Court Opinion

ID: 9538195
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:32:09.36545+00
Date Added: 2024-06-11T14:57:37.659489
License: Public Domain

PHELPS, Justice
(dissenting).
I am of the view that the judgment of the lower court dismissing plaintiff’s first cause of action should be reversed.
It seems perfectly clear to me that the members of the Phoenix Real Estate Board, *321including plaintiff and defendant, who were all subject to all rules, regulations and by-laws of said Board, and having signed pledges to observe the Articles of Incorporation, by-laws and rules and regulations of both the Phoenix Real Estate Board and the Arizona Association of Realtors, Inc., and the Code of Ethics of the National Association of the Real Estate Boards and its constitution and by-laws are as firmly bound by said pledges as if the terms thereof appeared above their signatures in a written contract to do the things therein prescribed. Pacaud v. Waite, 218 Ill. 138, 75 N.E. 779, 2 L.R.A.,N.S., 672.
It is provided in the Code of Ethics of the National Association of Real Estate Boards that:
“ * * * Each Article of the Code of Ethics pertaining to ethical practices shall be interpreted as a mandatory requirement of each Realtor: and the Realtor shall re-require his salesmen to comply with the provisions of the Code of Ethics”.
In the complaint filed before the Court of Ethics established by the Phoenix Realty Board, according to its By-Laws, that court was informed by the complaint of the alleged breach of the Code of Ethics by defendant as set up in said complaint and proceeded to a hearing thereof according to the provisions of the By-Laws.
Article 2, Part 1 of the Code of Ethics of the National Association of Real Estate Boards provides that:
“The Realtor should so conduct his business as to avoid controversies with his fellow-realtors, but in the event of a controversy between Realtors who are members of the same Real Estate Board, such controversy should be submitted for arbitration in accordance with the regulations of their Board and not to a suit at law, and the decision in such arbitration should be accepted as final and binding.” (Emphasis supplied.)
Article 20, Section 12 of the By-Laws of the Phoenix Real Estate Board provides in substance, that when a realtor is accused of violating any of the provisions he had pledged himself to observe and his guilt is established, the Court of Ethics may recommend, in addition to recommending such restitution to inpired parties deemed equitable, fines (or other specified penal sanctions) of not less than $25 nor more than $300. (Emphasis supplied.)
After due hearing in the matter, the Court of Ethics recommended that defendant be directed to pay to plaintiff, in accordance with the agreement between plaintiff and defendant, the sum of $6000 as and for 60% of a 5% commission upon the sale of a parcel of property defendant had for sale at a price of $200,000. This *322recommendation was affirmed by the Phoenix Real Estate Board and under the by-laws became a valid award. Defendant had agreed with plaintiff to pay 60% of the commission if he found a purchaser for said property. Plaintiff produced the purchaser and defendant allegedly sold the property to him for $194,000, collected $4,000 commission for himself, took a Bond of Indemnity from the purchaser for $6,000, in event he had to pay plaintiff that amount, and refused to pay plaintiff that or any other sum as and for his commission.
These facts were alleged, in substance, in the first count in the complaint which was dismissed by the trial court upon the ground that it failed to state a claim against defendant.
If I am correct in the conclusion above stated, that there existed in the pledge of members of the Board, an agreement to observe the Code of Ethics of the National Association of Real Estate Boards and, the Constitution and By-Laws of the local and state real estate boards, this would constitute a binding contract between plaintiff and defendant, and the lower court committed reversible error in entering judgment dismissing the first count of plaintiff’s complaint.
I agree first, that under the common law, an agreement to arbitrate matters to the exclusion of the jurisdiction of regularly constituted courts to determine such matters, is null and void in the absence of the completion of the arbitration in which both parties participate^, and secondly, I agree that the arbitration set up in plaintiff’s complaint cannot be considered as a statutory arbitration under the Arizona Statutes on Arbitration, for the reason that no attempt was made to comply with a statutory arbitration.
But the records in this case do indicate a completely executed agreement for a common law arbitration of the matter before the constituted authorities of the real estate Board of Phoenix. They show that a hearing was held before the Court of Ethics and then presented to the Board of Directors of the real estate Board who affirmed the findings and recommendation of the Court of Ethics. Under the rules, regulations and by-laws of the Phoenix Real Estate Board it then became a valid award upon which to present the action alleged in Count I of the complaint filed in the lower court.
