Court Opinion

ID: 3839948
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:09:01.195696+00
Date Added: 2024-06-11T07:40:19.876275
License: Public Domain

Petition for rehearing denied April 3, 1945                        ON PETITION FOR REHEARING                             (157 P.2d 510)
Respondent, in support of a petition for rehearing, has submitted a spirited brief in which he contends that our construction of the real estate brokers act (Ch. 423, Laws 1929; Ch. VII, Title LXIII, Oregon Code 1930) fails to give any effect to section 30, which provides that no person shall maintain an action for *Page 285 
collection of compensation as a real estate broker without alleging and proving that he was duly licensed at the time the alleged cause of action arose. At our request, appellant filed an answering brief.
In the construction of a statute, where there are several provisions or particulars, the court must, if possible, give effect to all of them. Section 2-216, O.C.L.A.; Astoria v.Kozer, 124 Or. 261, 264 P. 445; Union Pacific Railroad Co. v.Bean, 167 Or. 535, 119 P.2d 575.
Respondent criticizes statements in our opinion, to the effect that it was the legislative intention that agreements entered into in violation of the provisions of the statute should be void. He argues that such might have been a proper construction had section 30 been omitted, but that its inclusion should impute a legislative intention to the contrary in the case of a broker who secured his license before his cause of action accrued.
This argument, we think, ignores the primary purpose of the legislature in the enactment of the statute. Our opinion holds that such primary purpose was the protection of the public from evils which flow from the practice of the real estate broker's business by unlicensed persons. The doing, by an unlicensed person, of any of the acts which the statute embraces within its definition of the functions of a real estate broker is made a criminal offense, and the general tenor of the statute, interpreted in the light of its purpose, prohibits an unlicensed person both from entering into an agreement to act as a real estate broker and from performing such an agreement. See, in addition to the authorities cited in our original opinion, Restatement, Contracts, section 580. To construe section 30 *Page 286 
as respondent would have us do, would indeed benefit brokers who have operated in contravention of the statute, but would render the prohibitory provisions thereof largely ineffectual. We cannot concede that our construction of section 30 fails to give it effect and significance. On the contrary, in our opinion, it gives such section full and logical effect in the light of the statute as a whole and of the purpose of the legislature.
Respondent seeks, by analysis, to construe as dicta the holdings in Frankel v. Allied Mills, Inc., 369 Ill. 578,17 N.E.2d 570, and Bendell v. De Dominicis, 251 N.Y. 305,167 N.E. 452, cited in our original opinion. He cites (and cited in his original brief) the case of Calhoun v. Banner, 254 N.Y. 325,  172 N.E. 523, as having permitted recovery by a broker who was not licensed at the time when he was employed but was licensed before his customer accepted the seller's offer to sell. The New York statute is somewhat dissimilar to ours, in that it requires the broker to allege and prove that he was duly licensed "on the date when the alleged cause of action arose". (Italics ours.) In any event, Calhoun v. Banner is of no help to respondent here, the factual situation having been different, as the following quotation from the opinion therein indicates:
    "* * * Until the license was obtained any services he might render would be illegal; but for such illegal services, if any, the plaintiff claims no compensation. All the negotiations, all the services rendered through which the plaintiff induced his customer to accept the defendants' offer, came after the date of the license. No illegal act by the plaintiff was a producing cause of the results achieved by the plaintiff for which he claims compensation, or taints with his own illegality the plaintiff's cause of action." (Italics ours.) *Page 287
Respondent insists that, under the authority of Uhlmann v.Kin Daw, 97 Or. 681, 193 P. 435, this court must necessarily hold that, by section 30 of the statute, the legislature strongly implied that an unlicensed broker's agreement would be valid provided he secured his license before the sale was actually consummated. Such a conclusion does not follow from the Uhlmann decision. There, the court relied upon the decision in Harris v.Runnels, 12 How. 79, 13 L. Ed. 901, which our original opinion herein analyzed. We derived therefrom the fundamental distinction between the Uhlmann case and the case at bar, viz., that the rule, which avoids a contract made in contravention of a statute, will always be applied when the statute is intended for the protection of the public against those evils which we know from experience society must be guarded against by protective legislation. The statute under consideration is such a one.
Respondent admits that, by way of dictum, Irons Inv. Co. v.Richardson, 184 Wash. 118, 50 P.2d 42, supports the conclusion reached by this court. The opinion in that case held that the broker must allege and prove that he had a license at the time when he rendered the service for which he seeks compensation. It is true, as stated in our original opinion, that in that case the broker had completely performed his services and the sale was consummated before he obtained a license. To that extent, the statement of the court, above referred to, was dictum, but nevertheless, in our opinion, it embodied a correct interpretation of the statute.
