September 1, 1972, by refusing to pay the monthly operating expenses for the month of September 1972, and all subsequent months. Further, that the appellee failed to pay commissions on sales of property which were made after June 21, 1972. After appellee filed a motion to dismiss on the ground that the complaint failed to state a claim upon which relief may be granted and filed a motion for summary judgment, the court granted appellee's motion to dismiss. In its order the court concluded that the appellant's complaint failed to state a cause of action "by virtue of the fact that the plaintiff [appellant] was not a licensed real estate broker at the time the contract * * * was entered into on April 4, 1972 * * *" as required by § 67-24-33, N.M.S.A., 1953 Comp. It is this conclusion that is the subject of this appeal. The narrow issue involved in this appeal is when, within the factual situation presented and pursuant to § 67-24-33, supra, does a cause of action arise. Section 67-24-33, supra, provides: Simply stated, the trial court held that appellant's cause of action arose at the time the parties entered into their contract. We disagree with that conclusion for the reasons hereafter given. The issue presented by this case is one of first impression in New Mexico. As such, it is necessary to turn to other jurisdictions for authority in the resolution of this problem. In Schreibman v. L.I. Combs & Sons, Inc., 337 F.2d 410 (7th Cir.1964), cert. denied 380 U.S. 911, 85 S. Ct. 896, 13 L. Ed. 2d 797, the United States Court of Appeals had to decide whether a real estate broker licensed in New York was precluded from recovering a commission in Indiana for services rendered in Indiana under a listing contract there, because he had no reciprocal Indiana license when the listing contract was made but had obtained an Indiana license by the time the contract of sale of the property was entered into. The trial court, without a jury, found for the defendant at the close of plaintiff's case, concluding that plaintiff had acted as a real estate broker without an Indiana license and was guilty of violating the criminal provision, § 63-2407 of the Indiana Real Estate Licensing Act, IC 1971, XX-XX-X-X (similar to § 67-24-19, N.M.S.A., 1953 Comp. amended 1973 Pocket Supp.), which violation precluded recovery of his commission under § 63-2408 of that Act, IC 1971, XX-XX-X-X (similar to § 67-24-33, supra). In reversing the trial court, the Court of Appeals held that the fact that the plaintiff was not licensed when the listing contract was entered into does not preclude recovery under the applicable Indiana *1098 statutes. The court stated (337 F.2d at 412-413): We approve and adopt the language quoted above as applicable to the instant case. The only remaining question to be decided is when appellant's cause of action arose. In Livingston v. Sims, 197 S.C. 458, 462-463, 15 S.E.2d 770, 772 (1941), the Supreme Court of South Carolina considering the same question, stated: As to when the cause of action "arose" under the factual situation here, we believe that it is upon the breach of the duty by the defendant arising out of the contract. There can be no cause of action until there is a breach. Under the facts in the instant case, appellant became a duly authorized real estate broker in New Mexico on June 21, 1972, pursuant to § 67-24-26, N.M.S.A., 1953 Comp., amended 1973 Pocket Supp. Appellant was also licensed in California and Illinois. The contracts of sale upon which commissions and expenses are alleged to be due were entered into subsequent to the licensing of appellant by the State of New Mexico. Prior to September 1, 1972, the date of appellee's repudiation of the contract and failure to pay operating expenses, all payments for monthly operating expenses had been paid by appellee to appellant. It is clear from the record that the breach of the contract by the appellee did not occur until September 1972, well after the date the broker's license was obtained in the State of New Mexico. Appellee relies solely on Martinez v. Research Park, Inc., 75 N.M. 672, 410 P.2d 200 (1965), as authority in support of the trial court's judgment. That case is distinguishable from the instant case. First of all, the pleadings in the Martinez case failed to allege that the plaintiffs were licensed as contractors as required by the statute. The same requirement is contained in the real estate broker's contract, and in the instant case that required allegation was made. Secondly, the Martinez case does not stand for the proposition that the party seeking relief must be licensed at the time the contract is entered into as claimed by appellee. There is language in the Martinez opinion that is inconsistent which must be reconciled. In 75 N.M. at 677-678, 410 P.2d at 204, the following language appears: Then in 75 N.M. at 679, 410 P.2d at 205, of the same opinion, the following is stated: Subsequent decisions that we have rendered since that opinion clearly show that what we meant in the Martinez case, supra, was that in order for a party to state a cause of action, a party must be and allege that he was licensed at the time he performed the work for which compensation is sought. In Raby v. Westphall Homes, Inc., 76 N.M. 252, 254, 414 P.2d 227, 228 (1966), we said: See also Daughtrey v. Carpenter, 82 N.M. 173, 477 P.2d 807 (1970). We, therefore, hold that it is sufficient to allege that the party seeking relief was licensed at the time the work or service was performed in order to satisfy the requirements of the statute as against a motion to dismiss. To the extent that Martinez v. Research Park, Inc., supra, holds otherwise, if in fact it does, it is overruled. We believed the proper rule to be applied and followed is as stated in Schreibman v. L.I. Combs & Sons, Inc., supra. In view of the foregoing, it is apparent that appellant stated a cause of action and the trial court's granting of the motion to dismiss for failure to do so was error. Therefore, this case is reversed and remanded to the trial court with direction to reinstate the case on its docket and for further proceedings not inconsistent with the views expressed herein. It is so ordered. McMANUS, C.J., and OMAN, J., concur.