Vol. 3 of American Jurisprudence, Arbitration and Award, Sec. 30, on this subject is as follows:
“Executed agreements. — If nothing in the terms of an arbitration agreement contravenes public policy in other respects, it is the universal rule that however comprehensive it may be, the mere fact that it provides for arbitration of disputes which may arise in the *323future will not, when once it has been executed, — that is, fully carried out by the parties and a final, certain, complete, and honest award made by the arbitration upon all matters submitted, pursuant to the terms of the submission, — be ground for holding it invalid; it will then effectually bind the parties in the absence, of course, of some ground for impeaching the award.”
Citing many cases including Oskaloosa Sav. Bank v. Mahaska County State Bank, 205 Iowa 1351, 219 N.W. 530, 533, 60 A.L.R. 1204, in which the court recognized the invalidity of an unexecuted common law agreement of arbitration to the exclusion of duly constituted courts, the court said the cases so holding:
“ * * * were bottomed on the right of a party to such contract to revoke it at any time before decision had been reached or award made. We have found none of our cases, nor any from our sister states, holding that, where a matter of this character has been submitted and final determination made by the person specified in the contract, one can then revoke such agreement. In other words, this court has always held that where a matter has been submitted and finally disposed of by the proper party, all parties are bound thereby.” (Citing cases.)
The agreement to arbitrate was fully executed in the instant case and -all matters agreed to be arbitrated were submitted to and passed upon by the arbitrators and there was nothing in the agreement contravening public policy. Therefore, the parties are bound by it.
I do not agree with the majority opinion to the effect that the complaint before the Court of Ethics indicates to them that the plaintiff sought nothing more than to have defendant disciplined. Plaintiff sets forth in his complaint that he was entitled to 60% of a 5% commission on the sale of a property, the sale price of which was fixed by defendant at $200,000, and that he had notified the escrow agent he was entitled to $6,000 commission on the sale. Defendant evidently thought, or at least feared, plaintiff could probably recover a commission from him in the sum of $6,000, otherwise, he would not have exacted a Bond of Indemnity in that amount from the purchaser.
As pointed out by counsel for plaintiff, pleadings before a non-judicial body are not expected or required to be drawn with the nicety and technical precision required in courts of law. It is true the prayer of the complaint before the Court of Ethics does not expressly ask for an award of $6,000 commission; neither does it ask for punitive discipline to be meted out to defendant. All the facts necessary for the *324Court of Ethics to make such recommendation as it deemed equitable or proper were substantially incorporated in that complaint. The language of Article 20, Section 12 of the by-laws of the Phoenix Realty Board provide that when the Court of Ethics has found a realtor guilty of violating any of the provisions he has pledged to observe it may recommend in addition to recommending such restitution to the injured parties deemed equitable, fines (or other specified penal sanctions) of not less than $25 nor more than $300.
This clearly indicates to me that it is intended the primary consideration of the Court of Ethics is the awarding to plaintiff of the commission due him from defendant and that penal sanctions or disciplinary action of any kind is of secondary consideration. The language employed in my opinion, compels this construction because it clearly states that any disciplinary action recommended by it is in addition to recommending restitution.
It is further my view that the definition of restitution in equity has a much broader meaning than ascribed to it in the majority opinion. Unless it is given a broader interpretation its efficacy is rendered practically nugatory for the reason that it is difficult to envision in this type of case a fact situation where the word “restitution” would be applicable.
In 77 C.J.S., Restitution, it is said at page 323:
“ * * * but in modern usage restitution may go beyond the act of returning the thing taken, and, in its broad sense, is not confined to the return of something of which one had been deprived, but includes compensation for loss, damage, or injury done to another.” Citing Basile v. U. S., D.C.Mun.App., 38 A.2d 620, 622.
See, also, State v. Barnett, 110 Vt. 221, 3 A.2d 521, 525; Lauffer v. Vial, 153 Pa. Super. 342, 33 A.2d 777, 779.
In the instant case, according to the award of the Court of Ethics as affirmed by the Phoenix Real Estate Board, defendant was unjustly enriched, at least to the extent of $4000 which he collected as a result of plaintiff’s efforts and under his agreement with plaintiff, the defendant was not in justice entitled to retain this commission until he paid plaintiff the sum of $6,000 for his services.
And it is my further view that so long as he holds the Bond of Indemnity and refuses to pay plaintiff the sum of $6,000 awarded by the Court of Ethics and the Phoenix Real Estate Board, and at the same time retains the $4,000 collected by him as commission based upon plaintiff’s efforts, he should he compelled to faithfully perform his part of his agreement with plaintiff.
The judgment of the trial court in dismissing Count I of the complaint should be reversed.