Respondent places considerable reliance upon the case ofPierce v. Isabel, 70 Ohio App. 385, 40 N.E.2d 481,46 N.E.2d 292. That case was decided under a *Page 288 
much milder statute than ours (section 6377-25, et seq., Ohio General Code). It defined a real estate broker as follows:
    "`Real estate broker' means a person, firm or corporation who, for a commission, compensation or valuable consideration, sells, or offers for sale, buys, or offers to buy, negotiates the purchase or sale or exchange of real estate, or leases, or offers to lease, rents, or offers for rent, any real estate, or improvement thereon, for others."
It will be observed that the listing of real estate for sale is not included within the definition, whereas in our statutory definition it is included. Pierce v. Isabel, supra, therefore, does not appear to be in point.
Our original opinion conceded that Houston v. Williams,53 Cal. A. 267, 200 P. 55, was authority for the respondent's position, although we insisted, and still insist, that that authority was greatly weakened by Davis v. Chipman, 210 Cal. 609,  293 P. 40. The later California cases of Brenneman v.Lane, 87 Cal. App. 414, 262 P. 400, and Corvin v. Smead,115 Cal. App. 175, 1 P.2d 507, are in accord with Houston v.Williams, and incidentally, we think, not in accord with thedicta of the California supreme court in Davis v. Chipman.
Upon further consideration of the California statute, however, we have concluded that Houston v. Williams, Brenneman v. Lane, andCorvin v. Smead, supra, are not in conflict with our opinion herein. The California statute (chapter 605, Cal. St. 1919) thus defines a real estate broker:
    "A real estate broker within the meaning of this act is a person, copartnership or corporation who, for a compensation, sells, or offers for sale, buys, or offers to buy, or negotiates the purchase or sale or exchange of real estate, or who, for compensation, *Page 289 
negotiates loans on real estate, leases, or offers to lease, rents, or places for rent, or collects rent from real estate, or improvements thereon, for others as a whole or partial vocation. * * *"
So, under that statute, as in the Ohio act, a mere listing of real estate for sale is not prohibited.
Mr. Hunter's contract constituted a "listing" of real property for sale. Brown v. Gilpin, 75 Kan. 773, 90 P. 267;Zeligson v. Hartman-Blair, Inc., C.C.A. 10 Cir.,135 F.2d 874. Such listing being a violation of our statute, the contract was illegal and could not support a suit. Nor could such illegal contract afterwards be ratified. Fewel  Dawes v. Pratt,17 Cal. 2d 85, 109 P.2d 650, 654. From the Court of Appeals decision in the same case (103 P.2d 209), we quote:
    "* * * If the contract was invalid prior to the time of performance, the invalidity could not be cured by subsequently procuring a license. * * *"
Respondent is dissatisfied with our construction of the phrase "at the time the alleged cause of action arose". We cited, among other authorities, a number of cases which had to do with venue and with statutes of limitation, not because either venue or limitation was involved in this case, but simply because the language of the cited opinions illustrated the distinction which must sometimes be made between the "arising" and the "accruing" of a cause of action. In this connection, respondent argues that a cause of action does not "arise" until there has been a breach of some duty owed to plaintiff by the defendant, and that a broker's employment contract which requires consummation of the sale and payment of the purchase price before a commission is earned or payable is not performed *Page 290 
until the sale is concluded and the price is paid. It may be conceded that, in one sense, both propositions are correct, in that no action can be maintained until the delict of the defendant has occurred. Respondent apparently believes that we intended to intimate that the broker's cause of action arises when he obtains his employment contract rather than when he commences to perform it, or completes its performance, or carries out the conditions contained in it which give him the right to recover his commissions. We did not so intend. We said that, in view of the legislative purpose, as it is to be gathered from a consideration of the statute as a whole, the expression "at the time the alleged cause of action arose" is to be interpreted as meaning at the time, or throughout the period, when the broker performed the services which culminated in the accrual of his cause of action. By this, we meant that the quoted expression did not refer to a particular moment of time when the cause of action accrued, but to the whole period covered by the rendition of the broker's services. We agree with appellant that "the alleged cause of action", under the statute in question, must mean the facts, alleged in the complaint, which constituted the entire transaction out of which the plaintiff seeks to recover — "the operative facts" showing the plaintiff's right and the defendant's delict. Elliott v. Mosgrove, 162 Or. 507, 540,93 P.2d 1070. The cause of action may be said to have been "arising" throughout the period of the performance of plaintiff's services, although it did not "accrue" until the refusal of defendant to perform her part of the contract. It is in this sense that, with reference to pleading and proof, "cause of action" means the whole cause of action. With respect to venue and to the incidence of statutes of limitation *Page 291 
(matters with which we are not here concerned), a statute which speaks of the "arising" of a cause of action may refer only to the place where or to the time when the breach of the contract occurred which gave plaintiff the right to bring suit. Shapirov. McCarthy, 279 Mass. 425, 181 N.E. 842, 844; Stine v.Atkinson, 69 Ohio App. 529, 44 N.E.2d 372, 374; Tinker v.Sauer, 105 Ohio St. 135, 136 N.E. 854, 856; Bradford v.Southern Railway Co., 195 U.S. 243, 49 L. Ed. 178, 180,25 S. Ct. 55; United States v. Standard Oil Co., 21 F. Supp. 645, 660;Wildman v. Wildman, 70 Conn. 700, 41 A. 1, 3; Norwood v.McDonald, 142 Ohio St. 299, 52 N.E.2d 67, 72; Durham v.Spence, 6 L.R. Exch. 46; 1 C.J.S., Actions, section 8 (c).
