Court Opinion

ID: 9773082
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:36:17.389038+00
Date Added: 2024-06-11T07:31:49.952945
License: Public Domain

STEPHEN F. PRESLAR, Justice,
dissenting.
I respectfully dissent, and would reverse the judgment of the trial Court for three reasons. First, because Appellee is not an aggrieved party within the meaning of the Act; secondly, the facts of the case do not bring the Appellee within its coverage; and thirdly, the Act was not complied with, in that the judgment relied on by Appellee was not obtained in a court having jurisdiction over the Defendant.
Appellee took a judgment against his former employee, based on pleadings that he employed Defendant as his agent and authorized him to collect certain sums of money from customers of Plaintiff; that the Defendant did collect various sums but did not pay over to Plaintiff all of such sums, leaving an unpaid balance of $1,625.94. It is the writer’s opinion that this judgment of an employer against his employee for withholding funds due the employer cannot be recovered from the fund provided for members of the public who have been aggrieved by real estate salesmen.
On May 19,1975, Section 8 of the current Real Estate License Act, Article 6573a, Tex. Rev.Civ.Stat.Ann. (Supp.1980), became effective and established the real estate recovery fund, which replaced the former system of individual bonds purchased and maintained by each licensee. I would hold that the current Act should be given the same interpretation as the former Act since the recovery fund simply replaces the bonding provision, and both had the same purpose. The majority does not quarrel with the stated purpose of the Act as being to guarantee the fidelity and honesty of the real estate salesman in his dealings with the public and to insure and indemnify any member of the public against damages or injury caused by a violation of the Act, citing this Court’s decision in American Casualty Company of Reading, Pennsylvania v. Texas Real Estate Commission. The purpose has also been stated by the Amarillo Court in Justice v. Willard, 538 S.W.2d 651 (Tex.Civ.App.1976, no writ), as being:
The purpose of the Act is to regulate the practices of those engaged in the business of selling real estate for compensation and to eliminate or reduce fraud in the interest of the public. See Hall v. Hard, 160 Tex. 565, 335 S.W.2d 584 (1960); GUI v. Smith, 233 S.W.2d 223 (Tex.Civ.App.— Galveston 1950, writ ref’d n. r. e.).
Section 8, Part 1, of the Act provides that the recovery fund shall be used for “reimbursing aggrieved persons who suffer monetary damages by reason of certain acts committed by a duly licensed real estate broker or salesman, . . ” Appellee in this case is not, in my view, an “aggrieved party” within the meaning of the Act. His claim is not one by a client or a member of the public against a real estate salesman; rather, his claim only of an employer against an employee for the fraud of the employee who happened to be a real estate salesman. If, in fact, that fraud affected clients of Appellee, then it was his fraud under the doctrine of respondeat superior.
The judgment on which this claim is based recites that the “Plaintiff employed Defendant as his agent, and authorized him to collect certain sums of money from customers of Plaintiff for and on behalf of Plaintiff,” and it recites that he did collect money and did fail to pay it over to Plaintiff, and that judgment should be rendered *924in favor of Plaintiff against Defendant. Thus, there is nothing in that judgment, or the pleadings on which it is based, that the Appellee paid over any money to clients and is suing for recovery of such payments; the equitable principle of subrogation relied on by the majority is not present.
The Act provides that, before recovery can be had from the fund, recovery must be ordered by a court of competent jurisdiction against a broker or salesman. That has not been done in this case for the reason that the Court rendering judgment against the salesman did not have jurisdiction to render an in personam judgment against him. He was cited by publication and did not enter an appearance. Error is not assigned to the fact that Defendant was cited by publication, but I deem it to be fundamental to the right to recover under the Act.
For the reasons stated, I would reverse the judgment of the trial Court and render judgment that Appellee take nothing.