Respondent contends that our construction of Hunter's contract of employment, wherein we held that he was not authorized or required to negotiate or consummate a sale, but merely to procure a purchaser with whom the owner should consummate a sale, is erroneous and not supported by the record. Moreover, he says that such construction is at variance with that placed upon the contract by the trial court and invited by appellant. As to this, the contract in suit was expressly pleaded by plaintiff-respondent as follows:
    "That on or about the 15th day of October, 1938, the said Emily F. Gilchrist Wells and her said husband and agent, employed the plaintiff, by written agreement, to procure a purchaser for all of the timber lands then owned by Emily F. Gilchrist Wells in the Counties of Jefferson and Deschutes in Oregon, or portions thereof, by which agreement, the said deceased and her said husband and agent agreed to pay to the plaintiff, and he agreed to accept, a commission of five per cent on the total purchase price of any timber or timber lands sold through his efforts, for the said deceased, or which *Page 292 
might be sold by the deceased, to any purchaser procured by the plaintiff, with whom a sale should be consummated."
It is evident, therefore, that plaintiff's undertaking was, as we said, to procure a purchaser. He had no authority, under the contract pleaded or under the evidence, to carry on negotiations with a prospective purchaser as an agent of the owner, or to consummate a sale. Clearly, his agency, under the pleadings and proof, permitted him only to "display his wares" to prospective purchasers, and entitled him to a commission only upon consummation of a sale by the owner. His argument that he was authorized to negotiate and consummate a sale is repelled by the evidence, which shows that, at his request, the owner submitted to him in advance the price and terms upon which a sale would be made. At no time was he authorized to vary the price or terms, although it is true that, in response to Brooks-Scanlon's first tentative offer, the owner did modify them. He never submitted to the owner any proposal on the part of Brooks-Scanlon to purchase on any prices and terms quoted by her. Some of the documentary evidence introduced by plaintiff proves his employment contract as pleaded, and some of it tends to prove a variance, but we think that he was bound by his pleading. The contract, as pleaded, was one of the type in which the broker is entitled to his commission when he produces a purchaser who is ready, willing and able to buy on terms previously authorized or subsequently ratified by the owner. The proof shows that Mr. Hunter so construed it, by requiring the owner to advise him in advance as to the price and terms which would be satisfactory to her. It may be conceded that the owner was aware that, in order to make a deal, Mr. *Page 293 
Hunter would necessarily have to negotiate with prospective purchasers, but, in so doing, it is obvious that he would be negotiating for the purpose of endeavoring to earn a commission for himself by producing a purchaser under the terms of his contract as pleaded, and not as an agent of the owner authorized, in her behalf, to negotiate and consummate a sale. It is true that, in instructing the jury, the trial judge said:
    "By the letters and telegrams the plaintiff undertook to find a buyer ready, willing and able to buy, and to consummate a deal for the timber satisfactory to owner."
We take it that thereby the court did not mean to inform the jury that Mr. Hunter was authorized to consummate a sale, but rather that he undertook to find a buyer and to consummate a deal satisfactory to the owner. There is an obvious distinction between the consummation of a "deal" by a broker and the consummation of a sale by an owner.
Respondent reiterates his argument that he performed substantial services after December 5, 1938, when he was licensed. It will be remembered that these alleged services consisted only in obtaining a written memorandum from Brooks-Scanlon's local officials, to the effect that they "would recommend" to their directors a purchase of Mrs. Wells's property upon substantially similar price and terms as those which they had, prior to December 5th, informed him they "would recommend". Respondent concedes that the two "tentative offers" were substantially the same, but makes the point that he became licensed in the interim! If this fact is of any significance, it must be upon the theory that, subsequent to the issuance of the license, *Page 294 
he procured a new contract from the landowner. No new contract, however, was pleaded, nor was any proved.
Having carefully reconsidered the law and the record, we are satisfied that our original opinion, as modified herein, should stand. The petition for rehearing is, therefore, denied. *Page 295